OMNIBUS AMENDMENT NUMBER TWO to the OPTION ONE OWNER TRUST 2005-7 WAREHOUSE FACILITY
Exhibit 10.6
OMNIBUS AMENDMENT NUMBER TWO
to the
OPTION ONE OWNER TRUST 2005-7 WAREHOUSE FACILITY
This OMNIBUS AMENDMENT NUMBER TWO (this “Amendment”) is made and is effective as of this 31st
day of October, 2006, among Option One Owner Trust 2005-7 as issuer (the “Issuer”), Option One Loan
Warehouse Corporation as depositor (the “Depositor”), Option One Mortgage Corporation as loan
originator and servicer (“Option One”), Xxxxx Fargo Bank, N.A. as indenture trustee (the “Indenture
Trustee”), HSBC Securities (USA) Inc. (the “Noteholder Agent”), HSBC Bank USA, N.A. and Bryant Park
Funding LLC (the “Purchasers”) and HSBC Securities (USA) Inc. (the “Administrative Agent” and
collectively with the Noteholder Agent and the Purchasers, the “HSBC Entities”) to (i) the Note
Purchase Agreement, dated as of September 1, 2005 (as amended, supplemented or otherwise modified
from time to time, the “Note Purchase Agreement”), among the Issuer, the Depositor, the Noteholder
Agent, the Purchasers and the Administrative Agent, (ii) the Pricing Letter, dated as of September
1, 2005 (as amended, supplemented or otherwise modified from time to time, the “Pricing Letter”),
among the Issuer, the Depositor, Option One, and the Indenture Trustee and (iii) the Sale and
Servicing Agreement, dated as of September 1, 2005 (as amended, supplemented or otherwise modified
from time to time, the “Sale and Servicing Agreement” and together with the Note Purchase Agreement
and the Pricing Letter, the “Transaction Documents”), among the Issuer, the Depositor, Option One
and the Indenture Trustee.
RECITALS
WHEREAS, the parties have previously entered into the Transaction Documents; and
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and of the mutual covenants herein contained, the parties hereto hereby agree
as follows:
SECTION 1. Defined Terms. Capitalized terms used but not defined herein shall have
the meanings ascribed to such terms in the Transaction Documents.
SECTION 2. Amendment to Sale and Servicing Agreement.
(a) The definition of “Revolving Period” in Section 1.01 of the Sale and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:
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“Revolving Period: With respect to the Notes, the period commencing on October
31, 2006 and ending on the earlier of (i) March 31, 2007 and (ii) the date on which
the Revolving Period is terminated pursuant to Section 2.07.”
(b) The definition of “Accrual Period” in Section 1.01 of the Sale and Servicing Agreement is
hereby deleted in its entirety and replaced with the following:
“Accrual Period: With respect to the Notes, the preceding calendar month.”
SECTION 3. Amendment to Pricing Letter.
(a) The definition of “Make-Whole Premium” in Section 1 of the Pricing Letter is hereby
deleted in its entirety and replaced with the following:
“Make-Whole Premium: A fee payable by the Issuer to the Purchaser, (a) on the Payment
Date occurring five months following the date hereof (or, if sooner, the final Payment
Date), in an amount equal to (i) $1,250,000 minus (ii) the sum of any Commitment Fee
actually paid to the Note Purchaser plus all Interest Payment Amounts received by the Note
Purchaser since the date hereof.”
(b) Effective as of November 1, 2006, the definition of “Note Interest Rate” in Section 1 of
the Pricing Letter is hereby deleted in its entirety and replaced with the following:
“Note Interest Rate: For any Accrual Period, (a) in the case of any portion of the
Additional Note Principal Balance during such Accrual Period that is purchased by the
Conduit Purchaser, the CP Cost of Funds Rate plus the CP Margin and, if applicable, the
Additional CP Margin for such Accrual Period; and (b) in the case of any portion of the
Additional Note Principal Balance during such Accrual Period that is purchased by the
Committed Purchaser, a per annum interest rate equal to One-Month LIBOR for the related
LIBOR Determination Date plus the LIBOR Margin and, if applicable, the Additional LIBOR
Margin for such Accrual Period.”
