Document:

Exhibit 10.4

 

SHAREHOLDER RIGHTS
AGREEMENT

 

Dated as of June 21, 2021

 

THIS
SHAREHOLDER RIGHTS AGREEMENT (as amended, modified or supplemented in accordance with the terms hereof, this “Agreement”)
is entered into as of June 21, 2021 by and among Angel Oak Mortgage, Inc., a Maryland corporation (the “Company”),
Falcons I, LLC, a Delaware limited liability company (the “Manager”), and NHTV Atlanta Holdings LP, a Delaware limited
partnership (the “Investor”).

 

RECITALS

 

WHEREAS, in connection
with the IPO (as defined herein), the Company intends to consummate the transactions described in the IPO Registration Statement (as defined
herein);

 

WHEREAS, pursuant to the
limited partnership agreement, as amended, of Angel Oak Mortgage Fund, LP (the “Fund”), the Investor, as a limited
partner in the Fund, shall be receiving a distribution of shares of the Company’s common stock, $0.01 par value per share (the “Common
Stock”), from the Fund prior to or concurrently with the completion of the IPO; and

 

WHEREAS, pursuant to a
letter agreement, dated as of December 16, 2019, between the Manager and the Investor, the Manager agreed to enter into, and for
the Company to enter into, this Agreement to set forth certain understandings and agreements with respect to certain corporate governance
matters relating to the Company.

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1.     Certain
Defined Terms. As used herein, the following terms shall have the meanings as set forth below:

 

“Affiliate”
of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the
purposes of this definition, “control”, when used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative
to the foregoing; provided, however, that notwithstanding the foregoing, neither the Company nor the Manager nor
any of their respective controlled subsidiaries shall be deemed an Affiliate of the Investor.

 

     

     

    

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Beneficial Owner”
of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise (other
than solely through a revocable proxy) has or shares: (i) voting power, which includes the power to vote, or to direct the voting
of, such security and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.
The terms “Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.

 

“Board”
means the Board of Directors of the Company.

 

“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks in the city of New York, New York are obligated

by law
to close.

 

“Bylaws”
means the Bylaws of the Company, as the same may be amended, modified or restated from time to time.

 

“Charter”
means the charter of the Company.

 

“Common Stock”
has the meaning set forth in the Recitals.

 

“Company”
has the meaning set forth in the Preamble.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended
from time to time.

 

“Fund”
has the meaning set forth in the Recitals.

 

“Investor”
has the meaning set forth in the Preamble.

 

“Investor Nominee”
has the meaning set forth in Section 2.1(a).

 

“IPO”
means the initial public offering of Common Stock of the Company, as described in the IPO Registration Statement.

 

“IPO Registration
Statement” means the Registration Statement on Form S-11 (Registration No. 333-256301), as amended, of the Company.

 

“Nomination Information”
has the meaning set forth in Section 2.1(b).

 

“Nomination Termination
Date” has the meaning set forth in Section 2.1(g).

 

“Person”
means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization,
including

a government or political subdivision or an agency or instrumentality thereof.

 

    2 

     

    

 

Section 1.2.     Construction.
Unless the context requires otherwise, the gender of all words used in this Agreement includes the masculine, feminine and neuter forms
and the singular form of words shall include the plural and vice versa. Unless otherwise noted, all references to Articles and Sections
refer to articles and sections of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation” (except to the extent the
context otherwise provides). This Agreement shall be construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be drafted.

 

ARTICLE II

 

CORPORATE GOVERNANCE

 

Section 2.1.    Board
Nomination Rights.

 

(a)            Each
of the Company and the Manager agrees, to the fullest extent permitted by applicable law (including with respect to any standard of conduct
required of directors under Maryland law), until the Nomination Termination Date, (i) to include in the slate of nominees recommended
by the Board, or its Nominating and Corporate Governance Committee, as applicable, for election at any annual or special meeting of stockholders
of the Company at which directors are to be elected (or consent in lieu of such a meeting) one (1) individual designated by the Investor
for election pursuant to this Section 2.1 (the “Investor Nominee”), and (ii) to nominate, recommend and use
its commercially reasonable efforts to solicit the vote of stockholders of the Company to elect the Investor Nominee (which efforts shall,
to the fullest extent permitted by applicable law, include the inclusion in any proxy statement prepared, used, delivered or publicly
filed by the Company to solicit the vote of its stockholders in connection with any such meeting of the recommendation of the Board that
the stockholders of the Company vote in favor of the Investor Nominee); provided, however, that no such action with respect
to the Investor Nominee shall be required if the Board determines, after consultation with outside legal counsel, that the Investor Nominee
has been involved in any of the events enumerated in Items 2(d) or (e) of Schedule 13D under the Exchange Act or Item 401(f) of
Regulation S-K under the Exchange Act, or any comparable successor provision, or is subject to any order, decree or judgment of any governmental
authority prohibiting service as a director of any public company, in which case, the Investor shall withdraw the designation of such
Investor Nominee and shall designate another individual as the Investor Nominee, whose replacement will also be subject to the requirements
of this Section 2.1(a).

