Exhibit 10.6
EXECUTION COPY
SECOND AMENDED AND RESTATED
SALE AND SERVICING AGREEMENT
among
OPTION ONE OWNER TRUST 2002-3
as Issuer
and
OPTION ONE LOAN WAREHOUSE CORPORATION
as Depositor
and
OPTION ONE MORTGAGE CORPORATION
as Loan Originator and Servicer
OPTION ONE MORTGAGE CAPITAL CORPORATION
as Loan Originator
and
WELLS FARGO BANK, N.A.
as Indenture Trustee
Dated as of January 19, 2007
OPTION ONE OWNER TRUST 2002-3
MORTGAGE-BACKED NOTES

 

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ARTICLE I DEFINITIONS
    5  
 
       
Section 1.01 Definitions
    5  
Section 1.02 Other Definitional Provisions
    31  
 
       
ARTICLE II CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL NOTE PRINCIPAL BALANCES
    31  
 
       
Section 2.01 Conveyance of the Trust Estate; Additional Note Principal Balances
    31  
Section 2.02 Ownership and Possession of Loan Files
    33  
Section 2.03 Books and Records; Intention of the Parties
    33  
Section 2.04 Delivery of Loan Documents
    34  
Section 2.05 Acceptance by the Indenture Trustee of the Loans; Certain
Substitutions and Repurchases; Certification by the Custodian
    35  
Section 2.06 Conditions to Transfer
    37  
Section 2.07 Termination of Revolving Period
    39  
Section 2.08 Correction of Error
    39  
 
       
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS
    40  
 
       
Section 3.01 Representations, Warranties and Covenants of the Depositor
    40  
Section 3.02 Representations, Warranties and Covenants of the Loan Originator
    42  
Section 3.03 Representations, Warranties and Covenants of the Servicer
    45  
Section 3.04 Reserved
    47  
Section 3.05 Representations and Warranties Regarding Loans
    47  
Section 3.06 Purchase and Substitution
    47  
Section 3.07 Disposition
    49  
Section 3.08 Loan Originator Put; Servicer Call
    52  
Section 3.09 Modification of Underwriting Guidelines
    53  
 
       
ARTICLE IV ADMINISTRATION AND SERVICING OF THE LOANS
    53  
 
       
Section 4.01 Servicer’s Servicing Obligations
    53  
Section 4.02 Financial Statements
    53  
 
       
ARTICLE V ESTABLISHMENT OF TRUST ACCOUNTS; TRANSFER OBLIGATION
    54  
 
       
Section 5.01 Collection Account and Distribution Account
    54  
Section 5.02 Payments to Securityholders
    58  
Section 5.03 Trust Accounts; Trust Account Property
    59  

 

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Section 5.04 Advance Account
    61  
Section 5.05 Transfer Obligation Account
    62  
Section 5.06 Transfer Obligation
    63  
 
       
ARTICLE VI STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
    64  
 
       
Section 6.01 Statements
    64  
Section 6.02 Specification of Certain Tax Matters
    67  
Section 6.03 Valuation of Loans, Retained Securities Value; Market Value Agent
    67  
 
       
ARTICLE VII FINANCIAL COVENANTS
    68  
 
       
Section 7.01 [reserved]
    68  
Section 7.02 Financial Covenants
    69  
 
       
ARTICLE VIII THE SERVICER
    70  
 
       
Section 8.01 Indemnification; Third Party Claims
    70  
Section 8.02 Merger or Consolidation of the Servicer
    72  
Section 8.03 Limitation on Liability of the Servicer and Others
    72  
Section 8.04 Servicer Not to Resign; Assignment
    72  
Section 8.05 Relationship of Servicer to Issuer and the Indenture Trustee
    73  
Section 8.06 Servicer May Own Securities
    73  
Section 8.07 Indemnification of the Indenture Trustee and Majority Noteholders
    73  
 
       
ARTICLE IX SERVICER EVENTS OF DEFAULT
    74  
 
       
Section 9.01 Servicer Events of Default
    74  
Section 9.02 Appointment of Successor
    76  
Section 9.03 Waiver of Defaults
    77  
Section 9.04 Accounting Upon Termination of Servicer
    77  
 
       
ARTICLE X TERMINATION; PUT OPTION
    77  
 
       
Section 10.01 Termination
    77  
Section 10.02 Optional Termination
    78  
Section 10.03 Notice of Termination
    78  
Section 10.04 Put Option
    78  
 
       
ARTICLE XI MISCELLANEOUS PROVISIONS
    79  
Section 11.01 Acts of Securityholders
    79  

ii

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Section 11.02 Amendment
    79  
Section 11.03 Recordation of Agreement
    80  
Section 11.04 Duration of Agreement
    80  
Section 11.05 Governing Law
    80  
Section 11.06 Notices
    80  
Section 11.07 Severability of Provisions
    81  
Section 11.08 No Partnership
    81  
Section 11.09 Counterparts
    81  
Section 11.10 Successors and Assigns
    81  
Section 11.11 Headings
    81  
Section 11.12 Actions of Securityholders
    82  
Section 11.13 Non-Petition Agreement
    82  
Section 11.14 Holders of the Securities
    82  
Section 11.15 Due Diligence Fees, Due Diligence
    83  
Section 11.16 No Reliance
    84  
Section 11.17 Confidential Information
    84  
Section 11.18 Conflicts
    85  
Section 11.19 Limitation on Liability
    85  
Section 11.20 Third Party Beneficiary
    86  
Section 11.21 No Agency
    86  

iii

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EXHIBITS

     
EXHIBIT A
  Form of Notice of Additional Note Principal Balance
EXHIBIT B
  Form of Servicer’s Remittance Report to Indenture Trustee
EXHIBIT C
  Form of S&SA Assignment
EXHIBIT D
  Loan Schedule
EXHIBIT E
  Representations and Warranties Regarding the Loans
EXHIBIT F
  Servicing Addendum
EXHIBIT G
  Capital Adequacy Test

iv

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SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT
     This Second Amended and Restated Sale and Servicing Agreement (this
“Agreement”) is entered into effective as of January 19, 2007, among OPTION ONE
OWNER TRUST 2002-3, a Delaware statutory trust (the “Issuer” or the “Trust”),
OPTION ONE LOAN WAREHOUSE CORPORATION, a Delaware corporation, as Depositor (in
such capacity, the “Depositor”), OPTION ONE MORTGAGE CORPORATION, a California
corporation (“Option One”), as a Loan Originator (in such capacity, a “Loan
Originator”) and as Servicer (in such capacity, the “Servicer”), OPTION ONE
MORTGAGE CAPITAL CORPORATION, a Delaware corporation (“Option One Capital”), as
a Loan Originator (a “Loan Originator”), and WELLS FARGO BANK, N.A., a national
banking association, as Indenture Trustee on behalf of the Noteholders (in such
capacity, the “Indenture Trustee”). This Agreement amends and restates in its
entirety the Amended and Restated Sale and Servicing Agreement by and among the
Issuer, the Depositor, Option One and the Indenture Trustee dated as of
March 18, 2005.
W I T N E S S E T H:
     In consideration of the mutual agreements herein contained, the Issuer, the
Depositor, the Loan Originator, the Servicer and the Indenture Trustee hereby
agree as follows for the benefit of each of them and for the benefit of the
holders of the Securities:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations of interest described
herein shall be made on the basis of a 360-day year and the actual number of
days elapsed in each Accrual Period.
     Accepted Servicing Practices: The Servicer’s normal servicing practices in
servicing and administering similar mortgage loans for its own account, which in
general will conform to the mortgage servicing practices of prudent mortgage
lending institutions which service for their own account mortgage loans of the
same type as the Loans in the jurisdictions in which the related Mortgaged
Properties are located and will give due consideration to the Noteholders’
reliance on the Servicer and comply in all material respects with all applicable
laws, rules, regulations and orders.
     Accrual Period: With respect to the Notes, the period commencing on and
including the preceding Payment Date (or, in the case of the first Payment Date,
the period commencing on and including the first Transfer Date (which first
Transfer Date is the first date on which the Note Principal Balance is greater
than zero)) and ending on the day preceding the related Payment Date.
     Act or Securities Act: The Securities Act of 1933, as amended.

1

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     Additional LIBOR Margin: As defined in the Pricing Letter.
     Additional Note Principal Balance: With respect to each Transfer Date, the
aggregate Sales Prices of all Loans conveyed on such date.
     Adjustment Date: With respect to each ARM, the date set forth in the
related Promissory Note on which the Loan Interest Rate on such ARM is adjusted
in accordance with the terms of the related Promissory Note.
     Administration Agreement: The Administration Agreement, dated as of July 2,
2002, between the Issuer and Option One, as the Administrator and Servicer.
     Administrator: Option One, in its capacity as Administrator under the
Administration Agreement.
     Advance Account: The account established and maintained pursuant to
Section 5.04.
     Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.
     Agreement: This Agreement, as the same may be amended and supplemented from
time to time.
     ALTA: The American Land Title Association and its successors in interest.
     Appraised Value: With respect to any Loan, and the related Mortgaged
Property, the lesser of:
          (i) the lesser of (a) the value thereof as determined by an appraisal
made for the originator of the Loan at the time of origination of the Loan by an
appraiser who met the minimum requirements of Fannie Mae or Freddie Mac and
(b) the value thereof as determined by a review appraisal process which may
include an automated appraisal consistent with the Underwriting Guidelines
conducted by the Loan Originator in the event any such review appraisal
determines an appraised value more than 10% lower than the value thereof, in the
case of a Loan with a Loan-to-Value Ratio less than or equal to 80%, or more
than 5% lower than the value thereof, in the case of a Loan with a Loan-to-Value
Ratio greater than 80%, as determined by the appraisal referred to in clause
(i)(a) above; and
          (ii) the purchase price paid for the related Mortgaged Property by the
Borrower with the proceeds of the Loan; provided, however, that in the case of a
Refinanced Loan or a Loan originated in connection with a “lease option
purchase” if the “lease option purchase price” was set 12 months or more prior
to origination, such value of the Mortgaged Property is based solely upon clause
(i) above.

2

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     ARM: Any Loan, the Loan Interest Rate with respect to which is subject to
adjustment during the life of such Loan.
     Assignment: An LPA Assignment or S&SA Assignment.
     Assignment of Mortgage: With respect to any Loan, an assignment of the
related Mortgage in blank or to Wells Fargo Bank, N.A., as custodian or trustee
under the applicable custodial agreement or trust agreement, and notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the assignment and pledge of such Mortgage.
     Balloon Loan: A Mortgage Loan having an original term to maturity that is
shorter than the related amortization term.
     Basic Documents: This Agreement, the Administration Agreement, the
Custodial Agreement, the Indenture, the Loan Purchase and Contribution
Agreement, the Master Disposition Confirmation Agreement, the Note Purchase
Agreement, the Pricing Letter, the Trust Agreement, and, as and when required to
be executed and delivered, the Assignments.
     Borrower: The obligor or obligors on a Promissory Note.
     Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking institutions in New York City, California, Maryland, Minnesota,
Pennsylvania, Delaware or in the city in which the corporate trust office of the
Indenture Trustee is located or the city in which the Servicer’s servicing
operations are located are authorized or obligated by law or executive order to
be closed.
     Certificateholder: A holder of a Trust Certificate.
     Change of Control: As defined in the Indenture.
     Clean-up Call Date: The first Payment Date occurring after the end of the
Revolving Period on which the Note Principal Balance has declined to 10% or less
of the aggregate Note Principal Balance as of the end of the Revolving Period.
     Closing Date: January 19, 2007.
     Code: The Internal Revenue Code of 1986, as amended from time to time, and
the regulations promulgated by the United States Treasury thereunder.
     Collateral Percentage: As defined in the Pricing Letter.
     Collateral Value: As defined in the Pricing Letter.
     Collection Account: The account designated as such, established and
maintained by the Servicer in accordance with Section 5.01(a)(1) hereof.

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     Combined LTV or CLTV: With respect to any Second Lien Loan, the ratio,
expressed as a percentage, of the outstanding Principal Balance on the related
date of origination of (a) (i) such Loan plus (ii) the loan constituting the
first lien, to (b) the lesser of (x) the Appraised Value of the Mortgaged
Property at origination or (y) if the Mortgaged Property was purchased within 12
months of the origination of the Loan, the purchase price of the Mortgaged
Property.
     Commission: The Securities and Exchange Commission.
     Condominium Mortgage Loan: A Mortgage Loan secured by a lien on a
condominium unit.
     Credit Score: With respect to each Borrower, the credit score for such
Borrower from a nationally recognized credit repository; provided, however, in
the event that a credit score for such Borrower was obtained from two
repositories, the “Credit Score” shall be the lower of the two scores; provided,
further, in the event that a credit score for such Borrower was obtained from
three repositories, the “Credit Score” shall be the middle score of the three
scores.
     Custodial Agreement: The Custodial Agreement dated as of July 2, 2002,
among the Issuer, the Servicer, the Indenture Trustee (in the capacity of
Facility Administrator) and the Custodian, providing for the retention of the
Custodial Loan Files by the Custodian on behalf of the Indenture Trustee.
     Custodial Loan File: As defined in the Custodial Agreement.
     Custodian: The custodian named in the Custodial Agreement, which custodian
shall not be affiliated with the Servicer, the Loan Originator, the Depositor or
any Subservicer. Wells Fargo Bank, N.A., a national banking association, shall
be the initial Custodian pursuant to the terms of the Custodial Agreement.
     Custodian Fee: For any Payment Date, the fee payable to the Custodian on
such Payment Date as set forth in the Custodian Fee Notice for such Payment
Date, which fee shall be calculated in accordance with the separate fee letter
between the Custodian and the Servicer.
     Custodian Fee Notice: For any Payment Date, the written notice provided by
the Custodian to the Servicer and the Indenture Trustee pursuant to Section 6.01
hereof, which notice shall specify the amount of the Custodian Fee payable on
such Payment Date.
     Daily Interest Accrual Amount: With respect to each day and the related
Accrual Period, interest accrued at the Note Interest Rate with respect to such
Accrual Period on the Note Principal Balance as of the preceding Business Day
after giving effect to all changes to the Note Principal Balance on or prior to
such preceding Business Day.
     Default: Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
     Defaulted Loan: With respect to any Determination Date, any Loan,
including, without limitation, any Liquidated Loan, with respect to which any of
the following has occurred as of the end of the related Remittance Period:
(a) foreclosure or similar proceedings have been

4

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commenced; or (b) the Servicer or any Subservicer has determined in good faith
and in accordance with the servicing standard set forth in Section 4.01 of the
Servicing Addendum that such Loan is in default or imminent default.
     Deleted Loan: A Loan replaced or to be replaced by one or more Qualified
Substitute Loans.
     Delinquent: A Loan is “Delinquent” if any Monthly Payment due thereon is
not made by the close of business on the day such Monthly Payment is required to
be paid. A Loan is “30 days Delinquent” if any Monthly Payment due thereon has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such Monthly Payment was required to
be paid or, if there is no such corresponding day (e.g., as when a 30-day month
follows a 31-day month in which a payment was required to be paid on the 31st
day of such month), then on the last day of such immediately succeeding month.
The determination of whether a Loan is “60 days Delinquent,” “90 days
Delinquent”, etc., shall be made in like manner.
     Delivery: When used with respect to Trust Account Property means:
          (a) with respect to bankers’ acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute “instruments”
within the meaning of Section 9-102(a)(47) of the UCC and are susceptible of
physical delivery (except with respect to Trust Account Property consisting of
certificated securities (as defined in Section 8-102(a)(4) of the UCC)),
physical delivery to the Indenture Trustee or its custodian (or the related
Securities Intermediary) endorsed to the Indenture Trustee or its custodian (or
the related Securities Intermediary) or endorsed in blank (and if delivered and
endorsed to the Securities Intermediary, by continuous credit thereof by
book-entry to the related Trust Account);
          (b) with respect to a certificated security (i) delivery of such
certificated security endorsed to, or registered in the name of, the Indenture
Trustee or endorsed in blank to its custodian or the related Securities
Intermediary and the making by such Securities Intermediary of appropriate
entries in its records identifying such certificated securities as credited to
the related Trust Account, or (ii) by delivery thereof to a “clearing
corporation” (as defined in Section 8-102(a)(5) of the UCC) and the making by
such clearing corporation of appropriate entries in its records crediting the
securities account of the related Securities Intermediary by the amount of such
certificated security and the making by such Securities Intermediary of
appropriate entries in its records identifying such certificated securities as
credited to the related Trust Account (all of the Trust Account Property
described in Subsections (a) and (b), “Physical Property”);
and, in any event, any such Physical Property in registered form shall be in the
name of the Indenture Trustee or its nominee or custodian (or the related
Securities Intermediary); and such additional or alternative procedures as may
hereafter become appropriate to effect the complete transfer of ownership of any
such Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof;

5

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          (c) with respect to any security issued by the U.S. Treasury, Fannie
Mae or Freddie Mac that is a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations, the following
procedures, all in accordance with applicable law, including applicable federal
regulations and Articles 8 and 9 of the UCC: the making by a Federal Reserve
Bank of an appropriate entry crediting such Trust Account Property to an account
of the related Securities Intermediary or the securities intermediary that is
(x) also a “participant” pursuant to applicable federal regulations and (y) is
acting as securities intermediary on behalf of the Securities Intermediary with
respect to such Trust Account Property; the making by such Securities
Intermediary or securities intermediary of appropriate entries in its records
crediting such book-entry security held through the Federal Reserve System
pursuant to federal book-entry regulations and Articles 8 and 9 of the UCC to
the related Trust Account; and such additional or alternative procedures as may
hereafter become appropriate to effect complete transfer of ownership of any
such Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or the
interpretation thereof; and
          (d) with respect to any item of Trust Account Property that is an
uncertificated security (as defined in Section 8-102(a)(18) of the UCC) and that
is not governed by clause (c) above, registration in the records of the issuer
thereof in the name of the related Securities Intermediary, and the making by
such Securities Intermediary of appropriate entries in its records crediting
such uncertificated security to the related Trust Account.
     Designated Depository Institution: With respect to an Eligible Account, an
institution whose deposits are insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, the long-term deposits of which shall be
rated A or better by S&P or A2 or better by Moody’s and the short-term deposits
of which shall be rated P-1 or better by Moody’s and A-1 or better by S&P,
unless otherwise approved in writing by the Initial Noteholder and which is any
of the following: (A) a federal savings and loan association duly organized,
validly existing and in good standing under the federal banking laws, (B) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (C) a national banking association duly
organized, validly existing and in good standing under the federal banking laws,
(D) a principal subsidiary of a bank holding company or (E) approved in writing
by the Initial Noteholder and, in each case acting or designated by the Servicer
as the depository institution for the Eligible Account; provided, however, that
any such institution or association shall have combined capital, surplus and
undivided profits of at least $50,000,000.
     Depositor: Option One Loan Warehouse Corporation, a Delaware corporation,
and any successors thereto (including, without limitation, any limited liability
company into which it is converted).
     Determination Date: With respect to any Payment Date occurring on the 10th
day of a month, the last calendar day of the month immediately preceding the
month of such Payment Date, and with respect to any other Payment Date, as
mutually agreed by the Servicer and the Noteholders.
     Disposition: A Securitization, Whole Loan Sale transaction, or other
disposition of Loans.

6

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     Disposition Agent: UBS Real Estate Securities Inc. and its successors and
assigns acting at the direction, and as agent, of the Majority Noteholders.
     Disposition Participant: As applicable, with respect to a Disposition, any
“depositor” with respect to such Disposition, the Disposition Agent, the
Majority Noteholders, the Issuer, the Servicer, the related trustee and the
related custodian, any nationally recognized credit rating agency, the related
underwriters, the related placement agent, the related credit enhancer, the
related whole-loan purchaser, the related purchaser of securities and/or any
other party necessary or, in the good faith belief of any of the foregoing,
desirable to effect a Disposition.
     Disposition Proceeds: With respect to a Disposition, (x) the proceeds of
the Disposition remitted to the Trust in respect of the Loans transferred on the
date of and with respect to such Disposition, including without limitation, any
cash and Retained Securities created in any related Securitization less all
costs, fees and expenses incurred in connection with such Disposition,
including, without limitation, all amounts deposited into any reserve accounts
upon the closing thereof minus (y) all other amounts agreed upon in writing by
the Initial Noteholder, the Trust and the Servicer.
     Distribution Account: The account established and maintained pursuant to
Section 5.01(a)(2) hereof.
     Due Date: The day of the month on which the Monthly Payment is due from the
Borrower with respect to a Loan.
     Due Diligence Fees: Shall have the meaning provided in Section 11.15
hereof.
     Eligible Account: At any time, a deposit account or a securities account
which is: (i) maintained with a Designated Depository Institution; (ii) fully
insured by either the Bank Insurance Fund or the Savings Association Insurance
Fund of the FDIC; (iii) a trust account (which shall be a “segregated trust
account”) maintained with the corporate trust department of a federal or state
chartered depository institution or trust company with trust powers and acting
in its fiduciary capacity for the benefit of the Indenture Trustee and the
Issuer, which depository institution or trust company shall have capital and
surplus of not less than $50,000,000; or (iv) with the prior written consent of
the Initial Noteholder, any other deposit account or a securities account.
     Eligible Servicer: Either (a) Option One for so long as Option One (i) is
an approved seller-servicer by Fannie Mae or Freddie Mac and (ii) has a GAAP Net
Worth of at least $200,000,000, (b) any other Person to which the Majority
Noteholders may consent in writing.
     Escrow Payments: With respect to any Loan, the amounts constituting ground
rents, taxes, assessments, water rates, sewer rents, municipal charges, fire,
hazard, liability and other insurance premiums, condominium charges, and any
other payments required to be escrowed by the related Borrower with the lender
or servicer pursuant to the Mortgage or any other document.
     Event of Default: Either a Servicer Event of Default or an Event of Default
under the Indenture.

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     Exceptions: The meaning set forth in the Custodial Agreement.
     Exceptions Report: The meaning set forth in the Custodial Agreement.
     Exchange Act: The Securities Exchange Act of 1934, as amended.
     Fannie Mae: The Federal National Mortgage Association and any successor
thereto.
     Fatal Exception: With respect to a Mortgage Loan, (i) any variance from the
requirements of Section 2(b)(i), (ii), (iii), (iv) (v), (vi) or (viii) of the
Custodial Agreement with respect to the Custodial Loan File (giving effect to
the Issuer’s right to deliver certified copies in lieu of original documents in
certain circumstances); or (ii) that the documents in the Custodial Loan File
referred to in the preceding clause (i) have been reviewed by the Custodian in
accordance with the Review Procedures in Exhibit K to the Custodial Agreement
and do not appear on their face to be regular or to relate to such Mortgage
Loan.
     FDIC: The Federal Deposit Insurance Corporation and any successor thereto.
     Fidelity Bond: As described in Section 4.10 of the Servicing Addendum.
     Final Put Date: The Put Date following the end of the Revolving Period on
which the Majority Noteholders (or the Market Value Agent on their behalf)
exercise the Put Option with respect to the entire outstanding Note Principal
Balance, if the Majority Noteholders (or the Market Value Agent on their behalf)
elects to exercise the Put Option.
     First Lien Loan: A Loan secured by the lien on the related Mortgaged
Property, subject to no prior liens on such Mortgaged Property.
     First Payment Default Loan: A Loan with respect to which the first Monthly
Payment due following either the date of origination of such Loan or the related
Transfer Date is not paid by the related Borrower and received by the Servicer
within 30 days after the date on which it is or was due.
     Foreclosed Loan: As of any Determination Date, any Loan that as of the end
of the preceding Remittance Period has been discharged as a result of (i) the
completion of foreclosure or comparable proceedings by the Servicer on behalf of
the Issuer; (ii) the acceptance of the deed or other evidence of title to the
related Mortgaged Property in lieu of foreclosure or other comparable
proceeding; or (iii) the acquisition of title to the related Mortgaged Property
by operation of law.
     Foreclosure Property: Any real property securing a Foreclosed Loan that has
been acquired by the Servicer on behalf of the Issuer through foreclosure, deed
in lieu of foreclosure or similar proceedings in respect of the related Loan.
     Freddie Mac: The Federal Home Loan Mortgage Corporation and any successor
thereto.
     GAAP: Generally Accepted Accounting Principles as in effect in the United
States.

