Exhibit 10.5
WAIVER AND AMENDMENT
          THIS WAIVER (the “Waiver”) is entered into as of January _, 2007 by
and among OPTION ONE OWNER TRUST 2001-2 (the “Issuer”), OPTION ONE MORTGAGE
CORPORATION (“OOMC”) and OPTION ONE MORTGAGE CAPITAL CORPORATION (“OOMCC,” and
together with OOMC, the “Loan Originator”) and OOMC as servicer (in such
capacity, the “Servicer”), OPTION ONE LOAN WAREHOUSE CORPORATION (the
“Depositor,” and together with the Loan Originator and Depositor, the “OO
Entities”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as indenture trustee (the
“Indenture Trustee”) and the MAJORITY NOTEHOLDERS party hereto. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Sale and Servicing Agreement referred to below.
PRELIMINARY STATEMENTS
          A. The Issuer, OOMC, OOMCC, the Depositor and the Indenture Trustee
are parties to that certain Second Amended and Restated Sale and Servicing
Agreement dated as of March 8, 2005 (as amended, restated, supplemented or
otherwise modified from time to time, the “Sale and Servicing Agreement”) and
the Basic Documents as defined therein.
          B. Pursuant to the Sale and Servicing Agreement, the definition of
“Financial Covenants” includes an obligation on the part of OOMC to maintain a
minimum “Net Income” (defined and determined in accordance with GAAP) of at
least $1 based on the total of the current quarter combined with the previous
three quarters (the “Minimum Income Covenant”).Pursuant to the Basic Documents,
OOMC periodically represents and warrants its compliance with the Minimum Income
Covenant. In addition, under the Basic Documents, a failure by OOMC to satisfy
the Minimum Income Covenant, if not waived, could be or become a Default, Event
of Default or Servicing Event of Default, as those terms are used in the Basic
Documents,or could result in a termination of the Revolving Period.
          C. OOMC now believes that the Minimum Income Covenant will not be
satisfied as of the quarter ending January 31, 2007. The Issuer has requested
that the Majority Noteholders temporarily waive the Minimum Income Covenant and,
subject to the terms hereof, the Majority Noteholders have agreed to temporarily
waive the Minimum Income Covenant on and subject to the terms and conditions
hereinafter set forth.
          D. The parties also wish to waive the document delivery requirements
for Wet Funded Loans, as more specifically provided herein
          NOW, THEREFORE, in consideration of the premises set forth above, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
          1. Accuracy of Preliminary Statements. The OO Entities agree and
represent that the foregoing Preliminary Statements are true and correct in all
respects.
          2. Temporary Waiver with Respect to the Minimum Income Covenant.
Effective as of the date first above written and subject to the satisfaction of
the condition

 

