Exhibit 10.3
EXECUTION COPY
MASTER RECEIVABLES PURCHASE AGREEMENT
between
HOUSEHOLD AUTOMOTIVE FINANCE CORPORATION,
as Seller
and
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
dated as of
November 18, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS..........................................................1
SECTION 1.1 General...........................................................1
SECTION 1.2 Specific Terms....................................................1
SECTION 1.3 Other Definitional Provisions.....................................2
SECTION 1.4 Certain References................................................2
SECTION 1.5 No Recourse.......................................................3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY........3
SECTION 2.1 Purchase..........................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................5
SECTION 3.1 Representations and Warranties of Seller..........................5
SECTION 3.2 Representations and Warranties of HARC............................7
ARTICLE IV COVENANTS OF SELLER..................................................8
SECTION 4.1 Seller's Covenants................................................8
ARTICLE V REPURCHASES..........................................................9
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty.................9
SECTION 5.2 Reassignment of Repurchased Receivables..........................10
SECTION 5.3 Waivers..........................................................10
ARTICLE VI MISCELLANEOUS.......................................................11
SECTION 6.1 Liability of Seller..............................................11
SECTION 6.2 Amendment........................................................11
SECTION 6.3 GOVERNING LAW....................................................11
SECTION 6.4 Notices..........................................................11
SECTION 6.5 Severability of Provisions.......................................11
SECTION 6.6 Assignment.......................................................11
SECTION 6.7 Acknowledgment and Agreement of Seller...........................12
SECTION 6.8 Further Assurances...............................................12
SECTION 6.9 No Waiver; Cumulative Remedies...................................12
SECTION 6.10 Counterparts.....................................................12
SECTION 6.11 Binding Effect; Third-Party Beneficiaries........................12
SECTION 6.12 Merger and Integration...........................................13
SECTION 6.13 Heading..........................................................13
SECTION 6.14 Schedules and Exhibits...........................................13
SECTION 6.15 Survival of Representations and Warranties.......................13
SECTION 6.16 Nonpetition Covenant.............................................13
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EXHIBITS
EXHIBIT A Form of Receivables Purchase Agreement Supplement
SCHEDULE A Schedule of Related Master Sale and Servicing Agreements
ii
THIS
MASTER RECEIVABLES PURCHASE AGREEMENT, dated as of November 18,
2002, executed between
Household Auto Receivables Corporation, a Nevada
corporation, as purchaser ("HARC") and Household Automotive Finance Corporation,
a Delaware corporation, as seller ("SELLER").
W I T N E S S E T H :
WHEREAS, HARC has agreed to purchase from time to time from Seller,
and Seller, pursuant to this Agreement, has agreed to transfer from time to time
to HARC the Receivables and the Other Conveyed Property.
WHEREAS, HARC intends from time to time to transfer Receivables and
Other Conveyed Property to different Delaware business trusts, each of which
will issue notes and certificates secured by the Receivables and Other Conveyed
Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, HARC and Seller, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
related Master Sale and Servicing Agreement.
SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"AGREEMENT" means this
Master Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"CONVEYANCE" shall have the meaning specified in Section 2.1.
"CONVEYANCE PAPERS" shall have the meaning specified in Section 3.1.
"CUTOFF DATE" shall have the meaning assigned to such term in the
applicable Series Supplement or Receivables Purchase Agreement Supplement.
"MASTER SALE AND SERVICING AGREEMENT" means each agreement so entitled
set forth on Schedule A among HARC, Household Finance Corporation, as Master
Servicer, the indenture trustee named therein and the issuer named therein, each
as supplemented by a related series supplement among HARC, Household Finance
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Corporation, as Master Servicer, the indenture trustee named therein, the issuer
named therein and the owner trustee named therein, pursuant to which Receivables
are conveyed by HARC to such issuer.
"OTHER CONVEYED PROPERTY" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the related Indenture (including all property and interests
granted to the related Indenture Trustee), including all proceeds thereof, other
than the Receivables.
