Exhibit 10.14
EXECUTION COPY
 
 
SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
among
OPTION ONE ADVANCE TRUST 2007-ADV2
as Issuer,
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
as Committed Purchaser and Agent,
THE CIT GROUP/BUSINESS CREDIT, INC.
as Committed Purchaser
DB STRUCTURED PRODUCTS, INC.
as Committed Purchaser and Administrative Agent
and
MONTEREY FUNDING LLC and MONTAGE FUNDING LLC
as Conduit Purchasers
Dated as of January 18, 2008
OPTION ONE ADVANCE TRUST 2007-ADV2
ADVANCE RECEIVABLES BACKED NOTES, SERIES 2007-ADV2
 
 

 

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TABLE OF CONTENTS

                      Page
 
            ARTICLE I
  DEFINITIONS

 
           
SECTION 1.01.
  Certain Defined Terms     1  
SECTION 1.02.
  Other Definitional Provisions     4  
 
            ARTICLE II
  COMMITMENT; CLOSING AND PURCHASES OF ADDITIONAL NOTE BALANCES

 
           
SECTION 2.01.
  Commitment     5  
SECTION 2.02.
  Closing     7  
 
            ARTICLE III
  FUNDING DATES

 
           
SECTION 3.01.
  Funding Dates     7  
 
           
 
  ARTICLE IV        
 
            CONDITIONS PRECEDENT TO EFFECTIVENESS

 
           
SECTION 4.01.
  Closing Subject to Conditions Precedent     9  
 
            ARTICLE V
  REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 
           
SECTION 5.01.
  Issuer     12  
SECTION 5.02.
  Securities Act     14  
SECTION 5.03.
  No Fee     14  
SECTION 5.04.
  Information     14  
SECTION 5.05.
  The Purchased Notes     14  
SECTION 5.06.
  Use of Proceeds     14  
SECTION 5.07.
  Taxes, etc     15  
SECTION 5.08.
  Financial Condition     15  

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                      Page
 
            ARTICLE VI
  COVENANTS OF THE ISSUER

 
           
SECTION 6.01.
  Information from the Issuer     15  
SECTION 6.02.
  Access to Information     16  
SECTION 6.03.
  Ownership and Security Interests; Further Assurances     16  
SECTION 6.04.
  Covenants     16  
SECTION 6.05.
  Amendments     16  
SECTION 6.06.
  With Respect to the Exempt Status of the Purchased Notes     16  
SECTION 6.07.
  Additional Deliveries     17  
 
            ARTICLE VII
  ADDITIONAL COVENANTS

 
           
SECTION 7.01.
  Legal Conditions to Closing     17  
SECTION 7.02.
  Expenses     17  
SECTION 7.03.
  Mutual Obligations     17  
SECTION 7.04.
  Restrictions on Transfer     17  
SECTION 7.05.
  Securities Act     18  
SECTION 7.06.
  Agreement and Consent to Agent     18  
 
            ARTICLE VIII
  INDEMNIFICATION

 
           
SECTION 8.01.
  Indemnification     18  
SECTION 8.02.
  Procedure and Defense     18  
SECTION 8.03.
  Requirements of Law     18  
SECTION 8.04.
  Taxes     19  
 
            ARTICLE IX
  TRANSFERS OF NOTES

 
           
SECTION 9.01.
  Transfers of Notes     20  
 
            ARTICLE X
  MISCELLANEOUS

 
           
SECTION 10.01.
  Amendments     23  
SECTION 10.02.
  Severability of Provisions     23  
SECTION 10.03.
  Notices     23  
SECTION 10.04.
  No Waiver; Remedies     23  
SECTION 10.05.
  Integration     23  
SECTION 10.06.
  Negotiation     23  

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                      Page
 
           
SECTION 10.07.
  Binding Effect; Assignability     24  
SECTION 10.08.
  Provision of Documents and Information     24  
SECTION 10.09.
  GOVERNING LAW; JURISDICTION     24  
SECTION 10.10.
  No Proceedings     24  
SECTION 10.11.
  Execution in Counterparts     25  
SECTION 10.12.
  No Recourse — Purchasers     25  
SECTION 10.13.
  Survival     25  
SECTION 10.14.
  USA Patriot Act     25  
SECTION 10.15.
  Confidentiality.     25  
SECTION 10.16.
  Tax Characterization     27  
SECTION 10.17.
  No Recourse     27  
SECTION 10.18.
  Administrative Agent     28  

EXHIBITS:
Schedule I — Information for Notices
Schedule A — Purchaser Information

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SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
     SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT dated as of January 18,
2008 (this “Note Purchase Agreement” or “Agreement”), among Option One Advance
Trust 2007-ADV2, a Delaware statutory trust, as issuer (the “Issuer”), Greenwich
Capital Financial Products, Inc., a Delaware corporation (as “Greenwich
Purchaser” and as “Agent” under the Indenture), The CIT Group/Business Credit,
Inc., a Delaware corporation (as “CIT Purchaser”), DB Structured Products, Inc.,
a Delaware corporation (“DBSP”), as a Committed Purchaser and as administrative
agent for Monterey and Montage (in such capacity, the “Administrative Agent”),
Monterey Funding LLC, a Delaware limited liability company (“Monterey”) and
Montage Funding LLC, a Delaware limited liability company (“Montage” and,
together with the Greenwich Purchaser, the CIT Purchaser, DBSP and Monterey, the
“Purchasers”).
          The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
          SECTION 1.01. Certain Defined Terms. Capitalized terms used herein
without definition shall have the meanings set forth in the Indenture and the
Receivables Purchase Agreement (as defined below). Additionally, the following
terms shall have the following meanings:
          “Administrative Agent” is defined in the preamble.
          “Closing” shall have the meaning set forth in Section 2.02.
          “Committed Purchasers” means the Greenwich Purchaser, the CIT
Purchaser, DBSP and their successors and assigns.
          “Commitment” means the commitment of each Committed Purchaser to
purchase Additional Note Balances pursuant to Section 2.01 in an amount equal to
the Maximum Note Principal Balance of the Note acquired by it hereunder, in the
case of DBSP, minus the outstanding principal balance of such Note funded or
maintained by a related Conduit Purchaser. The Commitments of the Committed
Purchasers are set forth on Schedule A hereto.
          “Commitment Interest” With respect to any Committed Purchaser and as
of any date of determination, the percentage equal to a fraction, the numerator
of which is the Maximum Note Principal Balance with respect to (and as indicated
on) such Committed Purchaser’s Purchased Note(s) and the denominator of which is
the Maximum Note Balance.
          “Conduit Purchasers” means any Purchaser which is designated as a
“Conduit Purchaser” on the signature pages hereto or in any assignment agreement
pursuant to which it becomes a party to this Agreement. The initial Conduit
Purchasers are Monterey and Montage.

 

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          “Confidential Information” shall mean any and all materials and
information concerning Option One, the Depositor or the Issuer and their
subsidiaries and Affiliates, and their business, which information is
non-public, confidential or proprietary in nature, and shall include, without
limitation, (i) information transmitted in written, oral, magnetic or any other
medium, (ii) all copies and reproductions, in whole or in part, of such
information and (iii) all summaries, analyses, compilations, studies, notes or
other records which contain, reflect, or are generated from such information;
provided, that Confidential Information does not include, with respect to a
Person, information that: (a) is or becomes generally available to the public
other than as a result of an action by the Agent, the Administrative Agent or
any Purchaser or their representatives or (b) becomes available to the Agent,
the Administrative Agent or any Purchaser on a non-confidential basis from a
person other than Option One, the Depositor, the Issuer and/or any one or more
of their subsidiaries or Affiliates who is not, to the knowledge of the Agent,
the Administrative Agent or any Purchaser, as applicable, otherwise bound by a
confidentiality agreement with Option One, or is not, to the knowledge of the
Agent, the Administrative Agent or any Purchaser, as applicable, otherwise
prohibited from transmitting the information to the Agent, the Administrative
Agent or any Purchaser.
          “Foreign Owner” means any Owner or Participant that is organized under
the laws of a jurisdiction other than those in which the Seller, the Depositor
or the Issuer are located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
          “Governmental Actions” means any and all consents, approvals, permits,
orders, authorizations, waivers, exceptions, variances, exemptions or licenses
of, or registrations, declarations or filings with, any Governmental Authority
required under any Governmental Rules.
          “Governmental Authority” means the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and having jurisdiction over the applicable Person.
          “Governmental Rules” means any and all laws, statutes, codes, rules,
regulations, ordinances, orders, writs, decrees and injunctions, of any
Governmental Authority and any and all legally binding conditions, standards,
prohibitions, requirements and judgments of any Governmental Authority.
          “Indemnified Party” means each of the Agent, each Purchaser and any of
their officers, directors, employees, agents, representatives, assignees and
Affiliates and any Person who controls any of the Agent or any Purchaser or
their Affiliates within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act.
          “Indemnified Proceeding” shall have the meaning provided in
Section 8.02.
          “Indemnified Taxes” means Taxes other than Excluded Taxes.