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     Gross Margin: With respect to each ARM, the fixed percentage amount set
forth in the related Promissory Note.
     Indenture: The Indenture dated as of January 19, 2007, between the Issuer
and the Indenture Trustee and all supplements and amendments thereto.
     Indenture Trustee: Wells Fargo Bank, N.A., a national banking association,
as Indenture Trustee under the Indenture, or any successor indenture trustee
under the Indenture.
     Indenture Trustee Fee: An annual fee of $5,000 payable by the Servicer in
accordance with a separate fee agreement between the Indenture Trustee and the
Servicer and Section 5.01 hereof.
     Independent: When used with respect to any specified Person, such Person
(i) is in fact independent of the Loan Originator, the Servicer, the Depositor
or any of their respective Affiliates, (ii) does not have any direct financial
interest in, or any material indirect financial interest in, the Loan
Originator, the Servicer, the Depositor or any of their respective Affiliates
and (iii) is not connected with the Loan Originator, the Depositor, the Servicer
or any of their respective Affiliates, as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions;
provided, however, that a Person shall not fail to be Independent of the Loan
Originator, the Depositor, the Servicer or any of their respective Affiliates
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Loan Originator, the Depositor, the Servicer or any of
their respective Affiliates, as the case may be.
     Independent Accountants: A firm of nationally recognized certified public
accountants which is independent of the Loan Originator according to the
provisions of SEC Regulation S-X, Article 2.
     Index: With respect to each ARM, the index set forth in the related
Promissory Note for the purpose of calculating the Loan Interest Rate thereon.
     Initial Noteholder: UBS Real Estate Securities Inc. and its successors and
assigns.
     Interest Carry-Forward Amount: With respect to any Payment Date, the
excess, if any, of (A) the Interest Payment Amount for such Payment Date plus
any unpaid portion of the Interest Payment Amount for the prior Payment Date
over (B) the amount in respect of interest that is actually paid from the
Distribution Account on such Payment Date in respect of the interest for such
Payment Date.
     Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the period prior to the first Adjustment Date.
     Interest Payment Amount: With respect to any Payment Date, the sum of the
Daily Interest Accrual Amounts for all days in the related Accrual Period.
     LIBOR Business Day: Any day on which banks in the City of London are open
and conducting transactions in United States dollars.

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     LIBOR Determination Date: With respect to each Accrual Period, the first
day of such Accrual Period.
     LIBOR Margin: As defined in the Pricing Letter.
     Lien: With respect to any asset, (a) any mortgage, lien, pledge, charge,
security interest, hypothecation, option or encumbrance of any kind in respect
of such asset or (b) the interest of a vendor or lessor under any conditional
sale agreement, financing lease or other title retention agreement relating to
such asset.
     Lifetime Cap: The provision in the Promissory Note for each ARM which
limits the maximum Loan Interest Rate over the life of such ARM.
     Lifetime Floor: The provision in the Promissory Note for each ARM which
limits the minimum Loan Interest Rate over the life of such ARM.
     Liquidated Loan: As defined in Section 4.03(c) of the Servicing Addendum.
     Liquidated Loan Losses: With respect to any Determination Date, the
difference between (i) the aggregate Principal Balances as of such date of all
Loans that became Liquidated Loans during the applicable period and (ii) all
Liquidation Proceeds allocable to principal received during the applicable
period with respect to such Loans.
     Liquidation Proceeds: With respect to a Liquidated Loan, any cash amounts
received in connection with the liquidation of such Liquidated Loan, whether
through trustee’s sale, foreclosure sale or other disposition, any cash amounts
received in connection with the management of the Mortgaged Property from
Defaulted Loans, any proceeds from Primary Insurance Policies and any other
amounts required to be deposited in the Collection Account pursuant to
Section 5.01(b) hereof, in each case other than Mortgage Insurance Proceeds and
Released Mortgaged Property Proceeds. Liquidation Proceeds shall also include
any awards or settlements in respect of the related Mortgage Property, whether
permanent or temporary, partial or entire, by exercise of the power of eminent
domain or condemnation.
     Loan: Any loan sold to the Trust hereunder and pledged to the Indenture
Trustee, which loan includes, without limitation, (i) a Promissory Note or Lost
Note Affidavit and related Mortgage and (ii) all right, title and interest of
the Loan Originator in and to the Mortgaged Property covered by such Mortgage.
The term Loan shall be deemed to include the related Promissory Note or Lost
Note Affidavit, related Mortgage, all other Loan Documents and related
Foreclosure Property, if any.
     Loan Documents: With respect to a Loan, the documents comprising the Loan
File for such Loan.
     Loan File: With respect to each Loan, the Custodial Loan File and the
Servicer’s Loan File.

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     Loan Interest Rate: With respect to each Loan, the annual rate of interest
borne by the related Promissory Note, as shown on the Loan Schedule, and, in the
case of an ARM, as the same may be periodically adjusted in accordance with the
terms of such Loan.
     Loan Originator: Each of Option One and Option One Capital, and their
respective successors and assigns, jointly and severally.
     Loan Originator Put: The mandatory repurchase by the Loan Originator, at
the option of the Majority Noteholders, of a Loan pursuant to Section 3.08(a)
hereof.
     Loan Pool: As of any date of determination, the pool of all Loans conveyed
to the Issuer pursuant to this Agreement on all Transfer Dates up to and
including such date of determination, which Loans have not been released from
the Lien of the Indenture pursuant to the terms of the Basic Documents, together
with the rights and obligations of a holder thereof, and the payments thereon
and proceeds therefrom received on and after the applicable Transfer Cut-off
Date, as identified from time to time on the Loan Schedule.
     Loan Purchase and Contribution Agreement: Each of: (i) the Loan Purchase
and Contribution Agreement between Option One, as seller, and Option One
Capital, as purchaser, dated as of December 29, 2006 and all supplements and
amendments thereto and (ii) the Fifth Amended and Restated Loan Purchase and
Contribution Agreement, between Option One Capital, as seller, and Depositor, as
purchaser, dated as of December 29, 2006, and all supplements and amendments
thereto.
     Loan Schedule: The schedule of Loans conveyed to the Issuer on the Closing
Date and on each Transfer Date and delivered to the Initial Noteholder and the
Custodian in the form of a computer-readable transmission specifying the
information set forth on Exhibit D hereto and, with respect to Wet Funded Loans,
Exhibit N to the Custodial Agreement.
     Loan-to-Value Ratio or LTV: With respect to any First Lien Loan, the ratio
of the original outstanding principal amount of such Loan to the Appraised Value
of the Mortgaged Property at origination.
     Lost Note Affidavit: With respect to any Loan as to which the original
Promissory Note has been permanently lost or destroyed and has not been
replaced, an affidavit from the Loan Originator certifying that the original
Promissory Note has been lost, misplaced or destroyed (together with a copy of
the related Promissory Note) and indemnifying the Issuer against any loss, cost
or liability resulting from the failure to deliver the original Promissory Note,
in the form of Exhibit M attached to the Custodial Agreement.
     LPA Assignment: The assignment of Loans from Option One to the Depositor
under the Loan Purchase and Contribution Agreement.
     Majority Certificateholders: As defined in the Trust Agreement.
     Majority Noteholders: The holder or holders of in excess of 50% of the Note
Principal Balance. In the event of the release of the Lien of the Indenture in
accordance with the terms thereof, the Majority Noteholders shall mean the
Majority Certificateholders.

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     Make-Whole Premium: As defined in the Pricing Letter.
     Manufactured Home: A unit of manufactured housing which meets the
requirements of Section 25(e)(10) of the Code, including, without limitation,
any such unit that is legally classified as real property under applicable state
law.
     Manufactured Housing Loan: A loan or installment sales contract secured, in
whole or in part, by a Manufactured Home.
     Market Value: As of any date in respect of a Loan, the price at which such
Loan could readily be sold as determined in the Market Value Agent’s sole
discretion using its reasonable business judgment, taking into account the level
of interest rates, the financial condition of the Note Issuer, the
characteristics of the collateral and general market conditions, which price may
be determined to be zero.
     Market Value Agent: UBS Real Estate Securities Inc. or an Affiliate thereof
designated by UBS Real Estate Securities Inc. in writing to the parties hereto
and, in either case, its successors in interest.
     Master Disposition Confirmation Agreement: The Fifth Amended and Restated
Master Disposition Confirmation Agreement, dated as of December 29, 2006, by and
among Option One, the Depositor, the Delaware statutory trusts listed on
Schedule I thereto and each of the Lenders listed on Schedule II thereto, as
amended and supplemented from time to time.
     Maturity Date: With respect to the Notes, as set forth in the Indenture or
such later date as may be agreed in writing by the Majority Noteholders.
     Maximum Note Principal Balance: As defined in the Pricing Letter.
     Monthly Advance: The aggregate of the advances made by the Servicer on any
Remittance Date pursuant to Section 4.14 of the Servicing Addendum.
     Monthly Payment: The scheduled monthly payment of principal and/or interest
required to be made by a Borrower on the related Loan, as set forth in the
related Promissory Note.
     Monthly Remittance Amount: With respect to each Remittance Date, the sum,
without duplication, of (i) the aggregate payments on the Loans collected by the
Servicer pursuant to Section 5.01(b)(i) during the immediately preceding
Remittance Period and (ii) the aggregate of amounts deposited into the
Collection Account pursuant to Section 5.01(b)(ii) through 5.01(b)(xi) during
the immediately preceding Remittance Period.
     Moody’s: Moody’s Investors Service, Inc., or any successor thereto.
     Mortgage: With respect to any Loan, the mortgage, deed of trust or other
instrument securing the related Promissory Note, which creates a first or second
lien on the fee in real property and/or a first or second lien on the leasehold
estate in real property securing the Promissory Note and the assignment of rents
and leases related thereto.

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     Mortgage Insurance Policies: With respect to any Mortgaged Property or
Loan, the insurance policies required pursuant to Section 4.08 of the Servicing
Addendum.
     Mortgage Insurance Proceeds: With respect to any Mortgaged Property, all
amounts collected in respect of Mortgage Insurance Policies and not required
either pursuant to applicable law or the related Loan Documents to be applied to
the restoration of the related Mortgaged Property or paid to the related
Borrower.
     Mortgaged Property: With respect to a Loan, the related Borrower’s fee
and/or leasehold interest in the real property (and/or all improvements,
buildings, fixtures, building equipment and personal property thereon (to the
extent applicable) and all additions, alterations and replacements made at any
time with respect to the foregoing) and all other collateral securing repayment
of the debt evidenced by the related Promissory Note.
     Net Liquidation Proceeds: With respect to any Payment Date, Liquidation
Proceeds received during the prior Remittance Period, net of any reimbursements
to the Servicer made from such amounts for any unreimbursed Servicing
Compensation and Servicing Advances (including Nonrecoverable Servicing
Advances) made and any other fees and expenses paid in connection with the
foreclosure, inspection, conservation and liquidation of the related Liquidated
Loans or Foreclosure Properties pursuant to Section 4.03 of the Servicing
Addendum.
     Net Loan Losses: With respect to any Defaulted Loan that is subject to a
modification pursuant to Section 4.01 of the Servicing Addendum, an amount equal
to the portion of the Principal Balance, if any, released in connection with
such modification.
     Net Worth: With respect to any Person, the excess of total assets of such
Person, over total liabilities of such Person, determined in accordance with
GAAP.
     Non-Owner Occupied Loan: A Mortgage Loan secured by a Mortgaged Property
which is not occupied by the related Borrower as such Borrower’s primary
residence.
     Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made with respect to a Loan or Foreclosure Property that, in the
good faith business judgment of the Servicer, as evidenced by an Officer’s
Certificate of a Servicing Officer delivered to the Initial Noteholder, will
not, or, in the case of a proposed Monthly Advance, would not be, ultimately
recoverable from the related late payments, Mortgage Insurance Proceeds,
Liquidation Proceeds or condemnation proceeds on such Loan or Foreclosure
Property as provided herein.
     Nonrecoverable Servicing Advance: With respect to any Loan or any
Foreclosure Property, (a) any Servicing Advance previously made and not
reimbursed from late collections, condemnation proceeds, Liquidation Proceeds,
Mortgage Insurance Proceeds or the Released Mortgaged Property Proceeds on the
related Loan or Foreclosure Property or (b) a Servicing Advance proposed to be
made in respect of a Loan or Foreclosure Property either of which, in the good
faith business judgment of the Servicer, as evidenced by an Officer’s
Certificate of a Servicing Officer delivered to the Initial Noteholder, would
not be ultimately recoverable.
     Note: As defined in the Indenture.

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     Noteholder: As defined in the Indenture.
     Note Interest Rate: As defined in the Pricing Letter.
     Note Principal Balance: With respect to the Notes, as of any date of
determination (a) the sum of the Additional Note Principal Balances purchased on
or prior to such date pursuant to the Note Purchase Agreement less (b) all
amounts previously distributed in respect of principal of the Notes on or prior
to such day.
     Note Purchase Agreement: The Second Amended and Restated Note Purchase
Agreement among the Purchaser, the Issuer and the Depositor, dated as of
January 19, 2007, and any amendments thereto.
     Note Redemption Amount: As of any Determination Date, an amount without
duplication equal to the sum of (i) the then outstanding Note Principal Balance
of the Notes, plus the Interest Payment Amount for the related Payment Date,
plus any Interest Carry-Forward for any previous Payment Date that has not
theretofore been paid, (ii) any Trust Fees and Expenses due and unpaid on the
related Payment Date, (iii) any Servicing Advance Reimbursement Amount as of
such Determination Date, and (iv) any other amounts then due to the Noteholders
hereunder.
     Officer’s Certificate: A certificate signed by a Responsible Officer of the
Depositor, the Loan Originator, the Servicer or the Issuer, in each case, as
required by this Agreement.
     One-Month LIBOR: With respect to each Accrual Period, the rate determined
by the Initial Noteholder on the basis of the offered rate for one-month U.S.
dollar deposits, as such rate appears on the BTMM (Bloomberg Screen) (or such
other screen as may replace such screen) on the related LIBOR Determination
Date; provided that if such rate does not appear on the BTMM (Bloomberg Screen)
(or such other screen as may replace such screen), the rate for such date will
be determined on the basis of the rates offered to the Reference Bank for
one-month U.S. dollar deposits by prime banks in the London interbank Eurodollar
market on such LIBOR Determination Date. One-Month LIBOR shall be reset by the
Initial Noteholder as described above and the Initial Noteholder’s determination
of One-Month LIBOR shall be conclusive upon the parties absent manifest error on
the part of the Initial Noteholder.
     Opinion of Counsel: A written opinion of counsel who may be employed by the
Servicer, the Depositor, the Loan Originator or any of their respective
Affiliates.
     Option One: Option One Mortgage Corporation, a California corporation.
     Option One Capital: Option One Mortgage Capital Corporation, a Delaware
corporation.
     Overcollateralization Shortfall: With respect to any Business Day, an
amount equal to the positive difference, if any, between (a) the Note Principal
Balance on such Business Day and (b) the aggregate Collateral Value of all Loans
in the Loan Pool as of such Business Day; provided, however, that on (A) the
termination of the Revolving Period, (B) the Payment Date on which the Trust is
to be terminated pursuant to Section 10.02 hereof or (C) the Final Put Date, the
Overcollateralization Shortfall shall be equal to the Note Principal Balance.
Notwithstanding

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anything to the contrary herein, in no event shall the Overcollateralization
Shortfall, with respect to any Business Day, exceed the Note Principal Balance
as of such date.
     Owner Trustee: Wilmington Trust Company, a Delaware banking corporation,
not in its individual capacity but solely as Owner Trustee under this Agreement,
and any successor owner trustee under the Trust Agreement.
     Owner Trustee Fee: The annual fee of $4,000 payable in equal monthly
installments to the Servicer pursuant to Section 5.01(c)(3)(i) which the
Servicer shall in turn pay annually to the Owner Trustee on the anniversary of
the Closing Date occurring each year during the term of this Agreement.
     Paying Agent: As defined in the Indenture.
     Payment Date: Each of, (i) the 10th day of each calendar month commencing
on the first such 10th day to occur after the first Transfer Date, or if any
such day is not a Business Day, the first Business Day immediately following
such day, (ii) any day a Loan is sold pursuant to the terms hereof, (iii) a Put
Date as specified by the Majority Noteholders pursuant to Section 10.05 of the
Indenture and (iv) an additional Payment Date pursuant to Section 5.01(c)(4)(i)
and 5.01(c)(4)(iii). From time to time, the Majority Noteholders and the Issuer
may agree, upon written notice to the Owner Trustee and the Indenture Trustee,
to additional Payment Dates in accordance with Section 5.01(c)(4)(ii).
     Payment Statement: As defined in Section 6.01(b) hereof.
     Percentage Interest: As defined in the Trust Agreement.
     Periodic Cap: With respect to each ARM Loan and any Rate Change Date
therefor, the annual percentage set forth in the related Promissory Note, which
is the maximum annual percentage by which the Loan Interest Rate for such Loan
may increase or decrease (subject to the Lifetime Cap or the Lifetime Floor) on
such Rate Change Date from the Loan Interest Rate in effect immediately prior to
such Rate Change Date.
     Permitted Investments: Each of the following:
          (a) Direct general obligations of the United States or the obligations
of any agency or instrumentality of the United States fully and unconditionally
guaranteed, the timely payment or the guarantee of which constitutes a full
faith and credit obligation of the United States.
          (b) Federal Housing Administration debentures rated Aa2 or higher by
Moody’s and AA or better by S&P.
          (c) Freddie Mac senior debt obligations rated Aa2 or higher by Moody’s
and AA or better by S&P.
          (d) Federal Home Loan Banks’ consolidated senior debt obligations
rated Aa2 or higher by Moody’s and AA or better by S&P.

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          (e) Fannie Mae senior debt obligations rated Aa2 or higher by Moody’s.
          (f) Federal funds, certificates or deposit, time and demand deposits,
and bankers’ acceptances (having original maturities of not more than 30 days)
of any domestic bank, the short-term debt obligations of which have been rated
A-1 or better by S&P and P-1 or better by Moody’s.
          (g) Investment agreements approved by the Initial Noteholder provided:
               (1) The agreement is with a bank or insurance company which has
an unsecured, uninsured and unguaranteed obligation (or claims-paying ability)
rated Aa2 or better by Moody’s and AA or better by S&P, and
               (2) Monies invested thereunder may be withdrawn without any
penalty, premium or charge upon not more than one day’s notice (provided such
notice may be amended or canceled at any time prior to the withdrawal date), and
               (3) The agreement is not subordinated to any other obligations of
such insurance company or bank, and
               (4) The same guaranteed interest rate will be paid on any future
deposits made pursuant to such agreement, and
               (5) The Indenture Trustee and the Initial Noteholder receive an
opinion of counsel that such agreement is an enforceable obligation of such
insurance company or bank.
          (h) Commercial paper (having original maturities of not more than
365 days) rated A-1 or better by S&P and P-1 or better by Moody’s.
          (i) Investments in money market funds rated AAAM or AAAM-G by S&P and
Aaa or P-1 by Moody’s.
          (j) Investments approved in writing by the Initial Noteholder;
provided that no instrument described above is permitted to evidence either the
right to receive (a) only interest with respect to obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations; and provided, further,
that no instrument described above may be purchased at a price greater than par
if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity; and provided, further, that, with respect to any
instrument described above, such instrument qualifies as a “permitted
investment” within the meaning of Section 860G(a)(5) of the Code and the
regulations thereunder.

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     Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, national banking
association, unincorporated organization or government or any agency or
political subdivision thereof.
     Physical Property: As defined in clause (b) of the definition of “Delivery”
above.
     Pool Principal Balance: With respect to any Determination Date, the
aggregate Principal Balances of the Loans as of such Determination Date.
     Prepaid Installment: With respect to any Loan, any installment of principal
thereof and interest thereon received prior to the scheduled Due Date for such
installment, intended by the Borrower as an early payment thereof and not as a
Prepayment with respect to such Loan.
     Prepayment: Any payment of principal of a Loan which is received by the
Servicer in advance of the scheduled due date for the payment of such principal
(other than the principal portion of any Prepaid Installment), and the proceeds
of any Mortgage Insurance Policy which are to be applied as a payment of
principal on the related Loan shall be deemed to be Prepayments for all purposes
of this Agreement.
     Preservation Expenses: Expenditures made by the Servicer in connection with
a foreclosed Loan prior to the liquidation thereof, including, without
limitation, expenditures for real estate property taxes, hazard insurance
premiums, property restoration or preservation.
     Pricing Letter: The Amended and Restated Pricing Side Letter among the
Issuer, the Depositor, Option One Capital, the Initial Noteholder and the
Indenture Trustee, dated January 19, 2007 and any amendments thereto.
     Primary Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer pursuant to Section 4.06 of the Servicing
Addendum.
     Principal Balance: With respect to any Loan or related Foreclosure
Property, (i) at the Transfer Cut-off Date, the Transfer Cut-off Date Principal
Balance and (ii) with respect to any other date of determination, the
outstanding unpaid principal balance of the Loan as of the end of the preceding
Remittance Period (after giving effect to all payments received thereon and the
allocation of any Net Loan Losses with respect thereto for a Defaulted Loan
prior to the end of such Remittance Period); provided, however, that any
Liquidated Loan shall be deemed to have a Principal Balance of zero.
     Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
     Promissory Note: With respect to a Loan, the original executed promissory
note or other evidence of the indebtedness of the related Borrower or Borrowers.
     Purchaser: As defined in the Note Purchase Agreement.
     Put/Call Loan: Any (i) Loan that has become 90 or more days Delinquent,
(ii) Defaulted Loan, (iii) Loan that has been in default for a period of 30 days
or more (other than a Loan

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referred to in clause (i)), (iv) Loan that does not meet criteria established by
independent rating agencies or surety agency conditions for Dispositions which
criteria have been established at the related Transfer Date and may be modified
only to match changed criteria of independent rating agencies or surety agents,
or (v) Loan that is inconsistent with the intended tax status of a
Securitization.
     Put Date: Any date on which all or a portion of the Notes are to be
purchased by the Issuer as a result of the exercise of the Put Option.
     Put Option: The right of the Majority Noteholders to require the Issuer to
repurchase all or a portion of the Notes in accordance with Section 10.04 of the
Indenture.
     QSPE Affiliate: Any of Option One Owner Trust 2001-1A, Option One Owner
Trust 2001-1B, 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, or
any other Affiliate of Option One which is a “qualified special purpose entity”
in accordance with Financial Accounting Standards Board’s Statement No. 140 or
125.
     Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Property is located, duly authorized
and licensed in such states to transact the applicable insurance business and to
write the insurance provided and that meets the requirements of Fannie Mae and
Freddie Mac.
     Qualified Substitute Loan: A Loan or Loans substituted for a Deleted Loan
pursuant to Section 3.06 hereof, which (i) has or have been approved in writing
by the Majority Noteholders and (ii) complies or comply as of the date of
substitution with each representation and warranty set forth in Exhibit E and
(iii) is or are not 30 or more days Delinquent as of the date of substitution
for such Deleted Loan or Loans.
     Rate Change Date: The date on which the Loan Interest Rate of each ARM is
subject to adjustment in accordance with the related Promissory Note.
     Rating Agencies: S&P and Moody’s or such other nationally recognized credit
rating agencies as may from time to time be designated in writing by the
Majority Noteholders in their sole discretion.
     Record Date: With respect to each Payment Date, the close of business of
the immediately preceding Business Day.
     Reference Bank: The principal office in London, England of UBS Real Estate
Securities Inc.
     Refinanced Loan: A Loan the proceeds of which were not used to purchase the
related Mortgaged Property.
     Released Mortgaged Property Proceeds: With respect to any Loan, proceeds
received by the Servicer in connection with (i) a taking of an entire Mortgaged
Property by exercise of the

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power of eminent domain or condemnation or (ii) any release of part of the
Mortgaged Property from the lien of the related Mortgage, whether by partial
condemnation, sale or otherwise; which proceeds in either case are not released
to the Borrower in accordance with applicable law and/or Accepted Servicing
Practices.
     Remittance Date: The Business Day immediately preceding each Payment Date.
     Remittance Period: With respect to any Payment Date, the period commencing
immediately following the Determination Date for the preceding Payment Date (or,
in the case of the initial Payment Date, commencing immediately following the
initial Transfer Cut-off Date) and ending on and including the related
Determination Date.
     Repurchase Price: With respect to a Loan the sum of (i) the Principal
Balance thereof as of the date of purchase or repurchase, (ii) all accrued and
unpaid interest on such Loan to the date of purchase or repurchase computed at
the applicable Loan Interest Rate, (iii) the amount of any unreimbursed
Servicing Advances made by the Servicer with respect to such Loan (after
deducting therefrom any amounts received in respect of such purchased or
repurchased Loan and being held in the Collection Account for future
distribution to the extent such amounts represent recoveries of principal not
yet applied to reduce the related Principal Balance or interest (net of the
Servicing Fee) for the period from and after the date of repurchase) and
(iv) the amount of any damages incurred by the Purchaser as a result of the
violation of any Loan of any predatory or abusive lending law. To the extent the
Servicer does not reimburse itself for amounts, if any, in respect of the
Servicing Advance Reimbursement Amount pursuant to Section 5.01(c)(1) hereof,
with respect to such Loan, the Repurchase Price shall be reduced by such
amounts.
     Responsible Officer: When used with respect to the Indenture Trustee or
Custodian, any officer within the corporate trust office of such Person,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of such Person customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject. When used with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the date hereof (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on the list of
Responsible Officers delivered by the Administrator to the Owner Trustee on the
date hereof (as such list may be modified or supplemented from time to time
thereafter). When used with respect to the Depositor, the Loan Originator or the
Servicer, the President, any Vice President, or the Treasurer.
     Retained Security or Retained Securities: With respect to a Securitization,
any subordinated securities issued or expected to be issued, or excess
collateral value retained or expected to be retained, in connection therewith to
the extent the Depositor, the Loan Originator or an Affiliate thereof retains,
instead of sells, such securities.