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precedent set forth in Section 4 below, the Majority Noteholders hereby agree to
waive, until April 27, 2007 only, the Minimum Income Covenant.
          3. Amendment with Respect to the Document Delivery Requirement for Wet
Funded Loans. Until the termination of the Sale and Servicing Agreement, the
term “Wet Funded Custodial File Delivery Date” shall be deemed to be defined as
follows: “With respect to a Wet Funded Loan, the fifteenth Business Day after
the related Transfer Date, or if earlier, the twentieth calendar day after the
related Transfer Date, provided that if a Default or Event of Default shall have
occurred, the Wet Funded Custodial File Delivery Date shall be the earlier of
(x) such fifteenth Business Day or twentieth calendar day, whichever is earlier
and (y) the second Business Day after the occurrence of such event.” In
addition, for such period, the phrase “within fifteen (15) calendar days” in the
definition of “Collateral Value” in the Sale and Servicing Agreement, in clause
(7) of the proviso in the first sentence of such definition, shall be replaced
with “within fifteen (15) Business Days (or, if earlier, twenty (20) calendar
days)”.
          4. Condition Precedent. This Waiver shall become effective and be
deemed effective as of the date first above written upon (i) receipt by OOMC of
an executed counterpart of this Waiver from each of the Issuer, the Depositor,
the Majority Noteholders and the Indenture Trustee and (ii) receipt by the
Majority Noteholders of confirmation from OOMC that each Note Purchaser,
Purchaser, Initial Noteholder Agent or Note Agent, as applicable, in connection
with each of the Trusts listed on Schedule I hereto, has executed a waiver in
substantially similar form as this Waiver, regarding the failure by OOMC to
satisfy the Minimum Income Covenant as of the quarter ending January 31, 2007.
          5. Condition to Continuing Effectiveness. This Waiver shall continue
to be effective for the period stated in Section 2 above, but only so long as no
other Event of Default (other than with respect to the Minimum Income Covenant)
has occurred. Upon the occurrence of any Event of Default other than with
respect to the Minimum Income Covenant, this Waiver shall immediately cease to
be effective.
          6. Covenants, Representations and Warranties of the Issuer, OOMC,
OOMCC and the Depositor.
          (a) Upon the effectiveness of this Waiver, each of the Issuer, OOMC
(in its capacities as Servicer and Loan Originator), OOMCC and the Depositor
hereby reaffirms all covenants, representations and warranties made by the
Issuer, OOMC, OOMCC and the Depositor, as applicable, in the Sale and Servicing
Agreement, to the extent the same are not modified hereby and agrees that all
such covenants, representations and warranties shall be deemed to have been
re-made as of the effective date of this Waiver.
          (b) Each of the Issuer, OOMC, OOMCC and the Depositor hereby
represents and warrants that this Waiver constitutes the legal, valid and
binding obligation of the Issuer, OOMC, OOMCC and the Depositor, as applicable,
enforceable against the Issuer, OOMC, OOMCC and the Depositor, as applicable, in
accordance with its terms. The execution, delivery and performance by the
Issuer, OOMC, OOMCC and the Depositor of this Waiver: (i) are within the
Issuer’s, OOMC’s, OOMCC’s and the Depositor’s power; (ii) have been duly
authorized by all necessary or proper corporate action; (iii) are not in
contravention of any

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provision of the Issuer’s, OOMC’s, OOMCC’s or the Depositor’s certificate of
incorporation, bylaws or other organizational documents; (iv) will not violate
any law applicable to the Issuer, OOMC, OOMCC or the Depositor, as applicable;
(v) will not conflict with or result in the breach or termination of, constitute
a default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Issuer, OOMC, OOMCC or the Depositor is a party or by which the Issuer, OOMC,
OOMCC or the Depositor or any of their respective property is bound; (vi) will
not result in the creation or imposition of any Lien upon any of the property of
the Issuer, OOMC, OOMCC or the Depositor, as applicable; and (vii) do not
require the consent or approval of any governmental authority or any other
Person, except those which were duly obtained, made or complied with prior to
the date of this Waiver.
          7. Reference to and Effect on the Sale and Servicing Agreement.
          (a) Upon the effectiveness of this Waiver, each reference in the Sale
and Servicing Agreement and in each of the other Basic Documents to “this
Agreement,” “hereunder,” “hereof,” “herein,” or words of like import shall mean
and be a reference to the Sale and Servicing Agreement as modified hereby, and
each reference to the Sale and Servicing Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Sale
and Servicing Agreement shall mean and be a reference to the Sale and Servicing
Agreement as modified hereby.
          (b) Except as specifically modified hereby, the Sale and Servicing
Agreement, each of the other Basic Documents and all other documents,
instruments and agreements executed and/or delivered in connection therewith
shall remain in full force and effect and are hereby ratified and confirmed.
          (c) Except as expressly provided in Section 2 hereof, the execution,
delivery and effectiveness of this Waiver shall not operate as a waiver of any
right, power or remedy of the Majority Noteholders under the Sale and Servicing
Agreement or any of the other Basic Documents, nor constitute a waiver of,
amendment of, consent to or other modification of any other term, provision,
Event of Default, or of any term or provision of any other Basic Document, or of
any transaction or further or future action of the Issuer which would require
the consent of the Majority Noteholders under the Sale and Servicing Agreement.
Without limiting the generality of the foregoing, the execution, delivery and
effectiveness of this Waiver shall not entitle the Issuer to a waiver of any
existing or hereafter arising Event of Default (other than with respect to the
Minimum Income Covenant), nor shall the Majority Noteholders’ execution and
delivery of this Waiver establish a course of dealing between the Majority
Noteholders and the Issuer or in any other way obligate the Majority Noteholders
to hereafter provide any waiver or extension to the Issuer for the payment or
performance by the Issuer of its obligations under the Sale and Servicing
Agreement and the Basic Documents prior to the enforcement by the Majority
Noteholders of any of their respective rights and remedies under the Sale and
Servicing Agreement and the other Basic Documents.
          8. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES).

