exv10w5



 





EXHIBIT 10.5










NOTE PURCHASE AGREEMENT




among




OPTION ONE OWNER TRUST 2003-5

as Issuer




and




OPTION ONE LOAN WAREHOUSE CORPORATION

as Depositor




and




CITIGROUP GLOBAL MARKETS REALTY CORP.

as Purchaser




Dated as of November 14, 2003




OPTION ONE OWNER TRUST 2003-5

MORTGAGE-BACKED NOTES










 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page

	ARTICLE I
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	SECTION 1.01. Certain Defined Terms
	 	 	1	 
	SECTION 1.02. Other Definitional Provisions
	 	 	2	 
	ARTICLE II
	 	 	 	 
	COMMITMENT; CLOSING AND PURCHASES OF

ADDITIONAL NOTE PRINCIPAL BALANCES
	 	 	 	 
	SECTION 2.01. Commitment
	 	 	3	 
	SECTION 2.02. Closing
	 	 	3	 
	ARTICLE III
	 	 	 	 
	TRANSFER DATES
	 	 	 	 
	SECTION 3.01. Transfer Dates
	 	 	4	 
	ARTICLE IV
	 	 	 	 
	CONDITIONS PRECEDENT TO

EFFECTIVENESS OF COMMITMENT
	 	 	 	 
	SECTION 4.01. Closing Subject to Conditions Precedent
	 	 	5	 
	ARTICLE V
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES OF

THE ISSUER AND THE DEPOSITOR
	 	 	 	 
	SECTION 5.01. Issuer
	 	 	7	 
	SECTION 5.02. Securities Act
	 	 	9	 
	SECTION 5.03. No Fee
	 	 	10	 
	SECTION 5.04. Information
	 	 	10	 
	SECTION 5.05. The Purchased Note
	 	 	10	 
	SECTION 5.06. Use of Proceeds
	 	 	10	 
	SECTION 5.07. The Depositor
	 	 	10	 
	SECTION
5.08. Taxes, etc.
	 	 	10	 
	SECTION 5.09. Financial Condition
	 	 	10	 







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	 	 	Page

	ARTICLE VI
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE PURCHASER
	 	 	 	 
	SECTION 6.01. Organization
	 	 	11	 
	SECTION
6.02. Authority, etc.
	 	 	11	 
	SECTION 6.03. Securities Act
	 	 	11	 
	SECTION 6.04. Conflicts With Law
	 	 	11	 
	SECTION
6.05. Conflicts With Agreements, etc.
	 	 	11	 
	ARTICLE VII
	 	 	 	 
	COVENANTS OF THE ISSUER AND THE DEPOSITOR
	 	 	 	 
	SECTION 7.01. Information from the Issuer
	 	 	12	 
	SECTION 7.02. Access to Information
	 	 	12	 
	SECTION 7.03. Ownership and Security Interests; Further Assurances
	 	 	12	 
	SECTION 7.04. Covenants
	 	 	13	 
	SECTION 7.05. Amendments
	 	 	13	 
	SECTION 7.06. With Respect to the Exempt Status of the Purchased Note
	 	 	13	 
	ARTICLE VIII
	 	 	 	 
	ADDITIONAL COVENANTS
	 	 	 	 
	SECTION 8.01. Legal Conditions to Closing
	 	 	13	 
	SECTION 8.02. Expenses
	 	 	13	 
	SECTION 8.03. Mutual Obligations
	 	 	14	 
	SECTION 8.04. Restrictions on Transfer
	 	 	14	 
	SECTION 8.05. Confidentiality
	 	 	14	 
	SECTION 8.06. Information Provided by the Purchaser
	 	 	14	 
	ARTICLE IX
	 	 	 	 
	INDEMNIFICATION
	 	 	 	 
	SECTION 9.01. Indemnification of Purchaser
	 	 	15	 
	SECTION 9.02. Procedure and Defense
	 	 	15	 
	ARTICLE X
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	SECTION 10.01. Amendments
	 	 	16	 







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	 	 	Page

	SECTION 10.02. Notices
	 	 	16	 
	SECTION 10.03. No Waiver; Remedies
	 	 	16	 
	SECTION 10.04. Binding Effect; Assignability
	 	 	16	 
	SECTION 10.05. Provision of Documents and Information
	 	 	17	 
	SECTION 10.06. GOVERNING LAW; JURISDICTION
	 	 	17	 
	SECTION 10.07. No Proceedings
	 	 	17	 
	SECTION 10.08. Execution in Counterparts
	 	 	17	 
	SECTION 10.09. No Recourse — Purchaser and Depositor
	 	 	17	 
	SECTION 10.10. Survival
	 	 	18	 
	SECTION 10.12. Conflicts
	 	 	18	 
	SECTION 10.13. Limitation on Liability
	 	 	18	 





Schedule I — Information for Notices


iii









 






NOTE PURCHASE AGREEMENT




          NOTE PURCHASE AGREEMENT dated as of November 14, 2003 (the “Note Purchase
Agreement”), among OPTION ONE OWNER TRUST 2003-5 (the “Issuer”), OPTION ONE
LOAN WAREHOUSE CORPORATION (the “Depositor”), and CITIGROUP GLOBAL MARKETS
REALTY CORP. (“Citigroup,” and in its capacity as Purchaser hereunder, the
“Purchaser”).