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     Retained Securities Value: With respect to any Business Day and a Retained
Security, the market value thereof as determined by the Market Value Agent in
accordance with Section 6.03(d) hereof.
     Revolving Period: With respect to the Notes, the period commencing on the
Closing Date and ending on the earlier of (i) January 18, 2008, and (ii) the
date on which the Revolving Period is terminated pursuant to Section 2.07
hereof.
     Sales Price: For any Transfer Date, the sum of the Collateral Values with
respect to each Loan conveyed on such Transfer Date as of such Transfer Date.
     S&SA Assignment: An assignment, in the form of Exhibit C hereto, of Loans
and other property from the Depositor to the Issuer pursuant to this Agreement.
     Second Lien Loan: A Loan secured by the lien on the Mortgaged Property,
subject to one Senior Lien on such Mortgaged Property.
     Securities: The Notes and the Trust Certificates.
     Securities Intermediary: A “securities intermediary” as defined in
Section 8-102(a)(14) of the UCC that is holding a Trust Account for the
Indenture Trustee as the sole “entitlement holder” as defined in
Section 8-102(a)(7) of the UCC.
     Securitization: A sale or transfer of Loans by the Issuer at the direction
of the Majority Noteholders to any other Person in order to effect one or a
series of structured-finance securitization transactions, including but not
limited to transactions involving the issuance of securities which may be
treated for federal income tax purposes as indebtedness of Option One or one or
more of its wholly-owned subsidiaries.
     Securityholder: Any Noteholder or Certificateholder.
     Senior Lien: With respect to any Second Lien Loan, the mortgage loan having
a senior priority lien on the related Mortgaged Property.
     Servicer: Option One, in its capacity as the servicer hereunder, or any
successor appointed as herein provided.
     Servicer Call: The optional purchase by the Servicer of a Loan pursuant to
Section 3.08(b) hereof.
     Servicer Event of Default: As described in Section 9.01 hereof.
     Servicer’s Fiscal Year: May 1st of each year through April 30th of the
following year.
     Servicer’s Loan File: With respect to each Loan, the file held by the
Servicer, consisting of all documents (or electronic images thereof) relating to
such Loan, including, without limitation, copies of all of the Loan Documents
included in the related Custodial Loan File.

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     Servicer’s Remittance Report: A report prepared and computed by the
Servicer in substantially the form of Exhibit B attached hereto.
     Servicing Addendum: The terms and provisions set forth in Exhibit F
attached hereto relating to the administration and servicing of the Loans.
     Servicing Advance Reimbursement Amount: With respect to any Determination
Date, the amount of any Servicing Advances that have not been reimbursed as of
such date, including Nonrecoverable Servicing Advances.
     Servicing Advances: As defined in Section 4.14(b) of the Servicing
Addendum.
     Servicing Compensation: The Servicing Fee and other amounts to which the
Servicer is entitled pursuant to Section 4.15 of the Servicing Addendum.
     Servicing Fee: As to each Loan (including any Loan that has been foreclosed
and for which the related Mortgaged Property has become a Foreclosure Property,
but excluding any Liquidated Loan), the fee payable monthly to the Servicer,
which shall be the product of 0.50% (50 basis points), or such other lower
amount as shall be mutually agreed to in writing by the Majority Noteholders and
the Servicer, and the Principal Balance of such Loan as of the beginning of the
related Remittance Period, divided by 12. The Servicing Fee shall only be
payable to the extent interest is collected on the related Loan.
     Servicing Officer: Any officer of the Servicer or Subservicer involved in,
or responsible for, the administration and servicing of the Loans whose name and
specimen signature appears on a list of servicing officers annexed to an
Officer’s Certificate furnished by the Servicer or the Subservicer,
respectively, on the date hereof to the Issuer and the Indenture Trustee, on
behalf of the Noteholders, as such list may from time to time be amended.
     S&P: Standard & Poor’s Rating Services, a division of The McGraw-Hill
Companies, Inc.
     State: Any one of the states of the United States of America or the
District of Columbia.
     Subservicer: Any Person with which the Servicer has entered into a
Subservicing Agreement and which is an Eligible Servicer and satisfies any
requirements set forth in Section 4.22 of the Servicing Addendum in respect of
the qualifications of a Subservicer.
     Subservicing Account: An account established by a Subservicer pursuant to a
Subservicing Agreement, which account must be an Eligible Account.
     Subservicing Agreement: Any agreement between the Servicer and any
Subservicer relating to subservicing and/or administration of any or all Loans
as provided in Section 4.22 in the Servicing Addendum.
     Subsidiary: With respect to any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons

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performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
     Substitution Adjustment: As to any date on which a substitution occurs
pursuant to Section 2.05 or Section 3.06 hereof, the amount, if any, by which
(a) the aggregate principal balance of any Qualified Substitute Loans (after
application of principal payments received on or before the related Transfer
Cut-off Date) is less than (b) the aggregate of the Principal Balances of the
related Deleted Loans as of the first day of the month in which such
substitution occurs.
     Tangible Net Worth: With respect to any Person, as of any date of
determination, the consolidated Net Worth of such Person and its Subsidiaries,
less (i) the consolidated net book value of all assets of such Person and its
Subsidiaries (to the extent reflected as an asset in the balance sheet of such
Person or any Subsidiary at such date) which will be treated as intangibles
under GAAP, including, without limitation, such items as deferred financing
expenses, net leasehold improvements, goodwill, trademarks, trade names, service
marks, copyrights, patents, licenses and unamortized debt discount and expense;
provided, that residual securities issued by such Person or its Subsidiaries
shall not be treated as intangibles for purposes of this definition; (ii) any
loans outstanding to any officer or director of Option One or its Affiliates;
and (iii) any receivables from H&R Block, Inc.
     Termination Price: As of any Determination Date, an amount without
duplication equal to the greater of (A) the Note Redemption Amount and (B) the
sum of (i) the Principal Balance of each Loan included in the Trust as of the
end of the preceding Remittance Period; (ii) all unpaid interest accrued on the
Principal Balance of each such Loan at the related Loan Interest Rate to the end
of the preceding Remittance Period; and (iii) the aggregate fair market value of
each Foreclosure Property included in the Trust as of the end of the preceding
Remittance Period, as determined by an Independent appraiser acceptable to the
Majority Noteholders as of a date not more than 30 days prior to such Payment
Date.
     Transfer Cut-off Date: With respect to each Loan, (i) the first day of the
month in which the Transfer Date with respect to such Loan occurs or if
originated in such month, the date of origination or (ii) in the case of a
purchase from a QSPE Affiliate, unless otherwise specified in the confirmation
delivered in accordance with the Master Disposition Confirmation Agreement in
connection with such purchase, the related Transfer Date.
     Transfer Cut-off Date Principal Balance: As to each Loan, its Principal
Balance as of the opening of business on the Transfer Cut-off Date (after giving
effect to any payments received on the Loan before the Transfer Cut-off Date).
     Transfer Date: With respect to each Loan, the day such Loan is either
(i) sold and conveyed to the Depositor by the Loan Originator pursuant to the
Loan Purchase and Contribution Agreement and to the Issuer by the Depositor
pursuant to Section 2.01 hereof or (ii) sold to the Issuer pursuant to the
Master Disposition Confirmation Agreement, which results in

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an increase in the Note Principal Balance by the related Additional Note
Principal Balance. With respect to any Qualified Substitute Loan, the Transfer
Date shall be the day such Loan is conveyed to the Trust pursuant to
Section 2.05 or 3.06 hereof.
     Transfer Obligation: The obligation of the Loan Originator under
Section 5.06 hereof to make certain payments in connection with Dispositions and
other related matters.
     Transfer Obligation Account: The account designated as such, established
and maintained pursuant to Section 5.05 hereof.
     Transfer Obligation Target Amount: With respect to any Payment Date, the
cumulative total of all withdrawals pursuant to Section 5.05(e), 5.05(f),
5.05(g), and 5.05(h) hereof, from and after the date of this Second Amended and
Restated Sale and Servicing Agreement, from the Transfer Obligation Account to
but not including such Payment Date minus any amount withdrawn from the Transfer
Obligation Account to return to the Loan Originator pursuant to
Section 5.05(i)(i).
     Trust: Option One Owner Trust 2002-3, the Delaware statutory trust created
pursuant to the Trust Agreement.
     Trust Account Property: The Trust Accounts, all amounts and investments
held from time to time in the Trust Accounts and all proceeds of the foregoing.
     Trust Accounts: The Distribution Account, the Collection Account, the
Advance Account and the Transfer Obligation Account.
     Trust Agreement: The Trust Agreement dated as of July 2, 2002 between the
Depositor and the Owner Trustee.
     Trust Certificate: The meaning assigned thereto in the Trust Agreement.
     Trust Estate: Shall mean the assets subject to this Agreement, the Trust
Agreement and the Indenture and assigned to the Trust, which assets consist of:
(i) such Loans as from time to time are subject to this Agreement as listed in
the Loan Schedule, as the same may be amended or supplemented on each Transfer
Date and by the removal of Deleted Loans and Unqualified Loans and by the
addition of Qualified Substitute Loans, together with the Servicer’s Loan Files
and the Custodial Loan Files relating thereto and all proceeds thereof, (ii) the
Mortgages and security interests in the Mortgaged Properties, (iii) all payments
in respect of interest and principal with respect to each Loan received on or
after the related Transfer Cut-off Date, (iv) (iii) all guarantees, indemnities,
warranties, insurance (and proceeds and refunds of premiums in respect thereof)
or other agreements or arrangements of any kind from time to time supporting or
securing payment of such Loan or performance of any obligation with respect
thereto, whether pursuant to the Loan Documents related to such Loan or
otherwise; (v) such assets as from time to time are identified as Foreclosure
Property, (vi) such assets and funds as are from time to time deposited in the
Distribution Account, Collection Account, Advance Account and the Transfer
Obligation Account, including, without limitation, amounts on deposit in such
accounts that are invested in Permitted Investments, (vii) lenders’ rights under
all Mortgage Insurance Policies and to any Mortgage Insurance Proceeds,
(viii) Net Liquidation Proceeds and Released Mortgaged

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Property Proceeds, and (ix) all right, title and interest of each of the
Depositor, the Loan Originator and the Trust in and under the Basic Documents
including, without limitation, the obligations of the Loan Originator under the
Loan Purchase and Contribution Agreement and/or the Master Disposition
Confirmation Agreement, and all proceeds of any of the foregoing.
     Trust Fees and Expenses: As of each Payment Date, an amount equal to the
Servicing Compensation, the Owner Trustee Fee, the Indenture Trustee Fee and the
Custodian Fee, if any, and any expenses of the Servicer, the Owner Trustee, the
Indenture Trustee or the Custodian.
     UCC: The Uniform Commercial Code as in effect from time to time in the
State of New York.
     UCC Assignment: A form “UCC 2” or “UCC 3” statement meeting the
requirements of the Uniform Commercial Code of the relevant jurisdiction to
reflect an assignment of a secured party’s interest in collateral.
     UCC-1 Financing Statement: A financing statement meeting the requirements
of the Uniform Commercial Code of the relevant jurisdiction.
     Underwriting Guidelines: The underwriting guidelines (including the loan
origination guidelines) of the Loan Originator, as the same may be amended from
time to time with notice to the Initial Noteholder.
     Unfunded Transfer Obligation: With respect to any date of determination, an
amount equal to the greater of:
     (A) the sum of (i) 10% of the aggregate Sales Prices of all Loans owned by
the Issuer at the close of business on the immediately preceding day minus all
payments actually made by the Loan Originator in respect of the Unfunded
Transfer Obligation pursuant to Section 5.06 hereof with respect to such Loans
since the related Transfer Dates plus (ii) 10% of the aggregate Sales Prices of
all Loans purchased by the Issuer on such date of determination; and
     (B) 10% of the average daily aggregate Sales Prices (as of the related
Transfer Date) of all Loans owned by the Issuer over the 90 day period
immediately preceding such date of determination minus all payments actually
made by the Loan Originator in respect of the Unfunded Transfer Obligation
pursuant to Section 5.06 with respect to such Loans.
     Unfunded Transfer Obligation Percentage: As of any date of determination,
an amount equal to (x) the Unfunded Transfer Obligation as of such date, divided
by (y) 100% of the aggregate Collateral Values as of the related Transfer Date
of all Loans in the Loan Pool.
     Unqualified Loan: As defined in Section 3.06(a) hereof.
     Wet Funded Custodial File Delivery Date: With respect to a Wet Funded Loan,
the later of the fifteenth Business Day or 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 and (y) the fifth day
after the occurrence of such event.

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     Wet Funded Loan: A Loan for which the Custodian has not received the
related Custodial Loan File as of the related Transfer Date and for which the
Custodian has issued a Trust Receipt with respect to the Wet Funded Loan, in
substantially the form of Exhibit O attached to the Custodial Agreement.
     Whole Loan Sale: A Disposition of Loans pursuant to a whole-loan sale.
     Section 1.02 Other Definitional Provisions.
          (a) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
          (b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
          (c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under GAAP. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under GAAP, the definitions contained in this Agreement
or in any such certificate or other document shall control.
          (d) The words “hereof,” “herein,” “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule
and Exhibit references contained in this Agreement are references to Articles,
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified; and the term “including” shall mean “including without limitation.”
          (e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
          (f) Wells Fargo Bank, N.A. is the current name of the entity
previously named Wells Fargo Bank Minnesota, National Association. Any
references to Wells Fargo Bank Minnesota, National Association in this agreement
or in any other agreement related to this agreement shall be construed to mean
Wells Fargo Bank, N.A.

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ARTICLE II
CONVEYANCE OF THE TRUST ESTATE; ADDITIONAL
NOTE PRINCIPAL BALANCES
     Section 2.01 Conveyance of the Trust Estate; Additional Note Principal
Balances.
          (a) (i) On the terms and conditions of this Agreement, on each
Transfer Date during the Revolving Period, the Depositor agrees to offer for
sale and to sell a portion of each of the Loans and contribute to the capital of
the Issuer the balance of each of the Loans and deliver the related Loan
Documents to or at the direction of the Issuer. To the extent the Issuer has or
is able to obtain sufficient funds under the Note Purchase Agreement and the
Notes for the purchase thereof, the Issuer agrees to purchase such Loans offered
for sale by the Depositor; any portion of the value of such Loan not paid in
cash shall be deemed a contribution of capital by the Depositor to the Issuer.
On the terms and conditions of this Agreement and the Master Disposition
Confirmation Agreement, on each Transfer Date during the Revolving Period, the
Issuer may acquire Loans from another QSPE Affiliate of the Loan Originator to
the extent the Issuer has or is able to obtain sufficient funds for the purchase
thereof.
     (ii) In consideration of the payment of the Additional Note Principal
Balance pursuant to Section 2.06 hereof and as a contribution to the assets of
the Issuer, the Depositor as of the related Transfer Date and concurrently with
the execution and delivery hereof, hereby sells, transfers, assigns, sets over
and otherwise conveys to the Issuer, without recourse, but subject to the other
terms and provisions of this Agreement, all of the right, title and interest of
the Depositor in and to the Trust Estate.
     (iii) During the Revolving Period, on each Transfer Date, subject to the
conditions precedent set forth in Section 2.06 hereof and in accordance with the
procedures set forth in Section 2.01(c), the Depositor, pursuant to an S&SA
Assignment, will assign to the Issuer without recourse all of its respective
right, title and interest, in and to the Loans and all proceeds thereof listed
on the Loan Schedule attached to such S&SA Assignment, including all interest
and principal and any prepayment charges received by the Loan Originator, the
Depositor or the Servicer on or with respect to the Loans on or after the
related Transfer Cut-off Date, together with all right, title and interest in
and to the proceeds of any related Mortgage Insurance Policies and all of the
Depositor’s rights, title and interest in and to (but none of its obligations
under) the Loan Purchase and Contribution Agreement and all proceeds of the
foregoing.
     (iv) The foregoing sales, transfers, assignments, set overs and conveyances
do not, and are not intended to, result in a creation or an assumption by the
Issuer of any of the obligations of the Depositor, the Loan Originator or any
other Person in connection with the Trust Estate or under any agreement or
instrument relating thereto except as specifically set forth herein.

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          (b) As of the Closing Date and as of each Transfer Date, the Issuer
acknowledges (or will acknowledge pursuant to the S&SA Assignment) the
conveyance to it of the Trust Estate, including, as applicable, all rights,
title and interest of the Depositor and any QSPE Affiliate in and to the Trust
Estate, receipt of which is hereby acknowledged by the Issuer. Concurrently with
such delivery, as of the Closing Date and as of each Transfer Date, pursuant to
the Indenture the Issuer pledges the Trust Estate to the Indenture Trustee. In
addition, concurrently with such delivery and in exchange therefor, the Owner
Trustee, pursuant to the instructions of the Depositor, has executed (not in its
individual capacity, but solely as Owner Trustee on behalf of the Issuer) and
caused the Trust Certificates to be authenticated and delivered to or at the
direction of the Depositor.
          (c) (i) Pursuant to and subject to the Note Purchase Agreement, the
Issuer may, at its sole option, from time to time request advances on any
Transfer Date of Additional Note Principal Balances.
               (ii) Notwithstanding anything to the contrary herein, in no event
shall the Purchaser be required to advance Additional Note Principal Balances on
a Transfer Date if the conditions precedent to a transfer of the Loans under
Section 2.06 and the conditions precedent to the purchase of Additional Note
Principal Balances set forth in Section 4.01 of the Note Purchase Agreement have
not been fulfilled.
               (iii) The Servicer shall appropriately note such Additional Note
Principal Balance (and the increased Note Principal Balance) in the next
succeeding Payment Statement; provided, however, that failure to make any such
notation in such Payment Statement or any error in such notation shall not
adversely affect any Noteholder’s rights with respect to its Note Principal
Balance and its right to receive interest and principal payments in respect of
the Note Principal Balance held by such Noteholder. Each Noteholder shall record
on the schedule attached to such Noteholder’s Note, the date and amount of any
Additional Note Principal Balance advanced by it; provided, that failure to make
such recordation on such schedule or any error in such schedule shall not
adversely affect any Noteholder’s rights with respect to its Note Principal
Balance and its right to receive interest payments in respect of the Note
Principal Balance held by such Noteholder.
               (iv) Absent manifest error, the Note Principal Balance of each
Note as set forth in the Noteholder’s records shall be binding upon the
Noteholders and the Trust, notwithstanding any notation made by the Servicer in
its Payment Statement pursuant to the preceding paragraph.
     Section 2.02 Ownership and Possession of Loan Files.
     With respect to each Loan, as of the related Transfer Date the ownership of
the related Promissory Note, the related Mortgage and the contents of the
related Servicer’s Loan File and Custodial Loan File shall be vested in the
Trust for the benefit of the Securityholders, although possession of the
Servicer’s Loan File on behalf of and for the benefit of the Securityholders
shall remain with the Servicer, and the Custodian shall take possession of the
Custodial Loan Files as contemplated in Section 2.05 hereof.

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     Section 2.03 Books and Records; Intention of the Parties.
          (a) As of each Transfer Date, the sale of each of the Loans conveyed
by the Depositor on such Transfer Date shall be reflected on the balance sheets
and other financial statements of the Depositor and the Loan Originator, as the
case may be, as a sale of assets and a contribution to capital by the Loan
Originator and the Depositor, as applicable, under GAAP. Each of the Servicer
and the Custodian shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Loan which shall be clearly marked to
reflect the ownership of each Loan, as of the related Transfer Date, by the
Issuer and for the benefit of the Securityholders.
          (b) It is the intention of the parties hereto that, other than for
federal, state and local income or franchise tax purposes, the transfers and
assignments of the Trust Estate on the initial Closing Date, on each Transfer
Date and as otherwise contemplated by the Basic Documents and the Assignments
shall constitute a sale of the Trust Estate including, without limitation, the
Loans and all other property comprising the Trust Estate specified in
Section 2.01(a) hereof, from the Depositor to the Issuer and such property shall
not be property of the Depositor. The parties hereto shall treat the Notes as
indebtedness for federal, state and local income and franchise tax purposes.
          (c) Each transfer and assignment contemplated by this Agreement shall
constitute a sale in part, and a contribution to capital in part, of the Loans
from the Depositor to the Issuer. Upon the consummation of those transactions
the Loans shall be owned by and be the property of the Issuer, and not owned by
or otherwise be the property of, the Depositor for any purpose including without
limitation any bankruptcy, receivership, insolvency, liquidation,
conservatorship or similar proceeding relating to either the Depositor or the
Issuer or any property of either. The parties hereto hereby acknowledge that the
Issuer and its creditors are relying, and its subsequent transferees and their
creditors will rely, on such sales and contributions being recognized as such.
If (A) any transfer and assignment contemplated hereby is subsequently
determined for any reason under any circumstances to constitute a transfer to
secure a loan rather than a sale in part, and a contribution in part, of the
Loans or (B) any Loan is otherwise held to be property of the Depositor, then
this Agreement (i) is and shall be a security agreement within the meaning of
Articles 8 and 9 of the applicable Uniform Commercial Code and (ii) shall
constitute a grant by the Depositor to the Issuer of a security interest in all
of the Depositor’s right, title and other interest in and to the Loans and the
proceeds and other distributions and payments and general intangibles and other
rights and benefits in respect thereof. For purposes of perfecting that security
interest under any applicable Uniform Commercial Code, the possession by, and
notices and other communications with respect thereto to and from, the Issuer or
any agent thereof, of money, notes and other documents evidencing ownership of
and other rights with respect to the Loans shall be “possession” by the secured
party or purchaser and required notices and other communications to and from
applicable financial intermediaries, bailees and other agents.
          (d) The Depositor at its expense shall take such actions as may be
necessary or reasonably requested by the Issuer or the Initial Noteholder to
ensure the perfection, and priority to all other security interests, of the
security interest described in the preceding paragraph including without
limitation the execution and delivery of such financing statements and
amendments thereto, continuation statements and other documents as the Issuer
may reasonably request.

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     Section 2.04 Delivery of Loan Documents.
          (a) The Loan Originator shall, prior to the related Transfer Date (or,
in the case of each Wet Funded Loan, the related Wet Funded Custodial File
Delivery Date), in accordance with the terms and conditions set forth in the
Custodial Agreement, deliver or cause to be delivered to the Custodian, as the
designated agent of the Indenture Trustee, a Loan Schedule and each of the
documents constituting the Custodial Loan File with respect to each Loan. The
Loan Originator shall ensure that (i) in the event that any Wet Funded Loan is
not closed and funded to the order of the appropriate Borrower on the day funds
are provided to the Loan Originator by the Purchaser, on behalf of the Issuer,
such funds shall be promptly returned to the Purchaser, on behalf of the Issuer
and (ii) in the event that any Wet Funded Loan is subject to a rescission, all
funds received in connection with such rescission shall be promptly returned to
the Purchaser, on behalf of the Issuer.
          (b) The Loan Originator shall, on the related Transfer Date (or in the
case of a Wet Funded Loan, on or before the related Wet Funded Custodial File
Delivery Date), deliver or cause to be delivered to the Servicer the related
Servicer’s Loan File (i) for the benefit of, and as agent for, the Noteholders
and (ii) for the benefit of the Indenture Trustee, on behalf of the Noteholders,
for so long as the Notes are outstanding; after the Notes are not outstanding,
the Servicer’s Loan File shall be held in the custody of the Servicer for the
benefit of, and as agent for, the Certificateholders.
          (c) The Indenture Trustee shall cause the Custodian to take and
maintain continuous physical possession of the Custodial Loan Files in the State
of California (or upon prior written notice from the Custodian to the Loan
Originator and the Initial Noteholder and delivery of an Opinion of Counsel with
respect to the continued perfection of the Indenture Trustee’s security
interest, in the State of Minnesota or Utah) and, in connection therewith, shall
act solely as agent for the Noteholders in accordance with the terms hereof and
not as agent for the Loan Originator, the Servicer or any other party.

      Section 2.05 Acceptance by the Indenture Trustee of the Loans; Certain
Substitutions and Repurchases; Certification by the Custodian.

          (a) The Indenture Trustee declares that it will cause the Custodian to
hold the Custodial Loan Files and any additions, amendments, replacements or
supplements to the documents contained therein, as well as any other assets
included in the Trust Estate and delivered to the Custodian, in trust, upon and
subject to the conditions set forth herein. The Indenture Trustee further agrees
to cause the Custodian to execute and deliver such certifications as are
required under the Custodial Agreement and to otherwise direct the Custodian to
perform all of its obligations with respect to the Custodial Loan Files in
strict accordance with the terms of the Custodial Agreement.
     (b) (i) With respect to any Loans which are set forth as exceptions in the
Exceptions Report, the Loan Originator shall cure such exceptions by delivering
such missing documents to the Custodian or otherwise curing the defect no later
than, in the case of (x) a non-Wet Funded Loan, five (5) Business Days, or
(y) in the case of a Wet Funded Loan, one (1) Business Day after the Wet Funded
Custodial File Delivery Date, in each case, following the receipt of the first
Exceptions Report listing such exception with respect to such Loan.

