exv10w14



 





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




 

 








 









 












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	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	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	 






ii









 






	 	 	 	 	 	 	 
	 	 	 	 	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





iii











 





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.




 









 








          “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.




2









 








          “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.




3









 








          “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.




4









 








          (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




5









 







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.



6









 





               (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.





7









 








          (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.




8









 








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.





9









 








          (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





10









 







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





12









 







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”).




13









 








          (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




14









 







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;




15









 








          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.




16









 








          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.




17









 








          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,




18









 







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.




19









 








          (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





20









 







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.




21









 








          (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




22









 







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




23









 







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,




24









 







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




25









 







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





26









 







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





27











 




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









 






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









 








          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




 









 








          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




 









 








	 	 	 	 	 
	 	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

 









 






	 	 	 	 	 



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





 









 







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




 









 





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




 









 








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	%