 

(b)            The
Investor shall take all necessary action to cause the Investor Nominee to consent to all reference and background checks and to provide
such information (including information necessary to determine the Investor Nominee’s independence status as well as information
necessary to determine any disclosure obligations of the Company) as the Board, or its Nominating and Corporate Governance Committee,
as applicable, may reasonably request in connection with the Company’s disclosure obligations or in connection with the Company’s
legal, regulatory or stock exchange requirements (collectively, the “Nomination Information”), which requests shall
be of the same type and scope as the Board or the Nominating and Corporate Governance Committee, as applicable, requests of all other
nominees to the Board.

 

    3 

     

    

 

(c)            The
Investor shall provide notice to the Company and the Manager identifying the Investor Nominee, together with all Nomination Information
about the proposed Investor Nominee as shall be reasonably requested by the Board, or its Nominating and Corporate Governance Committee,
as applicable, no later than the earlier of (i) fifteen Business Days following the written request of the Company or the Manager
and (ii) the time by which such information is reasonably requested by the Board (or the Nominating and Corporate Governance Committee
thereof) to be delivered (which time shall be concurrent with the request for such information from and otherwise consistent with the
request for such information from the other nominees). If the Investor fails to designate the Investor Nominee it is entitled to designate
prior to such time, then the Investor Nominee previously designated by the Investor and then serving on the Board (if any is qualified
to be nominated in accordance with this Agreement) shall be the proposed Investor Nominee.

 

(d)            Prior
to the Nomination Termination Date, the Investor shall have the exclusive right to designate a nominee to fill any vacancy created by
reason of the death, resignation or removal of the Investor Nominee, and such nominee will be promptly elected to serve until the next
annual meeting of stockholders and until his or her successor is duly elected and qualifies; provided, however, that no
such action with respect to the replacement Investor Nominee shall be required if the Board determines, after consultation with outside
legal counsel, that such replacement Investor Nominee has been involved in any of the events enumerated in Items 2(d) or (e) of
Schedule 13D under the Exchange Act or Item 401(f) of Regulation S-K under the Exchange Act, or any comparable successor provision,
or is subject to any order, decree or judgment of any governmental authority prohibiting service as a director of any public company,
in which case the Investor shall withdraw the designation of such replacement Investor Nominee and shall designate another individual
as the Investor Nominee, whose replacement will also be subject to the requirements of this Section 2.1(d).

 

(e)            The
Investor Nominee serving as a director shall be subject to the policies and requirements of the Company and the Board, including the Company’s
Corporate Governance Guidelines and the Company’s Code of Business Conduct and Ethics, in a manner consistent with the application
of such policies and requirements to other members of the Board, and shall be entitled to the same rights and privileges applicable to
all other members of the Board generally or to which all such members of the Board are entitled; provided, that the Investor Nominee
shall not be eligible to receive compensation (including equity awards) applicable to unaffiliated non-employee directors. In furtherance
of the foregoing, the Company shall indemnify, exculpate, and reimburse fees and expenses of the Investor Nominee (including by entering
into an indemnification agreement in a form substantially similar to the Company’s form director indemnification agreement) and
provide the Investor Nominee with director and officer insurance to the same extent it indemnifies, exculpates, reimburses and provides
insurance for the other members of the Board pursuant to the Charter, the Bylaws, applicable law or otherwise.

 

    4 

     

    

 

(f)            Promptly
upon the Company’s request at any time after the Nomination Termination Date or a determination by the Board after consultation
with outside legal counsel, that an Investor Nominee currently serving as a director of the Company has been involved in any of the events
enumerated in Items 2(d) or (e) of Schedule 13D under the Exchange Act or Item 401(f) of Regulation S-K under the Exchange
Act, or any comparable successor provision, or is subject to any order, decree or judgment of any governmental authority prohibiting service
as a director of any public company, the Investor shall use its best efforts to cause the then-serving Investor Nominee to promptly resign
as a director of the Company, and, if the Nomination Termination Date has not occurred, may designate another individual as the Investor
Nominee. If an Investor Nominee does not resign within fifteen (15) days of any such request, all obligations of the Company and the Manager
under this Section 2.1 shall terminate, and the Investor shall have no further rights to designate an Investor Nominee (as a replacement
therefor).