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     (ii) In the event that, with respect to any Loan, the Loan Originator does
not comply with the document delivery requirements of Section 2.04 and such
failure has a material adverse effect on the value or enforceability of any
Loan, or the interests of the Securityholders in any Loan, the Loan Originator
shall repurchase such Loan within one (1) Business Day of notice thereof from
the Indenture Trustee or the Initial Noteholder at the Repurchase Price thereof
with respect to such Loan by depositing such Repurchase Price in the Collection
Account. In lieu of such a repurchase, the Depositor and Loan Originator may
comply with the substitution provisions of Section 3.06 hereof. The Loan
Originator shall provide the Servicer, the Indenture Trustee, the Issuer and the
Initial Noteholder with a certification of a Responsible Officer on or prior to
such repurchase or substitution indicating that the Loan Originator intends to
repurchase or substitute such Loan.
     (iii) It is understood and agreed that the obligation of the Loan
Originator to repurchase or substitute any such Loan pursuant to this
Section 2.05(b) shall constitute the sole remedy with respect to such failure to
comply with the foregoing delivery requirements.
          (c) In performing its reviews of the Custodial Loan Files pursuant to
the Custodial Agreement, the Custodian shall have no responsibility to determine
the genuineness of any document contained therein and any signature thereon. The
Custodian shall not have any responsibility for determining whether any document
is valid and binding, whether the text of any assignment or endorsement is in
proper or recordable form, whether any document has been recorded in accordance
with the requirements of any applicable jurisdiction, or whether a blanket
assignment is permitted in any applicable jurisdiction.
          (d) The Servicer’s Loan File shall be held in the custody of the
Servicer (i) for the benefit of, and as agent for, the Noteholders and (ii) for
the benefit of the Indenture Trustee, on behalf of the Noteholders, for so long
as the Notes are outstanding; after the Notes are not outstanding, the
Servicer’s Loan File shall be held in the custody of the Servicer for the
benefit of, and as agent for, the Certificateholders. It is intended that, by
the Servicer’s agreement pursuant to this Section 2.05(d), the Indenture Trustee
shall be deemed to have possession of the Servicer’s Loan Files for purposes of
Section 9-313 of the Uniform Commercial Code of the State in which such
documents or instruments are located. The Servicer shall promptly report to the
Indenture Trustee any failure by it to hold the Servicer’s Loan File as herein
provided and shall promptly take appropriate action to remedy any such failure.
In acting as custodian of such documents and instruments, the Servicer agrees
not to assert any legal or beneficial ownership interest in the Loans or such
documents or instruments. Subject to the exceptions in Section 8.01(a) hereof
and the procedure in Section 8.01(d) hereof, the Servicer agrees to indemnify
the Securityholders and the Indenture Trustee, their officers, directors,
employees, agents and “control persons” as such term is used under the Act and
under the Securities Exchange Act of 1934, as amended for any and all
liabilities, obligations, losses, damages, payments, costs or expenses of any
kind whatsoever which may be imposed on, incurred by or asserted against the
Securityholders or the Indenture Trustee as the result of the negligence or
willful misfeasance by the Servicer relating to the maintenance and custody of
such documents or instruments which have been delivered to the Servicer;
provided, however, that the Servicer will not be liable for any portion of any
such amount resulting from the negligence or willful misconduct of any
Securityholders or the Indenture Trustee; and provided, further, that the
Servicer will not be liable for any portion of any such

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amount resulting from the Servicer’s compliance with any instructions or
directions consistent with this Agreement issued to the Servicer by the
Indenture Trustee or the Majority Noteholders. The Indenture Trustee shall have
no duty to monitor or otherwise oversee the Servicer’s performance as custodian
of the Servicer Loan File hereunder.
     Section 2.06 Conditions to Transfer.
          (a) In the case of Wet Funded Loans, by 11:00 a.m. (New York City
time) on the related Transfer Date, the Issuer shall give notice to the Initial
Noteholder of such upcoming Transfer Date and shall deliver or cause to be
delivered to the Initial Noteholder: (i) an estimate of the number of Loans and
aggregate Principal Balance of such Loans to be transferred on such Transfer
Date and (ii) a funding request amount. By no later than 4:00 p.m. (New York
City time) on each Transfer Date, the Issuer shall deliver or cause to be
delivered to the Initial Noteholder a Wet Funded Loan Schedule in
computer-readable form with respect to the Loans requested to be transferred on
such Transfer Date.
          (b) In the case of non-Wet Funded Loans, two (2) Business Days prior
to each Transfer Date, the Issuer shall give notice to the Initial Noteholder of
such upcoming Transfer Date and by no later than 4:00 p.m. (New York City time)
on the Business Day preceding each Transfer Date, the Issuer shall deliver or
cause to be delivered to the Initial Noteholder: (i) an estimate of the number
of Loans and aggregate Principal Balance of such Loans to be transferred on such
Transfer Date and (ii) a funding request amount. By no later than 8:00 a.m. (New
York City time) on each Transfer Date, the Issuer shall deliver or cause to be
delivered to the Initial Noteholder a final Loan Schedule in computer-readable
form with respect to the Loans requested to be transferred on such Transfer
Date.
          (c) On each Transfer Date, the Depositor or the applicable QSPE
Affiliate shall convey to the Issuer, the Loans and the other property and
rights related thereto described in the related S&SA Assignment, and the Issuer,
only upon the satisfaction of each of the conditions set forth below on or prior
to such Transfer Date, shall deposit or cause to be deposited cash in the amount
of the Additional Note Principal Balance received from the Purchaser in the
Advance Account in respect thereof, and the Paying Agent shall, promptly after
such deposit, withdraw the amount deposited in respect of applicable Additional
Note Principal Balance from the Advance Account, and distribute such amount to
or at the direction of the Depositor or the applicable QSPE Affiliate.
          (d) As of the Closing Date and each Transfer Date:
     (i) the Depositor, the QSPE Affiliate and the Servicer, as applicable,
shall have delivered to the Issuer and the Initial Noteholder duly executed
Assignments, which shall have attached thereto a Loan Schedule setting forth the
appropriate information with respect to all Loans conveyed on such Transfer Date
and shall have delivered to the Initial Noteholder a computer readable
transmission of such Loan Schedule;
     (ii) the Depositor shall have deposited, or caused to be deposited, in the
Collection Account all collections received with respect to each of the Loans on
and after the applicable Transfer Cut-off Date;

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     (iii) as of such Transfer Date, none of the Loan Originator, the Depositor
or the QSPE Affiliate, as applicable, shall (A) be insolvent, (B) be made
insolvent by its respective sale of Loans or (C) have reason to believe that its
insolvency is imminent;
     (iv) the Revolving Period shall not have terminated;
     (v) as of such Transfer Date (after giving effect to the sale of Loans on
such Transfer Date), there shall be no Overcollateralization Shortfall;
     (vi) in the case of non-Wet Funded Loans, the Issuer shall have delivered
the Custodial Loan File to the Custodian in accordance with the Custodial
Agreement and the Initial Noteholder shall have received a Trust Receipt by 4:30
p.m. New York City time, reflecting such delivery; provided that, in the event
that any Additional Note Principal Balance is to be paid earlier than 8:00 a.m.
New York City time on the Transfer Date, the Trust Receipt must be received by
the Initial Noteholder prior to 6:00 p.m. New York City time on the Business Day
prior to such Transfer Date; and provided further that no Additional Note
Principal Balance shall be paid as to a Loan that has a Fatal Exception, as
indicated on the Custodian’s certification provided pursuant to the Custodial
Agreement;
     (vii) each of the representations and warranties made by the Loan
Originator contained in Exhibit E with respect to the Loans shall be true and
correct in all material respects as of the related Transfer Date with the same
effect as if then made and the proviso set forth in Section 3.05 hereof with
respect to Loans sold by a QSPE Affiliate shall not be applicable to any Loans,
and the Depositor or the QSPE Affiliate, as applicable, shall have performed all
obligations to be performed by it under the Basic Documents on or prior to such
Transfer Date;
     (viii) the Depositor or the QSPE Affiliate and the Servicer shall, at its
own expense, within one (1) Business Day following the Transfer Date, indicate
in their computer files that the Loans identified in each S&SA Assignment have
been sold to the Issuer pursuant to this Agreement and the S&SA Assignment;
     (ix) the Depositor or the QSPE Affiliate shall have taken any action
requested by the Indenture Trustee, the Issuer or the Noteholders required to
maintain the ownership interest of the Issuer in the Trust Estate;
     (x) no selection procedures believed by the Depositor or the QSPE Affiliate
to be adverse to the interests of the Noteholders shall have been utilized in
selecting the Loans to be conveyed on such Transfer Date;
     (xi) the Depositor shall have provided the Issuer, the Indenture Trustee
and the Initial Noteholder no later than two (2) Business Days prior to such
date a notice of Additional Note Principal Balance in the form of Exhibit A
hereto;

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     (xii) after giving effect to the Additional Note Principal Balance
associated therewith, the Note Principal Balance will not exceed the Maximum
Note Principal Balance;
     (xiii) all conditions precedent to the Depositor’s purchase of Loans
pursuant to the Loan Purchase and Contribution Agreement shall have been
fulfilled as of such Transfer Date and, in the case of purchases from a QSPE
Affiliate, all conditions precedent to the Issuer’s purchase of Loans pursuant
to the Master Disposition Confirmation Agreement shall have been fulfilled as of
such Transfer Date;
     (xiv) all conditions precedent to the Noteholders’ purchase of Additional
Note Principal Balance pursuant to the Note Purchase Agreement shall have been
fulfilled as of such Transfer Date; and
     (xv) with respect to each Loan acquired from any QSPE Affiliate that has a
limited right of recourse to the Loan Originator under the terms of the
applicable loan purchase agreement, the Loan Originator has not been required to
pay any amount to or on behalf of such QSPE Affiliate that lowered the recourse
to the Loan Originator available to such QSPE Affiliate below the maximum
recourse to the Loan Originator available to such QSPE Affiliate under the terms
of the related loan purchase contract providing for recourse by that QSPE
Affiliate to the Loan Originator.
     Section 2.07 Termination of Revolving Period.
     Upon the occurrence of (i) an Event of Default or Default or (ii) the
Unfunded Transfer Obligation Percentage equals 4% or less or (iii) either
(a) the aggregate Principal Balance of all Loans that are 30 to 59 days
Delinquent as of such Determination Date divided by the Pool Principal Balance
as of such Determination Date is greater than 5% (unless such percentage is
reduced to less than 5% within three Business Days of such Determination Date as
a result of the exercise of a Servicer Call) or (b) the aggregate Principal
Balance of all Loans that are 60 to 89 days Delinquent as of such Determination
Date divided by the Pool Principal Balance as of such Determination Date is
greater than 2% (unless such percentage is reduced to less than 2% within three
Business Days of such Determination Date as a result of the exercise of a
Servicer Call) or (iv) Option One, Option One Capital or any of their Affiliates
default under, or fail to perform as requested under, or shall otherwise
materially breach the terms of any repurchase agreement, loan and security
agreement or similar credit facility or agreement entered into by Option One,
Option One Capital or any of their Affiliates, including without limitation, the
Sale and Servicing Agreement, dated as of April 1, 2001, among the Option One
Owner Trust 2001-1A, the Depositor, Option One and the Indenture Trustee, the
Sale and Servicing Agreement, dated as of July 2, 2002, among the Option One
Owner Trust 2002-3, the Depositor, Option One and the Facility Administrator,
the Sale and Servicing Agreement, dated as of August 8, 2003, among the Option
One Owner Trust 2003-4, the Depositor, Option One and the Indenture Trustee, the
Sale and Servicing Agreement, dated as of June 1, 2005, among Option One Owner
Trust 2005-6, the Depositor, Option One and the Indenture Trustee, the Sale and
Servicing Agreement, dated as of September 1, 2005, among the Option One Owner
Trust 2005-7, the Depositor, Option One and

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the Indenture Trustee, the Sale and Servicing Agreement, dated as of October 1,
2005 among Option One Owner Trust 2005-8, the Depositor, Option One and the
Indenture Trustee and the Sale and Servicing Agreement, dated as of December 30,
2005 among Option One Owner Trust 2005-9, the Depositor, Option One and the
Indenture Trustee, in each case as amended from time to time, and such default,
failure or breach shall entitle any counterparty to declare the Indebtedness
thereunder to be due and payable prior to the maturity thereof. The Initial
Noteholder may, in any such case, in its sole discretion, terminate the
Revolving Period.
     Section 2.08 Correction of Errors.
     The parties hereto who have relevant information shall cooperate to
reconcile any errors in calculating the Sales Price from and after the Closing
Date. In the event that an error in the Sales Price is discovered by either
party, including without limitation, any error due to miscalculations of Market
Value where insufficient information has been provided with respect to a Loan to
make an accurate determination of Market Value as of any applicable Transfer
Date, any miscalculations of Principal Balance, accrued interest,
Overcollateralization Shortfall or aggregate unreimbursed Servicing Advances
attributable to the applicable Loan, or any prepayments not properly credited,
such party shall give prompt notice to the other parties hereto, and the party
that shall have benefited from such error shall promptly remit to the other, by
wire transfer of immediately available funds, the amount of such error with no
interest thereon.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
     Section 3.01 Representations, Warranties and Covenants of the Depositor.
     The Depositor hereby represents, warrants and covenants to the other
parties hereto and the Securityholders that as of the Closing Date and as of
each Transfer Date:
          (a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has, and had at all relevant times, full power to own its property, to carry on
its business as currently conducted, to enter into and perform its obligations
under each Basic Document to which it is a party;
          (b) The execution and delivery by the Depositor of each Basic Document
to which the Depositor is a party and its performance of and compliance with all
of the terms thereof will not violate the Depositor’s organizational documents
or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach or acceleration
of, any material contract, agreement or other instrument to which the Depositor
is a party or which are applicable to the Depositor or any of its assets;
          (c) The Depositor has the full power and authority to enter into and
consummate the transactions contemplated by each Basic Document to which the
Depositor is a party, has duly authorized the execution, delivery and
performance of each Basic Document to which it is a party and has duly executed
and delivered each Basic Document to which it is a party; each Basic Document to
which it is a party, assuming due authorization, execution and delivery by the
other party or parties

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thereto, constitutes a valid, legal and binding obligation of the Depositor,
enforceable against it in accordance with the terms thereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
          (d) The Depositor is not in violation of, and the execution and
delivery by the Depositor of each Basic Document to which the Depositor is a
party and its performance and compliance with the terms of each Basic Document
to which the Depositor is a party will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction, which violation
would materially and adversely affect the condition (financial or otherwise) or
operations of the Depositor or any of its properties or materially and adversely
affect the performance of any of its duties hereunder;
          (e) There are no actions or proceedings against, or investigations of,
the Depositor currently pending with regard to which the Depositor has received
service of process and no action or proceeding against, or investigation of, the
Depositor is, to the knowledge of the Depositor, threatened or otherwise pending
before any court, administrative agency or other tribunal that (A) if determined
adversely to the Depositor, have a reasonable possibility of prohibiting or
preventing its entering into any of the Basic Documents to which it is a party
or render the Securities invalid, (B) seek to prevent the issuance of the
Securities or the consummation of any of the transactions contemplated by any of
the Basic Documents to which it is a party or (C) if determined adversely to the
Depositor, would prohibit or materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or enforceability of,
any of the Basic Documents to which it is a party or the Securities, provided,
however, that insofar as this representation relates to the Loan Originator’s
satisfaction of its financial covenants, there is also a reasonable possibility
of an adverse determination of such action, proceeding or investigation having
such effect;
          (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, any of the
Basic Documents to which the Depositor is a party or the Securities, or for the
consummation of the transactions contemplated by any of the Basic Documents to
which the Depositor is a party, except for such consents, approvals,
authorizations and orders, if any, that have been obtained prior to such date;
          (g) The Depositor is solvent, is able to pay its debts as they become
due and has capital sufficient to carry on its business and its obligations
hereunder; it will not be rendered insolvent by the execution and delivery of
any of the Basic Documents to which it is a party or the assumption of any of
its obligations thereunder; no petition of bankruptcy (or similar insolvency
proceeding) has been filed by or against the Depositor;
          (h) The Depositor did not transfer the Loans sold thereon by the
Depositor to the Trust with any intent to hinder, delay or defraud any of its
creditors; nor will the Depositor be rendered insolvent as a result of such
sale;
          (i) The Depositor had good title to, and was the sole owner of, each
Loan sold thereon by the Depositor free and clear of any lien other than any
such lien released simultaneously

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with the sale contemplated herein, and, immediately upon each transfer and
assignment herein contemplated, the Depositor will have delivered to the Trust
good title to, and the Trust will be the sole owner of, each Loan transferred by
the Depositor thereon free and clear of any lien;
          (j) The Depositor acquired title to each of the Loans sold thereon by
the Depositor in good faith, without notice of any adverse claim;
          (k) None of the Basic Documents to which the Depositor is a party, nor
any Officer’s Certificate, statement, report or other document prepared by the
Depositor and furnished or to be furnished by it pursuant to any of the Basic
Documents to which it is a party or in connection with the transactions
contemplated thereby contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading;
          (l) The Depositor is not required to be registered as an “investment
company,” under the Investment Company Act of 1940, as amended;
          (m) The transfer, assignment and conveyance of the Loans by the
Depositor thereon pursuant to this Agreement is not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction;
          (n) The Depositor’s principal place of business and chief executive
offices are located at Irvine, California or at such other address as shall be
designated by such party in a written notice to the other parties hereto;
          (o) The Depositor covenants that during the continuance of this
Agreement it will comply in all respects with the provisions of its
organizational documents in effect from time to time;
          (p) The representations and warranties set forth in (h), (i), (j) and
(m) above were true and correct with respect to each Loan transferred to the
Trust by any QSPE Affiliate at the time such Loan was transferred to such QSPE
Affiliate by the Depositor; and
          (q) Whenever the Depositor becomes aware that a claim is being
asserted against Depositor in a judicial, administrative or arbitration forum,
the Depositor shall promptly notify the Initial Noteholder of the existence and
general nature of such claim.
     Section 3.02 Representations and Warranties of the Loan Originator.
     The Loan Originator hereby represents and warrants to the other parties
hereto and the Securityholders that as of the Closing Date and as of each
Transfer Date:
          (a) The Loan Originator is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and (i) is duly qualified, in good standing and licensed to carry
on its business in each state where any Mortgaged Property related to a Loan
sold by it is located and (ii) is in compliance with the laws of any such
jurisdiction, in both cases, to the extent necessary to ensure the
enforceability of such Loans in accordance with the terms thereof and had at all
relevant times, full corporate power to originate such Loans, to own its
property, to carry on its business as currently conducted and to enter into and
perform its obligations under each Basic Document to which it is a party;

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          (b) The execution and delivery by the Loan Originator of each Basic
Document to which it is a party and its performance of and compliance with the
terms thereof will not violate the Loan Originator’s articles of organization or
by-laws or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in the breach or
acceleration of, any contract, agreement or other instrument to which the Loan
Originator is a party or which may be applicable to the Loan Originator or any
of its assets;
          (c) The Loan Originator has the full power and authority to enter into
and consummate all transactions contemplated by the Basic Documents to be
consummated by it, has duly authorized the execution, delivery and performance
of each Basic Document to which it is a party and has duly executed and
delivered each Basic Document to which it is a party; each Basic Document to
which it is a party, assuming due authorization, execution and delivery by each
of the other parties thereto, constitutes a valid, legal and binding obligation
of the Loan Originator, enforceable against it in accordance with the terms
hereof, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);
          (d) The Loan Originator is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Loan Originator
and its performance and compliance with the terms of each Basic Document to
which it is a party will not constitute a violation with respect to, any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction, which violation would
materially and adversely affect the condition (financial or otherwise) or
operations of the Loan Originator or its properties or materially and adversely
affect the performance of its duties under any Basic Document to which it is a
party;
          (e) There are no actions or proceedings against, or investigations of,
the Loan Originator currently pending with regard to which the Loan Originator
has received service of process and no action or proceeding against, or
investigation of, the Loan Originator is, to the knowledge of the Loan
Originator, threatened or otherwise pending before any court, administrative
agency or other tribunal that (A) if determined adversely to the Loan
Originator, would reasonably be expected to prohibit its entering into any Basic
Document to which it is a party or render the Securities invalid, (B) seek to
prevent the issuance of the Securities or the consummation of any of the
transactions contemplated by any Basic Document to which it is a party or (C) if
determined adversely to the Loan Originator, would have a reasonable possibility
of prohibiting or preventing or materially and adversely affecting the sale of
the Loans to the Depositor, the performance by the Loan Originator of its
obligations under, or the validity or enforceability of, any Basic Document to
which it is a party or the Securities; provided, however, that insofar as this
representation relates to the Loan Originator’s satisfaction of its financial
covenants contained in any Basic Document, there is also a reasonable
possibility of an adverse determination of such action, proceeding or
investigation having such effect;
          (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for: (1) the execution, delivery and
performance by the Loan Originator of, or compliance by the Loan Originator
with, any Basic Document to which it is a party, (2) the issuance of the
Securities, (3) the sale and contribution of the Loans, or (4) the consummation
of the

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transactions required of it by any Basic Document to which it is a party, except
such as shall have been obtained before such date;
          (g) Immediately prior to the sale of any Loan to the Depositor, the
Loan Originator had good title to such Loan sold by it on such date without
notice of any adverse claim;
          (h) The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Loan Originator to the
Purchaser in connection with the negotiation, preparation or delivery of the
Basic Documents to which it is a party or delivered pursuant thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Loan
Originator to the Initial Noteholder or any Noteholder in connection with the
Basic Documents to which it is a party and the transactions contemplated thereby
will be true, complete and accurate in every material respect, or (in the case
of projections) based on reasonable estimates, on the date as of which such
information is stated or certified;
          (i) The Loan Originator is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its
obligations under each Basic Document to which it is a party; it will not be
rendered insolvent by the execution and delivery of this Agreement or by the
performance of its obligations under each Basic Document to which it is a party;
no petition of bankruptcy (or similar insolvency proceeding) has been filed by
or against the Loan Originator prior to the date hereof;
          (j) The Loan Originator has transferred the Loans transferred by it on
or prior to such Transfer Date without any intent to hinder, delay or defraud
any of its creditors;
          (k) Option One has received fair consideration and reasonably
equivalent value in exchange for the Loans sold by it to Option One Capital and
the Loan Originator has received fair consideration and reasonably equivalent
value in exchange for the Loans sold by it to on such Transfer Date to the
Depositor;
          (l) The Loan Originator has not dealt with any broker or agent or
other Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement;
          (m) Option One is in compliance with each of its financial covenants
set forth in Section 7.02;
          (n) The Loan Originator’s principal place of business and chief
executive offices are located at Irvine, California or at such other address as
shall be designated by such party in a written notice to the other parties
hereto; and
          (o) Whenever the Loan Originator becomes aware that a claim is being
asserted against the Loan Originator in a judicial, administrative or
arbitration forum, in which the amount of claimed damages exceeds $5 million
(and without regard to the Loan Originator’s judgment as to the likelihood of
actual recovery of such amount or any amount), the Loan Originator shall
promptly notify the Initial Noteholder of the existence and general nature of
such claim.