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          “Indenture” means the Indenture dated as of October 1, 2007 between
the Issuer and Wells Fargo Bank, National Association, as Indenture Trustee as
amended from time to time in accordance with the terms thereof.
          “Lien” means, 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.
          “Maximum Note Balance” shall have the meaning set forth in the
Indenture.
          “Maximum Note Principal Balance” means, with respect to each Purchased
Note, the amount set forth on Schedule A for such Purchased Note.
          “Other Taxes” means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or the Indenture.
          “Owner” shall mean each Purchaser or Support Party that is a
beneficial owner of an interest in a Note as reflected on the books of such
Purchaser, the Agent or the Administrative Agent in accordance with this
Agreement and the Transaction Documents.
          “Participant” shall have the meaning specified in Section 9.01 of this
Agreement.
          “Participation” shall have the meaning specified in Section 9.01 of
the Agreement.
          “Permitted Transferee” shall mean (i) each Purchaser, (ii) the
Administrative Agent (in its individual capacity), (iii) the Agent in its
individual capacity, (iv) any Affiliate of any Purchaser, the Agent or the
Administrative Agent, (v) any commercial paper conduit administered or managed
by the Agent, the Administrative Agent or any Affiliate thereof, the commercial
paper notes of which are rated in the highest short term rating category by at
least two of S&P, Moody’s or Fitch, Inc. and (vi) any other Person who has been
consented to by the Issuer (which consent shall not be unreasonably withheld,
delayed or conditioned); provided, that, from and after the occurrence of an
Event of Default or a Funding Termination Event, the consent of the Issuer shall
not be required.
          “Purchased Notes” means the Option One Advance Trust 2007-ADV2,
Advance Receivables Backed Notes, Series 2007-ADV2 issued by the Issuer pursuant
to the Indenture.
          “Purchasers” means the Committed Purchasers, the Conduit Purchasers,
their respective successors and assigns and any other Noteholder hereunder.
          “Receivables Purchase Agreement” means the Receivables Purchase
Agreement dated as of October 1, 2007, between the Issuer, the Depositor and the
Receivables Seller, as the same may be amended, modified or supplemented from
time to time.

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          “Receivables Seller” means Option One Mortgage Corporation.
          “Reference Rate” means the rate of interest publicly announced by
Wells Fargo Bank, National Association, its successors or any other commercial
bank designated by the Agent to the Issuer from time to time, in New York, New
York from time to time as its prime rate or base rate. The prime rate or base
rate is determined from time to time by such bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
such bank to any particular class or category of customers. Each change in the
Reference Rate shall be effective from and including the date such change is
publicly announced as being effective.
          “Regulatory Change” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Owner (or,
for purposes of Section 8.03(b), by any lending office of such Owner or by such
Owner’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
          “Support Advances” shall mean any loans or advances, or any
participation or other interest, funded or held by Support Party pursuant to a
Support Facility (but excluding any such loans or advances made to fund the
applicable Conduit Purchaser’s obligations to pay interest, fees or other
similar amounts relating to the funding of its making or maintaining its
interest in a Note).
          “Support Facility” shall mean any liquidity or credit support
agreement in favor a Conduit Purchaser which relates to this Agreement, the Note
held by or on behalf of such Conduit Purchaser and the other Transaction
Documents (including any agreement to purchase an assignment of or participation
in such Conduit Purchaser’s interest in such Note).
          “Support Party” shall mean any bank, insurance company or other
financial institution or Person extending or having a commitment to extend funds
to or for the account of a Conduit Purchaser (including by agreement to purchase
an assignment of, or participation in, the Note held by or on behalf of such
Conduit Purchaser) under a Support Facility. Deutsche Bank AG, New York Branch
shall be deemed to be a Support Party for Monterey and Montage.
          “Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
          SECTION 1.02. Other Definitional Provisions.
          (a) All terms defined in this Note Purchase Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

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          (b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.01, and accounting terms partially defined in Section 1.01 to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.
          (c) The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Note Purchase Agreement shall refer to this Note
Purchase Agreement as a whole and not to any particular provision of this Note
Purchase Agreement; and Section, subsection, Schedule and Exhibit references
contained in this Note Purchase Agreement are references to Sections,
subsections, and Exhibits in or to this Note Purchase Agreement unless otherwise
specified.
          (d) 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.
ARTICLE II
COMMITMENT; CLOSING AND PURCHASES OF
ADDITIONAL NOTE BALANCES
          SECTION 2.01. Commitment.
          (a) (i) At any time during the Funding Period at least two
(2) Business Days prior to a proposed Funding Date (or, with respect to any
Funding Date described in clause (iii) of the definition thereof in the
Indenture, at least one (1) Business Day prior to each such Funding Date), to
the extent that the aggregate outstanding Note Principal Balance (after giving
effect to the proposed purchase) is less than the lesser of (x) the Aggregate
Collateral Value and (y) the Maximum Note Balance, and subject to the terms and
conditions hereof and in accordance with the other Transaction Documents, the
Issuer may deliver to the Agent, on behalf of the Purchasers, a written request
that the Purchasers purchase Additional Note Balances (each such request, a
“Purchase Request”). Each Purchase Request shall identify the proposed Funding
Date, the Receivables Balance of the Receivables that will be sold and/or
contributed to the Issuer on such Funding Date and the Cash Purchase Price
thereof. Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties set forth herein and in the other Transaction
Documents, on the identified Funding Date, each Conduit Purchaser may in its
sole and absolute discretion, and each Committed Purchaser shall, severally and
not jointly, purchase its Commitment Interest of the Additional Note Balances
requested in the Purchase Request; provided, however, that the portion of such
Additional Note Balance required to be purchased by the Deutsche Purchaser shall
be reduced by the amount of such Additional Note Balance that the Conduit
Purchasers purchase pursuant to Section 2.01(a)(ii); provided, further, that no
Committed Purchaser shall be obligated to purchase an Additional

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Note Balance to the extent that, after giving effect to such purchase, the
existing principal balance of the Note held by it would exceed its Commitment.
               (ii) In the event that any Conduit Purchaser elects, in its sole
discretion, to purchase any portion of DBSP’s Commitment Interest of any
Additional Note Balance requested in a Purchase Request hereunder pursuant to
Section 2.01(a)(i), the portion of such Additional Note Balance required to be
purchased by DBSP shall be reduced by the amount purchased by such Conduit
Purchaser.
          (b) (i) Except as otherwise provided in this Section 2.01(b), all
purchases of Additional Note Balances under this Agreement shall be made by the
Committed Purchasers simultaneously and proportionately based on each Committed
Purchaser’s respective Commitment Interest, it being understood that no
Committed Purchaser shall be responsible for any default by any other Committed
Purchaser with respect to such other Committed Purchaser’s obligation to
purchase an Additional Note Balance requested hereunder. The Commitment of any
Committed Purchaser shall not be enforced as a result of the default by any
other Committed Purchaser in that other Committed Purchaser’s obligation to
purchase an Additional Note Balance requested hereunder and any amounts paid in
connection with the obligation to purchase shall be refunded with no penalty. No
Committed Purchaser shall be obligated to purchase Additional Note Balances
required to be made by it by the terms of this Agreement if any other Committed
Purchaser fails to do so. For the avoidance of doubt, in the event that the
Agent or a Committed Purchaser having a Commitment Interest greater than or
equal to 30% provides notice of a Funding Termination Event in accordance with
the terms and provisions of the Indenture, then no Committed Purchaser shall be
obligated to purchase Additional Note Balances otherwise required to be made by
it by the terms of this Agreement.
               (ii) Notwithstanding any other provision of this Agreement, and
in order to reduce the number of fund transfers among the parties hereto, the
Issuer, the Agent and the Purchasers agree that the Agent may (but shall not be
obligated to), and the Issuer and the Purchasers hereby irrevocably authorize
the Agent to, fund, on behalf of the Purchasers, purchases of Additional Note
Balances pursuant to this Section 2.01; provided, however, that the Agent shall
in no event fund such purchase of Additional Note Balances if the Agent shall
have determined pursuant to Section 3.01(b) that one or more of the conditions
precedent contained in Section 3.01(a) will not be satisfied on the day of the
proposed purchase of Additional Note Balances. If the Issuer gives a Purchase
Request requesting a purchase of Additional Note Balances and the Agent elects
not to fund such proposed purchase of Additional Note Balances on behalf of the
Purchasers, then promptly after receipt of the Purchase Request requesting such
purchase of Additional Note Balances, the Agent shall notify each Purchaser of
the specifics contained in such Purchase Request and that it will not fund such
Purchase Request on behalf of the Purchasers. If the Agent notifies the
Purchasers that it will not fund a requested purchase of Additional Note
Balances on behalf of the Purchasers, each Conduit Purchaser may in its sole and
absolute discretion, and each Committed Purchaser shall, purchase its Commitment
Interest of the Additional Note Balance pursuant to Section 2.01(a), by
remitting the required funds to the Issuer pursuant to and in accordance with
Section 3.01(c) hereto. If the Agent elects to fund a requested purchase of
Additional Note Balances, the Agent will remit the required funds for such
Purchase Request to the Issuer pursuant to and in accordance with
Section 3.01(c) hereto.

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               (iii) If the Agent has notified the Purchasers that the Agent, on
behalf of the Purchasers, will fund a particular purchase of Additional Note
Balances pursuant to Section 2.01(b)(ii), the Agent may assume that each
Committed Purchaser has made such amount available to the Agent on such day and
the Agent, in its sole discretion, may, but shall not be obligated to, cause a
corresponding amount to be made available to the Issuer on such day. If the
Agent makes such corresponding amount available to the Issuer and such
corresponding amount is not in fact made available to the Agent by a Committed
Purchaser, the Agent shall be entitled to recover such corresponding amount on
demand from such Committed Purchaser together with interest thereon, for each
day from the date such payment was due until the date such amount is paid to the
Agent, at the Reference Rate. During the period in which such Purchaser has not
paid such corresponding amount to the Agent, notwithstanding anything to the
contrary contained in this Agreement or any other Transaction Document, the
amount so advanced by the Agent to the Issuer shall, for all purposes hereof, be
a purchase of Additional Note Balances made by the Agent for its own account.
Upon any such failure by a Committed Purchaser to pay the Agent, the Agent shall
promptly thereafter notify the Issuer of such failure and the Issuer shall
immediately pay such corresponding amount to the Agent for its own account.
               (iv) Nothing in this Section 2.01(b) shall be deemed to relieve
any Committed Purchaser from its obligations to fulfill its Commitment hereunder
or to prejudice any rights that the Agent or the Issuer may have against any
Committed Purchaser as a result of any default by such Committed Purchaser
hereunder.
          (c) From time to time during the Funding Period, the Issuer may
request that the Agent consent to add transactions to the definition of
Securitization Trusts, and such additional transactions may be added to the
definition of Securitization Trusts with the written consent of the Agent (such
consent at the sole discretion of the Agent). The Issuer understands and
acknowledges that the Agent does not hereby commit to add any such transactions
and any agreement to do so is subject to completion by the Purchasers of due
diligence to their satisfaction regarding such transactions and execution of
such additional documentation as the Agent deems appropriate in its sole
discretion.
          SECTION 2.02. Closing. The closing (the “Closing”) of the execution of
this Agreement shall take place at 2:00 PM at the offices of Thacher Proffitt &
Wood LLP, 2 World Financial Center, New York, New York 10281 on January 18, 2008
(the “Effective Date”) or if the conditions precedent to closing set forth in
Section 4.01 of this Agreement shall not have been satisfied or waived by such
date, as soon as possible after such conditions shall have been satisfied or
waived, or at some other time or date and place as the parties hereto shall
agree upon.
ARTICLE III
FUNDING DATES
          SECTION 3.01. Funding Dates.