 

(g)            All
obligations of the Company and the Manager under this Section 2.1 shall terminate, and the Investor shall have no further rights
to designate an Investor Nominee (as a replacement therefor), at such time as the Investor and its Affiliates shall Beneficially Own,
in the aggregate, shares of Common Stock representing less than 10% of the shares of Common Stock then outstanding (excluding shares of
Common Stock that are subject to issuance upon the exercise or exchange of rights of conversion, or any options, warrants or other rights
to acquire shares of Common Stock) (the date of termination of the obligations of the Company and the Manager under this Section 2.1,
the “Nomination Termination Date”).

 

(h)            As
of the date of this Agreement, the Investor has designated Edward Cummings as the initial Investor Nominee, and the Company

and the Manager
have determined that the Investor Nominee satisfies the requirements of this Section 2.1.

 

ARTICLE III

 

REPRESENTATIONS AND COVENANTS

 

Section 3.1.    Organization,
Authority and Binding Effect.

 

(a)            The
Company is a corporation validly existing and in good standing under the laws of the State of Maryland. The Company has all requisite
corporate power, capacity and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against it in accordance
with its terms (except as such enforcement may be subject to any applicable bankruptcy, insolvency, reorganization, moratorium or other
laws now or hereafter in effect relating to or limiting creditors’ rights generally and except as the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which
any proceedings therefor may be brought).

 

    5 

     

    

 

(b)            The
Manager is a limited liability company validly existing and in good standing under the laws of the State of Delaware. The Manager has
all requisite limited liability company power, capacity and authority, as applicable, to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action
on the part of the Manager. This Agreement has been duly executed and delivered by the Manager and constitutes the valid and binding obligation
of the Manager, enforceable against it in accordance with its terms (except as such enforcement may be subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or limiting creditors’ rights generally
and except as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceedings therefor may be brought).

 

(c)            The
Investor is a limited partnership validly existing and in good standing under the laws of the State of Delaware. The Investor has all
requisite limited partnership power, capacity and authority, as applicable, to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all necessary limited partnership action on the part of the Investor.
This Agreement has been duly executed and delivered by the Investor, and constitutes the valid and binding obligation of the Investor,
enforceable against it in accordance with its terms (except as such enforcement may be subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to or limiting creditors’ rights generally and except
as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may be brought).

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.1.   Termination.
This Agreement shall automatically terminate and be of no further force and effect at the Nomination Termination Date.

 

Section 4.2.   Further
Assurances. Each of the parties hereto agrees that it shall use commercially reasonable efforts to take, or cause to be taken, all
actions necessary, proper or advisable to give effect to the obligations of the parties hereunder, including by executing and delivering
such additional documents as may be reasonably necessary or desirable to effectuate this Agreement.

 

Section 4.3.   Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable
document format (.pdf) or other electronic means shall be effective as delivery of a manually executed counterpart to this Agreement.

 

    6 

     

    

 

Section 4.4.     Consents,
Designations and Notices. All consents, designations, notices, requests, demands, claims and other communications which are required
or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered,
when transmitted if transmitted by facsimile (with written confirmation of transmission) or electronic mail (read-receipt requested and
received), and the Business Day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery
service (e.g., Federal Express). In each case notice shall be sent to:

 

	 	(a)	If to the Company:

 

Angel Oak Mortgage, Inc.

c/o Falcons I, LLC

3344 Peachtree Roade NE, Suite 1725

Atlanta, Georgia 30326

Attention:
Dory Black

E-mail:dory.black@angeloakcapital.com

 

with a copy (which shall not constitute notice) to:

 

Sidley
Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: J. Gerard Cummins

Facsimile: (212) 839-5599

E-mail: jcummins@sidley.com

 

	 	(b)	If to the Manager:

 

Falcons I, LLC

3344 Peachtree Road NE, Suite 1725 

Atlanta, Georgia 30326

Attention: Dory Black

E-mail: dory.black@angeloakcapital.com

 

	 	(c)	If to the Investor:

 

NHTV Atlanta Holdings LP

1585 Broadway

New York, NY 10019

Attention: Tia Lowe

E-mail: Tia.Lowe@morganstanley.com

 

Any party hereto may change the address, electronic
mail address or facsimile number to which consents, demands, notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving each other party hereto notice in the manner herein set forth.