"PURCHASE DATE" means, with respect to Receivables, any date, on which
Receivables are to be purchased by HARC pursuant to this Agreement and a
Receivables Purchase Agreement Supplement is executed and delivered by Seller
and HARC.
"RECEIVABLES" means the Receivables listed on the Schedules of
Receivables attached to a Receivables Purchase Agreement Supplement as Schedule
A.
"RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT" means an agreement between
HARC and Seller in connection with a Series, substantially in the form of
Exhibit A hereto.
"REPURCHASE EVENT" means a determination pursuant to Section 3.2 of
the related Master Sale and Servicing Agreement that HARC is required to
repurchase a Receivable.
"SCHEDULE OF RECEIVABLES" means a schedule of Receivables sold and
transferred pursuant to this Agreement and a related Receivables Purchase
Agreement Supplement, which is attached as Schedule A to such related
Receivables Purchase Agreement Supplement.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other documents, or Conveyance Paper made
or delivered pursuant hereto unless otherwise defined herein.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
any Receivable, and of any collections thereof, shall be made in accordance with
the related Master Sale and Servicing Agreement.
SECTION 1.4 CERTAIN REFERENCES. All references to the Principal
Balance of a Receivable as of any date of determination shall refer to the close
of
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business on such day, or as of the first day of a Collection Period shall refer
to the opening of business on such day. All references to the last day of a
Collection Period shall refer to the close of business on such day.
SECTION 1.5 NO RECOURSE. Without limiting the obligations of Seller
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of Seller,
or of any predecessor or successor of Seller.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 PURCHASE.
(a) By execution of this Agreement and subject to the terms and
conditions of this Agreement, on a Purchase Date with respect to a Receivables
Purchase Agreement Supplement, Seller shall sell, transfer, assign, and
otherwise convey to HARC (each, a "CONVEYANCE") without recourse (but without
limitation of its obligations in this Agreement), and HARC shall purchase, all
right, title and interest of Seller in and to:
(i) each and every Receivable listed from time to time on
Schedule A to such related Receivables Purchase Agreement Supplement
and all monies paid or payable thereon or in respect thereof on or
after the related Cutoff Date (including amounts due on or before the
related Cutoff Date but received by Seller after such date);
(ii) the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Receivables and any other
interest of Seller in such Financed Vehicles;
(iii) all rights of Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with
respect to such Receivables repurchased by a Dealer pursuant to a
Dealer Agreement;
(v) all rights of Seller under any Service Contracts on the
related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with
respect to the related Receivables from claims on any physical damage,
loss, credit life or disability insurance policies, if any, covering
Financed Vehicles or Obligors, including rebates of insurance premiums
relating to
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the Receivables and any proceeds from the liquidation of such
Receivables;
(vii) all items contained in the Receivables Files with
respect to such Receivables and any and all other documents that
Seller or Master Servicer keeps on file in accordance with its
customary procedures relating to the related Receivables, or the
related Financed Vehicles or Obligor;
(viii) all property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that
has been acquired by or on behalf of HARC pursuant to the liquidation
of such Receivable; and
(ix) all present and future claims, demands, causes and
choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash or
other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
(b) Simultaneously with each Conveyance, HARC will pay or cause to be
paid to or upon the order of Seller an amount equal to 100% of the Principal
Balance of the related Receivables on the books and records of Seller, plus the
present value of anticipated excess spread on such Receivables, discounted to
take into account any uncertainty as to future performance matching historical
performance, servicing fees, delinquencies, pay down rates, yield and such other
factors as may be mutually agreed upon between Seller and HARC, by wire transfer
of immediately available funds.
(c) In connection with each Conveyance, Seller further agrees that it
will, at its own expense, on or prior to the related Purchase Date (i) indicate
in its computer files or microfiche lists that the related Receivables have been
conveyed to HARC in accordance with this Agreement and the related Receivables
Purchase Agreement Supplement, and have been conveyed by HARC to the related
Indenture Trustee pursuant to the related Master Sale and Servicing Agreement
for the benefit of the related Secured Parties by including in such computer
files and microfiche lists the code identifying each such Receivable and (ii)
deliver to HARC (or to the related Indenture Trustee if HARC so directs) a
computer file or microfiche list containing a true and complete list of all such
Receivables specifying for each such Receivable, as of the Cutoff Date (A) its
account number and (B) the outstanding balance of such Receivable. Such computer
files or microfiche lists shall be delivered to HARC (or to the related
Indenture Trustee if so directed by HARC) and marked as proprietary and
confidential. Seller further agrees not
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to alter the code referenced in clause (i) of this paragraph with respect to any
Receivable during the term of this Agreement.
