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Exhibit 10.10
WAIVER
THIS
WAIVER (the " Waiver ") is entered into as of January _,
2007 by and among OPTION ONE OWNER TRUST 2003-4 (the "
Issuer "), OPTION ONE MORTGAGE CORPORATION (" OQMC ")
and OPTION ONE MORTGAGE CAPITAL CORPORATION (" OOMCC ,") and
together with OOMC in its capacity as loan originator in such
capacity, the " Loan Originator "), OOMC as servicer (in
such capacity, the " Servicer "), OPTION ONE LOAN WAREHOUSE
CORPORATION (the " Depositor ," and together with OOMC and
OOMCC, the " Entities "), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as indenture trustee (the " Indenture Trustee
") and the MAJORITY NOTEHOLDERS party hereto. Capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to them in the Sale and Servicing Agreement referred to
below.
PRELIMINARY STATEMENTS
A.
The Issuer, OOMC, OOMCC the Depositor and the Indenture Trustee are
parties to that certain Amended and Restated Sale and Servicing
Agreement dated as of August 5, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the " Sale
and Servicing Agreement" ) and the Basic Documents as defined
therein.
B.
Pursuant to Section 7.02(e) of the Sale and Servicing
Agreement, entitled "Financial Covenants," OOMC is required to
maintain a minimum "Net Income" (defined and determined in
accordance with GAAP) of at least $1 based on the total of the
current quarter combined with the previous three quarters (the "
Minimum Income Covenant "). Pursuant to the Basic Documents,
OOMC periodically represents and warrants its compliance with the
Minimum Income Covenant. In addition, under the Basic Documents, a
failure by OOMC to satisfy the Minimum Income Covenant, if not
waived, could be or become a Default, Event of Default or Servicing
Event of Default, as those terms are used in the Basic Documents,
or could result in a termination of the Revolving Period.
C.
OOMC now believes that the Minimum Income Covenant will not be
satisfied as of January 31, 2007. The Issuer has requested
that the Majority Noteholders temporarily waive the Minimum Income
Covenant, and, subject to the terms hereof, the Majority
Noteholders have agreed to temporarily waive the Minimum Income
Covenant on and subject to the terms and conditions hereinafter set
forth.
D.
The parties have also agreed to modify the circumstances in which
an Overcollateralization Shortfall is deemed not to exist, as
defined in the Pricing Side Letter identified in the Sale and
Servicing Agreement, as provided hereinbelow.
NOW,
THEREFORE, in consideration of the premises set forth above, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree
as follows:
1.
Accuracy of Preliminary Statements . The OO Entities agree
and represent that the foregoing Preliminary Statements are true
and correct in all respects.
2. (a) Temporary Waiver of
the Minimum Income Covenant. Effective as of the date first
above written and subject to the satisfaction of the conditions
precedent set forth in Section 3 below, the Majority
Noteholders hereby agree to waive, until April 27, 2007 only,
the Minimum Income Covenant.
(b)
Modification of Overcollateralization Shortfall Provisions.
Effective as of the date first above written and subject to the
satisfaction of the conditions precedent set forth in
Section 3 below,
(i) The definition of the term
"Overcollateralization Shortfall," as set forth in the Pricing Side
Letter, shall be applied as if the text of clause (i) in the
proviso were written as follows: "(i) if such Business Day is
not a Payment Date, an Overcollateralization Shortfall shall not
occur if the Note Principal Balance exceeds the Collateral Value on
such Business Day by an amount less than or equal to $250,000."
(ii)
Section 5.06(a)(iv) of the Sale and Servicing Agreement
is amended to delete such provision in its entirety and to
substitute the following new provision therefor:
"(iv) If on any Business Day
there exists an Overcollateralization Shortfall, the Loan
Originator shall on such Business Day deposit into the Transfer
Obligation Account the full amount of the Overcollateralization
Shortfall as of such date; and"
(iii) Section 5.05(f)
of the Sale and Servicing Agreement is amended to delete such
provision in its entirety and to substitute the following new
provision therefor:
"(f) If on any Business Day
there exists an Overcollateralization Shortfall, the Paying Agent
shall withdraw from the Transfer Obligation Account and deposit
into the Distribution Account on such Business Day the lesser of
(x) the amount then on deposit in the Transfer Obligation
Account and (y) the amount of such Overcollateralization
Shortfall as of such date."
(iv) Section 5.01(c)
of the Sale and Servicing Agreement is amended to add the following
new clause (5):
"(5) Withdrawals From
Distribution Account — Dates Other Than Payment Dates. On
each date on which a deposit is required to be made in the
Distribution Account in accordance with the terms of
Section 5.05(f) hereof, the Paying Agent shall make a
withdrawal therefrom of such deposit and distribute such deposit to
the holders of the Notes pro rata for application to the related
Overcollateralization Shortfall."
(v) The definition of the term
"Event of Default," as set forth in the Sale and Servicing
Agreement, shall be amended to add the following new sentence
thereto:
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"In addition, any of the following
shall constitute an ‘Event of Default’ hereunder:
(i) the failure on any Business Day of a deposit to be made to
the Transfer Obligation Account under
Section 5.06(a)(iv), (ii) the failure on any
Business Day of a deposit to be made to the Distribution Account
under Section 5.05(f) or (iii) the failure on any
Business Day of a withdrawal and application to be made under
Section 5.01(c)(5), in each case in the full amount of
the Overcollateralization Shortfall existing on such Business
Day."
(c) Waiver of Payment Delay
. Effective as of the date first above written and subject to the
satisfaction of the conditions precedent set forth in
Section 3 below, the Majority Noteholders hereby agree
to waive the failure to timely and accurately report, or to timely
and fully make any payment or distribution in respect of, any
Overcollateralization Shortfall at any time prior to the date
hereof.
3. Condition Precedent .
This Waiver shall become effective and be deemed effective as of
the date first above written upon (i) receipt by OOMC of
an
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