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     It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive delivery of the respective Custodial
Loan Files to the Custodian (as the agent of the Indenture Trustee) and shall
inure to the benefit of the Securityholders, the Depositor, the Servicer, the
Indenture Trustee, the Owner Trustee and the Issuer. Upon discovery by the Loan
Originator, the Depositor, the Servicer, the Indenture Trustee or the Issuer of
a breach of any of the foregoing representations and warranties that materially
and adversely affects the value of any Loan or the interests of the
Securityholders in any Loan or in the Securities, the party discovering such
breach shall give prompt written notice (but in no event later than two (2)
Business Days following such discovery) to the other parties and to the Initial
Noteholder. The obligations of the Loan Originator set forth in Sections 2.05
and 3.06 hereof to cure any breach or to substitute for or repurchase an
affected Loan shall constitute the sole remedies available hereunder to the
Securityholders, the Depositor, the Servicer, the Indenture Trustee, the Owner
Trustee or the Issuer respecting a breach of the representations and warranties
contained in this Section 3.02, but shall be cumulative with, and not exclusive
of, any remedies provided in any other Basic Document with respect to breaches
of the Loan Originator’s representations and warranties set forth therein. The
fact that the Initial Noteholder or any Noteholder has conducted or has failed
to conduct any partial or complete due diligence investigation of the Loan Files
shall not affect the Securityholders rights to demand repurchase or substitution
as provided under this Agreement.
     Section 3.03 Representations, Warranties and Covenants of the Servicer.
     The Servicer hereby represents and warrants to and covenants with the other
parties hereto and the Securityholders that as of the Closing Date and as of
each Transfer Date:
          (a) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and (i) is duly
qualified, in good standing and licensed to carry on its business in each state
where any Mortgaged Property is located, and (ii) is in compliance with the laws
of any such state, in both cases, to the extent necessary to ensure the
enforceability of the Loans in accordance with the terms thereof and to perform
its duties under each Basic Document to which it is a party and had at all
relevant times, full corporate power to own its property, to carry on its
business as currently conducted, to service the Loans and to enter into and
perform its obligations under each Basic Document to which it is a party;
          (b) The execution and delivery by the Servicer of each Basic Document
to which it is a party and its performance of and compliance with the terms
thereof will not violate the Servicer’s articles of incorporation or by-laws or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach or acceleration of,
any material contract, agreement or other instrument to which the Servicer is a
party or which are applicable to the Servicer or any of its assets;
          (c) The Servicer has the full power and authority to enter into and
consummate all transactions contemplated by each Basic Document to which it is a
party, has duly authorized the execution, delivery and performance of each Basic
Document to which it is a party and has duly executed and delivered each Basic
Document to which it is a party. Each Basic Document to which it is a party,
assuming due authorization, execution and delivery by each of the other parties
thereto, constitutes a valid, legal and binding obligation of the Servicer,
enforceable against it in accordance

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with the terms hereof, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
          (d) The Servicer is not in violation of, and the execution and
delivery of each Basic Document to which it is a party by the Servicer and its
performance and compliance with the terms of each Basic Document to which it is
a party will not constitute a violation with respect to, any order or decree of
any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially and
adversely affect the condition (financial or otherwise) or operations of the
Servicer or materially and adversely affect the performance of its duties under
any Basic Document to which it is a party;
          (e) There are no actions or proceedings against, or investigations of,
the Servicer currently pending with regard to which the Servicer has received
notice or service of process; and no action or proceeding against, or
investigation of, the Servicer is, to the knowledge of the Servicer, threatened
or otherwise pending before any court, administrative agency or other tribunal
or local, state or federal body or agency that (A) if determined adversely to
the Servicer, would prohibit its entering into any Basic Document to which it is
a party, (B) seek to prevent the consummation of any of the transactions
contemplated by any Basic Document to which it is a party, (C) if determined
adversely to the Servicer, would have a reasonable possibility of prohibiting or
materially and adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of, any Basic Document to
which it is a party or the Securities; provided, however, that insofar as this
representation relates to the Loan Originator’s satisfaction of its financial
covenants under any of the Basic Documents, there is also a reasonable
possibility of an adverse determination of such action, proceeding or
investigation having such effect, or (D) allege that the Servicer has engaged in
practices, with respect to any of the Loans, that are predatory, abusive,
deceptive or otherwise wrongful under an applicable statute, regulation or
ordinance or that are otherwise actionable and that have a reasonable
possibility of adverse determination;
          (f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, any Basic
Document to which it is a party or the Securities, or for the consummation of
the transactions contemplated by any Basic Document to which it is a party,
except for such consents, approvals, authorizations and orders, if any, that
have been obtained prior to such date;
          (g) The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Servicer to the Majority
Noteholders in connection with the negotiation, preparation or delivery of the
Basic Documents to which it is a party or delivered pursuant thereto, when taken
as a whole, do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Servicer to
the Noteholders in connection with the Basic Documents to which it is a party
and the transactions contemplated thereby will be true, complete and accurate in
every material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or certified;

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          (h) The Servicer is solvent and will not be rendered insolvent as a
result of the performance of its obligations pursuant to under the Basic
Documents to which it is a party;
          (i) The Servicer acknowledges and agrees that the Servicing
Compensation represents reasonable compensation for the performance of its
services hereunder and that the entire Servicing Compensation shall be treated
by the Servicer, for accounting purposes, as compensation for the servicing and
administration of the Loans pursuant to this Agreement;
          (j) The Servicer is in compliance with each of its financial covenants
set forth in Section 7.02;
          (k) Each Subservicer is an Eligible Servicer and the Servicer
covenants to cause each Subservicer to be an Eligible Servicer;
          (l) The Servicer has not engaged in any practice or activity with
respect to the Loans, or any other loans, that is predatory, abusive, deceptive
or otherwise wrongful under the statutes, regulations and ordinances, if any,
that are applicable to the particular loans or that is otherwise actionable;
          (m) Whenever the Servicer becomes aware that a claim is being asserted
against Servicer in a judicial, administrative or arbitration forum, in which
the amount of claimed damages exceeds $5 million (and without regard to the
Servicer’s judgment as to the likelihood of actual recovery of such amount or
any amount), the Servicer shall promptly notify the Initial Noteholder of the
existence and general nature of such claim;
          (n) Whenever the Servicer, the Depositor or the Loan Originator
becomes aware of a failure on the part of such company duly to observe or
perform in any material respect any other of the material covenants or
agreements on the part of the Servicer, contained in any Basic Document to which
it is a party, such company shall notify the Initial Noteholder of the existence
and general nature of such failure; and
          (o) Whenever the Servicer, the Depositor or the Loan Originator
becomes aware of a breach on the part of such company of any representation or
warranty contained in any Basic Document to which it is a party, such company
shall notify the Initial Noteholder of the existence and general nature of such
breach.
     It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.03 shall survive delivery of the
respective Custodial Loan Files to the Indenture Trustee or the Custodian on its
behalf and shall inure to the benefit of the Depositor, the Securityholders, the
Indenture Trustee, the Owner Trustee and the Issuer. Upon discovery by the Loan
Originator, the Depositor, the Servicer, the Indenture Trustee, the Owner
Trustee or the Issuer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the value of any
Loan or the interests of the Securityholders therein or in the Securities, the
party discovering such breach shall give prompt written notice (but in no event
later than two (2) Business Days following such discovery) to the other parties
and to the Initial Noteholder, and the Servicer shall take appropriate action to
correct the breach. The fact that the Initial Noteholder or any Noteholder has
conducted or has failed to conduct any

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partial or complete due diligence investigation shall not affect the
Securityholders, rights to exercise their remedies as provided under this
Agreement.
     Section 3.04 Reserved.
     Section 3.05 Representations and Warranties Regarding Loans.
     The Loan Originator makes each of the representations and warranties set
forth on Exhibit E hereto with respect to each Loan, provided, however, that
with respect to each Loan proposed to be transferred to the Issuer by a QSPE
Affiliate, to the extent that the Loan Originator has at the time of such
transfer actual knowledge of any facts or circumstances that would render any of
such representations and warranties materially false, the Loan Originator shall
notify the Initial Noteholder of such facts or circumstances and, in such event,
shall have no obligation to make such materially false representation and
warranty and the Issuer shall not purchase such Loan.
     In addition, the Loan Originator represents and warrants with respect to
each Loan sold by a QSPE Affiliate that the Loan Originator has not been
required to pay any amount to or on behalf of such QSPE Affiliate that lowered
the recourse to the Loan Originator available to such QSPE Affiliate below the
maximum recourse to the Loan Originator available to such QSPE Affiliate under
the terms of any loan purchase agreement providing for recourse by that QSPE
Affiliate to the Loan Originator.
     Section 3.06 Purchase and Substitution.
          (a) It is understood and agreed that the representations and
warranties set forth in Exhibit E hereto shall survive the conveyance of the
Loans to the Indenture Trustee on behalf of the Issuer, and the delivery of the
Securities to the Securityholders. Upon discovery by the Depositor, the
Servicer, the Loan Originator, the Custodian, the Issuer, the Indenture Trustee
or any Securityholder of a breach of any of such representations and warranties
or the representations and warranties of the Loan Originator set forth in
Section 3.02 which materially and adversely affects the value or enforceability
of any Loan or the interests of the Securityholders in any Loan (notwithstanding
that such representation and warranty was made to the Loan Originator’s best
knowledge) or which constitutes a breach of the representations and warranties
set forth in Exhibit E, the party discovering such breach shall give prompt
written notice to the others and to the Initial Noteholder. The Loan Originator
shall within five Business Days of the earlier of the Loan Originator’s
discovery or the Loan Originator’s receiving notice of any breach of a
representation or warranty, promptly cure such breach in all material respects.
If within five Business Days after the earlier of the Loan Originator’s
discovery of such breach or the Loan Originator’s receiving notice thereof such
breach has not been remedied by the Loan Originator and such breach materially
and adversely affects the interests of the Securityholders in the related Loan
(an “Unqualified Loan”), the Loan Originator shall promptly upon receipt of
instructions from the Majority Noteholders either (i) remove such Unqualified
Loan from the Trust (in which case it shall become a Deleted Loan) and
substitute one or more Qualified Substitute Loans in the manner and subject to
the conditions set forth in this Section 3.06 or (ii) purchase such Unqualified
Loan at a purchase price equal to the Repurchase Price with respect to such
Unqualified Loan by depositing or causing to be deposited such Repurchase Price
in the Collection Account.

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     Any substitution of Loans pursuant to this Section 3.06(a) shall be
accompanied by payment by the Loan Originator of the Substitution Adjustment, if
any, (x) if no Overcollateralization Shortfall exists on the date of such
substitution (after giving effect to such substitution), remitted to the
Noteholders in accordance with Section 5.01(c)(4)(i) or (y) otherwise to be
deposited in the Collection Account pursuant to Section 5.01(b) hereof.
          (b) As to any Deleted Loan for which the Loan Originator substitutes a
Qualified Substitute Loan or Loans, the Loan Originator shall effect such
substitution by delivering to the Indenture Trustee and the Initial Noteholder a
certification executed by a Responsible Officer of the Loan Originator to the
effect that the Substitution Adjustment, if any, has been (x) if no
Overcollateralization Shortfall exists on the date of such substitution (after
giving effect to such substitution), remitted to the Noteholders in accordance
with Section 5.01(c)(4)(i), or (y) otherwise deposited in the Collection
Account. As to any Deleted Loan for which the Loan Originator substitutes a
Qualified Substitute Loan or Loans, the Loan Originator shall effect such
substitution by delivering to the Custodian the documents constituting the
Custodial Loan File for such Qualified Substitute Loan or Loans.
     The Servicer shall deposit in the Collection Account all payments received
in connection with each Qualified Substitute Loan after the date of such
substitution. Monthly Payments received with respect to Qualified Substitute
Loans on or before the date of substitution will be retained by the Loan
Originator. The Trust will be entitled to all payments received on the Deleted
Loan on or before the date of substitution and the Loan Originator shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Loan. The Loan Originator shall give written notice to the Issuer,
the Servicer (if the Loan Originator is not then acting as such), the Indenture
Trustee and the Initial Noteholder that such substitution has taken place and
the Servicer shall amend the Loan Schedule to reflect (i) the removal of such
Deleted Loan from the terms of this Agreement and (ii) the substitution of the
Qualified Substitute Loan. The Servicer shall promptly deliver to the Issuer,
the Loan Originator, the Indenture Trustee and the Initial Noteholder, a copy of
the amended Loan Schedule. Upon such substitution, such Qualified Substitute
Loan or Loans shall be subject to the terms of this Agreement in all respects,
and the Loan Originator shall be deemed to have made with respect to such
Qualified Substitute Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Exhibit E hereto. On the
date of such substitution, the Loan Originator will (x) if no
Overcollateralization Shortfall exists as of the date of substitution (after
giving effect to such substitution), remit to the Noteholders as provided in
Section 5.01(c)(4)(i) or (y) otherwise deposit into the Collection Account, in
each case an amount equal to the related Substitution Adjustment, if any. In
addition, on the date of such substitution, the Servicer shall cause the
Indenture Trustee to release the Deleted Loan from the Lien of the Indenture and
the Servicer will cause such Qualified Substitute Loan to be pledged to the
Indenture Trustee under the Indenture as part of the Trust Estate.
          (c) With respect to all Unqualified Loans or other Loans repurchased
by the Loan Originator pursuant to this Agreement, upon the deposit of the
Repurchase Price therefor into the Collection Account or the conveyance of one
or more Qualified Substitute Loans and payment of any Substitution Adjustment,
(i) the Issuer shall assign to the Loan Originator, without representation or
warranty, all of the Issuer’s right, title and interest in and to such
Unqualified Loan, which right, title and interest were conveyed to the Issuer
pursuant to Section 2.01 hereof and (ii) the Indenture Trustee shall assign to
the Loan Originator, without recourse, representation or warranty, all the
Indenture

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Trustee’s right, title and interest in and to such Unqualified Loans or Loans,
which right, title and interest were conveyed to the Indenture Trustee pursuant
to Section 2.01 hereof and the Indenture. The Issuer and the Indenture Trustee
shall, at the expense of the Loan Originator, take any actions as shall be
reasonably requested by the Loan Originator to effect the repurchase of any such
Loans and to have the Custodian return the Custodial Loan File of the Deleted
Loan to the Servicer.
          (d) It is understood and agreed that the obligations of the Loan
Originator set forth in this Section 3.06 to cure, purchase or substitute for an
Unqualified Loan constitute the sole remedies hereunder of the Depositor, the
Issuer, the Indenture Trustee, the Owner Trustee and the Securityholders
respecting a breach of the representations and warranties contained in Sections
3.02 hereof and in Exhibit E hereto. Any cause of action against the Loan
Originator relating to or arising out of a defect in a Custodial Loan File or
against the Loan Originator relating to or arising out of a breach of any
representations and warranties made in Sections 3.02 hereof and in Exhibit E
hereto shall accrue as to any Loan upon (i) discovery of such defect or breach
by any party and notice thereof to the Loan Originator or knowledge thereof by
the Loan Originator (whereupon the Loan Originator shall be obligated to give
notice thereof to the Indenture Trustee and the Initial Noteholder) and either
(ii) failure by the Loan Originator to cure such defect or breach or purchase or
substitute such Loan as specified above or (iii) demand upon the Loan
Originator, as applicable, by the Issuer or the Majority Noteholders for all
amounts payable in respect of such Loan.
          (e) Neither the Issuer nor the Indenture Trustee shall have any duty
to conduct any affirmative investigation other than as specifically set forth in
this Agreement as to the occurrence of any condition requiring the repurchase or
substitution of any Loan pursuant to this Section or the eligibility of any Loan
for purposes of this Agreement.
     Section 3.07 Disposition.
          (a) The Majority Noteholders may at any time, and from time to time,
require that the Issuer redeem all or any portion of the Note Principal Balance
of the Notes by paying the Note Redemption Amount with respect to the Note
Principal Balance to be redeemed in accordance with Section 10.04. In connection
with any such redemption, the Issuer shall effect Dispositions at the direction
of the Majority Noteholders in accordance with this Agreement, including in
accordance with this Section 3.07.
          (b) (i) In consideration of the consideration received from the
Depositor under the Loan Purchase and Contribution Agreement, the Loan
Originator hereby agrees and covenants that in connection with each Disposition
it shall effect the following:
(A) make such representations and warranties concerning the Loans as of the
“cut-off date” of the related Disposition to the Disposition Participants as may
be necessary to effect the Disposition and such additional representations and
warranties as may be necessary, in the reasonable opinion of any of the
Disposition Participants, to effect such Disposition; provided, that, to the
extent that the Loan Originator has at the time of the Disposition actual
knowledge of any facts or circumstances that would render any of such
representations and warranties materially false, the Loan Originator may notify
the Disposition

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Participants of such facts or circumstances and, in such event, shall have no
obligation to make such materially false representation and warranty;
(B) supply such information, opinions of counsel, letters from law and/or
accounting firms and other documentation and certificates regarding the
origination of the Loans as any Disposition Participant shall reasonably request
to effect a Disposition and enter into such indemnification agreements customary
for such transaction relating to or in connection with the Disposition as the
Disposition Participants may reasonably require;
(C) make itself available for and engage in good faith consultation with the
Disposition Participants concerning information to be contained in any document,
agreement, private placement memorandum, or filing with the Securities and
Exchange Commission relating to the Loan Originator or the Loans in connection
with a Disposition and shall use reasonable efforts to compile any information
and prepare any reports and certificates, into a form, whether written or
electronic, suitable for inclusion in such documentation;
(D) to implement the foregoing and to otherwise effect a Disposition, enter
into, or arrange for its Affiliates to enter into insurance and indemnity
agreements, underwriting or placement agreements, servicing agreements, purchase
agreements and any other documentation which may reasonably be required of or
reasonably deemed appropriate by the Disposition Participants in order to effect
a Disposition; and
(E) take such further actions as may be reasonably necessary to effect the
foregoing; provided, that notwithstanding anything to the contrary, (a) the Loan
Originator shall have no liability for the Loans arising from or relating to the
ongoing ability of the related Borrowers to pay under the Loans; (b) none of the
indemnities hereunder shall constitute an unconditional guarantee by the Loan
Originator of collectability of the Loans; (c) the Loan Originator shall have no
obligation with respect to the financial inability of any Borrower to pay
principal, interest or other amount owing by such Borrower under a Loan; and
(d) the Loan Originator shall only be required to enter into documentation in
connection with Dispositions that is consistent with the prior public
securitizations of affiliates of the Loan Originator, provided that to the
extent an Affiliate of any Noteholder acts as “depositor” or performs a similar
function in a Securitization, additional indemnities and informational
representations and warranties are provided which are consistent with those in
the Basic Documents and may upon request of the Loan Originator be set forth in
a separate agreement between such Affiliate of the Noteholder and the Loan
Originator.
     (ii) In the event of any Disposition to the Loan Originator or any of its
Affiliates (except in connection with a Securitization or a Disposition to a
QSPE Affiliate), the purchase price paid by the Loan Originator or any such
Affiliate shall be the “fair market value” of the Loans subject to such
Disposition (as determined by the Market Value Agent based upon recent sales of
comparable

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loans or such other objective criteria as may be approved for determining “fair
market value” by a “Big Four” national accounting firm).
     (iii) As long as no Event of Default or Default shall have occurred and be
continuing under this Agreement or the Indenture, the Servicer may continue to
service the Loans included in any Disposition subject to any applicable
“term-to-term” servicing provisions in Section 9.01(b) and subject to any
required amendments to the related servicing provisions as may be necessary to
effect the related Disposition including but not limited to the obligation to
make recoverable principal and interest advances on the Loans.
     After the termination of the Revolving Period, the Issuer shall effect one
or more Dispositions at the direction of the Disposition Agent, and the Loan
Originator and the Depositor agree to use commercially reasonable efforts to
effectuate such Dispositions.
          (c) The Issuer shall effect Dispositions at the direction of the
Majority Noteholders in accordance with the terms of this Agreement and the
Basic Documents. In connection therewith, the Trust agrees to assist the Loan
Originator in such Dispositions and accordingly it shall, at the request and
direction of the Majority Noteholders:
     (i) transfer, deliver and sell all or a portion of the Loans, as of the
“cut-off dates” of the related Dispositions, to such Disposition Participants as
may be necessary to effect the Dispositions; provided, that any such sale shall
be for “fair market value,” as determined by the Market Value Agent in its
reasonable discretion;
     (ii) deposit the cash Disposition Proceeds into the Distribution Account
pursuant to Section 5.01(c)(2)(D);
     (iii) to the extent that a Securitization creates any Retained Securities,
to accept such Retained Securities as a part of the Disposition Proceeds in
accordance with the terms of this Agreement; and
     (iv) take such further actions, including executing and delivering
documents, certificates and agreements, as may be reasonably necessary to effect
such Dispositions.
          (d) The Servicer hereby covenants that it will take such actions as
may be reasonably necessary to effect Dispositions as the Disposition
Participants may request and direct, including without limitation providing the
Loan Originator such information as may be required to make representations and
warranties required hereunder, and covenants that it will make such
representations and warranties regarding its servicing of the Loans hereunder as
of the Cut-off Date of the related Disposition as reasonably required by the
Disposition Participants.
          (e) [reserved].
          (f) The Majority Noteholders may effect Whole Loan Sales upon written
notice to the Servicer of its intent to cause the Issuer to effect a Whole Loan
Sale at least five (5) Business Days

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in advance thereof. The Disposition Agent shall serve as agent for Whole Loan
Sales and will receive a reasonable fee for such services provided that no such
fee shall be payable if (i) the Loan Originator or its Affiliates purchase such
Loans and (ii) no Event of Default or Default shall have occurred and be
continuing. If no Default or Event of Default shall have occurred and be
continuing, the Loan Originator or its Affiliates may concurrently bid to
purchase Loans in a Whole Loan Sale; provided, however, that neither the Loan
Originator nor any such Affiliates shall pay a price in excess of the fair
market value thereof (as determined by the Market Value Agent based upon recent
sales of comparable loans or such other objective criteria as may be approved
for determining “fair market value” by a “Big Four” national accounting firm).
In the event that the Loan Originator does not bid in any such Whole Loan Sale,
it shall have a right of first refusal to purchase the Loans offered for sale at
the price offered by the highest bidder, but not less than 100% of the
outstanding principal balance plus accrued interest. The Disposition Agent shall
conduct any Whole Loan Sale subject to the Loan Originator’s right of first
refusal and shall promptly notify the Loan Originator of the amount of the
highest bid. The Loan Originator shall have five (5) Business Days following its
receipt of such notice to exercise its right of first refusal by notifying the
Disposition Agent in writing.
          (g) Except as otherwise expressly set forth under this Section 3.07,
the parties’ rights and obligations under this Section 3.07 shall continue
notwithstanding the occurrence of an Event of Default.
          (h) The Disposition Participants (and the Majority Noteholders to the
extent directing the Disposition Participants) shall be independent contractors
to the Issuer and shall have no fiduciary obligations to the Issuer or any of
its Affiliates. In that connection, the Disposition Participants shall not be
liable for any error of judgment made in good faith and shall not be liable with
respect to any action they take or omit to take in good faith in the performance
of their duties.

    Section 3.08 Loan Originator Put; Servicer Call.

          (a) Loan Originator Put. The Loan Originator shall promptly purchase,
upon the written demand of the Majority Noteholders, any Put/Call Loan;
provided, however, that the Loan Originator may (if it is at that time the
Servicer), upon receipt of such demand, elect to repurchase such Put/Call Loan
pursuant to (b) below, in which case such repurchase shall be deemed a Servicer
Call.
          (b) Servicer Call. The Servicer may repurchase any Put/Call Loan at
any time. Such Servicer Call shall be solely at the option of the Servicer.
Prior to exercising a Servicer Call, the Servicer shall deliver written notice
to the Majority Noteholders and the Indenture Trustee which notice shall
identify each Loan to be purchased and the Repurchase Price therefor; provided,
however, that the Servicer may irrevocably waive its right to repurchase any
Put/Call Loan as soon as reasonably practicable following its receipt of notice
of the occurrence of any event or events giving rise to such Loan being a
Put/Call Loan.
          (c) In connection with each Loan Originator Put, the Loan Originator
shall deposit into the Collection Account the Repurchase Price for the Loans to
be repurchased. In connection with each Servicer Call, the Servicer shall
deposit into the Collection Account the Repurchase Price for the Loans to be
purchased. The aggregate Repurchase Price of all Loans transferred pursuant to
Section

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3.08(a) as of any date shall in no event exceed the Unfunded Transfer Obligation
at the time of the related Loan Originator Put.
     Section 3.09 Modification of Underwriting Guidelines.
     The Loan Originator shall give the Noteholders prompt written notification
of any modification or change to the Underwriting Guidelines. If the Initial
Noteholder objects in writing to any modification or change to the Underwriting
Guidelines within fifteen (15) days after receipt of such notice, no Loans may
be conveyed to the Issuer pursuant to this Agreement unless such Loans have been
originated pursuant to the Underwriting Guidelines without giving effect to such
modification or change. Notwithstanding anything contained in this Agreement to
the contrary, any Loan conveyed to the Issuer pursuant to this Agreement that
was originated pursuant to a modification or change to the Underwriting
Guidelines that has been rejected by the Noteholders or of which the Noteholders
did not receive notice, shall be deemed an Unqualified Loan and shall be
repurchased or substituted for in accordance with Section 3.06.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE LOANS
     Section 4.01 Servicer’s Servicing Obligations.
     The Servicer, as independent contract servicer, shall service and
administer the Loans in accordance with the terms and provisions set forth in
the Servicing Addendum, which Servicing Addendum is incorporated herein by
reference. The Servicer shall timely deliver any reports and other information
necessary for the Indenture Trustee to prepare reports the Indenture Trustee is
required to prepare under the Basic Documents on the basis of reports or other
information to be provided by the Servicer.
     Section 4.02 Financial Statements.
          (a) So long as the Notes remain outstanding, the Servicer shall
furnish to the Noteholders:
          (i) annual consolidated audited financial statements of the Servicer
and its Affiliates no later than 105 days after the Servicer’s Fiscal Year;
          (ii) quarterly unaudited statements of the Servicer no later than
60 days after quarter-end, accompanied by a certification to the effect that
such statements were prepared in accordance with generally accepted accounting
principles consistently applied (with customary exceptions for year-end
adjustments), and as to the absence of any Default or Event of Default (or if a
Default or Event of Default exists, identifying it with reasonable specificity
and stating the Servicer’s plan for curing it);
          (iii) monthly unaudited statements of the Servicer no later than
45 days after month-end;

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          (iv) on a timely basis, (i) quarterly and annual consolidating
financial statements reflecting material intercompany adjustments, (ii) all form
10-K, registration statements and other “corporate finance” filings made with
the SEC (other than 8-K filings), provided, however, that the Servicer shall
provide the Noteholders a copy of the H&R Block, Inc.’s annual SEC Form 10-K
filing no later than 105 days after year-end, and (iii) any other financial
information that the Noteholders may reasonably request; and
          (v) monthly portfolio performance data with respect to the mortgage
loans the Servicer services, including, without limitation, any outstanding
delinquencies, prepayments in whole or in part, and repurchases by the Servicer.
          (b) Any and all financial statements provided pursuant to this
Section 4.02 shall be prepared in accordance with GAAP, and, in the case of
audited statements shall be accompanied by an unqualified auditor’s report.
ARTICLE V
ESTABLISHMENT OF TRUST ACCOUNTS; TRANSFER OBLIGATION
     Section 5.01 Collection Account and Distribution Account.
          (a) (1) Establishment of Collection Account. The Servicer, for the
benefit of the Noteholders, shall cause to be established and maintained one or
more Collection Accounts (collectively, the “Collection Account”), which shall
be separate Eligible Accounts entitled “Option One Owner Trust 2002-3 Collection
Account, Wells Fargo Bank, N.A., as Indenture Trustee, for the benefit of the
Option One Owner Trust 2002-3 Mortgage-Backed Notes.” The Collection Account
shall be maintained with a depository institution and shall satisfy the
requirements set forth in the definition of Eligible Account. Funds in the
Collection Account shall be invested in accordance with Section 5.03 hereof.
          (2) Establishment of Distribution Account. The Servicer, for the
benefit of the Noteholders, shall cause to be established and maintained, one or
more Distribution Accounts (collectively, the “Distribution Account”), which
shall be separate Eligible Accounts, entitled “Option One Owner Trust 2002-3
Distribution Account, Wells Fargo Bank, N.A., as Indenture Trustee, for the
benefit of the Option One Owner Trust 2002-3 Mortgage-Backed Notes.” The
Distribution Account shall be maintained with a depository institution and shall
satisfy the requirements set forth in the definition of Eligible Account. Funds
in the Distribution Account shall be invested in accordance with Section 5.03
hereof. The Servicer may, at its option, maintain one account to serve as both
the Distribution Account and the Collection Account, in which case, the account
shall be entitled “Option One Owner Trust 2002-3 Collection/Distribution
Account, Wells Fargo Bank, N.A., as Indenture Trustee, for the benefit of the
Option One Owner Trust 2002-3 Mortgage-Backed Notes.” If the Servicer makes such
an election, all references herein or in any other Basic Document to either the
Collection Account or the Distribution Account shall mean the
Collection/Distribution Account described in the preceding sentence.