          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 Sale and
Servicing Agreement (as defined below). Additionally, the following terms shall
have the following meanings:



          “Closing” shall have the meaning set forth in Section 2.02.



          “Closing Date” shall have the meaning set forth in Section 2.02.



          “Commitment” means the commitment of the Purchaser to purchase Additional
Note Principal Balances pursuant to Section 2.01.



          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.



          “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 the Purchaser and any of its officers,
directors, employees, agents, representatives, assignees and Affiliates and any
Person who controls the Purchaser or its Affiliates within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act.



 









 





          “Indenture” means the Indenture dated as of October 1, 2003 between the
Issuer as Issuer and Wells Fargo Bank Minnesota, National Association as
Indenture Trustee.



          “Investment Company Act” shall have the meaning provided in Section 5.01(i).



          “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.



          “Loan Originator” means Mortgage Corporation, a California
corporation.



          “Maximum Note Principal Balance” means an amount equal to $1,000,000,000.



          “Purchaser” means the Purchaser and its permitted successors and assigns.



          “Purchased Note” means the Option One Owner Trust 2003-5 Mortgage-Backed
Note issued by the Issuer pursuant to the Indenture.



          “Sale and Servicing Agreement” means the Sale and Servicing Agreement
dated as of November 1, 2003, among the Issuer, the Depositor, the Loan
Originator, the Servicer and Wells Fargo Bank Minnesota, National Association
as the Indenture Trustee, as the same may be amended, modified or supplemented
from time to time.



          “Servicer” means Option One Mortgage Corporation or its permitted
successors and assigns.



          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.



          (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, schedules and Exhibits in or to this Note Purchase Agreement
unless otherwise specified.



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ARTICLE II




COMMITMENT; CLOSING AND PURCHASES OF

ADDITIONAL NOTE PRINCIPAL BALANCES




          SECTION 2.01. Commitment; Collateral Value Increase Dates.



          (a) At any time during the Revolving Period at least two Business

Days prior to a proposed Transfer Date, to the extent that the aggregate
outstanding Note Principal Balance (after giving effect to the proposed
purchase) is less than the Maximum Note Principal Balance, and subject to the
terms and conditions hereof and in accordance with the other Basic Documents,
the Issuer may request that the Purchaser purchase Additional Note Principal
Balances (each such request, a “Purchase Request”). Each Purchase Request shall
identify the proposed Transfer Date and an estimate of the number of Loans and
aggregate Principal Balance of such Loans to be purchased by the Issuer on such
Transfer Date. On the identified Transfer Date, the Purchaser agrees to
purchase the Additional Note Principal Balances requested in the Purchase
Request, subject to the terms and conditions and in reliance upon the
covenants, representations and warranties set forth herein and in the other
Basic Documents.



          (b) On any Collateral Value Increase Date during the Revolving Period, to
the extent that the Note Principal Balance (after giving effect to the proposed
increase in the Note Principal Balance) is less than the Maximum Note Principal
Balance, and subject to the terms and conditions hereof and in accordance with
the other Basic Documents, the Issuer may request that the Purchaser purchase
Additional Note Principal Balances equal to the related increase in the
Collateral Percentage of the related Loans. The Purchaser may in its sole
discretion agree to purchase such Additional Note Principal Balances.



          SECTION 2.02. Closing. The closing (the “Closing”) of the execution of the
Basic Documents and Purchased Note shall take place at 10:00 a.m. at the
offices of Thacher Proffitt & Wood, Two World Financial Center, New York, New
York 10281 on November 14, 2003, or if the conditions to closing set forth in
Article IV of this Note Purchase Agreement shall not have been satisfied or
waived by such date, as soon as practicable after such conditions shall have
been satisfied or waived, or at such other time, date and place as the parties
shall agree upon (the date of the Closing being referred to herein as the
“Closing Date”).



ARTICLE III




TRANSFER DATES




          SECTION 3.01. Transfer Dates.