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          (a) Subject to the conditions and terms set forth herein and in
Sections 7.01 and 7.02 of the Indenture with respect to each Funding Date, the
Issuer may request, each Conduit Purchaser may in its sole and absolute
discretion, and each Committed Purchaser shall, severally and not jointly, to
purchase Additional Note Balances from the Issuer from time to time in
accordance with, and upon the satisfaction, as of the applicable Funding Date,
of each of the following additional conditions:
          (i) With respect to each Funding Date, each of the Funding Conditions
set forth in Section 7.02 of the Indenture shall have been satisfied;
          (ii) Each of the representations and warranties of the Servicer and
the Receivables Seller made in the Transaction Documents shall be true and
correct as if made as of such Funding Date (except to the extent they expressly
relate to an earlier or later time);
          (iii) The Servicer and the Receivables Seller shall be in compliance
with all of their respective covenants contained in the Transaction Documents;
          (iv) No Event of Default or default shall have occurred under the
Indenture and be continuing; and
          (v) With respect to each Funding Date, the Agent shall have received
evidence reasonably satisfactory to it of the completion of all recordings,
registrations, and filings as may be necessary or, in the reasonable opinion of
the Agent, desirable to perfect or evidence the assignments required to be
effected on such Funding Date in accordance with the Receivables Purchase
Agreement including, without limitation, the assignment of the Receivables and
the proceeds thereof required to be assigned pursuant to the Indenture.
          (b) The Agent shall determine in its reasonable discretion whether
each of the above conditions have been met and such determination shall be
binding on the parties hereto.
          (c) The price paid by the Purchasers on each Funding Date for the
Additional Note Balance purchased on such Funding Date shall be equal to the
amount of such Additional Note Balance purchased by such Purchaser and shall be
remitted not later than 3:00 PM New York City time on such Funding Date by wire
transfer of immediately available funds to the Funding Account.
          (d) Each Purchaser or its designee shall record on the schedule
attached to its related Purchased Note, the date and amount of any Additional
Note Balance purchased by it; provided, that failure to make such recordation on
such schedule or any error in such schedule shall not adversely affect such
Purchaser’s rights with respect to its Note Principal Balance and its right to
receive interest payments in respect of the Note Principal Balance actually
held.
          (e) On or prior to the date hereof, the Purchased Notes representing
the interest of each Committed Purchaser in the Issuer shall be delivered to the
applicable indenture trustee for each Committed Purchaser.

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ARTICLE IV
CONDITIONS PRECEDENT TO EFFECTIVENESS
          SECTION 4.01. Closing Subject to Conditions Precedent. The
effectiveness of this Agreement is subject to the satisfaction at the time of
the Closing of the following conditions (any or all of which may be waived by
the Purchasers, as applicable, in their sole discretion):
          (a) Performance by the Issuer, the Servicer the Depositor and the
Receivables Seller. All the terms, covenants, agreements and conditions of the
Transaction Documents to be complied with and performed by the Issuer, the
Depositor, the Servicer and the Receivables Seller on or before the Effective
Date shall have been complied with and performed in all material respects.
          (b) Representations and Warranties. Each of the representations and
warranties of the Issuer, the Depositor, the Servicer and the Receivables Seller
made in the Transaction Documents shall be true and correct in all material
respects as of the Effective Date (except to the extent they expressly relate to
an earlier or later time).
          (c) Officer’s Certificate. The Agent shall have received in form and
substance reasonably satisfactory to the Agent an officer’s certificate from the
Depositor, the Receivables Seller and the Servicer and a certificate of an
Authorized Officer of the Issuer, dated the Effective Date, each certifying to
the satisfaction of the conditions set forth in the preceding paragraphs (a) and
(b), in each case, together with incumbency, by-laws, resolutions and good
standing.
          (d) Opinions of Counsel to the Issuer, the Depositor, the Receivables
Seller and the Servicer. Counsel to the Issuer, the Depositor, the Receivables
Seller and the Servicer shall have delivered to the Agent and the Purchasers
favorable opinions, dated as of the date of the Effective Date, or reliance
letters dated as of the Effective Date with respect to legal opinions rendered
on the Closing Date, in each case, satisfactory in form and substance to the
Agent, the Purchasers and their counsel, relating to corporate matters,
enforceability, true sale, non-consolidation, and perfection and an opinion as
to which state’s law applies to security interest and perfection matters. In
addition to the foregoing, the Receivables Seller shall have caused its counsel
to deliver a favorable opinion dated as of the Effective Date, or a reliance
letter dated as of the Effective Date with respect to a legal opinion rendered
on the Closing Date, with respect to the effect that the Issuer will not be
treated as an association (or publicly traded partnership) taxable as a
corporation or as a taxable mortgage pool, for federal income tax purposes
satisfactory in form and substance of the Agent, the Purchasers and their
counsel.
          (e) Officer’s Certificate of Indenture Trustee. The Agent and the
Purchasers shall have received in form and substance reasonably satisfactory to
the Agent and the Purchasers an Officer’s Certificate from the Indenture
Trustee, dated as of the date of the Effective Date, with respect to the
Indenture, together with incumbency, by-laws, resolutions and good standing.

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          (f) Opinions of Counsel to the Indenture Trustee. Counsel to the
Indenture Trustee shall have delivered to the Agent and the Purchasers a
favorable opinion, dated as of the Effective Date and reasonably satisfactory in
form and substance to the Agent, the Purchasers and their counsel related to the
enforceability of the Indenture.
          (g) Opinions of Counsel to the Owner Trustee. Delaware counsel to the
Owner Trustee of the Issuer shall have delivered favorable opinions regarding
the formation, existence and standing of the Issuer and of the Issuer’s
execution, authorization and delivery of each of the Transaction Documents to
which it is a party and such other matters as were reasonably requested, dated
as of the date of the Effective Date and reasonably satisfactory in form and
substance to the Agent, the Purchasers and their counsel.
          (h) Filings and Recordations. The Agent shall have received evidence
reasonably satisfactory to it of (i) the completion of all recordings,
registrations, and filings as may be necessary or, in the reasonable opinion of
the Agent, desirable to perfect or evidence the assignment by the Receivables
Seller to the Depositor of the Receivables Seller’s ownership interest in the
Aggregate Receivables conveyed pursuant to the Receivables Purchase Agreement
and the proceeds thereof, (ii) the completion of all recordings, registrations,
and filings as may be necessary or, in the reasonable opinion of the Agent,
desirable to perfect or evidence the assignment by the Depositor to the Issuer
of the Receivables Seller’s and the Depositor’s ownership interest in the
Aggregate Receivables conveyed pursuant to the Receivables Purchase Agreement
and the proceeds thereof and (iii) the completion of all recordings,
registrations, and filings as may be necessary or, in the reasonable opinion of
the Agent, desirable to perfect or evidence the grant of a first priority
perfected security interest in the Issuer’s ownership interest in the Aggregate
Receivables in favor of the Indenture Trustee, subject to no Liens prior to the
Lien created by the Indenture.
          (i) Documents. The Agent shall have received a duly executed
counterpart of each of the Transaction Documents, the Second Amended and
Restated Fee Side Letter and the Deutsche Side Letter, that certain letter
agreement dated as of the Effective Date between the Agent and DBSP, in form
acceptable to the Agent, the Purchased Notes and each and every document or
certification delivered by any party in connection with any of the Transaction
Documents or the Purchased Notes, and each such document shall be in full force
and effect.
          (j) Actions or Proceedings. No action, suit, proceeding or
investigation by or before any Governmental Authority shall have been instituted
to restrain or prohibit the consummation of, or to invalidate, any of the
transactions contemplated by the Transaction Documents, the Purchased Notes and
the documents related thereto in any material respect.
          (k) Approvals and Consents. All Governmental Actions of all
Governmental Authorities required with respect to the transactions contemplated
by the Transaction Documents, the Purchased Notes and the documents related
thereto shall have been obtained or made.
          (l) Accounts. The Agent shall have received evidence reasonably
satisfactory to it that each Account has been established in accordance with the
terms of the Indenture, and

