EXECUTION COPY
MASTER SALE AND SERVICING AGREEMENT
among
HOUSEHOLD AUTOMOBILE REVOLVING TRUST I,
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
HOUSEHOLD FINANCE CORPORATION,
Master Servicer
and
THE CHASE MANHATTAN BANK,
Trustee
Amended and Restated as of November 1, 1998
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1. Definitions 1
SECTION 1.2. Other Interpretive Provisions 19
SECTION 1.3. Usage of Terms 20
SECTION 1.4. Certain References 20
SECTION 1.5. No Recourse 20
SECTION 1.6. Action by or Consent of Noteholders 20
SECTION 1.7. Material Adverse Effect 21
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables 21
SECTION 2.2. Further Encumbrance of Series Trust
Estate 24
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller 25
SECTION 3.2. Repurchase upon Breach 25
SECTION 3.3. Custody of Receivables Files 26
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of the Master Servicer 26
SECTION 4.2. Collection of Receivable Payments;
Modifications of Receivables 28
SECTION 4.3. Realization Upon Receivables 29
SECTION 4.4. Insurance 31
SECTION 4.5. Maintenance of Security Interests in
Vehicles 31
SECTION 4.6. Covenants, Representations, and
Warranties of Master Servicer 32
SECTION 4.7. Repurchase of Receivables Upon Breach of
Covenant 33
SECTION 4.8. Total Servicing Fee; Payment of Certain
Expenses by Master Servicer 33
SECTION 4.9. Master Servicer's Certificate 33
SECTION 4.10.Annual Statement as to Compliance, Notice
of Master Servicer Termination Event 34
SECTION 4.11.Annual Independent Accountants' Report 34
SECTION 4.12.Access to Certain Documentation and
Information Regarding Receivables 35
SECTION ▇.▇▇.▇▇▇▇▇▇▇▇ Bond and Errors and Omissions
Policy 35
SECTION 4.14.Year 2000 Compliance 35
ARTICLE V
Trust Accounts; Distributions;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts 36
SECTION 5.2. Certain Reimbursements to the Master
Servicer 38
SECTION 5.3. Application of Collections 38
SECTION 5.4. Additional Deposits 38
SECTION 5.5. Distributions 38
ARTICLE VI
RESERVED
ARTICLE VII
RESERVED
ARTICLE VIII
The Seller
SECTION 8.1. Representations of Seller 39
SECTION 8.2. Corporate Existence 41
SECTION 8.3. Liability of Seller; Indemnities 42
SECTION 8.4. Merger or Consolidation of, or Assumption
of the Obligations of, Seller 43
SECTION 8.5. Limitation on Liability of Seller and
Others 43
SECTION 8.6. Seller May Own Certificates or Notes 43
ARTICLE IX
The Master Servicer
SECTION 9.1. Representations of Master Servicer 44
SECTION 9.2. Liability of Master Servicer; Indemnities 46
SECTION 9.3. Merger or Consolidation of, or Assumption
of the Obligations of the Master Servicer 47
SECTION 9.4. Limitation on Liability of Master
Servicer and Others 48
SECTION 9.5. Delegation of Duties 49
SECTION 9.6. Master Servicer Not to Resign 49
SECTION 9.7. Sub-Servicing Agreements Between Master
Servicer and Sub-Servicers 49
SECTION 9.8. Successor Sub-Servicers 50
ARTICLE X
Default
SECTION 10.1.Master Servicer Termination Event 50
SECTION 10.2.Consequences of a Master Servicer
Termination Event 52
SECTION 10.3.Appointment of Successor 52
SECTION 10.4.Notification to Noteholders and
Certificateholders 53
SECTION 10.5.Waiver of Past Defaults 54
SECTION 10.6.Successor to Master Servicer 54
ARTICLE XI
Termination
SECTION 11.1.Optional Purchase of All Receivables 54
ARTICLE XII
Administrative Duties of the Master Servicer
SECTION 12.1.Administrative Duties. 55
SECTION 12.2.Records 57
SECTION 12.3.Additional Information to be Furnished to
the Issuer 57
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.1. Amendments 58
SECTION 13.2. Protection of Title to Trust 59
SECTION 13.3. Notices 61
SECTION 13.4. Assignment 61
SECTION 13.5. Limitations on Rights of Others 61
SECTION 13.6. Severability 62
SECTION 13.7. Separate Counterparts 62
SECTION 13.8. Headings 62
SECTION 13.9. Governing Law 62
SECTION 13.10. Assignment to Trustee 62
SECTION 13.11. Nonpetition Covenants 62
SECTION 13.12. Limitation of Liability of Owner Trustee 63
SECTION 13.13. Independence of the Master Servicer 63
SECTION 13.14. No Joint Venture 63
EXHIBITS
Exhibit A - Form of Servicer's Certificate
Exhibit B - Form of Transfer Agreement
Exhibit C - Form of Request for Release and Receipt of Documents
Exhibit D - Form of Trustee's Acknowledgement
AMENDED AND RESTATED MASTER SALE AND SERVICING
AGREEMENT dated as of November 1, 1998, among HOUSEHOLD
AUTOMOBILE REVOLVING TRUST I, a Delaware business trust (the
"Issuer"), HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada
corporation (the "Seller"), HOUSEHOLD FINANCE CORPORATION, a
Delaware corporation (the "Master Servicer") and THE CHASE
MANHATTAN BANK, a New York banking corporation, in its
capacity as Trustee.