          (a) Subject to the conditions and terms set forth herein and in Section
2.06 of the Sale and Servicing Agreement with respect to each Transfer Date,
the Issuer may request, and the Purchaser agrees to purchase Additional Note
Principal Balances from the Issuer from time to time in accordance with, and
upon the satisfaction, as of the applicable Transfer Date, of each of the
following additional conditions:



3









 





          (i) With respect to each Transfer Date, each condition set forth in Section
2.6 of the Sale and Servicing Agreement shall have been satisfied;



          (ii) Each of the representations and warranties of the Issuer, the
Servicer,
the Loan Originator and the Depositor made in the Basic Documents shall be true
and
correct in all material respects as of such date (except to the extent they
expressly relate to an earlier or later time);



          (iii) The Issuer, the Servicer, the Loan Originator and the Depositor
shall be in material compliance with all of their respective covenants
contained in the Basic Documents and the Purchased Note;
occurring;



          (iv) No Event of Default and no Default shall have occurred or shall be



          (v) With respect to each Transfer Date, the Purchaser 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 Purchaser, desirable to perfect or evidence the assignments required to be
effected on such Transfer Date in accordance with the Sale and Servicing
Agreement including, without limitation, the assignment of the Loans and the
proceeds thereof required to be assigned pursuant to the related LPA
Assignment, S&SA Assignment and the Indenture;



          (vi) Each Loan (i) has been originated in accordance with the Underwriting
Guidelines and (ii) is not “abusive” or “predatory”; and



          (vii) With respect to the first Transfer Date, the Purchaser shall have
completed its initial due diligence review with respect to the Loans and the
Loan Originator and determined, in the Purchaser’s sole discretion, that both
the Loans and the origination, servicing and business practices of the Loan
Originator are reasonably acceptable to the Purchaser. Unless otherwise agreed
by the parties, the Purchaser shall make such determination, and shall deliver
written notice of such determination to the Loan Originator, by the close of
business on November 21, 2003. Should the Purchaser fail to deliver such notice
to the Loan Originator by the close of business on November 21, 2003, this
condition shall be deemed satisfied.



          (viii) With respect to any Transfer Date after the first Transfer Date and
on or before December 3, 2003 (unless otherwise agreed by the parties), the
Purchaser shall not have delivered to the Loan Originator a written notice to
the effect that it has completed its final due diligence review with respect to
the Loans and the Loan Originator and has determined, in its sole discretion,
that either the Loans or the origination, servicing or business practices of
the Loan Originator or both are not reasonably acceptable to the Purchaser.
Should the Purchaser fail to deliver such notice to the Loan Originator by the
close of business on December 3, 2003, this condition shall be deemed
satisfied.



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          (b) The Purchaser shall determine in its reasonable discretion whether
each of the above conditions have been met in accordance with the Sale and
Servicing Agreement and its determination shall be binding on the parties
hereto.



          (c) The price paid by the Purchaser on each Transfer Date for the
Additional Note Principal Balance purchased on such Transfer Date shall be
equal to the amount of such Additional Note Principal Balance and shall be remitted not
later than 4:00 p.m. New York City time on the Transfer Date by wire transfer
of immediately available funds to the Advance Account.



          (d) The Purchaser shall record on the schedule attached to the Purchased
Note, the date and amount of any Additional Note Principal Balance purchased by
it; provided, that failure to make such recordation on such schedule or any
error in such schedule shall not adversely affect the 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. Absent
manifest error, the Note Principal Balance of the Purchased Note as set forth
in the Purchaser’s records shall be binding upon the parties hereto,
notwithstanding any notation or record made or kept by any other party hereto.



ARTICLE IV




CONDITIONS PRECEDENT TO

EFFECTIVENESS OF COMMITMENT




          SECTION 4.01. Closing Subject to Conditions Precedent. The effectiveness
of the Commitment hereunder 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
Purchaser in its sole discretion):



          (a) Performance by the Issuer, the Depositor, the Servicer and the Loan
Originator. All the terms, covenants, agreements and conditions of the Basic
Documents to be complied with and performed by the Issuer, the Depositor, the
Servicer and the Loan Originator on or before the Closing 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 Loan Originator
made in the Basic Documents shall be true and correct in all material respects
as of the Closing Date (except to the extent they expressly relate to an
earlier or later time).



          (c) Officer’s Certificate. The Purchaser shall have received in form and
substance reasonably satisfactory to the Purchaser an Officer’s Certificate
from the Loan Originator, the Depositor and the Servicer and a certificate of
an Authorized Officer of the Issuer, dated the Closing Date, certifying to the
satisfaction of the conditions set forth in the preceding paragraphs (a) and
(b).



          (d) Opinions of Counsel to the Issuer, the Loan Originator, the Servicer
and the Depositor. Counsel to the Issuer, the Loan Originator, the Servicer and
the Depositor shall have delivered to the Purchaser favorable opinions, dated
as of the Closing Date and reasonably satisfactory in form and substance to the
Purchaser and its counsel. In addition to the foregoing, the Loan Originator
shall have caused its counsel to deliver to the Purchaser a favorable opinion
to the



5









 




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.




          (e) Opinions of Counsel to the Indenture Trustee. Counsel to the Indenture
Trustee shall have delivered to the Purchaser a favorable opinion, dated as of
the Closing Date and reasonably satisfactory in form and substance to the
Purchaser and its counsel.