(d) The parties hereto intend that each Conveyance shall constitute a
sale of the Seller's right, title and interest in and to the related Receivables
and Other Conveyed Property, conveying good title free and clear of any liens,
claims, encumbrances or rights of others from Seller to HARC and that the such
Receivables and Other Conveyed Property subject to such Conveyance shall not be
part of Seller's estate in the event of the insolvency of Seller or a
conservatorship, receivership or similar event with respect to Seller. It is the
intention of the parties hereto that the arrangements with respect to each
Conveyance of Receivables and Other Conveyed Property shall constitute a
purchase and sale of such Receivables and Other Conveyed Property and not a
loan. In the event, however, that a court of competent jurisdiction were to hold
that the transactions evidenced hereby constitute a loan and not a purchase and
sale, it is the intention of the parties hereto that this Agreement shall
constitute a security agreement under applicable law, and that Seller shall be
deemed to have granted to HARC a first priority perfected security interest in
all of such Seller's right, title and interest in and to the Receivables and
Other Conveyed Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes
the representations and warranties set forth in Section 3.1(b) through (h) as of
each Purchase Date on which HARC relies in purchasing the Receivables and the
Other Conveyed Property subject to the related Conveyance and in transferring
the Receivables and the Other Conveyed Property to the Issuer under the related
Master Sale and Servicing Agreement. The representations set forth in Section
3.1(a), on which HARC relies in purchasing the Receivables and the Other
Conveyed Property subject to the related Conveyance and in transferring the
Receivables and the Other Conveyed Property to the Issuer under the related
Master Sale and Servicing Agreement, are made with respect to Receivables and
Other Conveyed Property conveyed hereunder, as of the execution and delivery of
the related Receivables Purchase Agreement Supplement, but shall, together with
the representations and warranties set forth in Section 3.1(b) through (h),
survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property hereunder, and the sale, transfer and assignment thereof by
HARC to the Issuer under each Master Sale and Servicing Agreement. Seller and
HARC agree that HARC will assign to Issuer all HARC's rights under this
Agreement and each Receivables Purchase Agreement Supplement and that the
Indenture Trustee will thereafter be entitled to enforce this Agreement and each
Receivables Purchase Agreement Supplement against Seller in the Indenture
Trustee's own name on behalf of the Securityholders.
(a) ELIGIBILITY CRITERIA. Each of the Receivables which is to be
pledged as collateral for a Series of Notes will satisfy the applicable
Eligibility Criteria set forth in, or to be set forth in, Schedule I to the
Series Supplement establishing such Series.
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(b) ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized and validly existing in good standing under the laws of the state of
Delaware and has, in all material respects, full power and authority to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(c) DUE OBLIGATION. Seller is duly qualified to do business and is in
good standing as a foreign corporation (or is exempt from such requirements) and
has obtained all necessary licenses and approvals, in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would (i) render
any Receivable unenforceable by Seller, HARC or any Trust and (ii) have a
material adverse effect on any Secured Parties.
(d) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement and any other document or instrument delivered pursuant hereto (such
other documents and instruments, including, but not limited to, the Receivables
Purchase Agreement Supplement collectively, the "CONVEYANCE PAPERS") and the
consummation of the transactions provided for in this Agreement or any other
Conveyance Papers have been duly authorized by all necessary corporate action on
the part of Seller and constitute or will constitute the legal, valid and
binding obligation of Seller, enforceable in accordance with their terms.
(e) NO CONFLICT. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms of this
Agreement and the Conveyance Papers applicable to Seller will not conflict with,
violate or result in any breach of any of the material terms and provisions of,
or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which Seller is a party or by which it or any of its
properties are bound.