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that the Issuer shall have deposited an amount equal to the amount required to
be deposited in the Reserve Account pursuant to the Indenture.
          (m) Fees and Expenses. The fees and expenses payable by the Issuer and
the Seller on or prior to the Effective Date pursuant to Section 7.02(b) of this
Agreement or any other Transaction Document (including, without limitation, the
Fee Side Letter) shall have been paid.
          (n) Other Documents. The Issuer, the Depositor, the Receivables Seller
and the Servicer shall have furnished such other opinions, information,
certificates and documents as the Agent or any Purchaser may have reasonably
requested.
          (o) Securitization Trust Acknowledgment. The Agent shall have received
acknowledgment notices from the Securitization Trustee of each Securitization
Trust acknowledging the receipt of notice from the Receivables Seller of the
transfer by the Receivables Seller of the Receivables to the Issuer that the
Indenture Trustee is an “Advance Financing Person” and that if there is an
“Advance Facility” referenced in the applicable Pooling and Servicing Agreement
related to any Securitization Trust, the Transaction Documents shall constitute
the “Advance Facility” (as and to the extent such terms or terms of
substantially similar import are used in such Pooling and Servicing Agreement).
          (p) Verification Agent. The Receivables Seller shall have engaged the
Verification Agent pursuant to an agreement reasonably satisfactory to the
Agent.
          (q) Proceedings in Contemplation of Sale of Purchased Notes. All
actions and proceedings undertaken by the Issuer, the Depositor, the Receivables
Seller and the Servicer in connection with the issuance and sale of the
Purchased Notes as herein contemplated shall be satisfactory in all respects to
the Agent, each Purchaser and their respective counsel.
          (r) Funding Termination Events. No Event of Default, Funding
Termination Event or Funding Interruption Event shall then be occurring.
          (s) Due Diligence. Each Purchaser shall have completed its due
diligence examination of the Issuer, the Depositor, the Receivables Seller and
the Receivables to its sole satisfaction.
          (t) Satisfaction of Conditions. Each condition to the purchase of
Additional Note Balance described in Section 3.01(a) of this Agreement shall
have been satisfied.
          If any condition specified in this Section 4.01 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Greenwich Purchaser by notice to the Receivables Seller at any time at or
prior to the Closing Date, and the Purchasers shall incur no liability as a
result of such termination.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
THE ISSUER
          The Issuer hereby makes the representations and warranties set forth
in ARTICLE IX of the Indenture to the Purchasers, as of the Closing Date, and as
of each Funding Date, as applicable, and the Purchasers shall be deemed to have
relied on such representations and warranties in making (or committing to make)
purchases of Additional Note Balances on each Funding Date.
          SECTION 5.01. Issuer. The representations and warranties set forth in
ARTICLE IX of the Indenture are true and correct as of the date hereof.
          (a) The Issuer has been duly organized and is validly existing and in
good standing as a statutory trust under the laws of the State of Delaware, with
requisite trust power and authority to own its properties and to transact the
business in which it is now engaged, and is duly qualified to do business and is
in good standing (or is exempt from such requirements) in each State of the
United States where the nature of its business requires it to be so qualified
and the failure to be so qualified and in good standing would have a material
adverse effect on the Issuer or any adverse effect on the interests of the
Purchasers.
          (b) The issuance, sale, assignment and conveyance of the Purchased
Note and the Additional Note Balances, the performance of the Issuer’s
obligations under each Transaction Document to which it is a party and the
consummation of the transactions therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien (other than any Lien
created by the Transaction Documents), charge or encumbrance upon any of the
property or assets of the Issuer or any of its Affiliates pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it or any of its Affiliates is bound or to which any of its
property or assets is subject, nor will such action result in any violation of
the provisions of its organizational documents or any Governmental Rule
applicable to the Issuer, in each case which could be expected to have a
material adverse effect on the transactions contemplated therein.
          (c) No Governmental Action which has not been obtained is required by
or with respect to the Issuer in connection with the execution and delivery to
the Purchasers of the Purchased Note. No Governmental Action which has not been
obtained is required by or with respect to the Issuer in connection with the
execution and delivery of any of the Transaction Documents to which the Issuer
is a party or the consummation by the Issuer of the transactions contemplated
thereby except for any requirements under state securities or “blue sky” laws in
connection with any transfer of the Purchased Note.
          (d) The Issuer possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
it, and has not received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit

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which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect its condition,
financial or otherwise, or its earnings, business affairs or business prospects.
          (e) Each of the Transaction Documents to which the Issuer is a party
has been duly authorized, executed and delivered by the Issuer and is a valid
and legally binding obligation of the Issuer, enforceable against the Issuer in
accordance with its terms, subject to enforcement of bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity.
          (f) The execution, delivery and performance by the Issuer of each of
its obligations under each of the Transaction Documents to which it is a party
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any agreement or instrument to which the Issuer
is a party or by which the Issuer is bound or to which any of its properties are
subject or of any statute, order or regulation applicable to the Issuer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Issuer or any of its properties, in each case which could
be expected to have a material adverse effect on any of the transactions
contemplated therein.
          (g) The Issuer is not in violation of its organizational documents or
in default under any agreement, indenture or instrument the effect of which
violation or default would be material to the Issuer or the transactions
contemplated by the Transaction Documents. The Issuer is not a party to, bound
by or in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Issuer that materially and adversely affects, or may in the future
materially and adversely affect (i) the ability of the Issuer to perform its
obligations under any of the Transaction Documents to which it is a party or
(ii) the business, operations, financial condition, properties, assets or
prospects of the Issuer.
          (h) There are no actions or proceedings against, or investigations of,
the Issuer pending, or, to the knowledge of the Issuer threatened, before any
Governmental Authority, court, arbitrator, administrative agency or other
tribunal (i) asserting the invalidity of any of the Transaction Documents or
(ii) seeking to prevent the issuance of the Purchased Note or the consummation
of any of the transactions contemplated by the Transaction Documents or the
Purchased Note or (iii) that, if adversely determined, could materially and
adversely affect the business, operations, financial condition, properties,
assets or prospects of the Issuer or the validity or enforceability of, or the
performance by the Issuer of its respective obligations under, any of the
Transaction Documents to which it is a party or (iv) seeking to affect adversely
the income tax attributes of the Purchased Note.
          (i) The Issuer is not, and neither the issuance and sale of the
Purchased Note to the Purchasers nor the activities of the Issuer pursuant to
the Transaction Documents, shall render the Issuer an “investment company” or
under the “control” of an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

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          (j) The Issuer is solvent and has adequate capital for its business
and undertakings.
          (k) The chief executive offices of the Issuer are located at Option
One Advance Trust 2007-ADV2, c/o Wilmington Trust Company, as Owner Trustee,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, or,
with the consent of the Purchaser, such other address as shall be designated by
the Issuer in a written notice to the other parties hereto.
          (l) There are no contracts, agreements or understandings between the
Issuer and any Person granting such Person the right to require the filing at
any time of a registration statement under the Act with respect to the Purchased
Note.
          SECTION 5.02. Securities Act. Assuming the accuracy of the
representations and warranties of and compliance with the covenants of the
Purchasers, contained herein, the sale of the Purchased Notes and the sale of
Additional Note Balances pursuant to this Agreement are each exempt from the
registration and prospectus delivery requirements of the 1933 Act. In the case
of the offer or sale of the Purchased Notes, no form of general solicitation or
general advertising was used by the Issuer, any Affiliates of the Issuer or any
person acting on its or their behalf, including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. Neither the Issuer, any Affiliates of the
Issuer nor any Person acting on its or their behalf has offered or sold, nor
will the Issuer or any Person acting on its behalf offer or sell directly or
indirectly, the Purchased Notes or any other security in any manner that,
assuming the accuracy of the representations and warranties and the performance
of the covenants given by the Purchasers and compliance with the applicable
provisions of the Indenture with respect to each transfer of any Purchased Note,
would render the issuance and sale of the Purchased Notes as contemplated hereby
a violation of Section 5 of the 1933 Act or the registration or qualification
requirements of any state securities laws, nor has any such Person authorized,
nor will it authorize, any Person to act in such manner.
          SECTION 5.03. No Fee. Neither the Issuer nor any of its Affiliates has
paid or agreed to pay to any Person any compensation for soliciting another to
purchase the Purchased Notes.
          SECTION 5.04. Information. The information provided pursuant to
Section 6.01(a) hereof will, at the date thereof, be true and correct in all
material respects.
          SECTION 5.05. The Purchased Notes. The Purchased Notes have been duly
and validly authorized, and, when executed and authenticated in accordance with
the terms of the Indenture, and delivered to and paid for in accordance with
this Note Purchase Agreement, will be duly and validly issued and outstanding
and will be entitled to the benefits of the Indenture.
          SECTION 5.06. Use of Proceeds. No proceeds of a purchase hereunder
will be used (i) for a purpose that violates or would be inconsistent with
Regulations T, U or X

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promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire any security in any transaction in violation of
Section 13 or 14 of the 1934 Act.
          SECTION 5.07. Taxes, etc. Any taxes, fees and other charges of
Governmental Authorities applicable to the Issuer, except for franchise or
income taxes, in connection with the execution, delivery and performance by the
Issuer of each Transaction Document to which it is a party, the issuance of the
Purchased Note or otherwise applicable to the Issuer have been paid or will be
paid by the Issuer at or prior to the Closing Date or Funding Date, to the
extent then due.
          SECTION 5.08. Financial Condition. On the date hereof and on each
Funding Date, the Issuer is not or will not be insolvent or the subject of any
voluntary or involuntary bankruptcy proceeding.
ARTICLE VI
COVENANTS OF THE ISSUER
          SECTION 6.01. Information from the Issuer. So long as any Purchased
Note remains outstanding, the Issuer shall furnish to the Agent and each
Purchaser:
          (a) such information (including financial information), documents,
records or reports with respect to the Receivables or the Issuer as the Agent or
any of the Purchasers or the Purchasers may from time to time reasonably
request;
          (b) as soon as possible and in any event within two (2) Business Days
after the occurrence thereof, notice of any Event of Default, Securitization
Termination Event, Funding Termination Event or Funding Interruption Event; and
          (c) promptly and in any event within 30 days after the occurrence
thereof, written notice of a change in address or the jurisdiction of
organization of the Issuer, the Depositor or the Receivables Seller; and
          (d) promptly, and in any event within 5 days after the occurrence
thereof, written notice of (i) any legal action brought in any jurisdiction
against the Depositor or the Issuer, or any legal action brought in any
jurisdiction against the Seller in which the plaintiff is seeking a judgment for
the payment of money in excess of $15,000,000.00, (ii) any final judgment or
judgments held against the Depositor or the Issuer or any final judgment or
judgments held against the Seller for the payment of money in excess of
$15,000,000.00 in the aggregate, (iii) any other events that could reasonably be
likely to have a Material Adverse Effect with respect to the Seller, the
Depositor or the Issuer, (iv) any claim for liability brought in any
jurisdiction against the Seller, the Depositor or the Issuer relating to ERISA,
or any contribution failure with respect to any “defined benefit plan” (as
defined in ERISA) sufficient to give rise to a lien under Section 302(f) of
ERISA, and (v) the creation or assertion of any Lien on the Aggregate
Receivables;