          (f) Opinions of Counsel to the Owner Trustee. Delaware counsel to the
Owner Trustee of the Issuer and the Depositor shall have delivered to the
Purchaser favorable opinions regarding the formation, existence and standing of
the Issuer and the Depositor and of the Issuer’s and the Depositor’s execution,
authorization and delivery of each of the Basic Documents to which it is a
party and such other matters as the Purchaser may reasonably request, dated as
of the Closing Date and reasonably satisfactory in form and substance to the
Purchaser and its counsel.



          (g) Filings and Recordations. The Purchaser 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 Purchaser, desirable to perfect or evidence the assignment by the Loan
Originator to the Depositor of the Loan Originator’s ownership interest in the
Trust Estate including, without limitation, the Loans conveyed pursuant to the
Loan 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 Purchaser, desirable to perfect or evidence the assignment by
the Depositor to the Issuer of the Depositor’s ownership interest in the Trust
Estate including, without limitation, the Loans 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 Purchaser, desirable to perfect
or evidence the grant of a first priority perfected security interest in the
Issuer’s ownership interest in the Trust Estate including, without limitation,
the Loans, in favor of the Indenture Trustee, subject to no Liens prior to the
Lien of the Indenture.



          (h) Documents. The Purchaser shall have received a duly executed
counterpart of each of the Basic Documents, in form acceptable to the
Purchaser, the Purchased Note and each and every document or certification
delivered by any party in connection with any of the Basic Documents or the
Purchased Note, and each such document shall be in full force and effect.



          (i) 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 Basic Documents, the Purchased Note and the documents
related thereto in any material respect.



          (j) Approvals and Consents. All Governmental Actions of all Governmental
Authorities required with respect to the transactions contemplated by the Basic
Documents, the Purchased Note and the documents related thereto shall have been
obtained or made.



          (k) Accounts. The Purchaser shall have received evidence reasonably
satisfactory to it that each Trust Account has each been established in
accordance with the terms of the Sale and Servicing Agreement.



6









 





          (l) Fees and Expenses. The fees and expenses payable by the Issuer and the
Depositor pursuant to Section 8.02(b) shall have been paid.



          (m) Other Documents. The Issuer, the Loan Originator, the Depositor and
the Servicer shall have furnished to the Purchaser such other opinions,
information, certificates and documents as the Purchaser may reasonably
request.



          (n) Proceedings in Contemplation of Sale of Purchased Note. All actions
and proceedings undertaken by the Issuer, the Loan Originator, the Depositor
and the Servicer in connection with the issuance and sale of the Purchased Note
as herein contemplated shall be reasonably satisfactory in all respects to the
Purchaser and its counsel.



          (o) Financial Covenants. The Loan Originator and the Servicer shall be in
compliance with the financial covenants set forth in Section 7.02 of the Sale
and Servicing Agreement.



          (p) Trust Accounts Control Agreements. The Purchaser shall have received
control agreements relating to the Trust Accounts reasonably satisfactory to
the Purchaser.



          (q) Wet Funding Agreement. The Issuer, the Depositor, the Loan Originator
and such other appropriate parties shall have entered into an agreement
concerning the terms, conditions and procedures applicable to the sale of Wet
Funded Loans to the Issuer and the pledge of such Loans to the Indenture
Trustee reasonably satisfactory to the Purchaser.



          (r) Underwriting Guidelines. The Purchaser shall have received a copy of
the current Underwriting Guidelines.



          If any condition specified in this Section 4.01 shall not have been
fulfilled when and as required to be fulfilled through no fault of the
Purchaser, this Agreement may be terminated by the Purchaser by notice to the
Loan Originator at any time at or prior to the Closing Date, and the Purchaser
shall incur no liability as a result of such termination.



ARTICLE V




REPRESENTATIONS AND WARRANTIES OF

THE ISSUER AND THE DEPOSITOR




          The Issuer and the Depositor hereby jointly and severally make the
following representations and warranties to the Purchaser, as of the Closing
Date, and as of each Transfer Date and the Purchaser shall be deemed to have
relied on such representations and warranties in making (or committing to make) purchases
of Additional Note Principal Balances on each Transfer Date:



          SECTION 5.01. Issuer.



          (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



7









 




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 Purchaser.




          (b) The issuance, sale, assignment and conveyance of the Purchased Note
and the Additional Note Principal Balances, the performance of the Issuer’s
obligations under each Basic 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 Basic 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
Purchaser 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 Basic 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 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 Basic 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 Basic 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.



8









 





          (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 Basic 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 Basic 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 Basic Documents, or (ii)
seeking to prevent the issuance of the Purchased Note or the consummation of
any of the transactions contemplated by the Basic 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 Basic
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 Purchaser nor the activities of the Issuer pursuant to the Basic
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”).



          (j) It is not necessary to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.



          (k) The Issuer is solvent and has adequate capital for its business and
undertakings.



          (l) The chief executive offices of the Issuer are located at
Option One Owner
Trust 2003-5, c/o Wilmington Trust Company, as Owner Trustee, One 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.