 

    7 

     

    

 

Section 4.5.     Governing
Law; Judicial Proceedings; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of
the State of Maryland, without regard to principles of conflicts of laws thereof. In any judicial proceeding involving any dispute, controversy
or claim arising out of or relating to this Agreement, each of the parties unconditionally submits to the exclusive jurisdiction and venue
in the Circuit Court for Baltimore City, Maryland, or if jurisdiction over the matter is vested exclusively in federal courts, the United
States District Court for the District of Maryland, Northern Division, and the appellate courts to which orders and judgments thereof
may be appealed. In any such judicial proceeding, the parties agree (a) to consent to the assignment of any proceeding in the Circuit
Court for Baltimore City, Maryland to the Business and Technology Case Management Program pursuant to Maryland Rule 16-205 (or any
successor thereof); and (b) that in addition to any method for the service of process permitted or required by such courts, to the
fullest extent permitted by law, service of process may be made by delivery provided pursuant to the directions in Section 4.4. EACH
OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY
DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

Section 4.6.     Enforcement.
Each of the parties hereto acknowledges and agrees that the other parties would be damaged irreparably, and in a manner for which monetary
damages would not be an adequate remedy, in the event any of the provisions of this Agreement are not performed in accordance with its
specific terms or otherwise are breached. Accordingly, each of the parties hereto agrees that the other parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms
and provisions hereof in any action instituted as provided in Section 4.5, in addition to any other remedy to which they may be entitled,
at law or in equity and that each party hereto agrees to waive any requirements for the securing or posting of any bond or other security
in connection with such remedy.

 

Section 4.7.     Amendment
and Modification; Waiver. This Agreement may not be amended, modified or supplemented, except by an instrument in writing signed on
behalf of each of the parties hereto and any party subsequently made a party hereto. Any agreement on the part of a party hereto to any
waiver of any obligation of the other parties shall be valid only if set forth in an instrument in writing signed on behalf of such waiving
party. The failure of any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights, nor shall any single or partial exercise by any party hereto of any of its rights under this Agreement preclude any other
or further exercise of such rights or any other rights under this Agreement.

 

Section 4.8.     Assignment.
None of the rights, privileges, or obligations set forth in, arising under, or created by this Agreement may be assigned or transferred
without the prior consent in writing of each of the Company, the Manager and the Investor.

 

    8 

     

    

 

Section 4.9.       Severability.
If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be
held to be invalid or unenforceable to any extent, (a) the remainder of this Agreement shall not be affected thereby, and each other
provision hereof shall be valid and enforceable to the fullest extent permitted by law, (b) as to such Person or circumstance or
in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law and (c) the
application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.

 

Section 4.10.     Headings
and Captions. The headings, subheadings and captions contained in this Agreement are included for convenience of reference only, and
in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.

 

Section 4.11.     Entire
Agreement; Third Party Beneficiaries. This Agreement (a) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties hereto and their Affiliates with respect to the subject matter hereof and
thereof and (b) is not intended to confer any rights, benefits, remedies, obligations or liabilities upon any Person other than the
parties hereto and thereto, as the case may be, and their respective successors and permitted assigns.

 

Section 4.12.     Certain
Transactions. In the event of any stock split, reverse stock split, stock dividend or distribution, subdivision, or any change in
the Common Stock by reason of any recapitalization, combination, reclassification, exchange of shares or similar transaction, the term
 “Common Stock” used herein shall be deemed to refer to and include all such dividends and distributions and any other securities
into which or for which any or all of such securities may be changed or exchanged or which are received in such transaction.

 

[Signature Page Follows]

 

    9 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	 	COMPANY:
	 	 
	 	Angel Oak Mortgage, Inc.
	 	 
	 	 
	 	By:	/s/ Brandon Filson
	 	Name: Brandon Filson
	 	Title: Chief Financial Officer
  and Treasurer
	 	 
	 	 
	 	MANAGER:
	 	 
	 	Falcons I, LLC
	 	 
	 	 
	 	By:	/s/ Dory Black
	 	Name: Dory Black
	 	Title: Secretary
	 	 
	 	 
	 	INVESTOR:
	 	 
	 	NHTV Atlanta Holdings
  LP
	 	 
	 	 
	 	By:	/s/ Teddy Cummings
	 	Name: Teddy Cummings
	 	Title: Vice President

 

- Signature Page to NHTV Shareholder Rights
Agreement – Angel Oak Mortgage, Inc.Exhibit 10.5

 

SHAREHOLDER RIGHTS
AGREEMENT

 

Dated as of June 21,
2021

 

THIS SHAREHOLDER RIGHTS
AGREEMENT (as amended, modified or supplemented in accordance with the terms hereof, this “Agreement”) is
entered into as of June 21, 2021 by and among Angel Oak Mortgage, Inc., a Maryland corporation (the “Company”),
Falcons I, LLC, a Delaware limited liability company (the “Manager”), and Xylem Finance LLC, a Delaware limited liability
company (the “Investor”).

 

RECITALS

 

WHEREAS, in connection
with the IPO (as defined herein), the Company intends to consummate the transactions described in the IPO Registration Statement (as defined
herein);

 

WHEREAS, pursuant to the
limited partnership agreement, as amended, of Angel Oak Mortgage Fund, LP (the “Fund”), the Investor, as a limited
partner in the Fund, shall be receiving a distribution of shares of the Company’s common stock, $0.01 par value per share (the “Common
Stock”), from the Fund prior to or concurrently with the completion of the IPO; and

 

WHEREAS, pursuant to a
letter agreement, dated as of January 17, 2021, between the Manager and the Investor, the Manager agreed to enter into, and for the
Company to enter into, this Agreement to set forth certain understandings and agreements with respect to certain corporate governance
matters relating to the Company.

