Form 485BPOS Angel Oak Funds Trust
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E-mailANGEL OAK FUNDS TRUST OPERATING EXPENSE LIMITATION AGREEMENT
THIS OPERATING EXPENSE LIMITATION AGREEMENT, dated as of March 23,
2021, is made and entered into by and between the Angel Oak Funds Trust, a Delaware statutory trust (the “Trust”), on behalf of each series of the Trust set forth on Schedule A attached hereto, which may be amended from time to time (the “Funds”), and Angel Oak Capital Advisors, LLC (the “Adviser”).
WHEREAS, the Adviser has been appointed the investment adviser of each of the Funds pursuant to an Investment Advisory Agreement between the Trust, on behalf of the Funds, and the Adviser (the “Advisory Agreement”); and
WHEREAS, the Funds, and each of their respective classes, are responsible for, and have assumed the obligation for, payment of certain expenses pursuant to the Advisory Agreement that have not been assumed by the Adviser; and
WHEREAS, the Adviser desires to limit each Fund’s Operating Expenses (as that term is defined in Paragraph 2 of this Agreement) pursuant to the terms and provisions of this Agreement, and the Trust (on behalf of the Funds) desires to allow the Adviser to implement those limits;
NOW THEREFORE, in consideration of the covenants and the mutual promises hereinafter set forth, the parties, intending to be legally bound hereby, mutually agree as follows:
1.LIMIT ON OPERATING EXPENSES. The Adviser hereby agrees, subject to Section 2 hereof, to reduce the fees payable to it under the Advisory Agreement between the Trust and the Adviser, and/or reimburse other expenses of the Funds, until the applicable date listed on Schedule A attached hereto, to the extent necessary to limit the current operating expenses of each class of shares of each Fund (exclusive of any front-end sales loads, taxes, interest on borrowings, dividends on securities sold short, brokerage commissions, 12b-1 fees, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization and extraordinary expenses (collectively, the “Excluded Expenses”) and inclusive of organizational expenses), to the amount of the “Maximum Operating Expense Limit” applicable to each Fund on the attached Schedule A. In the event that the current operating expenses of a Fund, as accrued each month, exceed its Maximum Operating Expense Limit, the Adviser will reduce the fees payable to it and/or pay to that Fund, on a monthly basis, the excess expense within 15 calendar days, or such other period as determined by the Board of Trustees of the Trust, of being notified that an excess payment is due. In the event that the Board of Trustees of the Trust determines that an excess expense payment due date be other than 15 calendar days, the Trust will provide the Adviser with ten (10) calendar days’ written notice prior to the implementation of such other excess expense payment due date.
2.DEFINITION. For purposes of this Agreement, the term “Operating Expenses” with respect to each class of the Funds, is defined to include all expenses necessary or appropriate for the operation of the Funds and each of its classes, including the Adviser’s investment advisory or management fee detailed in the Advisory Agreement between the Trust and the Adviser, any
Rule 12b-1 fees and other expenses described in the Advisory Agreement, but it does not include any Excluded Expenses.
3.REIMBURSEMENT OF FEES AND EXPENSES. Each Fund agrees to pay to the Adviser the amount of fees (including any amounts foregone through limitation or reimbursed pursuant to Section 1 hereof) that, but for Section 1 hereof, would have been payable by the Fund to the Adviser pursuant to the Advisory Agreement or which have been reimbursed in accordance with Section 1 (the “Deferred Fees”), subject to the limitations provided in this Section. Such repayment shall be made monthly, but only if the operating expenses of the Fund (exclusive of any Excluded Expenses), without regard to such repayment, are at an annual rate (as a percentage of the average daily net assets of the Fund) equal to or less than the “Maximum Operating Expense Limit” for each respective class of shares of the Fund, as set forth on Schedule A. Furthermore, the amount of Deferred Fees paid by a Fund in any month shall be limited so that the sum of: (a) the amount of such payment and (b) the other operating expenses of the Fund (exclusive of any Excluded Expenses) do not exceed the above-referenced “Maximum Operating Expense Limit” for each respective class of shares of a Fund.
Deferred Fees with respect to any month of a Fund shall not be payable by the Fund to the extent that the amounts payable by the Fund pursuant to the preceding paragraph during the period ending three years after the end of such month in which the Adviser incurred the expense are not sufficient to pay such Deferred Fees. In no event will a Fund be obligated to pay any fees waived or deferred by the Adviser with respect to any other series of the Trust.
4.TERM. This Agreement shall become effective on the date specified herein and shall remain in effect indefinitely and for a period ending no sooner than the applicable date listed on Schedule A attached hereto, unless sooner terminated as provided in Section 5 of this Agreement.
5.TERMINATION. This Agreement may be terminated at any time, and without payment of any penalty, by the Board of Trustees of the Trust, on behalf of the Funds, upon sixty
(60) days’ written notice to the Adviser. This Agreement may not be terminated by the Adviser without the consent of the Board of Trustees of the Trust, which consent will not be unreasonably withheld. This Agreement will automatically terminate if the Advisory Agreement is terminated, with such termination effective upon the effective date of the Advisory Agreement’s termination.
6.ASSIGNMENT. This Agreement and all rights and obligations hereunder may not be assigned without the written consent of the other party.
7.SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby.