          (m) 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 Purchaser, contained
herein, the sale of the Purchased Note and the sale of Additional Note
Principal Balances pursuant to this Agreement are each exempt from the
registration and prospectus delivery requirements of the Act. In the case of
the offer or sale of the Purchased Note, 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,



9









 




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 Note 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 Purchaser and compliance with the
applicable provisions of the Indenture with respect to each transfer of the
Purchased Note, would render the issuance and sale of the Purchased Note as
contemplated hereby a violation of Section 5 of the Securities 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 the Depositor, nor any of
their Affiliates has paid or agreed to pay to any Person any compensation for
soliciting another to purchase the Purchased Note.



          SECTION 5.04. Information. The information provided pursuant to
Section 7.01(a) hereof will, at the date thereof, be true and correct in all material
respects.



          SECTION 5.05. The Purchased Note. The Purchased Note has 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 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 Exchange Act.



          SECTION 5.07. The Depositor. The Depositor hereby makes to the Purchaser
each of the representations, warranties and covenants set forth in Section 3.01
of the Sale and Servicing Agreement as of the Closing Date and as of each
Transfer Date (except to the extent that any such representation, warranty or
covenant is expressly made as of another date).



          SECTION 5.08. Taxes, etc. Any taxes, fees and other charges of
Governmental Authorities applicable to the Issuer and the Depositor, except for
franchise or income taxes, in connection with the execution, delivery and
performance by the Issuer and the Depositor of each Basic Document to which
they are parties, the issuance of the Purchased Note or otherwise applicable to
the Issuer or the Depositor in connection with the Trust Estate have been paid
or will be paid by the Issuer or the Depositor, as applicable, at or prior to
the Closing Date or Transfer Date, to the extent then due.



          SECTION 5.09. Financial Condition. On the date hereof and on each Transfer
Date, neither the Issuer nor the Depositor is or will be insolvent or the
subject of any voluntary or involuntary bankruptcy proceeding.



10









 





ARTICLE VI




REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE PURCHASER




          The Purchaser hereby makes the following representations and warranties,
as to itself, to the Issuer and the Depositor on which the same are relying in
entering into this Note Purchase Agreement.



          SECTION 6.01. Organization. The Purchaser has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction of its
organization with power and authority to own its properties and to transact the
business in which it is now engaged.



          SECTION 6.02. Authority, etc. The Purchaser has all requisite power and
authority to enter into and perform its obligations under this Note Purchase
Agreement and to consummate the transactions herein contemplated. The execution
and delivery by the Purchaser of this Note Purchase Agreement and the
consummation by the
Purchaser of the transactions contemplated hereby have been duly and
validly authorized by all necessary organizational action on the part of the
Purchaser. This Note Purchase Agreement has been duly and validly executed and
delivered by the Purchaser and constitutes a legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, subject as to enforcement to bankruptcy, reorganization,
insolvency, moratorium and other similar laws of general applicability relating
to or affecting creditors’ rights and to general principles of equity. Neither
the execution and delivery by the Purchaser of this Note Purchase Agreement nor
the consummation by the Purchaser of any of the transactions contemplated
hereby, nor the fulfillment by the Purchaser of the terms hereof, will conflict
with, or violate, result in a breach of or constitute a default under any term
or provision of the Purchaser’s organizational documents or any Governmental
Rule applicable to the Purchaser.



          SECTION 6.03. Securities Act. The Purchaser hereby represents and warrants
to the Issuer, the Depositor and the Servicer as of the date of this Agreement,
as follows:



          (a) The Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
purchase of an interest in the Note. The Purchaser (i) is (A) a “qualified
institutional buyer” as defined under Rule 144A promulgated under the
Securities Act of 1933, as amended (the “1933 Act”), acting for its own account
or the accounts of other “qualified institutional buyers” as defined under Rule
144A, or (B) an “accredited investor” within the meaning of Regulation D
promulgated under the 1933 Act, and (ii) is aware that the Issuer intends to
rely on the exemption from registration requirements under the 1933 Act
provided by Rule 144A or Regulation D, as applicable.



          (b) The Purchaser understands that neither the Note nor interests in the
Note have been registered or qualified under the 1933 Act, nor under the
securities laws of any state, and therefore neither the Note nor interests in
the Note can be resold unless they are registered or qualified thereunder or
unless an exemption from registration or qualification is available.



          (c) It is the intention of the Purchaser to acquire interests in the Note (a)
for



11









 




investment for its own account, or (b) for resale to “qualified institutional
buyers” in transactions under Rule 144A, and not in any event with the view to,
or for resale in connection with, any distribution thereof. The Purchaser
understands that the Note and interests therein have not been registered under
the 1933 Act by reason of a specific exemption from the registration provisions
of the 1933 Act which depends upon, among other things, the bona fide nature of
the Purchaser’s investment intent (or intent to resell only in Rule 144A
transactions) as expressed herein.




