WAIVER AND AMENDMENT
Exhibit 10.5
THIS WAIVER (the “Waiver”) is entered into as of January _, 2007 by and among OPTION
ONE OWNER TRUST 2001-2 (the “Issuer”), OPTION ONE MORTGAGE CORPORATION (“OOMC”) and OPTION
ONE MORTGAGE CAPITAL CORPORATION (“OOMCC,” and together with OOMC, the “Loan Originator”)
and OOMC as servicer (in such capacity, the “Servicer”), OPTION ONE LOAN WAREHOUSE
CORPORATION (the “Depositor,” and together with the Loan Originator and Depositor, the “OO
Entities”), XXXXX FARGO BANK, NATIONAL ASSOCIATION, as indenture trustee (the “Indenture
Trustee”) and the MAJORITY NOTEHOLDERS party hereto. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Sale and Servicing
Agreement referred to below.
PRELIMINARY STATEMENTS
A. The Issuer, OOMC, OOMCC, the Depositor and the Indenture Trustee are
parties to that certain Second Amended and Restated Sale and Servicing Agreement dated as
of March 8, 2005 (as amended, restated, supplemented or otherwise modified from time to
time, the “Sale and Servicing Agreement”) and the Basic Documents as defined therein.
B. Pursuant to the Sale and Servicing Agreement, the definition of “Financial
Covenants” includes an obligation on the part of OOMC to maintain a minimum “Net Income”
(defined and determined in accordance with GAAP) of at least $1 based on the total of the
current quarter combined with the previous three quarters (the “Minimum Income
Covenant”).Pursuant to the Basic Documents, OOMC periodically represents and warrants its compliance
with the Minimum Income Covenant. In addition, under the Basic Documents, a failure by
OOMC to satisfy the Minimum Income Covenant, if not waived, could be or become a Default,
Event of Default or Servicing Event of Default, as those terms are used in the Basic
Documents,or could result in a termination of the Revolving Period.
C. OOMC now believes that the Minimum Income Covenant will not be
satisfied as of the quarter ending January 31, 2007. The Issuer has requested that the
Majority Noteholders temporarily waive the Minimum Income Covenant and, subject to the terms
hereof, the Majority Noteholders have agreed to temporarily waive the Minimum Income Covenant on
and subject to the terms and conditions hereinafter set forth.
D. The parties also wish to waive the document delivery requirements for
Wet Funded Loans, as more specifically provided herein
NOW, THEREFORE, in consideration of the premises set forth above, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Accuracy of Preliminary Statements. The OO Entities agree and represent
that the foregoing Preliminary Statements are true and correct in all respects.
2. Temporary Waiver with Respect to the Minimum Income Covenant.
Effective as of the date first above written and subject to the satisfaction of the
condition
precedent set forth in Section 4 below, the Majority Noteholders hereby agree to waive, until
April 27, 2007 only, the Minimum Income Covenant.
3. Amendment with Respect to the Document Delivery Requirement for Wet
Funded Loans. Until the termination of the Sale and Servicing Agreement, the term
“Wet Funded Custodial File Delivery Date” shall be deemed to be defined as follows: “With respect
to a Wet Funded Loan, the fifteenth Business Day after the related Transfer Date, or if earlier,
the twentieth calendar day after the related Transfer Date, provided that if a Default or Event of
Default shall have occurred, the Wet Funded Custodial File Delivery Date shall be the earlier
of (x) such fifteenth Business Day or twentieth calendar day, whichever is earlier and (y) the
second Business Day after the occurrence of such event.” In addition, for such period, the phrase
“within fifteen (15) calendar days” in the definition of “Collateral Value” in the Sale and
Servicing Agreement, in clause (7) of the proviso in the first sentence of such definition,
shall be replaced with “within fifteen (15) Business Days (or, if earlier, twenty (20) calendar days)”.
4. Condition Precedent. This Waiver shall become effective and be deemed
effective as of the date first above written upon (i) receipt by OOMC of an executed
counterpart of this Waiver from each of the Issuer, the Depositor, the Majority Noteholders and the
Indenture Trustee and (ii) receipt by the Majority Noteholders of confirmation from OOMC that each Note
Purchaser, Purchaser, Initial Noteholder Agent or Note Agent, as applicable, in connection
with each of the Trusts listed on Schedule I hereto, has executed a waiver in substantially similar
form as this Waiver, regarding the failure by OOMC to satisfy the Minimum Income Covenant as of
the quarter ending January 31, 2007.
5. Condition to Continuing Effectiveness. This Waiver shall continue to be
effective for the period stated in Section 2 above, but only so long as no other Event of
Default (other than with respect to the Minimum Income Covenant) has occurred. Upon the occurrence
of any Event of Default other than with respect to the Minimum Income Covenant, this Waiver
shall immediately cease to be effective.
6. Covenants, Representations and Warranties of the Issuer, OOMC,
OOMCC and the Depositor.
(a) Upon the effectiveness of this Waiver, each of the Issuer, OOMC (in its
capacities as Servicer and Loan Originator), OOMCC and the Depositor hereby reaffirms all
covenants, representations and warranties made by the Issuer, OOMC, OOMCC and the
Depositor, as applicable, in the Sale and Servicing Agreement, to the extent the same are not
modified hereby and agrees that all such covenants, representations and warranties shall be
deemed to have been re-made as of the effective date of this Waiver.