 

AGREEMENT

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1.            Certain
Defined Terms. As used herein, the following terms shall have the meanings as set forth below:

 

“Affiliate”
of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the
purposes of this definition, “control”, when used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative
to the foregoing; provided, however, that notwithstanding the foregoing, neither the Company nor the Manager nor
any of their respective controlled subsidiaries shall be deemed an Affiliate of the Investor.

 

    	 	 	 

     

    

 

“Agreement”
has the meaning set forth in the Preamble.

 

“Beneficial Owner”
of a security is a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise (other
than solely through a revocable proxy) has or shares: (i) voting power, which includes the power to vote, or to direct the voting
of, such security and/or (ii) investment power, which includes the power to dispose of, or to direct the disposition of, such security.
The terms “Beneficially Own,” “Beneficially Owns” and “Beneficial Ownership”
shall have correlative meanings.

 

“Board”
means the Board of Directors of the Company.

 

“Business Day”
means any day except a Saturday, Sunday or other day on which commercial banks in the city of New York, New York are obligated by law
to close.

 

“Bylaws”
means the Bylaws of the Company, as the same may be amended, modified or restated from time to time.

 

“Charter”
means the charter of the Company.

 

“Common Stock”
has the meaning set forth in the Recitals.

 

“Company”
has the meaning set forth in the Preamble.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, as the same may be amended
from time to time.

 

“Fund”
has the meaning set forth in the Recitals.

 

“Investor”
has the meaning set forth in the Preamble.

 

“Investor Nominee”
has the meaning set forth in Section 2.1(a).

 

“IPO”
means the initial public offering of Common Stock of the Company, as described in the IPO Registration Statement.

 

“IPO Registration
Statement” means the Registration Statement on Form S-11 (Registration No. 333-256301), as amended, of the Company.

 

“Nomination Information”
has the meaning set forth in Section 2.1(b).

 

“Nomination Termination
Date” has the meaning set forth in Section 2.1(g).

 

“Person”
means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality thereof.

 

    	 	2	 

     

    

 

Section 1.2.            Construction.
Unless the context requires otherwise, the gender of all words used in this Agreement includes the masculine, feminine and neuter forms
and the singular form of words shall include the plural and vice versa. Unless otherwise noted, all references to Articles and Sections
refer to articles and sections of this Agreement. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation” (except to the extent the
context otherwise provides). This Agreement shall be construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be drafted.

 

ARTICLE II

 

CORPORATE GOVERNANCE

 

Section 2.1.            Board
Nomination Rights.

 

(a)            Each
of the Company and the Manager agrees, to the fullest extent permitted by applicable law (including with respect to any standard of conduct
required of directors under Maryland law), until the Nomination Termination Date, (i) to include in the slate of nominees recommended
by the Board, or its Nominating and Corporate Governance Committee, as applicable, for election at any annual or special meeting of stockholders
of the Company at which directors are to be elected (or consent in lieu of such a meeting) one (1) individual designated by the Investor
for election pursuant to this Section 2.1 (the “Investor Nominee”), and (ii) to nominate, recommend and use
its commercially reasonable efforts to solicit the vote of stockholders of the Company to elect the Investor Nominee (which efforts shall,
to the fullest extent permitted by applicable law, include the inclusion in any proxy statement prepared, used, delivered or publicly
filed by the Company to solicit the vote of its stockholders in connection with any such meeting of the recommendation of the Board that
the stockholders of the Company vote in favor of the Investor Nominee); provided, however, that no such action with respect
to the Investor Nominee shall be required if the Board determines, after consultation with outside legal counsel, that the Investor Nominee
has been involved in any of the events enumerated in Items 2(d) or (e) of Schedule 13D under the Exchange Act or Item 401(f) of
Regulation S-K under the Exchange Act, or any comparable successor provision, or is subject to any order, decree or judgment of any governmental
authority prohibiting service as a director of any public company, , in which case, the Investor shall withdraw the designation of such
Investor Nominee and shall designate another individual as the Investor Nominee, whose replacement will also be subject to the requirements
of this Section 2.1(a).