          SECTION 6.04. Conflicts With Law. The execution, delivery and performance
by the Purchaser of its obligations under this Note Purchase Agreement will not
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any agreement or instrument to which the Purchaser
is a party or by which
the Purchaser is bound or of any statute, order or regulation applicable
to the Purchaser of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Purchaser, in each case which
could be expected to have a material adverse effect on the transactions
contemplated therein.



          SECTION 6.05. Conflicts With Agreements, etc. The Purchaser 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
materially adverse to the Purchaser in the performance of its obligations or
duties under any of the Basic Documents to which it is a party. The Purchaser
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 Purchaser that materially and adversely
affects, or which could be expected in the future to materially and adversely
affect the ability of the Purchaser to perform its obligations under this Note
Purchase Agreement.



ARTICLE VII




COVENANTS OF THE ISSUER AND THE DEPOSITOR




          SECTION 7.01. Information from the Issuer. So long as the Purchased Note
remains outstanding, the Issuer and the Depositor shall each furnish to the
Purchaser:



          (a) the financial information required to be delivered by the Servicer
under Section 4.02(a) of the Sale and Servicing Agreement;



          (b) such information (including financial information), documents, records
or reports with respect to the Trust Estate, the Loans, the Issuer, the Loan
Originator, the Servicer or the Depositor as the Purchaser may from time to
time reasonably request;



          (c) as soon as possible and in any event within five (5) Business Days
after the occurrence thereof, notice of each Event of Default under the Sale
and Servicing Agreement or the Indenture, and each Default;



          (d) promptly and in any event within 30 days after the occurrence thereof,
written notice of a change in address of the chief executive office of the
Issuer, the Loan Originator or the Depositor; and



12









 





          SECTION 7.02. Access to Information. So long as the Purchased Note remains
outstanding, each of the Issuer and the Depositor 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 or the Depositor, as applicable, permit
the Purchaser, or their agents or representatives to:



          (a) examine all books, records and documents (including computer
tapes and disks) in the possession or under the control of the Issuer or
the Depositor relating to the Loans or the Basic Documents as may be requested,
and



          (b) visit the offices and property of the Issuer and the Depositor for the
purpose of examining such materials described in clause (a) above.



          Except as provided in Section 10.05, information obtained by the Purchaser
pursuant to this Section 7.02 and Section 7.01 herein shall be held in
confidence in accordance with and to the extent provided in Sections 11.15 and
11.17 of the Sale and Servicing Agreement as if it constituted “Confidential
Information” (as defined therein).



          SECTION 7.03. Ownership and Security Interests; Further Assurances. The
Depositor will take all action necessary to maintain the Issuer’s ownership
interest in the Loans and the other items sold pursuant to Article II of the
Sale and Servicing Agreement. The Issuer will take all action necessary to
maintain the Indenture Trustee’s security interest in the Loans and the other
items pledged to the Indenture Trustee pursuant to the Indenture.



          The Issuer and the Depositor agree to take any and all acts and to execute
any and all further instruments reasonably necessary or requested by the
Purchaser to more fully effect the purposes of this Note Purchase Agreement.



          SECTION 7.04. Covenants. The Issuer and the Depositor shall each duly
observe and perform each of their respective covenants set forth in each of the
Basic Documents to which they are parties.



          SECTION 7.05. Amendments. Neither the Issuer nor the Depositor shall make,
or permit any Person to make, any amendment, modification or change to, or
provide any waiver under any Basic Document to which the Issuer or the
Depositor, as applicable, is a party without the prior written consent of the
Purchaser.



          SECTION 7.06. With Respect to the Exempt Status of the Purchased Note.



          (a) Neither the Issuer nor the Depositor, nor any of their respective
Affiliates, nor any Person acting on their behalf will, directly or indirectly,
make offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the Purchased Note
under the Securities Act.



          (b) Neither the Issuer nor the Depositor, nor any of their Affiliates, nor
any Person acting on their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D
promulgated under the Securities Act) in connection with any offer or sale of
the Purchased Note.



13









 





          (c) On or prior to any Transfer Date, the Issuer and the Depositor will
furnish or cause to be furnished to the Purchaser and any subsequent purchaser
therefrom of Additional Note Principal Balance, if the Purchaser or such
subsequent purchaser so
requests, a letter from each Person furnishing a certificate or opinion on
the Closing Date as described in Section 4.01 hereof or on or before any such
Transfer 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 made on and as of the Closing Date
or such Transfer Date, as the case may be, except for such exceptions set forth
in such letter as are attributable to events occurring after the Closing Date
or such Transfer Date.



ARTICLE VIII




ADDITIONAL COVENANTS




          SECTION 8.01. 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 8.02. Expenses.



          (a) The Issuer and the Depositor jointly and severally covenant 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 shall be paid by
the Issuer or the Depositor.



          (b) The Issuer and the Depositor jointly and severally covenant to pay as
and when billed by the 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 Basic Documents including,
without limitation, (i) all reasonable fees, disbursements and expenses of
counsel to the Purchaser, (ii) all reasonable fees and expenses of the
Indenture Trustee and the Owner Trustee and their counsel and (iii) all
reasonable fees and expenses of the Custodian and its counsel.