(f) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers and the fulfillment of the terms
contemplated herein and therein applicable to Seller will not conflict with or
violate any requirements of law applicable to Seller.
(g) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best knowledge of Seller, threatened against Seller, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of Seller, would
materially and adversely affect the performance by Seller of its obligations
under this Agreement or the Conveyance Papers, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or the Conveyance Papers or (v) seeking to affect adversely
the income tax attributes of any Trust under United States Federal, Nevada or
California income tax systems.
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(h) ALL CONSENTS. All authorizations, consents, orders, approvals,
registrations or declarations with, or of, any Governmental Authority required
to be obtained, effected or given by Seller in connection with the execution and
delivery by Seller of this Agreement or the Conveyance Papers and the
performance of the transactions contemplated by this Agreement or the Conveyance
Papers by Seller have been duly obtained, effected or given and are in full
force and effect.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF HARC. HARC makes the
representations and warranties set forth in Section 3.2 (a) through (f) as of
each Purchase Date, on which Seller relies in selling, assigning, transferring
and conveying the Receivables and the Other Conveyed Property subject to the
related conveyance to HARC hereunder. The representations are made with respect
to Receivables and Other Conveyed Property conveyed hereunder, as of the
execution and delivery of the related Receivables Purchase Agreement Supplement,
but shall survive the sale, transfer and assignment of the Receivables and the
Other Conveyed Property hereunder and the sale, transfer and assignment thereof
by HARC to the related Issuer under each Master Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. HARC is a corporation duly
organized and validly existing under the laws of the State of Nevada and has, in
all material respects, full power and authority to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations under
this Agreement and the Conveyance Papers.
(b) DUE AUTHORIZATION. The execution and delivery of this Agreement
and the Conveyance Papers and the consummation of the transactions provided for
in this Agreement and the Conveyance Papers have been duly authorized by HARC by
all necessary corporate action on the part of HARC.
(c) NO CONFLICT. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which HARC is a party or by which it or its
properties is bound.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers by HARC and the fulfillment of the terms
contemplated herein and therein applicable to HARC will not conflict with or
violate any requirements of law applicable to HARC.
(e) NO PROCEEDING. There are no proceedings or investigations pending
or, to the best knowledge of HARC, threatened against HARC, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to
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prevent the consummation of any of the transactions contemplated by this
Agreement or the Conveyance Papers, (iii) seeking any determination or ruling
that, in the reasonable judgment of HARC, would materially and adversely affect
the performance by HARC of its obligations under this Agreement or the
Conveyance Papers or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this Agreement
or the Conveyance Papers.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental Authority required to be
obtained, effected or given by HARC in connection with the execution and
delivery by HARC of this Agreement and the Conveyance Papers and the performance
of the transactions contemplated by this Agreement and the Conveyance Papers or
the fulfillment of the terms of this Agreement and the Conveyance Papers by HARC
have been duly obtained.
In the event of any breach of a representation and warranty made by
HARC hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by any Trust have been paid in full. Seller and HARC agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by HARC, the related Issuer or by the
related Indenture Trustee on behalf of the related Secured Parties and the
related Owner Trustee on behalf of the related Certificateholders. Seller agrees
that with respect to its obligations in connection with a Repurchase Event it
will exercise no rights of offset with respect to any claims it may have against
HARC.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 SELLER'S COVENANTS. Seller hereby covenants and agrees
with HARC as follows:
(a) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Seller will
take no action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder or as
otherwise provide herein, Seller will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with HARC's ownership of
the Receivables and Other Conveyed Property or grant, create, incur, assume or
suffer to exist any Lien on any Receivable or any Other Conveyed Property,
whether now existing or hereafter created, or any interest therein, and Seller
shall not claim any ownership interest in the Receivables or any Other Conveyed
Property and shall defend the right, title and interest of HARC in and to the
Receivables and Other Conveyed Property, whether now existing or hereafter
created, against all claims of third parties claiming through or under Seller.