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          SECTION 6.02. Access to Information. So long as any Purchased Note
remains outstanding, the Issuer shall, at any time and from time to time during
regular business hours, or at such other reasonable times upon reasonable notice
to the Issuer permit any of the Agent, the Purchasers, or their agents or
representatives to do the following in such a manner that does not unreasonably
interfere with the conduct by the Issuer or any of its Affiliates of their
business:
          (a) examine all books, records and documents (including computer tapes
and disks) in the possession or under the control of the Issuer relating to the
Receivables or the Transaction Documents as may be reasonably requested, and
          (b) visit the offices and property of the Issuer for the purpose of
examining such materials described in clause (a) above.
          SECTION 6.03. Ownership and Security Interests; Further Assurances.
The Issuer will take all action necessary to maintain the Indenture Trustee’s
security interest in the Receivables and the other items pledged to the
Indenture Trustee pursuant to the Indenture.
          The Issuer agrees to take any and all acts and to execute any and all
further instruments reasonably necessary or reasonably requested by the Agent or
any of the Purchasers to more fully effect the purposes of this Note Purchase
Agreement.
          SECTION 6.04. Covenants. The Issuer shall duly observe and perform
each of its covenants set forth in each of the Transaction Documents to which it
is a party.
          SECTION 6.05. Amendments. Except as otherwise provided in Section 8.01
of the Indenture, the Issuer shall not make, or permit any Person to make, any
amendment, modification or change to, or provide any waiver under any
Transaction Document to which the Issuer is a party without the prior written
consent of the Purchasers with aggregate Note Principal Balance of not less than
66 2/3% of the aggregate Note Principal Balance of the Outstanding Notes.
          SECTION 6.06. With Respect to the Exempt Status of the Purchased
Notes.
          (a) Neither the Issuer nor any of its respective Affiliates, nor any
Person acting on its behalf will, directly or indirectly, (i) make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Purchased Notes under
the 1933 Act or under any state securities laws, or (ii) permit the Issuer to
become an “investment company” registered or required to be registered under the
1940 Act.
          (b) Neither the Issuer nor any of its Affiliates, nor any Person
acting on its behalf will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D promulgated under the 1933 Act)
in connection with any offer or sale of the Purchased Notes.

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          SECTION 6.07. Additional Deliveries
          On or prior to any Funding Date, the Issuer will furnish or cause to
be furnished to the Purchasers and any subsequent purchaser therefrom of
Additional Note Balance, if any Purchaser or such subsequent purchaser so
requests, a letter from such Persons furnishing a certificate or opinion on the
Closing Date as described in Section 4.01 hereof or on or before any Funding
Date in which such Person shall state that such subsequent purchaser may rely
upon such original certificate or opinion as though delivered and addressed to
such subsequent purchaser and solely in the case of a certificate and not in the
case of an opinion made on and as of the Closing Date or such Funding Date, as
the case may be.
ARTICLE VII
ADDITIONAL COVENANTS
          SECTION 7.01. Legal Conditions to Closing. The parties hereto will
take all reasonable action necessary to obtain (and will cooperate with one
another in obtaining) any consent, authorization, permit, license, franchise,
order or approval of, or any exemption by, any Governmental Authority or any
other Person, required to be obtained or made by it in connection with any of
the transactions contemplated by this Note Purchase Agreement.
          SECTION 7.02. Expenses.
          (a) The Issuer covenants that, whether or not the Closing takes place,
except as otherwise expressly provided herein, all reasonable costs and expenses
incurred in connection with this Note Purchase Agreement and the transactions
contemplated hereby.
          (b) The Issuer covenants that, upon the Closing taking place, the
Issuer shall pay to the Agent from net proceeds of the sale of the Notes
contemplated hereunder the portion of the Facility Fee set forth in subclause
(i) of the definition thereof.
          (c) The Issuer covenants to pay as and when billed by the Agent or any
Purchaser all of the reasonable out-of-pocket costs and expenses incurred in
connection with the consummation and administration of the transactions
contemplated hereby and in the other Transaction Documents including, without
limitation, (i) all reasonable fees, disbursements and expenses of counsel to
the Agent and the Purchasers, (ii) all reasonable fees and expenses of the
Indenture Trustee, (iii) all reasonable fees and expenses of the Verification
Agent, in connection therewith and all reasonable costs and expenses incurred in
connection with the enforcement of rights and remedies hereunder, shall be paid
by the Issuer.
          SECTION 7.03. Mutual Obligations. On and after the Closing, each party
hereto will do, execute and perform all such other acts, deeds and documents as
the other party may from time to time reasonably require in order to carry out
the intent of this Note Purchase Agreement.
          SECTION 7.04. Restrictions on Transfer. Each of the Purchasers agrees
that it will comply with the restrictions on transfer of the Purchased Notes set
forth in the Indenture and resell the Purchased Notes only in compliance with
such restrictions.

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          SECTION 7.05. Securities Act. The Purchasers agree that they will
acquire the Purchased Notes, as applicable, pursuant to this Note Purchase
Agreement without a view to any public distribution thereof, and will not offer
to sell or otherwise dispose of the Purchased Notes (or any interest therein) in
violation of any of the registration requirements of the Act or any applicable
state or other securities laws, or by means of any form of general solicitation
or general advertising (within the meaning of Regulation D under the 1933 Act)
and will comply with the requirements of the Indenture. The Purchasers
acknowledge that they have no right to require the Issuer or any other Person to
register the Purchased Notes under the 1933 Act or any other securities law.
          SECTION 7.06. Agreement and Consent to Agent. The Purchasers agree
with, and consent to, each of the provisions in the Indenture regarding the
Agent.
ARTICLE VIII
INDEMNIFICATION
          SECTION 8.01. Indemnification. The Issuer hereby agrees to indemnify
and hold harmless each Indemnified Party in accordance with, and pursuant to,
Section 9.11 of the Indenture.
          SECTION 8.02. Procedure and Defense. In case any litigation, claim,
suit, action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be instituted involving any Indemnified Party
in respect of which indemnity may be sought pursuant to Section 8.01 (each such
litigation, claim, suit, action or proceeding being referred to an “Indemnified
Proceeding”), such Indemnified Party shall follow the procedures set forth in
Section 9.11 of the Indenture. The Indemnified Party shall have the rights and
defense set forth in Section 9.11 of the Indenture.
          SECTION 8.03. Requirements of Law.
          (a) If any Regulatory Change shall (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any Owner or
(ii) impose on any Owner any other condition affecting this Agreement,
maintaining its respective Commitment or the purchase of Additional Note
Balances in accordance with the terms and provisions of this Agreement, and the
result of any of the foregoing shall be to increase the cost to such Owner of
complying with the terms and provisions of this Agreement, maintaining its
respective Commitment or purchasing such Additional Note Balances or to reduce
the amount of any sum received or receivable by such Owner hereunder (whether of
principal, interest or otherwise), then the Issuer shall pay to such Owner such
additional amount or amounts as will compensate such Owner for such additional
costs incurred or reduction suffered.
          (b) If any Owner determines that any Regulatory Change regarding
capital requirements has or would have the effect of reducing the rate of return
on such Owner’s capital or on the capital of such Owner’s holding company, if
any, as a consequence of this Agreement,

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the maintenance of its respective Commitment or the purchase of Additional Note
Balances to a level below that which such Owner or such Owner’s holding company
could have achieved but for such Regulatory Change (taking into consideration
such Owner’s policies and the policies of such Owner’s holding company with
respect to capital adequacy), then from time to time the Issuer shall pay to
such Owner such additional amount or amounts as will compensate such Owner or
such Owner’s holding company for any such reduction suffered.
          (c) A certificate of an Owner setting forth the amount or amounts
necessary to compensate such Owner or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section 8.03 (together with a
statement of the reason for such compensation and a calculation thereof in
reasonable detail) shall be delivered to the Issuer and the Agent and shall be
conclusive absent manifest error. The Issuer shall pay such Owner the amount
shown as due on any such certificate in accordance with the terms and provisions
of Section 2.10(c) of the Indenture.
          (d) Failure or delay on the part of any Owner to demand compensation
pursuant to this Section shall not constitute a waiver of such Owner’s right to
demand such compensation; provided, that the Issuer shall not be required to
compensate an Owner pursuant to this Section 8.03 for any increased costs or
reductions incurred more than six (6) months prior to the date that such Owner
notifies the Issuer of the Regulatory Change giving rise to such increased costs
or reductions and of such Owner’s intention to claim compensation therefor;
provided, further, that, if the Regulatory Change giving rise to such increased
costs or reductions is retroactive, then the six (6) month period referred to
above shall be extended to include the period of retroactive effect thereof
          SECTION 8.04. Taxes.
          (a) Any and all payments by or on account of any obligation of the
Seller, Depositor or Issuer hereunder or pursuant to the Indenture (including,
but not limited to, all amounts payable with respect to the Notes) shall be made
free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided, that if the Seller, the Depositor or the Issuer shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then: (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 8.04), the Agent, the Administrative Agent, any Owner
or any Participant (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made; provided, however, that
none of the Seller, the Depositor or the Issuer shall be required to increase
any such amounts payable to the Agent, the Administrative Agent, any such Owner
or any such Participant (as the case may be) with respect to any Indemnified or
Other Taxes that are attributable to such party’s failure to comply with the
requirements of paragraph (e) of this Section 8.04; (ii) the Seller, the
Depositor or the Issuer shall make such deductions; and (iii) the Seller, the
Depositor or the Issuer shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
          (b) In addition, the Seller, the Depositor or the Issuer shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