          SECTION 8.03. 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 8.04. Restrictions on Transfer. The Purchaser agrees that
it will comply with the restrictions on transfer of the Purchased Note set forth in the
Indenture and resell the Purchased Note only in compliance with such
restrictions.



14









 





          SECTION 8.05. [Reserved].



          SECTION 8.06. Information Provided by the Purchaser. The Purchaser hereby
covenants to determine One-Month LIBOR in accordance with the definition
thereof in the Basic Documents and shall give notice to the Indenture Trustee,
the Issuer and the Depositor of the Interest Payment Amount on each
Determination Date. The Purchaser shall cause the Market Value Agent to give
notice to the Indenture Trustee, the Issuer and the Depositor of any Hedge
Funding Requirement on or before the Determination Date related to any Payment
Date. In addition, on each Determination Date, the Purchaser hereby covenants
to give notice to the Indenture Trustee, the Issuer and the Depositor of (i)
the Issuer/Depositor Indemnities (as defined in the Trust Agreement), (ii) Due
Diligence Fees and (iii) the Collateral Value for each Loan for the related
Payment Date.



ARTICLE IX




INDEMNIFICATION




          SECTION 9.01. Indemnification of Purchaser. Each of the Issuer and the
Depositor hereby agree to, jointly and severally, indemnify and hold harmless
each Indemnified Party against any and all losses, claims, damages,
liabilities, reasonable expenses or judgments (including reasonable accounting
fees and reasonable legal fees and other reasonable expenses incurred in
connection with this Note Purchase Agreement or any other Basic Document and
any action, suit or proceeding or any claim asserted) (collectively, “Losses”),
as incurred (payable promptly upon written request), for or on account of or
arising from or in connection with any information prepared by and furnished or
to be furnished by any of the Issuer, the Loan Originator or the Depositor
pursuant to or in connection with the transactions contemplated hereby
including, without limitation, such written information as may have been and
may be furnished in connection with any due diligence investigation with
respect to the business, operations, financial condition of the Issuer, the
Loan Originator, the Depositor or with respect to the Loans, to the extent such
information contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained therein in the light
of the circumstances under which such statements were made not misleading,
except with respect to any such information used by such Indemnified Party in
violation of the Basic Documents or as a result of an Indemnified Party’s gross
negligence or willful misconduct which results in such Losses. The indemnities
contained in this Section 9.01 will be in addition to any liability which the
Issuer or the Depositor may otherwise have pursuant to this Note Purchase
Agreement and any other Basic Document.



          SECTION 9.02. Procedure and Defense. In case any 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 9.01, such Indemnified Party shall promptly notify
the Issuer and the Depositor in writing and, upon request of the Indemnified
Party, the Issuer and the Depositor shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to such Indemnified Party to represent such
Indemnified Party and any others the indemnifying party may designate and shall
pay the reasonable fees and disbursements of such counsel related to such
proceeding; provided that failure to give such notice or deliver such documents
shall not affect the rights to indemnity hereunder unless such failure
materially prejudices the rights of the Indemnified Party. The Indemnified
Party will have the right to employ its own counsel in any such action in
addition to the counsel of the Issuer and/or



15









 




the Depositor, but the reasonable fees and expenses of such counsel will be at
the expense of such Indemnified Party, unless (i) the employment of counsel by
the Indemnified Party at its expense has been authorized in writing by the
Depositor or the Issuer, (ii) the Depositor or the Issuer has not in fact
employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include the Depositor or the Issuer and one or more Indemnified Parties, and
the Indemnified Parties shall have been advised by counsel that there may be
one or more legal defenses available to them which are different from or
additional to those available to the Depositor or the Issuer. Reasonable
expenses of counsel to any Indemnified Party for which the Issuer and the
Depositor are responsible hereunder shall be reimbursed by the Issuer and the
Depositor as they are incurred. The Issuer and the Depositor shall not be
liable for any settlement of any proceeding affected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment. Neither the Issuer nor the Depositor will, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding.




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. 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 10.03. 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 10.04. Binding Effect; Assignability.



          (a) This Note Purchase Agreement shall be binding upon and inure to the
benefit of the Issuer, the Depositor and the Purchaser and their respective
permitted successors and assigns (including any subsequent holders of the
Purchased Note); provided, however, neither the Issuer nor



16









 




the Depositor shall have any right to assign their respective rights hereunder
or interest herein (by operation of law or otherwise) without the prior written
consent of the Purchaser.