(b) Each of the Issuer, OOMC, OOMCC and the Depositor hereby represents
and warrants that this Waiver constitutes the legal, valid and binding obligation of the
Issuer, OOMC, OOMCC and the Depositor, as applicable, enforceable against the Issuer, OOMC,
OOMCC and the Depositor, as applicable, in accordance with its terms. The execution, delivery
and performance by the Issuer, OOMC, OOMCC and the Depositor of this Waiver: (i) are
within the Issuer’s, OOMC’s, OOMCC’s and the Depositor’s power; (ii) have been duly
authorized by all necessary or proper corporate action; (iii) are not in contravention of any
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provision of the Issuer’s, OOMC’s, OOMCC’s or the Depositor’s certificate of incorporation, bylaws
or other organizational documents; (iv) will not violate any law applicable to the Issuer, OOMC,
OOMCC or the Depositor, as applicable; (v) will not conflict with or result in the breach or
termination of, constitute a default under or accelerate any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Issuer, OOMC,
OOMCC or the Depositor is a party or by which the Issuer, OOMC, OOMCC or the Depositor or any of
their respective property is bound; (vi) will not result in the creation or imposition of any Lien
upon any of the property of the Issuer, OOMC, OOMCC or the Depositor, as applicable; and (vii) do
not require the consent or approval of any governmental authority or any other Person, except those
which were duly obtained, made or complied with prior to the date of this Waiver.
7. Reference to and Effect on the Sale and Servicing Agreement.
(a) Upon the effectiveness of this Waiver, each reference in the Sale and
Servicing Agreement and in each of the other Basic Documents to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import shall mean and be a reference to the
Sale and Servicing Agreement as modified hereby, and each reference to the Sale and Servicing
Agreement in any other document, instrument or agreement executed and/or delivered in
connection with the Sale and Servicing Agreement shall mean and be a reference to the Sale and
Servicing Agreement as modified hereby.
(b) Except as specifically modified hereby, the Sale and Servicing Agreement,
each of the other Basic Documents and all other documents, instruments and agreements
executed and/or delivered in connection therewith shall remain in full force and effect and
are hereby ratified and confirmed.
(c) Except as expressly provided in Section 2 hereof, the execution, delivery
and effectiveness of this Waiver shall not operate as a waiver of any right, power or remedy
of the Majority Noteholders under the Sale and Servicing Agreement or any of the other Basic
Documents, nor constitute a waiver of, amendment of, consent to or other modification of any
other term, provision, Event of Default, or of any term or provision of any other Basic
Document, or of any transaction or further or future action of the Issuer which would require
the consent of the Majority Noteholders under the Sale and Servicing Agreement. Without limiting
the generality of the foregoing, the execution, delivery and effectiveness of this Waiver
shall not entitle the Issuer to a waiver of any existing or hereafter arising Event of Default (other
than with respect to the Minimum Income Covenant), nor shall the Majority Noteholders’ execution and
delivery of this Waiver establish a course of dealing between the Majority Noteholders and the
Issuer or in any other way obligate the Majority Noteholders to hereafter provide any waiver
or extension to the Issuer for the payment or performance by the Issuer of its obligations under
the Sale and Servicing Agreement and the Basic Documents prior to the enforcement by the
Majority Noteholders of any of their respective rights and remedies under the Sale and
Servicing Agreement and the other Basic Documents.
8. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
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9.
Execution in Counterparts. This Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
constitute but one and the same instrument.
10. Headings. Section headings in this Waiver are included herein for
convenience or reference only and shall not constitute a part of this Waiver for any other
purpose.
11. Liability. It is expressly understood and agreed by the parties that (a) this
Waiver is executed and delivered by Wilmington Trust Company, not individually or personally,
but solely as Owner Trustee, in the exercise of the powers and authority conferred and vested
in it, pursuant to the Trust Agreement, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended for the
purpose of binding the Issuer with respect thereto, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressly or impliedly contained herein, and the right to claim
any and all such liability, if any, being expressly waived by the parties hereto and by any person
claiming by, through or under the parties hereto, and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any indebtedness or
expenses of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer hereunder or under any other related
documents.
12. Direction of Majority Noteholders. By their signature(s) below, the Majority
Noteholders hereby authorize and direct the Indenture Trustee to sign this Waiver.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be executed by
their respective officers thereto duly authorized as of the date first written above.
| OPTION ONE OWNER TRUST 2001-2, as Issuer | ||||||
| By: | Wilmington Trust Company, not in its individual capacity, but solely as Owner Trustee |
|||||
| By: Name: |
/s/ Xxxx Xxx Xxxxxxx
|
|||||
| Title: | Assistant Vice President | |||||
| OPTION ONE MORTGAGE CORPORATION, | ||||||
| as Loan Originator and as Servicer | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Vice President | |||||
| OPTION ONE MORTGAGE CAPITAL | ||||||
| CORPORATION, as Loan Originator | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Vice President | |||||
| OPTION ONE LOAN WAREHOUSE CORPORATION, as Depositor |
||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Assistant Secretary | |||||
| XXXXX FARGO BANK, NATIONAL | ||||||
| ASSOCIATION, as Indenture Trustee | ||||||
| By: | /s/ Xxxxxx Xxxxx | |||||
| Name: | Xxxxxx Xxxxx | |||||
| Title: | Vice President | |||||
| THE MAJORITY NOTEHOLDERS: |
||||||
| BANK OF AMERICA, N. A. | ||||||
| By: | /s/ [ILLEGIBLE] | |||||
| Name: | [ILLEGIBLE] | |||||
| Title: | [ILLEGIBLE] | |||||
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SCHEDULE I
List of Owner Trusts
Option One Owner Trust 2001-1A
Option One Owner Trust 2002-3
Option One Owner Trust 2003-4
Option One Owner Trust 2003-5
Option One Owner Trust 2005-6
Option One Owner Trust 2005-7
Option One Owner Trust 2005-8
Option One Owner Trust 2005-9
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