(c) The definition of “CP Cost of Funds Rate” is hereby added to Section 1 of the Pricing
Letter as follows:
“CP Cost of Funds Rate”: The per annum rate equivalent to the weighted average of the
rates payable by the Conduit Purchaser in respect of its commercial paper outstanding on
such day that is allocated, in whole or in part, to fund or maintain its net investment in
the Additional Note Principal Balances, converted (as necessary) to an annual yield
equivalent rate calculated on the basis of a 360-day year, which rates shall include issuing
and paying agent fees and any placement agent or commercial paper fees and commissions.
(d) The definition of “CP Margin” is hereby added to Section 1 of the Pricing Letter as
follows:
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“CP Margin: With respect to each day, the percentage corresponding to the Loans
pledged to the Indenture Trustee on of such day, as set forth in the following table:
First Lien Mortgage Loans
|
0.50 | % | ||
Second Lien Mortgage Loans
|
0.50 | % | ||
Wet Funded Loans
|
0.70 | % | ||
30 days Delinquent Loan
|
1.00 | %” |
(e) The definition of “Additional CP Margin” is hereby added to Section 1 of the Pricing
Letter as follows:
“Additional CP Margin: With respect to each day, the percentage corresponding to the Unfunded
Transfer Obligation Percentage as of such day, as set forth in the following table:
| Unfunded Transfer Obligation Percentage: | Additional CP Margin: | |||
>=7.00% |
0.00 | % | ||
>=6.00%, but <7.00% |
0.375 | % | ||
>=5.00%, but <6.00% |
0.75 | % | ||
>=4.00%, but <5.00% |
1.00 | % | ||
<4.00% |
1.25 | % | ||
provided that the Additional CP Margin shall be equal to 3.00% upon the occurrence of an Event
of Default, any Termination Event or after the conditions for a Cleanup Call have been satisfied.”
SECTION 4. Representations. To induce the HSBC Entities to execute and deliver this
Amendment, each of the Issuer and the Depositor hereby jointly and severally represents to the HSBC
Entities that as of the date hereof, after giving effect to this Amendment, (a) all of its
respective representations and warranties in the Basic Documents are true and correct, and (b) it
is otherwise in full compliance with all of the terms and conditions of the Basic Documents.
SECTION 5. Fees and Expenses. The Issuer and the Depositor jointly and severally
covenant to pay as and when billed by the HSBC Entities all of the reasonable out-of-pocket costs
and expenses incurred in connection with the transactions contemplated hereby and in the other
Basic Documents including, without limitation, (i) all reasonable fees, disbursements and expenses
of counsel to the HSBC Entities, (ii) all reasonable fees and expenses of the Indenture Trustee and
Owner Trustee and their counsel and (iii) all reasonable fees and expenses of the Custodian and its
counsel.
SECTION 6. Limited Effect. Except as expressly amended and modified by this
Amendment, the Transaction Documents shall continue in full force and effect in accordance with its
terms. Reference to this Amendment need not be made in any of the Transaction Documents or any
other instrument or document executed in connection therewith, or in any certificate, letter or
communication issued or made pursuant to, or with respect to, the Transaction Documents, any
reference in any of such items to the Transaction Documents being sufficient to refer to the
Transaction Documents as amended hereby.
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SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS DOCTRINE
APPLIED IN SUCH STATE.
SECTION 8. Counterparts. This Amendment may be executed by each of the parties
hereto in any number of separate counterparts, each of which when so executed shall be an original
and all of which taken together shall constitute one and the same instrument.
SECTION 9. Limitation on Liability. It is expressly understood and agreed by the
parties hereto that (a) this Amendment is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee of Option One Owner Trust 2005-7 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 Amendment or any other related documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their duly authorized officers as of the day and year first above written.
| OPTION ONE OWNER TRUST 2005-7 | ||||||
| By: | Wilmington Trust Company, not in its individual capacity but solely as owner trustee | |||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| OPTION ONE LOAN WAREHOUSE CORPORATION | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| OPTION ONE MORTGAGE CORPORATION | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XXXXX FARGO BANK, N.A. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| HSBC BANK USA, N.A., as Committed Purchaser | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| BRYANT PARK FUNDING LLC, as Conduit Purchaser | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| HSBC SECURITIES (USA) INC., as Noteholder Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| HSBC SECURITIES (USA) INC., as Administrative Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