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(c) SECURITY'S INTEREST. Except for the conveyances hereunder and in
connection with any transaction permitted pursuant to Section 6.6, Seller hereby
agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the Receivables or any
Other Conveyed Property and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. In the event that Seller
receives collections or recoveries with respect to the Receivables, Seller
agrees to pay to HARC (or to the Master Servicer if HARC so directs) all such
collections and recoveries to the extent such amounts are payable to HARC as
soon as practicable after receipt thereof.
(e) NOTICE OF LIENS. Seller shall notify HARC promptly after becoming
aware of any Lien on any Receivable or any Other Conveyed Property other than
the conveyances hereunder.
(f) DOCUMENTATION OF TRANSFER. Seller shall undertake to file the
documents which would be necessary to perfect and maintain the transfer of the
security interest in and to the Receivables and Other Conveyed Property.
(g) APPROVAL OF OFFICE RECORDS. Seller shall cause this Agreement to
be duly approved by Seller's Board of Directors, and Seller shall maintain this
Agreement as a part of the official records of Seller for the term of this
Agreement.
(h) MAINTENANCE OF SECURITY INTERESTS IN VEHICLES. In the event that
the assignment of a Receivable to HARC or any assignee thereof is insufficient,
without a notation on the related Financed Vehicle's certificate of title, or
without fulfilling any additional administrative requirements under the laws of
the state in which the Financed Vehicle is located, to perfect a security
interest in the related Financed Vehicle in favor of HARC or any assignee
thereof, Seller hereby agrees that the designation of Seller or any Affiliate of
Seller as the secured party on the certificate of title is in its capacity as
agent of HARC or the agent of any assignee of HARC for such limited purpose.
ARTICLE V
REPURCHASES
SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY. Upon
the occurrence of a Repurchase Event, Seller shall, unless the breach which is
the subject of such Repurchase Event shall have been cured in all material
respects, repurchase the Receivable relating thereto from the related Issuer
under the related Master Sale and Servicing Agreement by the last day of the
first full calendar month following the discovery of such breach by Seller or
receipt by Seller of notice of such breach from any of the Master Servicer,
HARC, a Trust Officer of the related Indenture Trustee or the related Owner
Trustee and, simultaneously with the repurchase of the Receivable, Seller shall
deposit the Repurchase Amount in full, without deduction or offset, in the
Collection Account, pursuant to Section 3.2 of the related Master Sale and
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Servicing Agreement. It is understood and agreed that, except as set forth in
Section 6.1 hereof, the obligation of Seller to repurchase any Receivable, as to
which a breach occurred and is continuing, shall, if such obligation is
fulfilled, constitute the sole remedy against Seller for such breach available
to HARC, the related Issuer, the related Secured Parties, the related
Certificateholders, the related Indenture Trustee on behalf of the related
Noteholders or the related Owner Trustee on behalf of the related
Certificateholders. The provisions of this Section 5.1 are intended to grant the
related Indenture Trustee or the related Issuer a direct right against Seller to
demand performance hereunder, and in connection therewith, Seller waives any
requirement of prior demand against HARC with respect to such repurchase
obligation. Any such repurchase shall take place in the manner specified in
Section 3.2 of the related Master Sale and Servicing Agreement. Notwithstanding
any other provision of this Agreement or the related Master Sale and Servicing
Agreement to the contrary, the obligation of Seller under this Section shall not
terminate upon a termination of Household Finance Corporation as Master Servicer
under the related Master Sale and Servicing Agreement and shall be performed in
accordance with the terms hereof notwithstanding the failure of the Master
Servicer or HARC to perform any of their respective obligations with respect to
such Receivable under the related Master Sale and Servicing Agreement.