 

(b)            The
Investor shall take all necessary action to cause the Investor Nominee to consent to all reference and background checks and to provide
such information (including information necessary to determine the Investor Nominee’s independence status as well as information
necessary to determine any disclosure obligations of the Company) as the Board, or its Nominating and Corporate Governance Committee,
as applicable, may reasonably request in connection with the Company’s disclosure obligations or in connection with the Company’s
legal, regulatory or stock exchange requirements (collectively, the “Nomination Information”), which requests shall
be of the same type and scope as the Board or the Nominating and Corporate Governance Committee, as applicable, requests of all other
nominees to the Board.

 

    	 	3	 

     

    

 

(c)            The
Investor shall provide notice to the Company and the Manager identifying the Investor Nominee, together with all Nomination Information
about the proposed Investor Nominee as shall be reasonably requested by the Board, or its Nominating and Corporate Governance Committee,
as applicable, no later than  fifteen Business Days following the written request of the Company or the Manager . If the Investor
fails to designate the Investor Nominee it is entitled to designate prior to such time, then the Investor Nominee previously designated
by the Investor and then serving on the Board (if any is qualified to be nominated in accordance with this Agreement) shall be the proposed
Investor Nominee.

 

(d)            Prior
to the Nomination Termination Date, the Investor shall have the exclusive right to designate a nominee to fill any vacancy created by
reason of the death, resignation or removal of the Investor Nominee, and such nominee will be promptly elected to serve until the next
annual meeting of stockholders and until his or her successor is duly elected and qualifies; provided, however, that no
such action with respect to the replacement Investor Nominee shall be required if the Board determines, after consultation with outside
legal counsel, that such replacement Investor Nominee has been involved in any of the events enumerated in Items 2(d) or (e) of
Schedule 13D under the Exchange Act or Item 401(f) of Regulation S-K under the Exchange Act, or any comparable successor provision,
or is subject to any order, decree or judgment of any governmental authority prohibiting service as a director of any public company,
in which case the Investor shall withdraw the designation of such replacement Investor Nominee and shall designate another individual
as the Investor Nominee, whose replacement will also be subject to the requirements of this Section 2.1(d).

 

(e)            The
Investor Nominee serving as a director shall be entitled to the same rights and privileges applicable to all other members of the Board
generally or to which all such members of the Board are entitled; provided, that the Investor Nominee shall not be eligible to
receive compensation (including equity awards) applicable to unaffiliated non-employee directors. In furtherance of the foregoing, the
Company shall indemnify, exculpate, and reimburse fees and expenses of the Investor Nominee (including by entering into an indemnification
agreement in a form substantially similar to the Company’s form director indemnification agreement) and provide the Investor Nominee
with director and officer insurance to the same extent it indemnifies, exculpates, reimburses and provides insurance for the other members
of the Board pursuant to the Charter, the Bylaws, applicable law or otherwise. The Investor Nominee shall not be subject to the corporate
opportunity doctrine and shall be under no obligation to present business opportunities to the Company; provided, that the foregoing shall
not apply where the Investor Nominee becomes aware of such business opportunity as a direct result of his or her capacity as a director
of the Company and (a) which the Company is financially able to undertake, (b) which the Company is not prohibited by contract
or applicable law from pursuing or undertaking, (c) which, from its nature, is in the line of the Company’s business, (d) which
is of practical advantage to the Company and (e) in which the Company has an interest or reasonable expectancy.

 

    	 	4	 

     

    

 

(f)            Promptly
upon the Company’s request at any time after the Nomination Termination Date or a determination by the Board after consultation
with outside legal counsel, that an Investor Nominee currently serving as a director of the Company has been involved in any of the events
enumerated in Items 2(d) or (e) of Schedule 13D under the Exchange Act or Item 401(f) of Regulation S-K under the Exchange
Act, or any comparable successor provision, or is subject to any order, decree or judgment of any governmental authority prohibiting service
as a director of any public company, the Investor shall use its best efforts to cause the then-serving Investor Nominee to promptly resign
as a director of the Company, and, if the Nomination Termination Date has not occurred, may designate another individual as the Investor
Nominee. If an Investor Nominee does not resign within thirty (30) days of any such request, all obligations of the Company and the Manager
under this Section 2.1 shall terminate, and the Investor shall have no further rights to designate an Investor Nominee (as a replacement
therefor).

 

(g)            All
obligations of the Company and the Manager under this Section 2.1 shall terminate, and the Investor shall have no further rights
to designate an Investor Nominee (as a replacement therefor), at such time as the Investor and its Affiliates are not either (i) Beneficial
Owners, in the aggregate, of shares of Common Stock representing 10% or more of the shares of Common Stock then outstanding (excluding
shares of Common Stock that are subject to issuance upon the exercise or exchange of rights of conversion, or any options, warrants or
other rights to acquire shares of Common Stock) or (ii) both (a) Beneficial Owners, in the aggregate, of shares of Common Stock
in an amount that makes them one of the three (3) largest Beneficial Owners of shares of Common Stock at such time (excluding shares
of Common Stock that are subject to issuance upon the exercise or exchange of rights of conversion, or any options, warrants or other
rights to acquire shares of Common Stock) and (b) Beneficial Owners, in the aggregate, of shares of Common Stock representing 7%
or more of the shares of Common Stock then outstanding (excluding shares of Common Stock that are subject to issuance upon the exercise
or exchange of rights of conversion, or any options, warrants or other rights to acquire shares of Common Stock) (the date of termination
of the obligations of the Company and the Manager under this Section 2.1, the “Nomination Termination Date”).