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          (3) The Servicer will inform the Indenture Trustee of the location of
any accounts held in the Indenture Trustee’s name, including any location to
which an account is transferred.
          (b) Deposits to Collection Account. The Servicer shall deposit or
cause to be deposited (without duplication) to the Collection Account:
     (i) all payments on or in respect of each Loan collected on or after the
related Transfer Cut-off Date (net, in each case, of any Servicing Compensation
retained therefrom) within two (2) Business Days after receipt thereof;
     (ii) all Net Liquidation Proceeds within two (2) Business Days after
receipt thereof;
     (iii) all Mortgage Insurance Proceeds within two (2) Business Days after
receipt thereof;
     (iv) all Released Mortgaged Property Proceeds within two (2) Business Days
after receipt thereof;
     (v) any amounts payable in connection with the repurchase of any Loan and
the amount of any Substitution Adjustment pursuant to Sections 2.05 and 3.06
hereof concurrently with payment thereof;
     (vi) any Repurchase Price payable in connection with a Servicer Call
pursuant to Section 3.08 hereof concurrently with payment thereof;
     (vii) the deposit of the Termination Price under Section 10.02 hereof
concurrently with payment thereof;
     (viii) from the Servicer’s own funds, any Make-Whole Premiums; and
     (ix) any Repurchase Price payable in connection with a Loan Originator Put
remitted by the Loan Originator pursuant to Section 3.08 hereof.
     Except as otherwise expressly provided in Section 5.01(c)(4)(i), the
Servicer agrees that it will cause the Loan Originator, Borrower or other
appropriate Person paying such amounts, as the case may be, to remit directly to
the Servicer for deposit into the Collection Account all amounts referenced in
clauses (i) through (ix). To the extent the Servicer receives any such amounts,
it will deposit them into the Collection Account on the same Business Day as
receipt thereof.
     (c) Withdrawals From Collection Account; Deposits to Distribution Account.
     (1) Withdrawals From Collection Account — Reimbursement Items. The Paying
Agent shall periodically but in any event on each Determination Date, make the
following withdrawals from the Collection Account prior to any other
withdrawals, in no particular order of priority:

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          (i) to withdraw any amount not required to be deposited in the
Collection Account or deposited therein in error, including Servicing
Compensation;
          (ii) to withdraw the Servicing Advance Reimbursement Amount except to
the extent that an Overcollateralization Shortfall would result from such
withdrawal; and
          (iii) to clear and terminate the Collection Account in connection with
the termination of this Agreement.

  (2)   Deposits to Distribution Account — Payment Dates.

(A) On the Business Day prior to each Payment Date, the Paying Agent shall
deposit into the Distribution Account such amounts as are required from the
Transfer Obligation Account pursuant to Sections 5.05(e), 5.05(f), 5.05(g) and
5.05(h).
(B) After making all withdrawals specified in Section 5.01(c)(1) above, on each
Remittance Date, the Paying Agent (based on information provided by the Servicer
for such Payment Date), shall withdraw the Monthly Remittance Amount (or, with
respect to an additional Payment Date pursuant to Section 5.01(c)(4)(ii), all
amounts on deposit in the Collection Account on such date up to the amount
necessary to make the payments due on the related Payment Date in accordance
with Section 5.01(c)(3)) from the Collection Account not later than 5:00 P.M.,
New York City time and deposit such amount into the Distribution Account.
(C) [reserved];
(D) The Servicer shall deposit or cause to be deposited in the Distribution
Account any cash Disposition Proceeds pursuant to Section 3.07. To the extent
the Servicer receives such amounts, it will deposit them into the Distribution
Account on the same Business Day as receipt thereof.
     (3) Withdrawals From Distribution Account — Payment Dates. On each Payment
Date, to the extent funds are available in the Distribution Account, the Paying
Agent (based on the information provided by the Servicer contained in the
Servicer’s Remittance Report for such Payment Date) shall make withdrawals
therefrom for application in the following order of priority:
          (i) to distribute on such Payment Date the following amounts in the
following order: (a) to the Indenture Trustee, an amount equal to the Indenture
Trustee Fee and all unpaid Indenture Trustee Fees from prior Payment Dates and
all amounts owing to the Indenture Trustee pursuant to Section 6.07 of the
Indenture and not paid by the Servicer or the Depositor up to an amount not to
exceed $25,000 per annum, (b) to the Custodian, an amount equal to the Custodian
Fee and all unpaid Custodian Fees from prior Payment Dates, (c) to the Servicer,
(x) an amount equal to the Servicing Compensation and all unpaid Servicing
Compensation from prior Payment Dates (to the extent not retained from
collections or remitted to the Servicer pursuant to Section 5.01(c)) and (y) all
Nonrecoverable Servicing Advances not previously reimbursed except to the extent
that an Overcollateralization Shortfall would result from such payment, and
(d) to the

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Servicer, in trust for the Owner Trustee, an amount equal to the Owner Trustee
Fee and all unpaid Owner Trustee Fees from prior Payment Dates;
          (ii) [reserved]
          (iii) to the holders of the Notes pro rata, the sum of the Interest
Payment Amount for such Payment Date and the Interest Carry-Forward Amount for
the preceding Payment Date;
          (iv) to the holders of the Notes pro rata, the Overcollateralization
Shortfall for such Payment Date; provided, however, that if an Event of Default
under the Indenture or Default shall have occurred, the holders of the Notes
shall receive, in respect of principal, all remaining amounts on deposit in the
Distribution Account;
          (v) to the Purchaser, any Make-Whole Premium for such Payment Date, to
the extent payable, together with any Make-Whole Premiums unpaid from any prior
Payment Dates;
          (vi) to the appropriate Person, amounts in respect of Issuer/Depositor
Indemnities (as defined in the Trust Agreement) and Due Diligence Fees until
such amounts are paid in full;
          (vii) to the Transfer Obligation Account, all remaining amounts until
the balance therein equals the Transfer Obligation Target Amount;
          (viii) to the Indenture Trustee all amounts owing to the Indenture
Trustee pursuant to Section 6.07 of the Indenture and not paid by the Servicer
or Depositor or pursuant to clause (i) above; and
          (ix) to the holders of the Trust Certificates, subject to
Section 5.2(b) of the Trust Agreement, all amounts remaining therein; provided,
however, if the Owner Trustee has notified the Paying Agent that any amounts are
due and owing to it and remain unpaid, then first to the Owner Trustee, such
amounts.
     (4) (i) If the Loan Originator or the Servicer, as applicable, repurchases,
purchases or substitutes a Loan pursuant to Section 2.05, 3.06, 3.08(a), 3.08(b)
or 3.08(c), then the Noteholders and the Issuer shall deem such date to be an
additional Payment Date and the Issuer shall provide written notice to the
Indenture Trustee and the Paying Agent of such additional Payment Date at least
one (1) Business Day prior to such Payment Date. On such additional Payment
Date, the Loan Originator or the Servicer, in satisfaction of its obligations
under Section 2.05, 3.06, 3.08(a) 3.08(b) or 3.08(c) and in satisfaction of the
obligations of the Issuer and the Paying Agent to distribute such amounts to the
Noteholders pursuant to Section 5.01(c), shall remit to the Noteholders, on
behalf of the Issuer and the Paying Agent, an amount equal to the Repurchase
Prices and any Substitution Adjustments (as applicable) to be paid by the Loan
Originator or the Servicer by 12:00 p.m. New York City time, as applicable,
under such Section, on such Payment Date, and the Note Principal Balance will be
reduced accordingly. Such amounts shall be deemed deposited into the Collection
Account and the Distribution Account, as applicable, and such amounts will be
deemed distributed pursuant to the terms of Section 5.01(c). Upon notice of an
additional Payment Date to the Paying Agent and

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the Indenture Trustee as provided above, the Paying Agent shall provide the Loan
Originator or the Servicer (as applicable) information necessary so that
remittances to the Noteholders pursuant to this clause (4)(i) may be made by the
Loan Originator or the Servicer, as applicable, in compliance with
Section 5.02(a) hereof.
          (ii) To the extent that there is deposited in the Collection Account
or the Distribution Account any amounts referenced in Section 5.01(b)(vii) and
5.01(c)(2)(D), the Majority Noteholders and the Issuer may agree, upon
reasonable written notice to the Paying Agent and the Indenture Trustee, to
additional Payment Dates. The Issuer and the Majority Noteholders shall give the
Paying Agent and the Indenture Trustee at least one (1) Business Day’s written
notice prior to such additional Payment Date and such notice shall specify each
amount in Section 5.01(c) to be withdrawn from the Collection Account and
Distribution Account on such day.
          (iii) To the extent that there is deposited in the Distribution
Account any amounts referenced in Section 5.05(f), an additional Payment Date
shall be deemed to have been established on such date (or if that fact is not
recognized by 4:30 PM, then on the next following Business Day). On such
additional Payment Date, the Paying Agent shall pay the sum of the
Overcollateralization Shortfall to the Noteholders in respect of principal on
the Notes.
     Notwithstanding that the Notes have been paid in full, the Indenture
Trustee, the Paying Agent and the Servicer shall continue to maintain the
Distribution Account hereunder until this Agreement has been terminated.
     Section 5.02 Payments to Securityholders.
          (a) All distributions made on the Notes on each Payment Date or
pursuant to Section 5.04(b) of the Indenture will be made on a pro rata basis
among the Noteholders of record of the Notes on the next preceding Record Date
based on the Percentage Interest represented by their respective Notes, without
preference or priority of any kind, and, except as otherwise provided in the
next succeeding sentence, shall be made by wire transfer of immediately
available funds to the account of such Noteholder, if such Noteholder shall own
of record Notes having a Percentage Interest (as defined in the Indenture) of at
least 20% and shall have so notified the Paying Agent and the Indenture Trustee
five (5) Business Days prior to the related Record Date, and otherwise by check
mailed to the address of such Noteholder appearing in the Note Register on the
related Record Date. The final distribution on each Note will be made in like
manner, but only upon presentment and surrender of such Note at the location
specified in the notice to Noteholders of such final distribution.
          (b) All distributions made on the Trust Certificates on each Payment
Date or pursuant to Section 5.04(b) of the Indenture will be made in accordance
with the Percentage Interest among the holders of the Trust Certificates of
record on the next preceding Record Date based on their Percentage Interests (as
defined in the Trust Agreement) on the date of distribution, without preference
or priority of any kind, and, except as otherwise provided in the next
succeeding sentence, shall be made by wire transfer of immediately available
funds to the account of each such holder, if such holder shall own of record a
Trust Certificate in an original denomination aggregating at least 25% of the
Percentage Interests and shall have so notified the Paying Agent and the
Indenture Trustee five (5) Business Days prior to the related Record Date, and
otherwise by check mailed to the address of such

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Certificateholder appearing in the Certificate Register. The final distribution
on each Trust Certificate will be made in like manner, but only upon presentment
and surrender of such Trust Certificate at the location specified in the notice
to holders of the Trust Certificates of such final distribution. Any amount
distributed to the holders of the Trust Certificates on any Payment Date shall
not be subject to any claim or interest of the Noteholders. In the event that at
any time there shall be more than one Certificateholder, the Indenture Trustee
shall be entitled to reasonable additional compensation from the Servicer for
any increase in its obligations hereunder.
     Section 5.03 Trust Accounts; Trust Account Property.
          (a) Control of Trust Accounts. Each of the Trust Accounts established
hereunder has been pledged by the Issuer to the Indenture Trustee under the
Indenture and shall be subject to the Lien of the Indenture. Amounts distributed
from each Trust Account in accordance with the terms of this Agreement shall be
released for the benefit of the Securityholders from the Trust Estate upon such
distribution thereunder or hereunder. The Indenture Trustee shall possess all
right, title and interest in and to all funds on deposit from time to time in
the Trust Accounts and in all proceeds thereof (including all income thereon)
and all such funds, investments, proceeds and income shall be part of the Trust
Account Property and the Trust Estate. If, at any time, any Trust Account ceases
to be an Eligible Account, the Indenture Trustee shall, within ten (10) Business
Days (or such longer period, not to exceed thirty (30) calendar days, with the
prior written consent of the Majority Noteholders) (i) establish a new Trust
Account as an Eligible Account, (ii) terminate the ineligible Trust Account, and
(iii) transfer any cash and investments from such ineligible Trust Account to
such new Trust Account.
               With respect to the Trust Accounts, the Issuer and the Indenture
Trustee agree, that each such Trust Account shall be subject to the “control”
(in accordance with Section 9-104 of the Uniform Commercial Code) of the
Indenture Trustee for the benefit of the Noteholders, and, except as may be
consented to in writing by the Majority Noteholders, or provided in the related
Blocked Account Agreement, the Indenture Trustee shall have sole signature and
withdrawal authority with respect thereto.
               The Servicer (unless it is also the Paying Agent) shall not be
entitled to make any withdrawals or payments from the Trust Accounts.
          (b) (1) Investment of Funds. Funds held in the Collection Account, the
Distribution Account and the Transfer Obligation Account may be invested and
reinvested (to the extent practicable and consistent with any requirements of
the Code) in Permitted Investments, as directed by the Servicer prior to the
occurrence of an Event of Default and by the Majority Noteholders thereafter, in
writing or facsimile transmission confirmed in writing by the Servicer or
Majority Noteholders, as applicable. In the event the Indenture Trustee has not
received such written direction, such funds shall be invested in any Permitted
Investment described in clause (a) of the definition of Permitted Investments.
In any case, funds in the Collection Account, the Distribution Account and the
Transfer Obligation Account must be available for withdrawal without penalty,
and any Permitted Investments must mature or otherwise be available for
withdrawal, one (1) Business Day prior to the next Payment Date and shall not be
sold or disposed of prior to its maturity subject to Subsection (b)(2) of this
Section. All Permitted Investments in which funds in the Collection Account, the
Distribution Account or the Transfer Obligation Account are invested must be
held by or registered

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in the name of “Wells Fargo Bank, N.A., as Indenture Trustee, in trust for the
Option One Owner Trust 2002-3 Mortgage-Backed Notes.”
               (2) Insufficiency and Losses in Trust Accounts. If any amounts
are needed for disbursement from the Collection Account, the Distribution
Account or the Transfer Obligation Account held by or on behalf of the Indenture
Trustee and sufficient uninvested funds are not available to make such
disbursement, the Indenture Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in the Collection
Account, the Distribution Account or the Transfer Obligation Account, as the
case may be. The Indenture Trustee shall not be liable for any investment loss
or other charge resulting therefrom, unless such loss or charge is caused by the
failure of the Indenture Trustee to perform in accordance with written
directions provided pursuant to this Section 5.03.
                    If any losses are realized in connection with any investment
in the Collection Account, the Distribution Account or the Transfer Obligation
Account pursuant to this Agreement during a period in which the Servicer has the
right to direct investments pursuant to Section 5.03(b), then the Servicer shall
deposit the amount of such losses (to the extent not offset by income from other
investments in the Collection Account, the Distribution Account or the Transfer
Obligation Account, as the case may be) into the Collection Account, the
Distribution Account or the Transfer Obligation Account, as the case may be,
immediately upon the realization of such loss. All interest and any other
investment earnings on amounts held in the Collection Account, the Distribution
Account and the Transfer Obligation Account shall be taxed to the Issuer and for
federal and state income tax purposes the Issuer shall be deemed to be the owner
of the Collection Account, the Distribution Account and/or the Transfer
Obligation Account, as the case may be.
          (c) Subject to Section 6.01 of the Indenture, the Indenture Trustee
shall not in any way be held liable by reason of any insufficiency in any Trust
Account held by the Indenture Trustee resulting from any investment loss on any
Permitted Investment included therein.
          (d) With respect to the Trust Account Property, the Indenture Trustee
acknowledges and agrees that:
(1) any Trust Account Property that is held in deposit accounts or securities
accounts shall be held solely in the Eligible Accounts, subject to the last
sentence of the first paragraph of Subsection (a) of this Section 5.03; and each
such Eligible Account shall be subject to the “control” (in accordance with
Section 9-104 of the UCC) of the Indenture Trustee; and, without limitation on
the foregoing, the Indenture Trustee shall have sole signature authority with
respect thereto;
(2) any Trust Account Property that constitutes Physical Property shall be
delivered to the Indenture Trustee in accordance with paragraphs (a) and (b) of
the definition of “Delivery” in Section 1.01 hereof and shall be held, pending
maturity or disposition, solely by the Indenture Trustee or a securities
intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) acting
solely for the Indenture Trustee;

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(3) any Trust Account Property that is a book-entry security held through the
Federal Reserve System pursuant to federal book-entry regulations shall be
delivered in accordance with paragraph (c) of the definition of “Delivery” in
Section 1.01 hereof and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued book-entry registration of such Trust
Account Property as described in such paragraph; and
(4) any Trust Account Property that is an “uncertificated security” under
Article 8 of the UCC and that is not governed by clause (3) above shall be
delivered to the Indenture Trustee in accordance with paragraph (d) of the
definition of “Delivery” in Section 1.01 hereof and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through continued
registration of the Indenture Trustee’s (or its nominee’s) ownership of such
security.
     Section 5.04 Advance Account.
          (a) The Servicer shall cause to be established and maintained in its
name, an Advance Account (the “Advance Account”), with respect to which a
Blocked Account Agreement acceptable to the Purchaser shall be duly executed.
The Advance Account shall be a separate Eligible Account. The Advance Account
shall be maintained with a financial institution acceptable to the Purchaser and
shall be maintained for and on behalf of the Purchaser, entitled “Option One
Mortgage Corporation on behalf of UBS Real Estate Securities Inc., for the
benefit of the Issuer, Re: Custodial Agreement dated as of July 2, 2002.”
Amounts in the Advance Account may not be invested.
          (b) Deposits and Withdrawals. Amounts in respect of the transfer of
Additional Note Principal Balances and Loans shall be deposited into and
withdrawn from the Advance Account as provided in Sections 2.01(c) and 2.06
hereof and Section 3.01 of the Note Purchase Agreement. Any amounts on deposit
in the Advance Account but not applied on any Transfer Date shall remain in the
Advance Account and may be applied to any subsequent transfer of Additional Note
Principal Balances and Loans, subject to the conditions set forth in
Sections 2.01(c) and 2.06 hereof and Section 3.01 of the Note Purchase
Agreement.
     Section 5.05 Transfer Obligation Account.
          (a) The Servicer, for the benefit of the Noteholders, shall cause to
be established and maintained in the name of the Indenture Trustee a Transfer
Obligation Account (the “Transfer Obligation Account”), which shall be a
separate Eligible Account and may be interest-bearing, entitled “Option One
Owner Trust 2002-3 Transfer Obligation Account, Wells Fargo Bank, N.A., as
Indenture Trustee, in trust for the Option One Owner Trust 2002-3
Mortgage-Backed Notes.” The Indenture Trustee shall have no monitoring or
calculation obligation with respect to withdrawals from the Transfer Obligation
Account. Amounts in the Transfer Obligation Account shall be invested in
accordance with Section 5.03 hereof.
          (b) In accordance with Section 5.06 hereof, the Loan Originator shall
deposit into the Transfer Obligation Account any amounts as may be required
thereby.
          (c) On each Payment Date, the Paying Agent will deposit in the
Transfer Obligation Account any amounts required to be deposited therein
pursuant to Section 5.01(c)(3)(vii) hereof.

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          (d) On the date of each Disposition, the Paying Agent shall withdraw
from the Transfer Obligation Account such amount on deposit therein in respect
of the payment of Transfer Obligations as may be requested by the Disposition
Agent in writing to effect such Disposition.
          (e) On each Payment Date, the Paying Agent shall withdraw from the
Transfer Obligation Account and deposit into the Distribution Account on such
Payment Date the lesser of (x) the amount then on deposit in the Transfer
Obligation Account and (y) the Interest Carry-Forward Amount as of such date,
after taking all other funds into account.
          (f) If with respect to any Business Day there exists an
Overcollateralization Shortfall which has not been remitted directly to the
Noteholders pursuant to Section 5.06 hereof, the Paying Agent, upon the written
direction of the Majority Noteholders, shall withdraw from the Transfer
Obligation Account and deposit into the Distribution Account on such Business
Day the lesser of (x) the amount then on deposit in the Transfer Obligation
Account and (y) the amount of such Overcollateralization Shortfall as of such
date.
          (g) [reserved]
          (h) In the event of the occurrence of an Event of Default under the
Indenture, the Paying Agent shall withdraw all remaining funds from the Transfer
Obligation Account and apply such funds in satisfaction of the Notes as provided
in Section 5.04(b) of the Indenture.
          (i) The Paying Agent shall return to the Loan Originator all amounts
on deposit in the Transfer Obligation Account (after making all other
withdrawals pursuant to this Section 5.05) whenever funds remain on deposit,
until the Majority Noteholders provide written notice to the Indenture Trustee
(with a copy to the Loan Originator and the Servicer) of the occurrence of a
default or event of default (however defined) under any Basic Document with
respect to the Issuer, the Depositor, the Loan Originator or any of their
Affiliates and (ii) upon the date of the termination of this Agreement pursuant
to Article X, the Paying Agent shall withdraw any remaining amounts from the
Transfer Obligation Account and remit all such amounts to the Loan Originator.
     Section 5.06 Transfer Obligation.
          (a) In consideration of the transactions contemplated by the Basic
Documents, the Loan Originator agrees and covenants with the Depositor that:
     (i) In connection with each Disposition it shall fund, or cause to be
funded, reserve funds, pay credit enhancer fees, pay, or cause to be paid,
underwriting fees, fund any negative difference between the cash Disposition
Proceeds and the aggregate Note Principal Balance at the time of such
Disposition, and make, or cause to be made, such other payments as may be, in
the reasonable opinion of the Disposition Agent, commercially reasonably
necessary to effect Dispositions, in each case to the extent that Disposition
Proceeds are insufficient to pay such amounts;
     (ii) [reserved]

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     (iii) If any Interest Carry-Forward Amount is projected to occur, it shall
deposit into the Transfer Obligation Account any such Interest Carry-Forward
Amount on or before the Business Day preceding such related Payment Date;
     (iv) If on any Business Day there exists an Overcollateralization
Shortfall, it shall on such Business Day either (A) remit such
Overcollateralization Shortfall Amount to the Paying Agent for immediate payment
to the Noteholders (in which case such day shall be deemed an additional Payment
Date) or (B) if so directed by the Majority Noteholders, deposit into the
Transfer Obligation Account the full amount of the Overcollateralization
Shortfall as of such date, provided, that in the event that notice of such
Overcollateralization Shortfall is provided to the Loan Originator after 3:00
p.m. New York City time, the Loan Originator shall make such remittance or
deposit on the following Business Day;
     (v) If on any applicable Payment Date, the amount available to pay the
Make-Whole Premium is insufficient, the Loan Originator, from its own funds,
shall deposit the amount of such shortfall on the Business Day prior to such
Payment Date;
     (vi) If the amount available to pay an Indemnified Party against any Losses
(as such terms are defined in the Note Purchase Agreement) is insufficient, the
Loan Originator shall promptly deposit the amount of such shortfall; and
     (vii) Notwithstanding anything to the contrary herein, in the event of the
occurrence of an Event of Default under the Indenture, the Loan Originator shall
promptly deposit into the Transfer Obligation Account the entire amount of the
Unfunded Transfer Obligation;
provided, that notwithstanding anything to the contrary contained herein, the
Loan Originator’s cumulative payments under or in respect of the Transfer
Obligations (after subtracting therefrom any amounts returned to the Loan
Originator pursuant to Section 5.05(i)(i)) together with the Loan Originator’s
payments in respect of any Loan Originator Puts shall not in the aggregate
exceed the Unfunded Transfer Obligation.
          (b) The Loan Originator agrees that the Noteholders, as ultimate
assignee of the rights of the Depositor under this Agreement and the other Basic
Documents, may enforce the rights of the Depositor directly against the Loan
Originator.
          (c) With respect to the obligations of the Loan Originator pursuant to
this Section 5.06, Option One shall be obligated to make payments hereunder only
if Option One Capital does not make such payments prior to the time any such
payment is required to be made. If Option One Capital does not make any such
payment prior to the time such payment is required to be made, Option One shall
be required to make such payment not later than the time such payment is
required to be made. ]