SECTION 5.2 REASSIGNMENT OF REPURCHASED RECEIVABLES. Upon deposit
in the Collection Account of the Repurchase Amount of any Receivable repurchased
by Seller under Section 5.1 hereof, HARC and the related Issuer shall take such
steps as may be reasonably requested by Seller in order to assign to Seller all
of HARC's and the related Issuer's right, title and interest in and to such
Receivable and all security and documents and all Other Conveyed Property
conveyed to HARC and the related Issuer directly relating thereto, without
recourse, representation or warranty, except as to the absence of liens, charges
or encumbrances created by or arising as a result of actions of HARC or the
related Issuer. Such assignment shall be a sale and assignment outright, and not
for security. If, following the reassignment of a Repurchased Receivable, in any
enforcement suit or legal proceeding, it is held that Seller may not enforce any
such Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Receivable, HARC and the related Issuer shall, at
the expense of Seller, take such steps as Seller deems reasonably necessary to
enforce the Receivable, including bringing suit in HARC's or in the related
Issuer's name.
SECTION 5.3 WAIVERS. No failure or delay on the part of HARC, or
the related Issuer as assignee of HARC, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIABILITY OF SELLER. Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
SECTION 6.2 AMENDMENT. This Agreement and any Conveyance Papers and
the rights and obligations of the parties hereunder may not be changed orally,
but only by an instrument in writing signed by HARC and Seller in accordance
with this Section 6.2. This Agreement and any Conveyance Papers may be amended
from time to time by HARC and Seller only with the prior written consent of all
of the Secured Parties.
SECTION 6.3 GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 6.4 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of Seller, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Chief Operating Officer, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Director--Asset Securitization, (b) in the case of
HARC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Compliance
Officer, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasurer; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
SECTION 6.5 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement or Conveyance
Paper shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement or any Conveyance
Paper and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of any Conveyance Paper.
SECTION 6.6 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, other than HARC's assignment of its rights, title, and
interests in, to, and under this Agreement to the Issuer specified in a Master
Sale and Servicing Agreement (which Issuer shall assign such rights, title and
interest in and to this Agreement to the related Indenture Trustee for the
benefit of the related Secured Parties), as contemplated by the Master Sale and
Servicing Agreement and Section 6.7 hereof, the Receivables, the Other Conveyed
Property, this Agreement and all other Conveyance
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Papers may not be assigned by the parties hereto; PROVIDED, HOWEVER, that Seller
shall have the right to assign its rights, title and interests, in to and under
this Agreement to (i) any successor by merger or consolidation, or any Person
which acquires by conveyance, transfer or sale the properties and assets of
Seller or (ii) any Affiliate owned directly or indirectly by Household
International, Inc. The right granted in the foregoing proviso is subject to the
further condition that any such successor or other Person shall expressly assume
by written agreement, in form and substance satisfactory to HARC, the
obligations of Seller hereunder and under the Conveyance Papers.
SECTION 6.7 ACKNOWLEDGMENT AND AGREEMENT OF SELLER. By execution
below, Seller expressly acknowledges and agrees that all of HARC's right, title,
and interest in, to, and under this Agreement, including, without limitation,
all of HARC's right title, and interest in and to the Receivables purchased
pursuant to this Agreement, shall be assigned by HARC to an Issuer specified in
a Master Sale and Servicing Agreement and by such Issuer to the related
Indenture Trustee for the benefit of the related Secured Parties, and Seller
consents to such assignment. Additionally, Seller agrees for the benefit of such
Indenture Trustee that any amounts payable by Seller to HARC hereunder which are
to be paid by HARC to such Indenture Trustee for the benefit of the related
Secured Parties shall be paid by Seller, on behalf of HARC, directly to such
Indenture Trustee. Any payment required to be made on or before a specified date
in same-day funds may be made on the prior business day in next-day funds.
SECTION 6.8 FURTHER ASSURANCES. HARC and Seller agree to do and
perform, from time to time, any and all acts to authenticate any and further
records, to execute any and further instruments, in each case required or
reasonably requested by the other party more fully to effect the purposes of
this Agreement and the Conveyance Papers, including, without limitation, the
execution of any financing statements or continuation statements or equivalent
documents relating to the Receivables for filing under the provisions of the UCC
or other law of any applicable jurisdiction.