 

(h)            As
of the date of this Agreement, the Investor has designated Vikram Shankar as the initial Investor Nominee, and the Company and the Manager
have determined that the Investor Nominee satisfies the requirements of this Section 2.1.

 

ARTICLE III

 

REPRESENTATIONS AND COVENANTS

 

Section 3.1.            Organization,
Authority and Binding Effect.

 

(a)            The
Company is a corporation validly existing and in good standing under the laws of the State of Maryland. The Company has all requisite
corporate power, capacity and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes the valid and binding obligation of the Company, enforceable against it in accordance
with its terms (except as such enforcement may be subject to any applicable bankruptcy, insolvency, reorganization, moratorium or other
laws now or hereafter in effect relating to or limiting creditors’ rights generally and except as the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which
any proceedings therefor may be brought).

 

    	 	5	 

     

    

 

(b)            The
Manager is a limited liability company validly existing and in good standing under the laws of the State of Delaware. The Manager has
all requisite limited liability company power, capacity and authority, as applicable, to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action
on the part of the Manager. This Agreement has been duly executed and delivered by the Manager and constitutes the valid and binding obligation
of the Manager, enforceable against it in accordance with its terms (except as such enforcement may be subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or limiting creditors’ rights generally
and except as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceedings therefor may be brought).

 

(c)            The
Investor is a limited liability company validly existing and in good standing under the laws of the State of Delaware. The Investor has
all requisite limited liability company power, capacity and authority, as applicable, to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action
on the part of the Investor. This Agreement has been duly executed and delivered by the Investor, and constitutes the valid and binding
obligation of the Investor, enforceable against it in accordance with its terms (except as such enforcement may be subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other laws now or hereafter in effect relating to or limiting creditors’ rights
generally and except as the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceedings therefor may be brought).

 

ARTICLE IV

 

MISCELLANEOUS

 

Section 4.1.            Termination.
This Agreement shall automatically terminate and be of no further force and effect at the Nomination Termination Date.

 

    	 	6	 

     

    

 

Section 4.2.            Further
Assurances. Each of the parties hereto agrees that it shall use commercially reasonable efforts to take, or cause to be taken, all
actions necessary, proper or advisable to give effect to the obligations of the parties hereunder, including by executing and delivering
such additional documents as may be reasonably necessary or desirable to effectuate this Agreement.

 

Section 4.3.            Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable
document format (.pdf) or other electronic means shall be effective as delivery of a manually executed counterpart to this Agreement.

 

Section 4.4.            Consents,
Designations and Notices. All consents, designations, notices, requests, demands, claims and other communications which are required
or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered,
when transmitted if transmitted by facsimile (with written confirmation of transmission) or electronic mail (read-receipt requested and
received), and the Business Day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery
service (e.g., Federal Express). In each case notice shall be sent to:

 

	 	(a)	If to the Company:

 

Angel Oak Mortgage, Inc.

c/o Falcons I, LLC

3344 Peachtree Roade NE, Suite 1725

Atlanta, Georgia 30326

Attention: Dory Black

E-mail: dory.black@angeloakcapital.com

 

with a copy (which shall not constitute notice) to:

 

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Attention: J. Gerard Cummins

Facsimile: (212) 839-5599

E-mail: jcummins@sidley.com

 

	 	(b)	If to the Manager:

 

Falcons I, LLC

3344 Peachtree Road NE, Suite 1725

Atlanta, Georgia 30326

Attention: Dory Black

E-mail: dory.black@angeloakcapital.com

 

    	 	7	 

     

    

 

	 	(c)	If to the Investor:

 

Xylem Finance LLC

c/o Davidson Kempner Capital Management LP

520 Madison Avenue, 30th Floor

New York, NY 10022

Attention: Andrew Tan

E-mail: atan@dkp.com

 

Any party hereto may change the address, electronic
mail address or facsimile number to which consents, demands, notices, requests, demands, claims, and other communications hereunder are
to be delivered by giving each other party hereto notice in the manner herein set forth.