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          (c) The Seller, the Depositor and the Issuer shall indemnify the
Agent, the Administrative Agent, each Owner and each Participant, within ten
(10) days after written demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 8.04) paid by
the Seller, the Depositor or the Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Seller, the Depositor,
the Issuer and the Agent by an Owner or a Participant or by the Agent or the
Administrative Agent on its own behalf or on behalf of an Owner or Participant,
shall be conclusive absent manifest error.
          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Seller, the Depositor or the Issuer to a Governmental
Authority, such party shall deliver to the Agent and the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Agent and the
Administrative Agent.
          (e) Any Foreign Owner that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Seller, the Depositor or the Issuer is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement, shall
deliver to the Seller, the Depositor and the Issuer (with a copy to the Agent
and the Administrative Agent), at the time or times prescribed by applicable law
or reasonably requested by the Seller, the Depositor or the Issuer, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
ARTICLE IX
TRANSFERS OF NOTES
          SECTION 9.01. Transfers of Notes
          (a) Any sale, transfer, assignment, participation, pledge,
hypothecation or other disposition (a “Transfer”) of a Note or any interest
therein may be made only in accordance with this Section 9.01 and any applicable
provisions of the Indenture. Any partial Transfer of an interest in a Note
(other than to an existing Purchaser or by a Conduit Purchaser under a Support
Facility, which may be in any amount) or a Commitment by a Purchaser shall be in
respect of, at least $5,000,000 in the aggregate, which may be composed of (A) a
portion of the outstanding principal balance of the Note funded or maintained by
such Purchaser or (B) to the extent in excess of such portion of the outstanding
principal balance of such Note, such Purchaser’s Commitment hereunder. Any
Transfer of an interest in a Note otherwise permitted by this Section 9.01 and
any applicable provisions of the Indenture will be permitted only if it consists
of a pro rata percentage interest in all payments made with respect to the
Purchaser’s interest in such Note. No Note or any interest therein may be
Transferred by Assignment or Participation to any Person (each, a “Transferee”)
unless the Transferee is a Permitted Transferee and prior to

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the Transfer, the Transferee shall have executed and delivered to the Agent and
the Issuer a Transferee Certificate in substantially the form of Exhibit B to
the Indenture.
          (b) Each of the Issuer and Option One authorizes each Purchaser to
disclose to any Transferee and Support Party and to any prospective Transferee
or Support Party which is a Permitted Transferee any and all Confidential
Information in the Purchaser’s possession concerning this Agreement or the
Transaction Documents or concerning Option One, the Depositor, the Issuer, the
Receivables or such party which has been delivered to such Purchaser pursuant to
this Agreement or the Transaction Documents (including information obtained
pursuant to rights of inspection granted hereunder) or which has been delivered
to such Purchaser by or on behalf of the Issuer or Option One in connection with
such Purchaser’s credit evaluation of the Receivables, the Issuer or Option One
prior to becoming a party to, or purchasing an interest in this Agreement or the
Notes; provided, that prior to any such disclosure, such Transferee or Support
Party or prospective Transferee or Support Party shall have agreed in writing to
maintain the confidentiality of all Confidential Information provided to it in
accordance with the provisions of this Agreement.
          (c) Each Purchaser may, in accordance with applicable law, at any time
grant participations in all or part of its Commitment or its interest in the
Notes, including the payments due to it under this Agreement and the Transaction
Documents (each, a “Participation”), to any Permitted Transferee (each such
Permitted Transferee, a “Participant”); provided, however, that no Participation
shall be granted to any Person unless; (i) the conditions to Transfer specified
in this Agreement shall have been satisfied, and (ii) such Participation
consists of a pro rata percentage interest in all payments made with respect to
such Purchaser’s beneficial interest (if any) in the Notes. In connection with
any such Participation, each Purchaser shall maintain a register of each
Participant and the amount of each related Participation. Each Purchaser hereby
acknowledges and agrees that (A) any such Participation will not alter or affect
such Purchaser’s direct obligations hereunder, and (B) none of the Indenture
Trustee, the Issuer or Option One shall have any obligation to have any
communication or relationship with any Participant. Each Purchaser and each
Participant shall comply with the provisions of Section 8.04(c) of this
Agreement. No Participant shall be entitled to Transfer all or any portion of
its Participation, without the prior written consent of the applicable
Purchaser. Each Participant shall be entitled to receive additional amounts and
indemnification pursuant to Sections 8.01, 8.03 and 8.04 hereof as if such
Participant were a Purchaser and such Sections applied to its Participation;
provided, that, in the case of Section 8.04, such Participant has complied with
the provisions of Section 8.04(c) hereof as if it were a Purchaser. Each
Purchaser shall give the Agent notice of the consummation of any sale by it of a
Participation. It shall be a further condition to the grant of any Participation
that the Participant shall have certified, represented and warranted that (i) it
is entitled to (A) receive payments with respect to its participation without
deduction or withholding of any United States federal income taxes and (B) an
exemption from United States backup withholding tax, and (ii) to the extent such
Participant has not otherwise directly provided such forms to the Issuer and the
Indenture Trustee, (A) prior to the date on which the first interest payment is
due to such Participant, such Participant will provide to the Issuer and
Indenture Trustee, the forms described in Section 8.04(c) as though the
Participant were a Purchaser, and (B) such Participant similarly will provide
subsequent forms as described in Section 8.04(c) with respect to such
Participant as though it were a Purchaser.

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          (d) Each Purchaser may in accordance with applicable law, sell or
assign (each, an “Assignment”) to any Permitted Transferee (each, an “Assignee”)
all or any part of its Commitment (if any) or its interest in the Notes and its
rights and obligations under this Agreement and the Transaction Documents
pursuant to an agreement (a “Transfer Supplement”), executed by such Assignee
and the Purchaser and delivered to the Agent; provided, however, that no such
assignment or sale shall be effective unless and until the conditions to
Transfer specified in this Agreement shall have been satisfied. From and after
the effective date determined pursuant to such Transfer Supplement, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Transfer Supplement, have the rights and obligations of a Purchaser hereunder as
set forth therein and (y) the transferor Purchaser shall, to the extent provided
in such Transfer Supplement, be released from its Commitment and other
obligations under this Agreement; provided, however, that after giving effect to
each such Assignment, the obligations released by any such Purchaser shall have
been assumed by an Assignee or Assignees. Such Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Assignee and the resulting adjustment of
Commitment Interests arising from the Assignment.
          (e) Upon instruction to register a transfer of a Purchaser’s interest
in the Notes (or portion thereof) and surrender for registration of transfer of
such Purchaser’s Note(s) (if applicable) and delivery to the Issuer and the
Indenture Trustee of a Transferee Certification, executed by the registered
owner (and the beneficial owner if it is a Person other than the registered
owner), and receipt by the Indenture Trustee of a copy of the duly executed
related Transfer Supplement and such other documents as may be required under
this Agreement or the Indenture, such interest in the Notes (or portion thereof)
shall be transferred in the records of the Indenture Trustee and, if requested
by the Assignee, new Notes shall be issued to the Assignee and, if applicable,
the transferor Purchaser in amounts reflecting such Transfer as provided in the
Indenture.
          (f) Each Purchaser may pledge its interest in the Notes to any Federal
Reserve Bank as collateral in accordance with applicable law.
          (g) Each Support Party shall be entitled to receive additional
payments and indemnification pursuant to Sections 8.01, 8.03 and 8.04 hereof as
though it were a Purchaser and such Section applied to its interest in or
commitment to acquire an interest in the Notes; provided, that such Support
Party shall not be entitled to additional payments pursuant to (i) Section 8.03
by reason of Regulatory Changes which occurred prior to the date it became a
Support Party or (ii) Section 8.04 attributable to its failure to satisfy the
requirements of Section 8.04(c) as if it were a Purchaser; provided, further,
that unless such Support Party is a Permitted Transferee or has been consented
to by the Issuer, such Support Party shall be entitled to receive additional
amounts pursuant to Sections 8.03 or 8.04 only to the extent that its related
Conduit Purchaser would have been entitled to receive such amounts in the
absence of the Commitment and Support Advances from such Support Party. The
provisions of Section 8.03 shall apply to the Administrative Agent and to such
of its Affiliates as may from time to time administer, make referrals to or
otherwise provide services or support to the Conduit Purchasers (in each case as
though such Administrative Agent or Affiliate were a Purchaser and such Section
applied to its administration of or other provisions of services or support to
such Conduit

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Purchaser in connection with the transactions contemplated by this Agreement),
whether as an administrator, administrative agent, referral agent, managing
agent or otherwise.
          (h) Each Support Party claiming increased amounts described in
Sections 8.03 or 8.04 hereof shall furnish, through its related Conduit
Purchaser, to the Issuer, the Administrative Agent, the Indenture Trustee and
the Agent a certificate setting forth the basis and amount of each request by
such Support Party for any such amounts referred to in Sections 8.03 or 8.04,
such certificate to be conclusive with respect to the factual information set
forth therein absent manifest error.
ARTICLE X
MISCELLANEOUS
          SECTION 10.01. Amendments. No amendment or waiver of any provision of
this Note Purchase Agreement shall in any event be effective unless the same
shall be in writing and signed by all of the parties hereto, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
          SECTION 10.02. Severability of Provisions. If any one or more of the
agreements, provisions or terms of this Agreement shall for any reason
whatsoever be held invalid, then the unenforceable agreements, provisions or
terms shall be deemed severable from the remaining agreements, provisions or
terms of this Agreement and shall in no way affect the validity or
enforceability of the other agreements, provisions or terms of this Agreement.
          SECTION 10.03. Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telecopies) and mailed, telecopied (with a copy delivered by overnight courier)
or delivered, as to each party hereto, at its address as set forth in Schedule I
hereto or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be deemed effective upon receipt thereof, and in the case of telecopies,
when receipt is confirmed by telephone.
          SECTION 10.04. No Waiver; Remedies. No failure on the part of any
party hereto to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
          SECTION 10.05. Integration. This Agreement contains a final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and thereof,
superseding all prior oral or written understandings.
          SECTION 10.06. Negotiation. This Agreement and the other Transaction
Documents are the result of negotiations among the parties hereto, and have been
reviewed by the respective counsel to the parties hereto, and are the products
of all parties hereto. Accordingly, this Agreement and the other Transaction
Documents shall not be construed against