SECTION 6.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of HARC or Seller, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
SECTION 6.10 COUNTERPARTS. This Agreement and all Conveyance Papers
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 6.11 BINDING EFFECT; THIRD-PARTY BENEFICIARIES. This
Agreement and the Conveyance Papers will inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Each of the Indenture Trustee and Issuer with respect to a Master Sale and
Servicing Agreement and
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the related Owner Trustee shall be considered a third-party beneficiary of this
Agreement.
SECTION 6.12 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers. This Agreement and the Conveyance Papers may not be modified,
amended, waived or supplemented except as provided herein.
SECTION 6.13 HEADING. The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 6.14 SCHEDULES AND EXHIBITS. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this Agreement
and are incorporated into this Agreement for all purposes.
SECTION 6.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements contained in this Agreement or
contained in any Conveyance Paper, shall remain operative and in full force and
effect and shall survive conveyance of the Receivables by HARC to the Issuer
pursuant to the Master Sale and Servicing Agreement and the pledge thereof by
the Issuer to the Indenture Trustee pursuant to the related Indenture and the
related Series Supplement.
SECTION 6.16 NONPETITION COVENANT. Until the date which is one year
and one day after payment in full of all the Notes of all Series, neither HARC
nor Seller shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
Seller or any Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of Seller or any Issuer or any
substantial part of their respective properties, or ordering the winding up or
liquidation of the affairs of Seller or any Issuer. This provision shall survive
the termination of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this
Master Receivables
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.
HOUSEHOLD AUTOMOTIVE FINANCE CORPORATION
as Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President &
Chief Financial Officer
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Assistant
Treasurer
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EXHIBIT A
FORM OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT
Transfer No. __ of Receivables, dated as of ___________________,
pursuant to a
Master Receivables Purchase Agreement (the "PURCHASE AGREEMENT")
dated as of November 18, 2002, between Household Automotive Finance Corporation,
a Delaware corporation ("SELLER") and
Household Auto Receivables Corporation, a
Nevada corporation ("HARC").
W I T N E S S E T H :
WHEREAS pursuant to the Purchase Agreement, Seller wishes to convey
Receivables and Other Conveyed Property to HARC; and
WHEREAS, HARC is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, Seller and HARC hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement unless otherwise defined
herein.
"CUTOFF DATE" shall mean with respect to the Receivables conveyed
hereby, the close of business on ___________________, 200_.
"MASTER SALE AND SERVICING AGREEMENT" means the agreement dated as of
____________, _____ among HARC, Household Finance Corporation, as Master
Servicer, _______________, as indenture trustee and ________________, as issuer.
"PURCHASE DATE" shall mean with respect to the Receivables conveyed
hereby, ___________________, 200_.
"PURCHASE PRICE" shall mean 100% of the Principal Balance of the
Receivables on the books and records of Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, paydown rates, yield and such other factors as
may be mutually agreed upon by Seller and HARC.
"TRANSFER DATE" means, with respect to Receivables, the date on which
Receivables and Other Conveyed Property are to be transferred to the Trust
pursuant to the Master Sale and Servicing Agreement.
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2. SCHEDULE OF RECEIVABLES. Annexed as Schedule A hereto is a
computer file which reflects the Receivables that constitute the Receivables to
be conveyed pursuant to this Agreement on the Purchase Date.
3. CONVEYANCE OF RECEIVABLES. In consideration of HARC's delivery to
or upon the order of Seller of the Purchase Price, Seller does hereby sell,
transfer, assign, set over and otherwise convey to HARC, without recourse
(except as expressly provided in the Purchase Agreement), all right, title and
interest of Seller in and to:
(i) each and every Receivable listed on Schedule A hereto and all
monies paid or payable thereon or in respect thereof on or after the Cutoff
Date (including amounts due on or before the Cutoff Date but received by
Seller after such date);
(ii) the security interests in the related Financed Vehicles granted
by Obligors pursuant to such Receivables and any other interest of Seller
in such Financed Vehicles;
(iii) all rights of Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with respect to
such Receivables repurchased by a Dealer pursuant to a Dealer Agreement;
(v) all rights of Seller under any Service Contracts on the related
Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with respect to
the related Receivables from claims on any physical damage, loss, credit
life or disability insurance policies, if any, covering Financed Vehicles
or Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such Receivables;
(vii) all items contained in the Receivables Files with respect to such
Receivables and any and all other documents that Seller or the Master
Servicer keeps on file in accordance with its customary procedures relating
to the related Receivables, or the related Financed Vehicles or Obligor;
(viii) all property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that has
been acquired by or on behalf of HARC pursuant to liquidation of such
Receivable;
(ix) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and
A-2
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds
of any of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Purchase
Date, Seller hereby makes the representations and warranties to HARC that are
set forth in Section 3.1 of the Purchase Agreement with respect to the
Conveyance effected hereby to the same extent as if set forth in full herein.