 

Section 4.5.            Governing
Law; Judicial Proceedings; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of
the State of Maryland, without regard to principles of conflicts of laws thereof. In any judicial proceeding involving any dispute, controversy
or claim arising out of or relating to this Agreement, each of the parties unconditionally submits to the exclusive jurisdiction and venue
in the Circuit Court for Baltimore City, Maryland, or if jurisdiction over the matter is vested exclusively in federal courts, the United
States District Court for the District of Maryland, Northern Division, and the appellate courts to which orders and judgments thereof
may be appealed. In any such judicial proceeding, the parties agree (a) to consent to the assignment of any proceeding in the Circuit
Court for Baltimore City, Maryland to the Business and Technology Case Management Program pursuant to Maryland Rule 16-205 (or any
successor thereof); and (b) that in addition to any method for the service of process permitted or required by such courts, to the
fullest extent permitted by law, service of process may be made by delivery provided pursuant to the directions in Section 4.4. EACH
OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY
DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

Section 4.6.            Enforcement.
Each of the parties hereto acknowledges and agrees that the other parties would be damaged irreparably, and in a manner for which monetary
damages would not be an adequate remedy, in the event any of the provisions of this Agreement are not performed in accordance with its
specific terms or otherwise are breached. Accordingly, each of the parties hereto agrees that the other parties shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms
and provisions hereof in any action instituted as provided in Section 4.5, in addition to any other remedy to which they may be entitled,
at law or in equity and that each party hereto agrees to waive any requirements for the securing or posting of any bond or other security
in connection with such remedy.

 

Section 4.7.            Amendment
and Modification; Waiver. This Agreement may not be amended, modified or supplemented, except by an instrument in writing signed on
behalf of each of the parties hereto and any party subsequently made a party hereto. Any agreement on the part of a party hereto to any
waiver of any obligation of the other parties shall be valid only if set forth in an instrument in writing signed on behalf of such waiving
party. The failure of any party hereto to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of
such rights, nor shall any single or partial exercise by any party hereto of any of its rights under this Agreement preclude any other
or further exercise of such rights or any other rights under this Agreement.

 

    	 	8	 

     

    

 

Section 4.8.            Assignment.
None of the rights, privileges, or obligations set forth in, arising under, or created by this Agreement may be assigned or transferred
without the prior consent in writing of each of the Company, the Manager and the Investor.

 

Section 4.9.            Severability.
If any provision of this Agreement, or the application of such provision to any Person or circumstance or in any jurisdiction, shall be
held to be invalid or unenforceable to any extent, (a) the remainder of this Agreement shall not be affected thereby, and each other
provision hereof shall be valid and enforceable to the fullest extent permitted by law, (b) as to such Person or circumstance or
in such jurisdiction such provision shall be reformed to be valid and enforceable to the fullest extent permitted by law and (c) the
application of such provision to other Persons or circumstances or in other jurisdictions shall not be affected thereby.

 

Section 4.10.            Headings
and Captions. The headings, subheadings and captions contained in this Agreement are included for convenience of reference only, and
in no way define, limit or describe the scope of this Agreement or the intent of any provision hereof.

 

Section 4.11.           Entire
Agreement; Third Party Beneficiaries. This Agreement (a) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties hereto and their Affiliates with respect to the subject matter hereof and
thereof and (b) is not intended to confer any rights, benefits, remedies, obligations or liabilities upon any Person other than the
parties hereto and thereto, as the case may be, and their respective successors and permitted assigns.

 

Section 4.12.           Certain
Transactions. In the event of any stock split, reverse stock split, stock dividend or distribution, subdivision, or any change in
the Common Stock by reason of any recapitalization, combination, reclassification, exchange of shares or similar transaction, the term
 “Common Stock” used herein shall be deemed to refer to and include all such dividends and distributions and any other securities
into which or for which any or all of such securities may be changed or exchanged or which are received in such transaction.

 

[Signature Page Follows]

 

    	 	9	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

 

	 	COMPANY:
	 	 	 	 
	 	Angel Oak Mortgage, Inc.
	 	 	 	 
	 	By:	/s/ Brandon Filson
	 	 	Name: 	Brandon Filson
	 	 	Title: 	Chief Financial Officer and Treasurer
	 	 	 	 
	 	MANAGER:
	 	 	 	 
	 	Falcons I, LLC
	 	 	 	 
	 	By: 	/s/ Dory Black
	 	 	Name: 	Dory Black
	 	 	Title: 	Secretary
	 	 	 	 
	 	INVESTOR:
	 	 	 	 
	 	Xylem Finance
    LLC
	 	By: Davidson Kempner Capital Management
    LP, its
	 	Investment Manager
	 	 	 	 
	 	By: 	/s/ Patrick W. Dennis
	 	 	Name: 	Patrick W. Dennis
	 	 	Title: 	Co-Deputy Executive Managing Member

 

- Signature Page to Xylem Shareholder Rights
Agreement – Angel Oak Mortgage, Inc.

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