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the Agent or any Purchaser merely because of the Agent’s or such Purchaser’s
involvement in the preparation of this Agreement and the other Transaction
Documents.
          SECTION 10.07. Binding Effect; Assignability.
          (a) This Note Purchase Agreement shall be binding upon and inure to
the benefit of the Issuer, the Agent and the Purchasers and their respective
permitted successors and assigns (including any subsequent holders of any
Purchased Note); provided, however, the Issuer shall not have any right to
assign its respective rights hereunder or interest herein (by operation of law
or otherwise) without the prior written consent of all of the Purchasers.
          (b) Each Purchaser shall have the right to assign its rights and
obligations hereunder to an Affiliate without the consent of the Issuer or the
Receivables Seller.
          (c) This Note Purchase Agreement shall create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time as all amounts payable
with respect to the Purchased Notes shall have been paid in full.
          SECTION 10.08. Provision of Documents and Information. The Issuer
acknowledges and agrees that the Agent and each Purchaser is permitted to
provide to any subsequent Purchaser, permitted assignees and Participants,
opinions, certificates, documents and other information relating to the Issuer
and the Receivables delivered to the Agent or the Purchasers pursuant to this
Note Purchase Agreement.
          SECTION 10.09. GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). EACH OF THE
PARTIES TO THIS NOTE PURCHASE AGREEMENT HEREBY AGREES TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY
APPELLATE COURT HAVING JURISDICTION TO REVIEW THE JUDGMENTS THEREOF. EACH OF THE
PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE
AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
          SECTION 10.10. No Proceedings. Until the date that is one year and one
day after the last day on which any amount is outstanding under this Note
Purchase Agreement and the Purchasers hereby covenant and agree that they will
not institute against the Issuer, or join in any institution against the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law. Each of the Issuer, the Administrative Agent, the
Agent and each Purchaser hereby agrees that it shall not institute or join
against any Conduit Purchaser any bankruptcy,

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reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day after the latest maturing commercial paper note, medium term note or
other debt security issued by such Conduit Purchaser is paid.
          SECTION 10.11. Execution in Counterparts. This Note Purchase Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
          SECTION 10.12. No Recourse — Purchasers. The obligations of each
Purchaser under this Note Purchase Agreement, or any other agreement,
instrument, document or certificate executed and delivered by or issued by such
Purchaser or any officer thereof are solely the partnership or corporate
obligations of such Purchaser, as the case may be. No recourse shall be had for
payment of any fee or other obligation or claim arising out of or relating to
this Note Purchase Agreement or any other agreement, instrument, document or
certificate executed and delivered or issued by any Purchaser or any officer
thereof in connection therewith, against any stockholder, limited partner,
employee, officer, director or incorporator of such Purchaser.
          SECTION 10.13. Survival. All representations, warranties, covenants,
guaranties and indemnifications contained in this Note Purchase Agreement and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the sale, transfer or repayment of the
Purchased Notes. In addition the respective agreements, covenants, indemnities
and other statements set forth in this Section 9.13 and in Sections 7.02, 8.01,
8.02, 9.01, 9.02, 9.03, 9.04, 9.06, 9.07, 9.09, 9.10, 9.12 and 9.14 shall remain
in full force and effect regardless of any termination or cancellation of this
Agreement.
          SECTION 10.14. USA Patriot Act. Each Purchaser hereby notifies the
Issuer that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies the Issuer,
which information includes the name and address of the Issuer and other
information that will allow such Purchaser to identify the Issuer in accordance
with the Patriot Act.
          SECTION 10.15. Confidentiality.
          (a) The Issuer covenants and agrees to hold in confidence, and not
disclose to any Person, the terms of this Agreement (including any fees payable
in connection with this Agreement or the other Transaction Documents or the
identity of any Purchaser under this Agreement), except as the Agent, the
Administrative Agent or Purchaser may have consented to in writing prior to any
proposed disclosure and except it may disclose such information (i) to its
officers, directors, employees, agents, counsel, accountants, auditors, advisors
or representatives, (ii) to the extent such information has become available to
the public other than as a result of a disclosure by or through the Issuer or
(iii) to the extent it should be (A) required by law, rule, regulation,
subpoena, or in connection with any legal or regulatory proceeding or
(B) requested by any governmental or regulatory authority having jurisdiction
over the Issuer; provided, that, in the case of clause (iii)(A), the Issuer will
use all reasonable efforts to maintain confidentiality

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and will (unless otherwise prohibited by law) notify the Agent, the
Administrative Agent and the Purchasers of its intention to make any such
disclosure prior to making such disclosure. Notwithstanding the foregoing,
Option One and its Affiliates shall be permitted: (i) to disclose the terms of
the Transaction Documents other than the Pricing Side Letter or Fee Side Letter
(unless required by law or a regulatory agency), including, without limitation,
filing copies with the Securities and Exchange Commission; and (ii) to disclose
the terms of the Transaction Documents, including the Pricing Side Letter and
the Fee Side Letter, and to provide copies thereof, to any Person or
representative of a Person who has executed a confidentiality agreement with H&R
Block, Inc. in connection with a potential acquisition of Option One or any
portion of its business by such Person.
          (b) Each of the Agent, the Administrative Agent and each Purchaser,
severally and with respect to itself only, agrees that it will use the
Confidential Information solely for the purpose of the Transaction (as defined
below) and agrees not to disclose to any third party any such Confidential
Information now or hereafter received or obtained by it without the Issuer’s
prior written consent; provided, however, that it may disclose such Confidential
Information (i) to its Affiliates, subsidiaries, directors, officers, employees
and agents with a need to know the Confidential Information for the purposes of
the transaction evidenced by this Agreement and the other Transaction Documents
(the “Transaction”), (ii) to its respective accountants, attorneys and other
confidential advisors (collectively “Advisors”) who need to know such
information for the purpose of assisting it in connection with the Transaction,
(iii) to the extent it should be (A) required by applicable law, rule,
regulation, subpoena or in connection with any legal or regulatory proceeding or
(B) requested by any governmental or regulatory authority having jurisdiction
over the Administrative Agent, the Agent, the Purchasers or any Company
Representative; provided, that, in the case of clause (iii)(A) and (B), the
Administrative Agent, the Agent or Purchaser will use all reasonable efforts to
maintain confidentiality and will (unless otherwise prohibited by law) notify
the Issuer of its intention to make any such disclosure prior to making such
disclosure, (iv) to S&P, Moody’s or any other nationally recognized statistical
rating agency then rating the Notes or the commercial paper notes or other debt
obligations of a Conduit Purchaser, (v) to any actual or potential subordinated
investor in any Conduit Purchaser that has signed a confidentiality agreement
containing restrictions on disclosure substantially similar to this
Section 10.15, (vi) to credit enhancers and dealers and investors in respect of
the commercial paper notes of any Conduit Purchaser in accordance with the
customary practices of such Conduit Purchaser for disclosures to credit
enhancers, dealers or investors, as the case may be, it being understood that
any such credit enhancers, dealers and investors shall be required to maintain
the confidentiality of any such information received by them and any such
disclosure to credit enhancers, dealers or investors will not identify the
Issuer or any of its Affiliates by name, (vii) to any third party that has
executed a confidentially agreement with a Noteholder or (viii) to the extent
that such information has been independently acquired or developed by the Agent,
the Administrative Agent or any Purchaser without violating any of their
respective obligations under this Agreement. Each of the Agent, the
Administrative Agent and each Purchaser agrees to be responsible for any breach
of this Agreement by its Affiliates and Advisors and agrees that its Affiliates
and Advisors will be advised by it of the confidential nature of such
information and shall agree to be bound by this Agreement.
          (c) None of the Agent, the Administrative Agent or any Purchaser nor
any of their Affiliates or Advisors, without the prior written consent of the
Issuer, will disclose to any

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person the fact that Confidential Information has been provided to it or them,
that discussions or negotiations have taken place with respect to the
Transaction, or the existence, terms, conditions, or other facts of the
Transaction, including the status thereof. Notwithstanding the foregoing, the
Confidential Information and the fact that discussions or negotiations are
taking place with respect to a Transaction or the existence, terms, conditions,
or other facts of such Transaction, including the status thereof may be
disclosed on a confidential basis to (i) any rating agency that assigns a rating
to the debt obligations of the Agent, the Administrative Agent or any Purchaser,
(ii) Support Parties and (iii) to any third party that has executed a
confidentiality agreement with a Noteholder; provided, that such Persons shall
be informed of the confidential nature of the Confidential Information.
          (d) Notwithstanding anything herein to the contrary, if the Agent, the
Administrative Agent or any Purchaser or any of their Affiliates or Advisors are
legally compelled (whether by deposition, interrogatory, request for documents,
subpoena, civil investigation, demand or similar process) to disclose any of the
Confidential Information (including the fact that discussions or negotiations
are taking place with respect to the Transaction) it may disclose such
Confidential Information; provided, that it promptly notify Option One and the
Issuer of such requirement so that Option One and/or the Issuer may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions hereof. Each of the Agent, the Administrative Agent, and each
Purchaser agrees to use commercially reasonable efforts to assist Option One and
the Issuer in obtaining any such protective order. Failing the entry of a
protective order or the receipt of a waiver hereunder, it may disclose, without
liability hereunder, that portion (and only that portion) of the Confidential
Information that it has been advised by counsel that it is legally compelled to
disclose; provided that it agrees to use commercially reasonable efforts to
obtain assurance that confidential treatment will be accorded such Confidential
Information by the person or persons to whom it was disclosed.
          (e) Notwithstanding anything herein to the contrary, it is understood
that the Agent, the Administrative Agent and the Purchasers or their affiliates
may disclose the Confidential Information or portions thereof at the request of
a bank examiner or other regulatory authority or in connection with an
examination of any of the Agent, the Administrative Agent or the Purchasers and
their respective Affiliates by a bank examiner or other regulatory authority
without any notice to the Issuer or Option One.
          SECTION 10.16. Tax Characterization. Each party to this Note Purchase
Agreement (a) acknowledges and agrees that it is the intent of the parties to
this Note Purchase Agreement that for all purposes, including federal, state and
local income, single business and franchise tax purposes, the Purchased Notes
will be treated as evidence of indebtedness secured by the Receivables and
proceeds thereof and the trust created under the Indenture will not be
characterized as an association (or publicly traded partnership) taxable as a
corporation, (b) agrees to treat the Purchased Notes for federal, state and
local income and franchise tax purposes as indebtedness and (c) agrees that the
provisions of all Transaction Documents shall be construed to further these
intentions of the parties.
          SECTION 10.17. No Recourse. It is expressly understood and agreed by
the parties hereto that (a) this Note Purchase Agreement is executed and
delivered by Wilmington