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          9. Execution in Counterparts. This Waiver may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall
constitute but one and the same instrument.
          10. Headings. Section headings in this Waiver are included herein for
convenience or reference only and shall not constitute a part of this Waiver for
any other purpose.
          11. Liability. It is expressly understood and agreed by the parties
that (a) this Waiver is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee, in the exercise of the
powers and authority conferred and vested in it, pursuant to the Trust
Agreement, (b) each of the representations, undertakings and agreements herein
made on the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose of binding the Issuer with respect thereto,
(c) nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressly or impliedly contained herein, and the right to claim any and
all such liability, if any, being expressly waived by the parties hereto and by
any person claiming by, through or under the parties hereto, and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer hereunder or under any other related documents.
          12. Direction of Majority Noteholders. By their signature(s) below,
the Majority Noteholders hereby authorize and direct the Indenture Trustee to
sign this Waiver.
[Signature Page Follows]

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               IN WITNESS WHEREOF, the parties hereto have caused this Waiver to
be executed by their respective officers thereto duly authorized as of the date
first written above.

                  OPTION ONE OWNER TRUST 2001-2, as Issuer    
 
           
 
  By:   Wilmington Trust Company, not in its
individual capacity, but solely as
Owner Trustee    
 
           
 
  By:
Name:   /s/ Mary Kay Pupillo
 
Mary Kay Pupillo    
 
  Title:   Assistant Vice President    
 
                OPTION ONE MORTGAGE CORPORATION,         as Loan Originator and
as Servicer    
 
           
 
  By:   /s/ Charles R. Fulton    
 
  Name:  
 
Charles R. Fulton    
 
  Title:   Vice President    
 
                OPTION ONE MORTGAGE CAPITAL         CORPORATION, as Loan
Originator    
 
           
 
  By:   /s/ Charles R. Fulton    
 
  Name:  
 
Charles R. Fulton    
 
  Title:   Vice President                       OPTION ONE LOAN WAREHOUSE
CORPORATION,
as Depositor    
 
           
 
           
 
  By:   /s/ Charles R. Fulton    
 
     
 
   
 
  Name:   Charles R. Fulton    
 
  Title:   Assistant Secretary    
 
                WELLS FARGO BANK, NATIONAL         ASSOCIATION, as Indenture
Trustee    
 
           
 
  By:   /s/ Joshna Kelly    
 
     
 
   
 
  Name:   Joshna Kelly    
 
  Title:   Vice President    
 
                THE MAJORITY NOTEHOLDERS:
        BANK OF AMERICA, N. A.    
 
           
 
  By:   /s/ [ILLEGIBLE]    
 
     
 
   
 
  Name:   [ILLEGIBLE]    
 
  Title:   [ILLEGIBLE]    

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SCHEDULE I
List of Owner Trusts
Option One Owner Trust 2001-1A
Option One Owner Trust 2002-3
Option One Owner Trust 2003-4
Option One Owner Trust 2003-5
Option One Owner Trust 2005-6
Option One Owner Trust 2005-7
Option One Owner Trust 2005-8
Option One Owner Trust 2005-9

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