          (b) The Purchaser may, in the ordinary course of its business and in
accordance with the Basic Documents and applicable law, including applicable
securities laws, at any time sell to one or more Persons (each, a
“Participant”), participating interests in all or a portion of its rights and
obligations under this Note Purchase Agreement. Notwithstanding any such sale
by the Purchaser of participating interests to a Participant, the Purchaser’s
rights and obligations under this Note Purchase Agreement shall remain
unchanged, the Purchaser shall remain solely responsible for the performance
thereof, and the Issuer and the Depositor shall continue to deal solely and
directly with the Purchaser and shall have no obligations to deal with any
Participant in connection with the Purchaser’s rights and obligations under
this Note Purchase Agreement.



          (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 Note shall have been paid in full.



          SECTION 10.05. Provision of Documents and Information. Each of the Issuer
and the Depositor acknowledges and agrees that the Purchaser is permitted to
provide to any subsequent Purchaser, permitted assignees and Participants,
opinions, certificates, documents and other information relating to the Issuer,
the Depositor and the Loans delivered to the Purchaser pursuant to this Note
Purchase Agreement provided that with respect to Confidential Information, such
subsequent Purchaser, permitted assignees and Participants agree to be bound by
Section 8.05 hereof.



          SECTION 10.06. 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
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 10.07. 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, the Depositor and the Purchaser hereby covenant and agree that they
will not institute against the Issuer or the Depositor, or join in any
institution against the Issuer or the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law.



17









 





          SECTION 10.08. 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 10.09. No Recourse — Purchaser and Depositor.



          (a) The obligations of the Purchaser under this Note Purchase Agreement,
or any other agreement, instrument, document or certificate executed and
delivered by or issued by the Purchaser or any officer thereof are solely the
partnership or corporate obligations of the 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 the Purchaser or any officer thereof in connection therewith, against any
stockholder, limited partner, employee, officer, director or incorporator of
the Purchaser.



          (b) The obligations of the Depositor under this Note Purchase Agreement,
or any other agreement, instrument, document or certificate executed and
delivered by or issued by the Depositor or any officer thereof are solely the
partnership or corporate obligations of the Depositor, 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 the Purchaser or any officer
thereof in connection therewith, against any stockholder, limited partner,
employee, officer, director or incorporator of the Depositor.



          (c) The Purchaser, by accepting the Purchased Note, acknowledges that such
Purchased Note represents an obligation of the Issuer and does not represent an
interest in or an obligation of the Loan Originator, the Servicer, the
Depositor, the Administrator, the Owner Trustee, the Indenture Trustee or any
Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Purchased Note or the Basic Documents.



          SECTION 10.10. 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 Note.



          SECTION 10.11. 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
Note will be treated as evidence of indebtedness secured by the Loans 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 Note for federal, state and
local income and franchise tax purposes as indebtedness and (c) agrees that the
provisions of all Basic Documents shall be construed to further these
intentions of the parties.



18









 





          SECTION 10.12. Conflicts. Notwithstanding anything contained herein to the
contrary, in the event of the conflict between the terms of the Sale and
Servicing Agreement and this Note Purchase Agreement, the terms of the Sale and
Servicing Agreement shall control.



          SECTION 10.13. Limitation on Liability. It is expressly understood and
agreed by the parties hereto that (a) this Note Purchase Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally, but
solely as Owner Trustee of Option One Owner Trust 2003-5, in the exercise of
the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer
under this Note Purchase Agreement or any other related documents.



19









 





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



	 	 	 	 	 	 	 
	 	 	OPTION ONE OWNER TRUST 2003-5
	 
	 	 	 	 	 	 
	

	 	By:
	 	Wilmington Trust Company not in its

individual capacity but solely as owner

trustee	 	 







	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Joann A. Rozell	 
	 	Name:	Joann A. Rozell	 
	 	Title:	Financial Services Officer	 	 
	 



	 	 	 	 	 
	 	OPTION ONE LOAN WAREHOUSE

CORPORATION

 	 
	 	By:  	/s/ Bob Fulton	 
	 	Name:	Bob Fulton	 	 
	 	Title:	Vice President	 	 
	 



	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS REALTY CORP.

 	 
	 	By:  	/s/ Susan Mills	 
	 	Name:	Susan Mills	 	 
	 	Title:	  	 	 



 









 






	 	 	 	 	 



Schedule I

Information for Notices




1. if to the Issuer:



Option One
Owner Trust 2003-5

c/o Wilmington Trust Company 

as Owner Trustee

One Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration

Telecopy: (302) 636-4144

Telephone: (302) 636-1000




     with a copy to:


Option One
Mortgage Corporation

3 Ada Road

Irvine, California 92618

Attention: William O’Neill

Telecopy number: (949) 790-7540

Telephone number: (949) 790-7504



2. if to the Depositor:



Option One Loan Warehouse Corporation

3 Ada Road

Irvine, California 92618

Attention: William O’Neill

Telecopy number: (949) 790-7540

Telephone number: (949) 790-7504



3. if to the Purchaser:



Citigroup Global Markets Realty Corp.

390 Greenwich Street 

New York, New York 10013

Attention: Randy Appleyard

Telecopy: (212) 723-8603

Telephone: (212) 723-6394




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