8.GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the conflict of laws principles thereof; provided that nothing herein shall be construed to preempt, or to be inconsistent with, any federal law, regulation or rule, including the Investment Company Act of 1940, and the Investment Advisers Act of 1940, and any rules and regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
ANGEL OAK FUNDS TRUST ANGEL OAK CAPITAL ADVISORS, LLC
By: /s/ Dory S. Black By: /s/ Sreeniwas V. Prabhu Name: Dory S. Black Name: Sreeniwas V. Prabhu
Title: President Title: Managing Partner
SCHEDULE A OPERATING EXPENSE LIMITS
September 22, 2021
Fund Name | Maximum Operating Expense Limit* | Termination Date | ||||||
Angel Oak Flexible Income Fund | 0.85% | May 31, 2023 | ||||||
| Angel Oak Multi-Strategy Income Fund | 0.99% | May 31, 2023 | ||||||
| Angel Oak High Yield Opportunities Fund | 0.65% | May 31, 2023 | ||||||
| Angel Oak UltraShort Income Fund | 0.35%** | May 31, 2023 | ||||||
| Angel Oak Core Impact Fund | 0.59% | May 31, 2023 | ||||||
* Expressed as a percentage of a Fund’s average daily net assets.
** Effective November 1, 2020. Prior to November 1, 2020, the Maximum Operating Expense Limit for the Angel Oak UltraShort Income Fund was 0.49%.
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May 26, 2022
Angel Oak Funds Trust
3344 Peachtree Rd. NE
Suite 1725
Atlanta, Georgia 30326
Dear Ladies and Gentlemen:
We have acted as counsel for Angel Oak Funds Trust (the “Registrant”) and its investment series, Angel Oak Core Impact Fund, Angel Oak Multi-Strategy Income Fund, Angel Oak Financials Income Fund, Angel Oak High Yield Opportunities Fund and Angel Oak UltraShort Income Fund (the “Funds”), and are familiar with the Registrant’s registration statement with respect to the Funds under the Investment Company Act of 1940, as amended, and with the registration statement relating to its shares under the Securities Act of 1933, as amended (collectively, the “Registration Statement”). The Registrant is organized as a statutory trust under the laws of the State of Delaware.
We have examined such governmental and corporate certificates and records as we deemed necessary to render this opinion, and we are familiar with the Trust’s Declaration of Trust and its By-Laws.
Based upon the foregoing, we are of the opinion that each Fund’s shares proposed to be sold pursuant to the Registration Statement, when they are made effective by the Securities and Exchange Commission, will have been validly authorized and, when sold in accordance with the terms of such Registration Statement and the requirements of applicable federal and state law and delivered by the Registrant against receipt of the net asset value of the shares of the respective Fund, as described in the Registration Statement, will have been legally and validly issued and will be fully paid and non-assessable by the Registrant.
We hereby consent to the filing of this opinion as an exhibit to Post-Effective Amendment No. 38 to the Registration Statement, to be filed with the Securities and Exchange Commission in connection with the continuous offering of the Registrant’s shares of beneficial interest, as indicated above, and to the reference to our firm, as counsel to the Registrant, in the Statement of Additional Information forming a part of the Registration Statement and in any amended versions thereof, until such time as we revoke such consent. In giving such consent, we do not admit that we are within the
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category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, and the rules and regulations thereunder.
| Very truly yours, | ||
/s/ Dechert LLP | ||
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated March 31, 2022, relating to the financial statements and financial highlights of Angel Oak Funds Trust, for the year or period ended January 31, 2022, and to the references to our firm under the headings “Financial Highlights” in the Prospectus and “Independent Registered Public Accounting Firm” in the Statement of Additional Information.
/s/ COHEN & COMPANY, LTD.
COHEN & COMPANY, LTD.
Cleveland, Ohio
May 26, 2022
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned Trustee of each of Angel Oak Funds Trust, Angel Oak Strategic Credit Fund, Angel Oak Dynamic Financial Strategies Income Term Trust and Angel Oak Credit Opportunities Term Trust (each a “Trust”) hereby appoints Dory S. Black, Daniel Fazioli, John Hsu, Douglas P. Dick, Stephen T. Cohen, and Matthew E. Barsamian each individually with power of substitution or resubstitution, her true and lawful attorneys-in-fact and agents (each, an “Attorney-in-Fact”) with the power and authority to do any and all acts and things and to execute any and all instruments which said Attorney-in-Fact may deem necessary or advisable in furtherance of the business and affairs of each Trust, as fully to all intents and purposes as she might or could do in person, and relating to (i) compliance by each Trust with the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Acts”), and any rules, regulations or requirements of the U.S. Securities and Exchange Commission (the “SEC”) in respect thereof, (ii) filing by each Trust of any and all Registration Statements on Forms N-1A and N-2, as applicable, pursuant to the relevant Acts and any amendments thereto, including applications for exemptive orders, rulings or filings of proxy materials (together “SEC filings”), and (iii) signing in the name and on behalf of the undersigned as a Trustee of each Trust any and all such SEC filings, and the undersigned does hereby ratify and confirm all that said Attorneys-in-Fact shall do or cause to be done by virtue thereof.
The undersigned Trustee hereby executes this Power of Attorney as of the 26th day of May, 2022.
| /s/ Cheryl M. Pate | |||||
| Cheryl M. Pate | |||||
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