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ARTICLE VI
STATEMENTS AND REPORTS; SPECIFICATION OF TAX MATTERS
     Section 6.01 Statements.
          (a) No later than 12:00 noon (New York City time) on each Remittance
Date, the Servicer shall deliver to the Indenture Trustee and the Initial
Noteholder by electronic transmission, the receipt and legibility of which shall
be confirmed by telephone, and with hard copy thereof to be delivered no later
than one (1) Business Day after such Remittance Date, the Servicer’s Remittance
Report, setting forth the date of such Report (day, month and year), the name of
the Issuer (i.e., “Option One Owner Trust 2002-3”), and the date of this
Agreement, all in substantially the form set out in Exhibit B hereto.
Furthermore, on each Remittance Date, the Servicer shall deliver to the
Indenture Trustee and the Noteholder a data file providing, with respect to each
Loan in the Loan Pool as of the last day of the related Remittance Period (i) if
such Loan is an ARM, the current Loan Interest Rate; (ii) the Principal Balance
with respect to such Loan; (iii) the date of the last Monthly Payment paid in
full; and (iv) such other information as may be reasonably requested by the
Initial Noteholder and the Indenture Trustee. In addition, no later than 12:00
noon (New York City time) on the fifteenth (15th) day of each calendar month (or
if such day is not a Business Day, the preceding Business Day), the Custodian
shall prepare and provide to the Servicer and the Indenture Trustee by
facsimile, the Custodian Fee Notice for the Payment Date falling in such
calendar month.
          (b) No later than 12:00 noon (New York City time) on each Remittance
Date, the Servicer shall prepare (or cause to be prepared) and provide to the
Indenture Trustee electronically, receipt confirmed by telephone, and each
Noteholder, a statement (the “Payment Statement”), stating each date and amount
of a purchase of Additional Note Principal Balance (day, month and year), the
name of the Issuer (i.e., “Option One Owner Trust 2002-3”), the date of this
Agreement, restating all of the information set forth in the Loan Schedule for
all Loans as of such Remittance Date and the following information:
          (1) the aggregate amount of collections in respect of principal of the
Loans received by the Servicer during the preceding Remittance Period;
          (2) the aggregate amount of collections in respect of interest on the
Loans received by the Servicer during the preceding Remittance Period;
          (3) all Mortgage Insurance Proceeds received by the Servicer during
the preceding Remittance Period and not required to be applied to restoration or
repair of the related Mortgaged Property or returned to the Borrower under
applicable law or pursuant to the terms of the applicable Mortgage Insurance
Policy;
          (4) all Net Liquidation Proceeds deposited by the Servicer into the
Collection Account during the preceding Remittance Period;
          (5) all Released Mortgaged Property Proceeds deposited by the Servicer
into the Collection Account during the preceding Remittance Period;

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          (6) the aggregate amount of all Servicing Advances made by the
Servicer during the preceding Remittance Period;
          (7) the aggregate of all amounts deposited into the Distribution
Account in respect of the repurchase of Unqualified Loans and the repurchase of
Loans pursuant to Section 3.06 hereof during the preceding Remittance Period;
          (8) the aggregate Principal Balance of all Loans for which a Servicer
Call was exercised during the preceding Remittance Period;
          (9) the aggregate Principal Balance of all Loans for which a Loan
Originator Put was exercised during the preceding Remittance Period;
          (10) [reserved]
          (11) the aggregate amount of all withdrawals from the Distribution
Account pursuant to Section 5.01(c)(1)(i) hereof during the preceding Remittance
Period;
          (12) the aggregate amount of cash Disposition Proceeds received during
the preceding Remittance Period;
          (13) withdrawals from the Collection Account in respect of the
Servicing Advance Reimbursement Amount with respect to the related Payment Date;
          (14) [reserved];
          (15) the number and aggregate Principal Balance of all Loans that are
(i) 30-59 days Delinquent, (ii) 60- 89 days Delinquent, (iii) 90 or more days
Delinquent as of the end of the related Remittance Period;
          (16) the aggregate amount of Liquidated Loan Losses incurred
(i) during the preceding Remittance Period, and (ii) during the preceding three
Remittance Periods;
          (17) the aggregate of the Principal Balances of all Loans in the Loan
Pool as of the end of the related Remittance Period;
          (18) the aggregate amount of all deposits into the Distribution
Account from the Transfer Obligation Account pursuant to Sections 5.05(e),
5.05(f), 5.05(g), and 5.05(h) on the related Payment Date;
          (19) the aggregate amount of distributions in respect of Servicing
Compensation to the Servicer, and unpaid Servicing Compensation from prior
Payment Dates for the related Payment Date;
          (20) the aggregate amount of distributions in respect of Indenture
Trustee Fees and unpaid Indenture Trustee Fees from prior Payment Dates for the
related Payment Date;

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          (21) the aggregate amount of distributions in respect of the Custodian
Fee and unpaid Custodian Fees from prior Payment Dates for the related Payment
Date;
          (22) the aggregate amount of distributions in respect of the Owner
Trustee Fees and unpaid Owner Trustee Fees from prior Payment Dates and for the
related Payment Date;
          (23) the Unfunded Transfer Obligation and Overcollateralization
Shortfall on such Payment Date for the related Payment Date;
          (24) the aggregate amount of distributions to the Transfer Obligation
Account for the related Payment Date;
          (25) the aggregate amount of distributions in respect of
Trust/Depositor Indemnities for the related Payment Date;
          (26) the aggregate amount of distributions to the holders of the Trust
Certificates for the related Payment Date;
          (27) the Note Principal Balance of the Notes as of the last day of the
related Remittance Period (without taking into account any Additional Note
Principal Balance between the last day of such Remittance Period and the related
Payment Date) before and after giving effect to distributions made to the
holders of the Notes for such Payment Date;
          (28) the Pool Principal Balance as of the end of the preceding
Remittance Period; and
          (29) the Unfunded Transfer Obligation Percentage as of the related
Payment Date.
Such Payment Statement shall also be provided on the Remittance Date to the
Noteholders and Indenture Trustee in the form of a data file in a form mutually
agreed to by and between the Noteholders, the Indenture Trustee and the
Servicer. The Indenture Trustee shall have no duty to monitor any events
resulting in withdrawals from the Transfer Obligation Account.
     Section 6.02 Specification of Certain Tax Matters.
     The Paying Agent shall comply with all requirements of the Code and
applicable state and local law with respect to the withholding from any
distributions made to any Securityholder of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith, giving due effect to any applicable exemptions from such
withholding and effective certifications or forms provided by the recipient. Any
amounts withheld pursuant to this Section 6.02 shall be deemed to have been
distributed to the Securityholders, as the case may be, for all purposes of this
Agreement. The Indenture Trustee shall have no responsibility for preparing or
filing any tax returns.

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     Section 6.03 Valuation of Loans, Retained Securities Value; Market Value
Agent.
          (a) The Issuer hereby irrevocably appoints the Market Value Agent to
determine the Market Value of each Loan and the Retained Securities Value of all
Retained Securities, in accordance with subsections (b) and (c) below.
          (b) The Market Value Agent shall determine the Market Value of each
Loan in its sole judgment. In determining the Market Value of each Loan, the
Market Value Agent may consider any information that it may deem relevant and
shall base such determination primarily on the lesser of its estimate of the
projected proceeds from such Loan’s inclusion in (i) a Securitization (inclusive
of the projected Retained Securities Value of any Retained Securities to be
issued in connection with such Securitization) and (ii) a Whole Loan Sale, in
each case net of such Loan’s ratable share of all costs and fees associated with
such Disposition, including, without limitation, any costs of issuance, sale,
underwriting and funding reserve accounts. The Market Value Agent’s
determination, in its sole judgment, of Market Value shall be conclusive and
binding upon the parties hereto, absent manifest error (including, without
limitation, any error contemplated in Section 2.08).
          (c) On each Business Day, the Market Value Agent shall determine in
its sole judgment the Retained Securities Value of the Retained Securities, if
any, expected to be issued pursuant to such Securitization as of the closing
date of such Securitization. In making such determination the Market Value Agent
may rely exclusively on quotations provided by leading dealers in instruments
similar to such Retained Securities, which leading dealers may include the
Market Value Agent and its Affiliates and such other sources of information as
the Market Value Agent may deem appropriate.
ARTICLE VII
FINANCIAL COVENANTS
     Section 7.01 [reserved]
     Section 7.02 Financial Covenants.
          (a) Each of Option One and the Servicer shall maintain a minimum
Tangible Net Worth of $425 million as of any day.
          (b) Each of Option One and the Servicer shall maintain a ratio of 1.0
or greater at any time pursuant to the Capital Adequacy Test, attached as
Exhibit G hereto.
          (c) Neither Option One nor the Servicer may exceed a maximum
non-warehouse leverage ratio (the ratio of (i) the sum of (A) all funded debt
(excluding debt from H&R Block, Inc. or any of its Affiliates and all
non-recourse debt) less (B) 91% of its mortgage loan inventory held for sale
less (C) 90% of servicing advance receivables (determined and valued in
accordance with GAAP) to (ii) Tangible Net Worth) of 0.50x at any time. Any
direct or indirect debt provided by H&R Block, Inc. will be subject to a
subordination agreement; or, if H&R Block, Inc. does not enter into a
subordination agreement, the maximum permitted non-warehouse leverage ratio
including debt from

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H&R Block, Inc. will be 1.0x at any time, provided, that no more than 0.5x of
such non-warehouse leverage ratio can be funded by entities not affiliated with
Option One or H&R Block, Inc.
          (d) Each of Option One and the Servicer shall maintain a minimum
liquidity facility (defined as a committed, unsecured, non-amortizing liquidity
facility from H&R Block, Inc. not to mature (scheduled or accelerated) prior to
the Maturity Date) in an amount no less than $150 million or cash of
$20 million. Such facility from H&R Block, Inc. cannot contain covenants or
termination events more restrictive than the covenants or termination events
contained in the Basic Documents.
          (e) Each of Option One and the Servicer shall 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,
commencing with the quarter ending April 30, 2007.
          (f) Each of Option One and the Servicer, on a quarterly basis, shall
provide the Initial Noteholder with an Officer’s Certificate stating that Option
One or the Servicer, as the case may be, is in compliance with the financial
covenants set forth in this Section 7.02 and the details of such compliance.
          (g) Each of Option One and the Servicer shall possess sufficient net
capital and liquid assets (or ability to access the same) to satisfy its debts
and other obligations as they become due in the normal course of business.
ARTICLE VIII
THE SERVICER
     Section 8.01 Indemnification; Third Party Claims.
          (a) The Servicer shall indemnify the Loan Originator, the Owner
Trustee, the Trust, the Depositor, the Indenture Trustee and the Noteholders,
their respective officers, directors, employees, agents and “control persons,”
as such term is used under the Act and under the Securities Exchange Act of 1934
as amended (each a “Servicer Indemnified Party”) and hold harmless each of them
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of any of the Servicer’s representations and
warranties and covenants contained in this Agreement or in any way relating to
the failure of the Servicer to perform its duties and service the Loans in
compliance with the terms of this Agreement except to the extent such loss
arises out of such Servicer Indemnified Party’s gross negligence or willful
misconduct; provided, however, that if the Servicer is not liable pursuant to
the provisions of Section 8.01(b) hereof for its failure to perform its duties
and service the Loans in compliance with the terms of this Agreement, then the
provisions of this Section 8.01 shall have no force and effect with respect to
such failure. The provisions of this indemnity shall run directly to and be
enforceable by a Servicer Indemnified Party subject to the limitations hereof.

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          (b) None of the Loan Originator, the Depositor or the Servicer or any
of their respective Affiliates, directors, officers, employees or agents shall
be under any liability to the Owner Trustee, the Issuer, the Indenture Trustee
or the Securityholders for any action taken, or for refraining from the taking
of any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Loan
Originator, the Depositor, the Servicer or any of their respective Affiliates,
directors, officers, employees, agents against the remedies provided herein for
the breach of any warranties, representations or covenants made herein, or
against any expense or liability specifically required to be borne by such party
without right of reimbursement pursuant to the terms hereof, or against any
expense or liability which would otherwise be imposed by reason of misfeasance,
bad faith or negligence in the performance of the respective duties of the
Servicer, the Depositor or the Loan Originator, as the case may be. The Loan
Originator, the Depositor, the Servicer and any of their respective Affiliates,
directors, officers, employees, agents may rely in good faith on any document of
any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder.
          (c) The Loan Originator agrees to indemnify and hold harmless the
Depositor and the Noteholders, as the ultimate assignees from the Depositor
(each an “Originator Indemnified Party,” together with the Servicer Indemnified
Parties, the “Indemnified Parties”), from and against any loss, liability,
expense, damage, claim or injury arising out of or based on (i) any breach of
any representation, warranty or covenant of the Loan Originator, the Servicer or
their Affiliates, in any Basic Document, including, without limitation, the
origination or prior servicing of the Loans by reason of any acts, omissions, or
alleged acts or omissions arising out of activities of the Loan Originator, the
Servicer or their Affiliates, and (ii) any untrue statement by the Loan
Originator, the Servicer or its Affiliates of any material fact or any such
Person’s failure to state a material fact necessary to make such statements not
misleading with respect to any such Person’s statements contained in any Basic
Document, including, without limitation, any Officer’s Certificate, statement,
report or other document or information prepared by any such Person and
furnished or to be furnished by it pursuant to or in connection with the
transactions contemplated thereby and not corrected prior to completion of the
relevant transaction including, without limitation, such written information as
may have been and may be furnished in connection with any due diligence
investigation with respect to the Loans or any such Person’s business,
operations or financial condition, including reasonable attorneys’ fees and
other costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the Loan Originator shall
not indemnify an Originator Indemnified Party to the extent such loss,
liability, expense, damage or injury is due to either an Originator Indemnified
Party’s willful misfeasance, bad faith or negligence or by reason of an
Originator Indemnified Party’s reckless disregard of its obligations hereunder;
provided, further, that the Loan Originator shall not be so required to
indemnify an Originator Indemnified Party or to otherwise be liable hereunder or
under any provision of the Basic Documents to an Originator Indemnified Party
for any losses in respect of the performance of the Loans, the insolvency,
bankruptcy, delinquency, creditworthiness and similar characteristics of the
Borrowers under the Loans, the uncollectability of any principal, interest, and
any other charges (including late fees) under such loans (provided such
uncollectability was not due to an error on the part of the Loan Originator or
any affiliate of the Loan Originator), changes in the market value of the Loans
or other similar investment risks associated with the Loans arising from a
breach of any representation or warranty set forth in Exhibit E hereto, the sole
remedy for the breach of which is provided in Section 3.06 hereof. The
provisions of this indemnity shall run directly to and be enforceable by an
Originator Indemnified Party subject to the limitations hereof.

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          (d) With respect to a claim subject to indemnity hereunder made by any
Person against an Indemnified Party (a “Third Party Claim”), such Indemnified
Party shall notify the related indemnifying parties (each an “Indemnifying
Party”) in writing of the Third Party Claim within a reasonable time after
receipt by such Indemnified Party of written notice of the Third Party Claim
unless the Indemnifying Parties shall have previously obtained actual knowledge
thereof. Thereafter, the Indemnified Party shall deliver to the Indemnifying
Parties, within a reasonable time after the Indemnified Party’s receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim. No failure to give such
notice or deliver such documents shall effect the rights to indemnity hereunder.
Each Indemnifying Party shall promptly notify the Indenture Trustee and the
Indemnified Party (if other than the Indenture Trustee) of any claim of which it
has been notified and shall promptly notify the Indenture Trustee and the
Indemnified Party (if applicable) of its intended course of action with respect
to any claim.
          (e) If a Third Party Claim is made against an Indemnified Party, while
maintaining control over its own defense, the Indemnified Party shall cooperate
and consult fully with the Indemnifying Party in preparing such defense, and the
Indemnified Party may defend the same in such manner as it may deem appropriate,
including settling such claim or litigation after giving notice to the
Indemnifying Party of such terms and the Indemnifying Party will promptly
reimburse the Indemnified Party upon written request; provided, however, that
the Indemnified Party may not settle any claim or litigation without the consent
of the Indemnifying Party.
     Section 8.02 Merger or Consolidation of the Servicer.
     The Servicer shall keep in full effect its existence, rights and franchises
as a corporation, and will obtain and preserve its qualification to do business
as a foreign corporation and maintain such other licenses and permits in each
jurisdiction necessary to protect the validity and enforceability of each Basic
Document to which it is a party and each of the Loans and to perform its duties
under each Basic Document to which it is a party; provided, however, that the
Servicer may merge or consolidate with any other corporation upon the
satisfaction of the conditions set forth in the following paragraph.
     Subject to the prior written consent of the Majority Noteholders, any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be an Eligible Servicer and shall be the successor of the Servicer, as
applicable hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Servicer shall send notice of any such proposed
merger, conversion, consolidation or succession to the Indenture Trustee and the
Issuer.
     Section 8.03 Limitation on Liability of the Servicer and Others.
     The Servicer and any director, officer, employee or agent of the Servicer
may rely on any document of any kind which it in good faith reasonably believes
to be genuine and to have been adopted or signed by the proper authorities
respecting any matters arising hereunder. Subject to the terms of Section 8.01
hereof, the Servicer shall have no obligation to appear with respect to,

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prosecute or defend any legal action which is not incidental to the Servicer’s
duty to service the Loans in accordance with this Agreement.
     Section 8.04 Servicer Not to Resign; Assignment.
     The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) with the consent of the Majority Noteholders or
(b) upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to clause (b) of the preceding
sentence permitting the resignation of the Servicer shall be evidenced by an
Independent opinion of counsel to such effect delivered (at the expense of the
Servicer) to the Indenture Trustee and the Majority Noteholders. No resignation
of the Servicer shall become effective until a successor servicer, appointed
pursuant to the provisions of Section 9.02 hereof shall have assumed the
Servicer’s responsibilities, duties, liabilities (other than those liabilities
arising prior to the appointment of such successor) and obligations under this
Agreement.
     Except as expressly provided herein, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Servicer hereunder and any agreement, instrument or act purporting to effect
any such assignment, transfer, delegation or appointment shall be void.
     The Servicer agrees to cooperate with any successor Servicer in effecting
the transfer of the Servicer’s servicing responsibilities and rights hereunder
pursuant to the first paragraph of this Section 8.04, including, without
limitation, the transfer to such successor of all relevant records and documents
(including any Loan Files in the possession of the Servicer) and all amounts
received with respect to the Loans and not otherwise permitted to be retained by
the Servicer pursuant to this Agreement. In addition, the Servicer, at its sole
cost and expense, shall prepare, execute and deliver any and all documents and
instruments to the successor Servicer including all Loan Files in its possession
and do or accomplish all other acts necessary or appropriate to effect such
termination and transfer of servicing responsibilities.
     Section 8.05 Relationship of Servicer to Issuer and the Indenture Trustee.
     The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Agreement) to the Issuer, the Owner Trustee and the
Indenture Trustee under this Agreement is intended by the parties hereto to be
that of an independent contractor and not of a joint venturer, agent or partner
of the Issuer, the Owner Trustee or the Indenture Trustee.
     Section 8.06 Servicer May Own Securities.
     Each of the Servicer and any Affiliate of the Servicer may in its
individual or any other capacity become the owner or pledgee of Securities with
the same rights as it would have if it were not the Servicer or an Affiliate
thereof except as otherwise specifically provided herein; provided, however,
that at any time that Option One or any of its Affiliates is the Servicer,
neither the Servicer nor any of its Affiliates (other than an Affiliate which is
a corporation whose purpose is limited to holding securities and related
activities and which cannot incur recourse debt) may be a Noteholder. Securities
so owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without

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preference, priority, or distinction as among all of the Securities; provided,
however, that any Securities owned by the Servicer or any Affiliate thereof,
during the time such Securities are owned by them, shall be without voting
rights for any purpose set forth in this Agreement unless the Servicer or such
Affiliate owns all outstanding Securities of the related class. The Servicer
shall notify the Indenture Trustee promptly after it or any of its Affiliates
becomes the owner or pledgee of a Security.
     Section 8.07 Indemnification of the Indenture Trustee and the Noteholders.
     The Servicer agrees to indemnify the Indenture Trustee and its employees,
officers, directors and agents, and reimburse its reasonable out-of-pocket
expenses in accordance with Section 6.07 of the Indenture as if it was a
signatory thereto. The Servicer agrees to indemnify the Noteholders and the
Initial Noteholder in accordance with Section 9.01 of the Note Purchase
Agreement as if it were signatory thereto.
ARTICLE IX
SERVICER EVENTS OF DEFAULT
     Section 9.01 Servicer Events of Default.
          (a) In case one or more of the following Servicer Events of Default
shall occur and be continuing, that is to say:
               (1) any failure by Servicer to deposit into the Collection
Account or the Distribution Account or any failure by the Servicer to make
payments therefrom in accordance with Section 5.01 hereof; or
               (2) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the material covenants or
agreements on the part of the Servicer, contained in any Basic Document to which
it is a party, which continues unremedied for a period of thirty (30) days (or,
in the case of payment of insurance premiums, for a period of fifteen (15) days)
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by any other party hereto or to
the Servicer (with copy to each other party hereto), by Holders of 25% of the
Percentage Interests of the Notes or the Trust Certificates; or
               (3) any breach on the part of the Servicer of any representation
or warranty contained in any Basic Document to which it is a party that
materially and adversely affects the interests of any of the parties hereto or
any Securityholder and which continues unremedied for a period of thirty (30)
days after the date on which written notice of such breach, requiring the same
to be remedied, shall have been given to the Servicer by any other party hereto
or to the Servicer (with copy to each other party hereto), by the Initial
Noteholder or Holders of 25% of the Percentage Interests (as defined in the
Indenture) of the Notes; or
               (4) there shall have been commenced before a court or agency or
supervisory authority having jurisdiction in the premises an involuntary
proceeding against the Servicer under any present or future federal or state
bankruptcy, insolvency or similar law for the

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appointment of a conservator, receiver, liquidator, trustee or similar official
in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, which action shall not have been dismissed for a period of 60 days; or
               (5) the Servicer shall consent to the appointment of a
conservator, receiver, liquidator, trustee or similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to it or of or relating to all
or substantially all of its property; or
               (6) the Servicer (or the Loan Originator if the Servicer is not
Option One) fails to be an Eligible Servicer or to comply with the financial
covenants set forth in Section 7.02; or
               (7) the Servicer ceases to be a 100% direct or indirect
wholly-owned subsidiary of H&R Block Inc.;
               (8) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations, or take any corporate action in furtherance of the foregoing; or
               (9) the Servicer ceases to be an approved servicer for Fannie Mae
or Freddie Mac, and that status continues unremedied for a period of 30 days.
     Then, and in each and every such case, so long as a Servicer Event of
Default shall not have been remedied, the Indenture Trustee or the Majority
Noteholders, by notice in writing to the Servicer may, in addition to whatever
rights such Person may have at law or in equity to damages, including injunctive
relief and specific performance, may terminate all the rights and obligations of
the Servicer under this Agreement and in and to the Loans and the proceeds
thereof, as servicer under this Agreement. Upon receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Loans or otherwise, shall, subject to Section 9.02
hereof, pass to and be vested in a successor servicer, and the successor
servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, including, but
not limited to, the transfer and endorsement or assignment of the Loans and
related documents. The Servicer agrees to cooperate with the successor servicer
in effecting the termination of the Servicer’s responsibilities and rights
hereunder, including, without limitation, the transfer to the successor servicer
for administration by it of all amounts which shall at the time be credited by
the Servicer to each Collection Account or thereafter received with respect to
the Loans.
          (b) Upon the occurrence of (i) an Event of Default or Default under
any of the Basic Documents, (ii) a Servicer Event of Default under this
Agreement, or (iii) an event shall occur or circumstances otherwise arise which,
in the Initial Noteholder’s sole determination, exercised in good