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Trust Company, not individually or personally but solely as trustee of the
Issuer, 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 of 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 Note Purchase Agreement or any other
related documents.
          SECTION 10.18. Administrative Agent. Each Conduit Purchaser hereby
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The provisions of this Section 10.18 are solely
for the benefit of the Administrative Agent and the Conduit Purchasers. None of
the Issuer, the Agent or any other Purchaser shall have any rights as a
third-party beneficiary or otherwise under any of the provisions of this
Section 10.18. In performing its functions and duties hereunder, the
Administrative Agent shall act solely as the agent for the Conduit Purchasers
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the other Purchasers, the Issuer,
the Agent, any Affiliate thereof or any of their respective successors and
assigns. As to any matters not expressly provided for by this Note Purchase
Agreement or the other Transaction Documents, the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Conduit Purchasers;
provided, however, that the Administrative Agent shall not be required to take
any action which, in the reasonable opinion of the Administrative Agent, exposes
the Administrative Agent to liability or which is contrary to this Note Purchase
Agreement or any other Transaction Document or applicable law. The duties of the
Administrative Agent shall be mechanical and administrative in nature. The
Administrative Agent shall not have by reason of this Note Purchase Agreement or
any other Transaction Document a fiduciary relationship in respect of any
Noteholder. Nothing in this Note Purchase Agreement or any other Transaction
Document, express or implied, is intended to or shall be construed to impose
upon the Administrative Agent any obligations in respect of this Note Purchase
Agreement or any other Transaction Document except as expressly set forth herein
or therein. The Administrative Agent and its directors, officers, agents or
employees shall not be liable for any action taken or omitted to be taken by it
under or in connection with this Note Purchase Agreement or any other
Transaction Document unless such action or inaction shall constitute gross
negligence or willful misconduct on the part of the Administrative Agent or its
directors, officers, agents or employees. The Administrative Agent may at any
time request instructions from the Conduit Purchasers with respect to any
actions or approvals which by the terms of this Note Purchase Agreement or any
other Transaction Document the Administrative Agent is permitted or required to
take or to grant, and if such instructions are promptly requested, the
Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval under any of the other Transaction Document
until it shall have received

28

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such instructions from the Conduit Purchasers. Without limiting the foregoing,
the Conduit Purchasers shall not have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting under this Note Purchase Agreement, the Notes or any of
the other Transaction Document in accordance with the instructions of the
Conduit Purchasers.

29

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          IN WITNESS WHEREOF, the parties have caused this Second Amended and
Restated Note Purchase Agreement to be executed by their respective officers
hereunto duly authorized, as of the date first above written.

            Option One Advance Trust 2007-ADV2
      By:   Wilmington Trust Company, not in its         individual capacity but
solely as Owner        Trustee              By:   /s/ Rosaline K. Maney        
Name:   Rosaline K. Maney        Title:   Vice President       
Greenwich Capital Financial Products, Inc., as
Committed Purchaser and as Agent
      By:           Name:           Title:           The CIT Group/Business
Credit, Inc.
as Committed Purchaser
      By:           Name:           Title:           DB Structured Products,
Inc.
as Committed Purchaser and Administrative Agent
      By:           Name:           Title:        

Second Amended and Restated Note Purchase Agreement

 

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          IN WITNESS WHEREOF, the parties have caused this Second Amended and
Restated Note Purchase Agreement to be executed by their respective officers
hereunto duly authorized, as of the date first above written.

            Option One Advance Trust 2007-ADV2
      By:   Wilmington Trust Company, not in its         individual capacity but
solely as Owner        Trustee              By:           Name:          
Title:          
Greenwich Capital Financial Products, Inc., as
Committed Purchaser and as Agent
      By:   /s/ Dominic Obaditch         Name:   Dominic Obaditch        
Title:   Managing Director
Greenwich Capital Corporate Services, Inc.
as attorney-in-fact        The CIT Group/Business Credit, Inc. as
Committed Purchaser
      By:           Name:           Title:           DB Structured Products,
Inc.
as Committed Purchaser and Administrative Agent
      By:           Name:           Title:        

Second Amended and Restated Note Purchase Agreement

 

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and
Restated Note Purchase Agreement to be executed by their respective officers
hereunto duly authorized, as of the date first above written.

            Option One Advance Trust 2007-ADV2
      By:   Wilmington Trust Company, not in its individual         capacity but
solely as Owner Trustee              By:           Name:           Title:      
    Greenwich Capital Financial Products, Inc., as
Committed Purchaser and as Agent
      By:           Name:           Title:           The CIT Group/Business
Credit, Inc. as
Committed Purchaser
      By:   /s/ Howard Trebach         Name:   Howard Trebach        Title:  
Vice President        DB Structured Products, Inc.
as Committed Purchaser and Administrative Agent
      By:           Name:           Title:        

Second Amended and Restated Note Purchase Agreement

 

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, the parties have caused this Second Amended and
Restated Note Purchase Agreement to be executed by their respective officers
hereunto duly authorized, as of the date first above written.

            Option One Advance Trust 2007-ADV2
      By:   Wilmington Trust Company, not in its         individual capacity but
solely as Owner        Trustee       By:           Name:           Title:      
    Greenwich Capital Financial Products, Inc., as
Committed Purchaser and as Agent
      By:           Name:           Title:           The CIT Group/Business
Credit, Inc.
as Committed Purchaser
      By:           Name:           Title:           DB Structured Products,
Inc.
as Committed Purchaser and Administrative Agent    

            /s/ John McCarthy   By:   /s/ GLENN MINKOFF     John McCarthy    
Name:   GLENN MINKOFF    Authorized Signatory     Title:   DIRECTOR     

Second Amended and Restated Note Purchase Agreement

 

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            Monterey Funding LLC,
as Conduit Purchaser
      By:   /s/ Philip A. Martone         Name:   Philip A. Martone       
Title:   Vice President        Montage Funding LLC,
as Conduit Purchase
      By:   /s/ Philip A. Martone         Name:   Philip A. Martone       
Title:   Vice President   

Second Amended and Restated Note Purchase Agreement

 

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Schedule I
Information for Notices

1.   if to the Issuer:

OPTION ONE ADVANCE TRUST 2007-ADV2
3 Ada
Irvine, California 92618
Attention: Rod Smith
Facsimile: (949) 790-7514
Telephone: (949) 790-8100

2.   if to the Depositor:

OPTION ONE ADVANCE CORPORATION
3 Ada
Irvine, California 92618
Attention: Rod Smith
Facsimile: (949) 790-7514
Telephone: (949) 790-8100

3.   if to the Receivables Seller:

OPTION ONE MORTGAGE CORPORATION
3 Ada
Irvine, California 92618
Attention: Rod Smith
Facsimile: (949) 790-7514
Telephone: (949) 790-8100

4.   if to the Greenwich Purchaser or the Agent:

GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Robert Pravetz
Facsimile: 203-618-2148
Telephone: 203-618-6884

 

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With a copy to:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
600 Steamboat Road
Greenwich, Connecticut 06830
Attn: Dominic Obaditch
Telecopy: (203) 422-4565
Telephone: (203) 618-2565

5.   if to the CIT Purchaser:

The CIT Group/Business Credit, Inc.
11 West 42nd Street, 13th floor
New York, NY 10036
Attention: Howard Trebach
Facsimile: (212) 461-7760
Telephone: (212) 461-7753
With Copy To:
The CIT Group/Business Credit, Inc.
11 West 42nd Street, 13th floor
New York, NY 10036
Attention: Jorge S. Wagner
Facsimile: (212) 771-9517
Telephone: (212) 771-9520

6.   if to DBSP:

  (a)   DB Structured Products, Inc.

60 Wall Street, 19th Floor
New York, New York 10005
Attention: Glenn Minkoff
Tel: (212) 250-3406
Fax: (212) 797-5160

  (b)   Monterey Funding LLC
c/o Lord Securities Corporation
48 Wall Street, 27th Floor
New York, NY 10005

With Copy To:
Deutsche Bank AG, New York Branch
60 Wall Street, 18th Floor
New York,
New York 10005
Mail Stop: NYC60-1850

 

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Attention: Mary Conners
Telecopier: (212) 797-5150
Telephone: (212) 250-4731

  (c)     Montage Funding LLC

c/o Lord Securities Corporation
48 Wall Street, 27th Floor
New York, NY 10005
With Copy To:
Deutsche Bank AG, New York Branch
60 Wall Street, 18th Floor
New York, New York 10005
Mail Stop: NYC60-1850
Attention: Mary Conners
Telecopier: (212) 797-5150
Telephone: (212) 250-4731

7.   if to the Administrative Agent:

DB Structured Products, Inc.
60 Wall Street, 19th Floor
New York, New York 10005
Attention: Glenn Minkoff
Tel: (212) 250-3406
Fax: (212) 797-5160

 

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Schedule A
Purchaser Information

         
Greenwich Capital Financial Products, Inc.
       
 
       
Maximum Note Principal Balance:
  $ 1,200,000,000  
Commitment:
  $ 725,000,000  
Commitment Interest:
    60.4167 %
 
       
The CIT Group/Business Credit, Inc.
       
 
       
Maximum Note Principal Balance:
  $ 1,200,000,000  
Commitment:
  $ 50,000,000  
Commitment Interest:
    4.1667 %
 
       
DB Structured Products, Inc.
       
 
       
Maximum Note Principal Balance:
  $ 1,200,000,000  
Commitment:
  $ 425,000,000  
Commitment Interest:
    35.4167 %