5. REPRESENTATIONS AND WARRANTIES OF HARC. As of the Purchase Date,
HARC hereby makes the representations and warranties to Seller that are set
forth in Section 3.2 of the Purchase Agreement with respect to the Conveyance
effected hereby to the same extent as if set forth in full herein. In the event
of any breach of a representation and warranty made by HARC hereunder, Seller
covenants and agrees that it will not take any action to pursue any remedy that
it may have hereunder, in law, in equity or otherwise, until a year and a day
have passed since the date on which all Notes and Certificates issued by the
Trust have been paid in full. Seller and HARC agree that damages will not be an
adequate remedy for such breach and that this covenant may be specifically
enforced by HARC, the related Issuer or by the related Indenture Trustee on
behalf of the related Secured Parties and the related Owner Trustee on behalf of
the related Certificateholders.
6. CONDITIONS PRECEDENT. The obligation of HARC to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Purchase Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by Seller in Section 4 of this Agreement and in Section 3.1 of
the
Master Receivables Purchase Agreement shall be true and correct as of the
date of this Agreement and as of the Purchase Date.
(b) ADDITIONAL INFORMATION. Seller shall have delivered to HARC such
information as was reasonably requested by HARC to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4 of this
Agreement and in Section 3.1 of the Purchase Agreement and (ii) the satisfaction
of the conditions set forth in this Section.
7. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Purchase Agreement is in all respects ratified and confirmed and the Purchase
Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
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9. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY TO
THE ISSUER. Seller acknowledges that HARC intends, pursuant to the related
Master Sale and Servicing Agreement, to convey the Receivables and the Other
Conveyed Property, together with its rights under this Agreement, to the related
Issuer on the Transfer Date. The Seller acknowledges and consents to such
conveyance and pledge and waives any further notice thereof and covenants and
agrees that the representations and warranties of the Seller contained in this
Agreement and the rights of HARC hereunder are intended to benefit the related
Issuer, the related Owner Trustee, the related Indenture Trustee, the related
Secured Parties and the related Certificateholders. In furtherance of the
foregoing, the Seller covenants and agrees to perform its duties and obligations
hereunder, in accordance with the terms hereof for the benefit of the related
Issuer, the related Owner Trustee, the related Indenture Trustee and the related
Secured Parties and that, notwithstanding anything to the contrary in this
Agreement, the Seller shall be directly liable to the related Issuer, the
related Owner Trustee, the related Indenture Trustee and the related Secured
Parties (notwithstanding any failure by the Master Servicer or HARC to perform
their respective duties and obligations hereunder or under any Basic Document)
and that the related Indenture Trustee may enforce the duties and obligations of
Seller under this Agreement against Seller for the benefit of the related
Secured Parties and the related Owner Trustee.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, Seller and HARC have caused this Purchase
Agreement to be duly executed and delivered by their respective duly authorized
officers as of day and the year first above written.
HOUSEHOLD AUTOMOTIVE FINANCE CORPORATION,
as Seller
By:
-------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By:
-------------------------------------
Name:
Title:
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SCHEDULE A
SCHEDULE OF RELATED MASTER SALE AND SERVICING AGREEMENTS
(1) Master Sale and Servicing Agreement dated as of November 18, 2002, among
Household Finance Corporation, as Master Servicer, Household Automotive Trust
2002-3, as Issuer,
Household Auto Receivables Corporation, as Seller and U.S.
Bank National Association, as Indenture Trustee.