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faith, may have a reasonable possibility of materially impairing the ability of
the Servicer to service and administer the Loans in accordance with the terms
and provisions set forth in the Basic Documents (each, a “Term Event”), the
Servicer’s right to service the Loans pursuant to the terms of this Agreement
shall be in effect for an initial period commencing on the date on which such
Term Event occurred and shall automatically terminate at 5:00 p.m. New York City
time, on the last Business Day of the calendar month in which such Term Event
occurred (the “Initial Term”). Thereafter, the Initial Term shall be extendible
in the sole discretion of the Majority Noteholders by written notice (each, a
“Servicer Extension Notice”) of the Majority Noteholders for successive
one-month terms (each such term ending at 5:00 p.m. New York City time, on the
last business day of the related month). Following a Term Event, the Servicer
hereby agrees that the Servicer shall be bound for the duration of the Initial
Term and the term covered by any such Servicer Extension Notice to act as the
Servicer pursuant to this Agreement. Following a Term Event, the Servicer agrees
that if, as of 3:00 p.m. New York City time on the last Business Day of any
month, the Servicer shall not have received a Servicer Extension Notice from the
Majority Noteholders, the Servicer shall give written notice of such non-receipt
to the Majority Noteholders by 4:00 p.m. New York City time. Following a Term
Event, the failure of the Majority Noteholders to deliver a Servicer Extension
Notice by 5:00 p.m. New York City time shall result in the automatic and
immediate termination of the Servicer (the “Termination Date”). Notwithstanding
these time frames, the Servicer and the Noteholders shall comply with all
applicable laws in connection with such transfer and the Servicer shall continue
to service the Loans until completion of such transfer.
     Section 9.02 Appointment of Successor.
     On and after the date the Servicer receives a notice of termination
pursuant to Section 9.01 hereof or is automatically terminated pursuant to
Section 9.01(c) hereof, or the Owner Trustee receives the resignation of the
Servicer evidenced by an Opinion of Counsel or accompanied by the consents
required by Section 8.04 hereof, or the Servicer is removed as servicer pursuant
to this Article IX or Section 4.01 of the Servicing Addendum, then, the Majority
Noteholders shall appoint a successor servicer to be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof; provided, however, that the
successor servicer shall not be liable for any actions of any servicer prior to
it.
     As compensation for making Servicing Advances, the successor servicer
appointed pursuant to the following paragraph, shall be entitled to all funds
relating to the Loans which the Servicer would have been entitled to receive
from the Collection Account pursuant to Section 5.01 hereof as if the Servicer
had continued to act as servicer hereunder, together with other Servicing
Compensation in the form of assumption fees, late payment charges or otherwise
as provided in Section 4.15 of the Servicing Addendum. The Servicer shall not be
entitled to any termination fee if it is terminated pursuant to Section 9.01
hereof but shall be entitled to any accrued and unpaid Servicing Compensation to
the date of termination.
     Any collections received by the Servicer after removal or resignation shall
be endorsed by it to the Indenture Trustee and remitted directly to the
successor servicer. The compensation of any successor servicer appointed shall
be the Servicing Fee, together with other Servicing Compensation provided for
herein. The Indenture Trustee, the Issuer, any Custodian, the

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Servicer and any such successor servicer shall take such action, consistent with
this Agreement, as shall be reasonably necessary to effect any such succession.
Any costs or expenses incurred by the Indenture Trustee in connection with the
termination of the Servicer and the succession of a successor servicer shall be
an expense of the outgoing Servicer and, to the extent not paid thereby, an
expense of such successor servicer. The Servicer agrees to cooperate with the
Indenture Trustee and any successor servicer in effecting the termination of the
Servicer’s servicing responsibilities and rights hereunder and shall promptly
provide the successor servicer all documents and records reasonably requested by
it to enable it to assume the Servicer’s functions hereunder and shall promptly
also transfer to the successor servicer all amounts which then have been or
should have been deposited in any Trust Account maintained by the Servicer or
which are thereafter received with respect to the Loans. Upon the occurrence of
an Event of Default, the Majority Noteholders shall have the right to order the
Servicer’s Loan Files and all other files of the Servicer relating to the Loans
and all other records of the Servicer and all documents relating to the Loans
which are then or may thereafter come into the possession of the Servicer or any
third party acting for the Servicer to be delivered to such custodian or
servicer as it selects and the Servicer shall deliver to such custodian or
servicer such assignments as the Majority Noteholders shall request. No
successor servicer shall be held liable by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Servicer to deliver, or any delay in delivering, cash,
documents or records to it or (ii) restrictions imposed by any regulatory
authority having jurisdiction over the Servicer hereunder. No appointment of a
successor to the Servicer hereunder shall be effective until written notice of
such proposed appointment shall have been provided to the Majority Noteholders,
the Indenture Trustee, the Issuer and the Depositor, the Majority Noteholders
and the Issuer shall have consented in writing thereto.
     In connection with such appointment and assumption, the Majority
Noteholders may make such arrangements for the compensation of such successor
servicer out of payments on the Loans as they and such successor servicer shall
agree.
     Section 9.03 Waiver of Defaults.
     The Majority Noteholders may waive any events permitting removal of the
Servicer as servicer pursuant to this Article IX. Upon any waiver of a past
default, such default shall cease to exist and any Servicer Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so waived.
     Section 9.04 Accounting Upon Termination of Servicer.
     Upon termination of the Servicer under this Article IX, the Servicer shall,
at its own expense:
          (a) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee the funds in any Trust Account maintained by
the Servicer;

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          (b) deliver to its successor or, if none shall yet have been
appointed, to the Custodian all Loan Files and related documents and statements
held by it hereunder and a Loan portfolio by computer transmission or disk;
          (c) deliver to its successor or, if none shall yet have been
appointed, to the Indenture Trustee and to the Issuer and the Securityholders a
full accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for payments or
charges with respect to the Loans; and
          (d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Loans to its successor and to more fully and definitively vest
in such successor all rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer under this Agreement.
ARTICLE X
TERMINATION; PUT OPTION
     Section 10.01 Termination.
          (a) This Agreement shall terminate upon either: (A) the later of
(i) the satisfaction and discharge of the Indenture and the provisions thereof,
including payment to the Noteholders of all amounts due and owing in accordance
with the provisions hereof or (ii) the disposition of all funds with respect to
the last Loan and the remittance of all funds due hereunder and the payment of
all amounts due and payable, including, in both cases, without limitation,
indemnification payments payable pursuant to any Basic Document to the Indenture
Trustee, the Owner Trustee, the Issuer, the Initial Noteholder, the Servicer and
the Custodian, written notice of the occurrence of either of which shall be
provided to the Indenture Trustee by the Servicer; or (B) the mutual consent of
the Servicer, the Depositor and all Securityholders in writing and delivered to
the Indenture Trustee by the Servicer.
          (b) The Securities shall be subject to an early redemption or
termination at the option of the Servicer and the Majority Noteholders in the
manner and subject to the provisions of Section 10.02 and 10.04 of this
Agreement.
          (c) Except as provided in this Article X, none of the Depositor, the
Servicer nor any Certificateholder or Noteholder shall be entitled to revoke or
terminate the Trust.
     Section 10.02 Optional Termination.
     The Servicer may, at its option, effect an early termination of the Trust
on any Payment Date on or after the Clean-up Call Date by purchasing all of the
Loans at a purchase price, payable in cash, equal to or greater than the
Termination Price. The Servicer shall effect such early termination by providing
notice thereof to the Indenture Trustee and Owner Trustee not later than the
time of payment of the purchase price. The expense of any Independent appraiser
required in connection with the calculation and payment of the Termination Price
under this Section 10.02 shall be a nonreimbursable expense of the Servicer.

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     Any such early termination by the Servicer shall be accomplished by
depositing into the Collection Account on the third Business Day prior to the
Payment Date on which the purchase is to occur the amount of the Termination
Price to be paid. The Termination Price and any amounts then on deposit in the
Collection Account (other than any amounts withdrawable pursuant to Section
5.01(c)(1) hereof) shall be deposited in the Distribution Account and
distributed by the Indenture Trustee pursuant to Section 5.01(c)(3) of this
Agreement and Section 9.1 of the Trust Agreement on the next succeeding Payment
Date; and any amounts received with respect to the Loans and Foreclosure
Properties subsequent to the final Payment Date shall belong to the Servicer, as
purchaser thereof.
     Section 10.03 Notice of Termination.
     Notice of termination of this Agreement or of early redemption and
termination of the Issuer pursuant to Section 10.01 shall be sent by the
Indenture Trustee to the Noteholders in accordance with Section 10.02 of the
Indenture.
     Section 10.04 Put Option.
     The Majority Noteholders may, at their option, effect a put of the entire
outstanding Note Principal Balance, or any portion thereof, to the Trust on any
date by exercise of the Put Option. The Majority Noteholders shall effect such
put by providing notice thereof in accordance with Section 10.05 of the
Indenture.
     Unless otherwise agreed by the Majority Noteholders, on the third Business
Day prior to the Put Date, the Issuer shall deposit the Note Redemption Amount
into the Distribution Account and, if the Put Date occurs after the termination
of the Revolving Period and constitutes a put of the entire outstanding Note
Principal Balance, any amounts then on deposit in the Collection Account (other
than any amounts withdrawable pursuant to Section 5.01(c)(1) hereof) shall be
deposited in the Distribution Account and distributed by the Paying Agent
pursuant to Section 5.01(c)(3) of this Agreement on the Put Date; and any
amounts received with respect to the Loans and Foreclosure Properties subsequent
to the Put Date shall belong to the Issuer.
ARTICLE XI
MISCELLANEOUS PROVISIONS
     Section 11.01 Acts of Securityholders.
     Except as otherwise specifically provided herein and except with respect to
Section 11.02(b), whenever action, consent or approval of the Securityholders is
required under this Agreement, such action, consent or approval shall be deemed
to have been taken or given on behalf of, and shall be binding upon, all
Securityholders if the Majority Noteholders agree to take such action or give
such consent or approval.
     Section 11.02 Amendment.
          (a) This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Loan Originator, the Indenture Trustee and the
Issuer by written agreement, with the

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prior written consent of the Majority Noteholders, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, collections of payments on Loans or
distributions which are required to be made on any Security, without the consent
of the holders of 100% of the Securities affected thereby, (ii) adversely affect
in any material respect the interests of any of the holders of the Securities in
any manner other than as described in clause (i), without the consent of the
holders of 100% of the Securities affected thereby, or (iii) reduce the
percentage of the Securities, the consent of which is required for any such
amendment, without the consent of the holders of 100% of the Securities.
          (b) It shall not be necessary for the consent of Securityholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.
     Prior to the execution of any amendment to this Agreement, the Issuer and
the Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Issuer and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Issuer’s own
rights, duties or immunities of the Issuer or the Indenture Trustee, as the case
may be, under this Agreement.
     Section 11.03 Recordation of Agreement.
     To the extent permitted by applicable law, this Agreement, or a memorandum
thereof if permitted under applicable law, is subject to recordation in all
appropriate public offices for real property records in all of the counties or
other comparable jurisdictions in which any or all of the Mortgaged Property is
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at the Securityholders’ expense
on direction of the Majority Noteholders but only when accompanied by an Opinion
of Counsel to the effect that such recordation materially and beneficially
affects the interests of the Securityholders or is necessary for the
administration or servicing of the Loans.
     Section 11.04 Duration of Agreement.
     This Agreement shall continue in existence and effect until terminated as
herein provided.
     Section 11.05 Governing Law.
     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW). With respect to all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby, each party
irrevocably submits to the non-exclusive jurisdiction of the courts of the State
of New York and the United States District

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Court located in the Borough of Manhattan, City of New York, and each party
irrevocably waives any objection which it may have at any time to the laying of
venue of any suit, action or proceeding arising out of or relating hereto
brought in any such court, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party, provided that
service of process is made by any lawful means. Nothing in this Section 11.05
shall affect the right of any party hereto or its assignees, or of any
Noteholder or its assignees, to bring any other action or proceeding against any
party hereto or its property in the courts of other jurisdictions.
     Section 11.06 Notices.
     All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if (i) delivered personally, mailed by
overnight mail, certified mail or registered mail, postage prepaid, or
(ii) transmitted by telecopy, upon telephone confirmation of receipt thereof, as
follows:
     (I) in the case of the Depositor, to Option One Loan Warehouse Corporation,
3 Ada, Irvine, California 92618, or such other addresses or telecopy or
telephone numbers as may hereafter be furnished to the Securityholders and the
other parties hereto in writing by the Depositor;
     (II) in the case of the Trust, to Option One Owner Trust 2002-3, c/o
Wilmington Trust Company, One Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration, telecopy
number: (302) 636-4144, telephone number: (302) 636-1000, or such other address
or telecopy or telephone numbers as may hereafter be furnished to the
Noteholders and the other parties hereto in writing by the Trust;
     (III) in the case of the Loan Originator, (A) if to Option One, to Option
One Mortgage Corporation, 3 Ada, Irvine, California 92618, Attention: Matthew
Engel, telecopy number: (949) (866)715-8329 telephone number: (949) 790-8128 or
(B) if to Option One Capital, to Option One Mortgage Capital Corporation, 3 Ada
Road, Irvine, California 92618, Attention: Chief Financial Officer, telecopy
number: (866)715-8329, telephone number: (949) 790-8128 or, in either case, to
such other addresses or telecopy or telephone numbers as may hereafter be
furnished to the Securityholders and the other parties hereto in writing by
Option One or Option One Capital;
     (IV) in the case of the Servicer, to Option One Mortgage Corporation 3 Ada,
Irvine, California 92618, Attention: Matthew Engel, telecopy number:
(866)715-8329, telephone number: (949) 790-8128 or such other addresses or
telecopy or telephone numbers as may hereafter be furnished to the
Securityholders and the other parties hereto in writing by the Servicer; and
     (V) in the case of the Indenture Trustee, to Wells Fargo Bank, N.A., 9062
Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust
Services — Option One Owner Trust 2002-3, with a copy to it at the Corporate
Trust Office, as defined in the Indenture, any

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such notices shall be deemed to be effective with respect to any party hereto
upon the receipt of such notice or telephone confirmation thereof by such party;
provided, that notices to the Securityholders shall be effective upon mailing or
personal delivery.
     Section 11.07 Severability of Provisions.
     If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other covenants,
agreements, provisions or terms of this Agreement.
     Section 11.08 No Partnership.
     Nothing herein contained shall be deemed or construed to create any
partnership or joint venture between the parties hereto and the services of the
Servicer shall be rendered as an independent contractor.
     Section 11.09 Counterparts.
     This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same Agreement.
     Section 11.10 Successors and Assigns.
     This Agreement shall inure to the benefit of and be binding upon the
Servicer, the Loan Originator, the Depositor, the Indenture Trustee, the Issuer
and the Securityholders and their respective successors and permitted assigns.
     Section 11.11 Headings.
     The headings of the various Sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed to be part of this
Agreement.
     Section 11.12 Actions of Securityholders.
          (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Securityholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Depositor, the Servicer, the Loan Originator or the Issuer.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Depositor, the Servicer, the Loan Originator and the Issuer if made
in the manner provided in this Section 11.12.

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          (b) The fact and date of the execution by any Securityholder of any
such instrument or writing may be proved in any reasonable manner which the
Depositor, the Servicer, the Loan Originator or the Issuer may deem sufficient.
          (c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Securityholder shall bind every holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Depositor, the Servicer, the Loan Originator or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Security.
          (d) The Depositor, the Servicer, the Loan Originator or the Issuer may
require additional proof of any matter referred to in this Section 11.12 as it
shall deem necessary.
     Section 11.13 Non-Petition Agreement.
     Notwithstanding any prior termination of any Basic Document, the Loan
Originator, the Servicer, the Depositor and the Indenture Trustee each severally
and not jointly covenants that it shall not, prior to the date which is one year
and one day after the payment in full of the all of the Notes, acquiesce,
petition or otherwise, directly or indirectly, invoke or cause the Trust or the
Depositor to invoke the process of any governmental authority for the purpose of
commencing or sustaining a case against the Issuer or Depositor under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or Depositor or any substantial part of their respective property
or ordering the winding up or liquidation of the affairs of the Issuer or the
Depositor.
     Section 11.14 Holders of the Securities.
          (a) Any sums to be distributed or otherwise paid hereunder or under
this Agreement to the holders of the Securities shall be paid to such holders
pro rata based on their Percentage Interests;
          (b) Where any act or event hereunder is expressed to be subject to the
consent or approval of the holders of the Securities, such consent or approval
shall be capable of being given by the holder or holders evidencing in the
aggregate not less than 51% of the Percentage Interests of the Notes or the
Certificates, as applicable.
     Section 11.15 Due Diligence Fees, Due Diligence.
     The Loan Originator acknowledges that the Majority Noteholders have the
right to perform continuing due diligence reviews with respect to the Loans, for
purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and the Loan Originator agrees that
upon reasonable prior notice (with no notice being required upon the occurrence
of an Event of Default) to the Loan Originator, the Majority Noteholders, the
Indenture Trustee and Custodian or its authorized representatives will be
permitted during normal business hours to examine, inspect, and make copies and
extracts of, the Loan Files and any and all documents, records, agreements,
instruments or information relating to such Loans in the possession or under the
control of the Servicer and the Indenture Trustee. The Loan

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Originator also shall make available to the Majority Noteholders a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Loan Files and the Loans and the financial condition of the Loan
Originator. Without limiting the generality of the foregoing, the Loan
Originator acknowledges that the Majority Noteholders may purchase Notes based
solely upon the information provided by the Loan Originator to the Majority
Noteholders in the Loan Schedule and the representations, warranties and
covenants contained herein, and that the Majority Noteholders, at their option,
have the right at any time to conduct a partial or complete due diligence review
on some or all of the Loans securing such purchase, including without limitation
ordering new credit reports and new appraisals on the related Mortgaged
Properties and otherwise re-generating the information used to originate such
Loan. The Majority Noteholders may underwrite such Loans or engage a mutually
agreed upon third party underwriter to perform such underwriting. The Loan
Originator agrees to cooperate with the Majority Noteholders and any third party
underwriter in connection with such underwriting, including, but not limited to,
providing the Majority Noteholders and any third party underwriter with access
to any and all documents, records, agreements, instruments or information
relating to such Loans in the possession, or under the control, of the Servicer.
The Loan Originator further agrees that the Loan Originator shall reimburse the
Majority Noteholders for any and all reasonable out-of-pocket costs and expenses
incurred by the Majority Noteholders in connection with the Majority
Noteholders’s activities pursuant to this Section 11.15 hereof (the “Due
Diligence Fees”). In addition to the obligations set forth in Section 11.17 of
this Agreement, the Majority Noteholders agree (on behalf of themselves and
their Affiliates, directors, officers, employees and representatives) to use
reasonable precaution to keep confidential, in accordance with its customary
procedures for handling confidential information and in accordance with safe and
sound practices, and not to disclose to any third party, any non-public
information supplied to it or otherwise obtained by it hereunder with respect to
the Loan Originator or any of its Affiliates (including, but not limited to, the
Loan File); provided, however, that nothing herein shall prohibit the disclosure
of any such information to the extent required by statute, rule, regulation or
judicial process; provided, further, that, unless specifically prohibited by
applicable law or court order, the Majority Noteholders shall, prior to
disclosure thereof, notify the Loan Originator of any request for disclosure of
any such non-public information. The Majority Noteholders further agree not to
use any such non-public information for any purpose unrelated to this Agreement
and that the Majority Noteholders shall not disclose such non-public information
to any third party underwriter in connection with a potential Disposition
without obtaining a written agreement from such third party underwriter to
comply with the confidentiality provisions of this Section 11.15. Without
limiting the foregoing, non-public information shall not include information
which (i) is or becomes generally available to the public other than as a result
of a disclosure; (ii) was available to the Majority Noteholders on a
non-confidential basis prior to its disclosure to such Majority Noteholders by
the Servicer or the Loan Originator; (iii) is required to be disclosed by a
governmental authority or related governmental agencies or as otherwise required
by law; or (iv) becomes available to the Majority Noteholders on a
non-confidential basis from a Person other than the Servicer or the Loan
Originator who, to the best knowledge of such Majority Noteholders, is not
otherwise bound by a confidentiality agreement with the Servicer or the Loan
Originator and is not otherwise prohibited from transmitting the information to
such Majority Noteholders.

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     Section 11.16 No Reliance.
     Each of the Loan Originator, the Depositor, the Servicer and the Issuer
hereby acknowledges that it has not relied on the Initial Noteholder, the
Noteholders or any of their officers, directors, employees, agents and “control
persons” as such term is used under the Act and under the Securities Exchange
Act of 1934, as amended, for any tax, accounting, legal or other professional
advice in connection with the transactions contemplated by the Basic Documents,
that each of the Loan Originator, the Depositor, the Servicer and the Issuer has
retained and been advised by such tax, accounting, legal and other professionals
as it has deemed necessary in connection with the transactions contemplated by
the Basic Documents and that neither the Initial Noteholder nor the Noteholders
makes any representation or warranty, and shall have no liability with respect
to, the tax, accounting or legal treatment or implications relating to the
transactions contemplated by the Basic Documents.
     Section 11.17 Confidential Information.
     In addition to the confidentiality requirements set forth in Section 11.15
of this Agreement, each Noteholder, as well as the Indenture Trustee and the
Disposition Agent (each of said parties singularly referred to herein as a
“Receiving Party” and collectively referred to herein as the “Receiving
Parties”), agrees to hold and treat all Confidential Information (as defined
below) in confidence and in accordance with this Section. Such Confidential
Information will not, without the prior written consent of the Servicer and the
Loan Originator, be disclosed or used by such Receiving Parties or their
subsidiaries, Affiliates, directors, officers, members, employees, agents or
controlling persons (collectively, the “Information Recipients”) other than for
the purpose of making a decision to purchase or sell Notes or taking any other
permitted action under this Agreement or any other Basic Document. Each
Receiving Party agrees to disclose Confidential Information only to its
Information Recipients who need to know it for the purpose of making a decision
to purchase or sell Notes or the taking of any other permitted action under this
Agreement or any other Basic Document (including in connection with the
servicing of the Loans and in connection with any servicing transfers) and who
are informed by such Receiving Party of its confidential nature and who agree to
be bound by the terms of this Section 11.17. Disclosure that is not in violation
of the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act or other
applicable law by such Receiving Party of any Confidential Information at the
request of its outside auditors or governmental regulatory authorities in
connection with an examination of a Receiving Party by any such authority shall
not constitute a breach of its obligations under this Section 11.17 and shall
not require the prior consent of the Servicer and the Loan Originator.
     Each Receiving Party shall be responsible for any breach of this
Section 11.17 by its Information Recipients. The Noteholders may use
Confidential Information for internal due diligence purposes in connection with
their analysis of the transactions contemplated by the Basic Documents. The
Disposition Agent may disclose Confidential Information to the Disposition
Participants as required to effect Dispositions. This Section 11.17 shall
terminate upon the occurrence of an Event of Default; provided, however, that
such termination shall not relieve the Receiving Parties or their respective
Information Recipients from the obligation to comply with the Gramm-Leach-Bliley
Act or other applicable law with respect to their use or disclosure of
Confidential Information following the occurrence of an Event of Default.

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     As used herein, “Confidential Information” means non-public personal
information (as defined in the Gramm-Leach-Bliley Act and its enabling
regulations issued by the Federal Trade Commission) regarding Borrowers.
Confidential Information shall not include information which (i) is or becomes
generally available to the public other than as a result of a disclosure by a
Receiving Party or any Information Recipients; (ii) was available to a Receiving
Party on a non-confidential basis prior to its disclosure to such Receiving
Party by the Servicer or the Loan Originator; (iii) is required to be disclosed
by a governmental authority or related governmental agencies or as otherwise
required by law; or (iv) becomes available to a Receiving Party on a
non-confidential basis from a Person other than the Servicer or the Loan
Originator who, to the best knowledge of such Receiving Party, is not otherwise
bound by a confidentiality agreement with the Servicer or the Loan Originator
and is not otherwise prohibited from transmitting the information to such
Receiving Party. Without limiting the generality of the foregoing, the parties
acknowledge and agree that this Agreement and other Basic Documents (other than
the Pricing Letter) will be filed with the Securities and Exchange Commission as
exhibits to filings of the Loan Originator’s parent corporation under the
Securities Exchange Act of 1934.
     Section 11.18 Conflicts.
     Notwithstanding anything contained in the Basic Documents to the contrary,
in the event of the conflict between the terms of this Agreement and any other
Basic Document, the terms of this Agreement shall control.
     Section 11.19 Limitation on Liability.
     It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee of Option One Owner
Trust 2002-3, in the exercise of the powers and authority conferred and vested
in it, (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 for binding only the Issuer, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust Company, individually
or personally, to perform any covenant either expressed or implied contained
herein, 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 under this Agreement or any other related documents.
     Section 11.20 No Agency.
     Nothing contained herein or in the Basic Documents shall be construed to
create an agency or fiduciary relationship between the Initial Noteholder, any
Noteholder or the Majority Noteholders or any of their Affiliates and the
Issuer, the Depositor, the Loan Originator or the Servicer. None of the Initial
Noteholder, any Noteholder, the Majority Noteholders or any of their Affiliates
shall be liable for any acts or actions affected in connection with a
disposition of Loans, including without limitation, any Securitization pursuant
to Section 3.07 hereof, any Loan

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Originator Put or Servicer Call pursuant to Section 3.08 hereof nor any Whole
Loan Sale pursuant to Section 3.07 hereof.
(SIGNATURE PAGE FOLLOWS)

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     IN WITNESS WHEREOF, the Issuer, the Depositor, the Servicer, the Indenture
Trustee and the Loan Originator have caused their names to be signed by their
respective officers thereunto duly authorized, as of the day and year first
above written, to this SECOND AMENDED AND RESTATED SALE AND SERVICING AGREEMENT.

                  OPTION ONE OWNER TRUST 2002-3,    
 
  By:   Wilmington Trust Company,    
 
      not in its individual capacity    
 
      but solely as Owner Trustee    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                OPTION ONE LOAN WAREHOUSE
CORPORATION, as Depositor    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                OPTION ONE MORTGAGE CORPORATION,
as Loan Originator and Servicer    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                WELLS FARGO BANK, NA, as Indenture
Trustee    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

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