WHEREAS the Issuer desires to purchase from time
to time Receivables arising in connection with motor vehicle
retail installment sale contracts acquired by Household
Automotive Finance Corporation or any of its subsidiaries;
WHEREAS the Seller will purchase from time to time
Receivables from Household Automotive Finance Corporation
and is willing to sell Receivables to the Issuer;
WHEREAS the Master Servicer is willing to service
all such receivables;
NOW, THEREFORE, in consideration of the promises
and the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions
. Whenever used in this Agreement, the following words and
phrases shall have the following meanings:
"Accountants' Report" means the report of a firm
of nationally recognized independent accountants described
in Section 4.11.
"Accounting Date" means, with respect to a
Distribution Date, the last day of the Collection Period
immediately preceding such Distribution Date.
"Actuarial Method" means the method of allocating
a fixed level monthly payment on an obligation between
principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the
product of (a) 1/12, (b) the fixed annual rate of interest
on such obligation and c the outstanding principal balance
of such obligation.
"Actuarial Receivable" means a Receivable under
which the portion of the payment allocated to interest and
the portion allocable to principal is determined in
accordance with the Actuarial Method.
"Addition Notice" means, with respect to any
transfer of Receivables to the Trust pursuant to Section 2.1
of this Agreement, notice of the Seller's election to
transfer Receivables to the Trust, such notice to designate
the related Transfer Date, the related Series Trust Estate,
if any, and the approximate principal amount of Receivables
to be transferred on such Transfer Date.
"Affiliate" means, with respect to any specified
Person, any other Person controlling or controlled by or
under common control with such specified Person. For the
purposes of this definition, "control" when used with
respect to any Person means the power to direct the
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
"Aggregate Principal Balance" means, with respect
to any date of determination, the sum of the Principal
Balances for all Receivables (other than (i) any Receivable
that has become a Liquidated Receivable and (ii) any
Receivable that has become a Repurchased Receivable as of
the date of determination).
"Agreement" means this Master Sale and Servicing
Agreement, as the same may be amended and supplemented from
time to time.
"Amount Financed" means, with respect to a
Receivable, the aggregate amount advanced under such
Receivable toward the purchase price of the Financed Vehicle
and any related costs, including amounts advanced in respect
of accessories, insurance premiums, service and warranty
contracts, other items customarily financed as part of
retail automobile installment sale contracts or promissory
notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable
means the annual percentage rate of finance charges or
service charges, as stated in the related Contract.
"Base Servicing Fee" means, with respect to each
Series Trust Estate and with respect to any Collection
Period, the fee payable to the Master Servicer for services
rendered during such Collection Period, which, unless
otherwise specified in the related Series Supplement, shall
be equal to one-twelfth of the Servicing Fee Rate multiplied
by the daily average Pool Balance for such Series Trust
Estate determined with respect to the preceding Collection
Period.
"Basic Documents" means this Agreement, the
Certificate of Trust, the Trust Agreement, the Indenture,
the Purchase Agreement and other documents and certificates
delivered in connection therewith.
"Business Day" means a day other than a Saturday,
a Sunday or other day on which commercial banks located in
the states of Illinois, California or New York are
authorized or obligated to be closed.
"Certificate" has the meaning assigned to such
term in the Trust Agreement and, with respect to a Series,
the meaning specified in the relevant Series Supplement.
"Certificateholder" has the meaning assigned to
such term in the Trust Agreement.
"Class" means a class of Notes or Certificates, as
the context requires.
"Closing Date" means March 31, 1998.
"Collected Funds" means, with respect to any
Distribution Date, the amount of funds in the Master
Collection Account representing collections on Receivables
during the related Collection Period, including all Net
Liquidation Proceeds collected during the related Collection
Period (but excluding any Repurchase Amounts) and funds
deposited into the Collection Account representing payments
pursuant to the Interest Rate Cap.
"Collection Period" means, for each Series, with
respect to the first Distribution Date in such Series, the
period beginning on the opening of business on the related
Cutoff Date and ending on the close of business on the last
day of the calendar month preceding such Distribution Date.
With respect to each subsequent Distribution Date, the
preceding calendar month. Any amount stated "as of the
close of business of the last day of a Collection Period"
shall give effect to all applications of collections on such
day.
"Collection Records" means all manually prepared
or computer generated records relating to collection efforts
or payment histories with respect to the Receivables.
"Computer Tape" means the computer tapes or other
electronic media furnished by the Seller to the Issuer and
its assigns describing certain characteristics of the
Receivables.
"Contract" means a motor vehicle retail
installment sale contract.
"Corporate Trust Office" means (i) with respect to
the Owner Trustee, the principal corporate trust office of
the Owner Trustee, which at the time of execution of this
agreement is ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Administration, and (ii) with respect to the Trustee, the
principal corporate trust office of The Chase Manhattan
Bank, which at the time of execution of this agreement is
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
Structured Finance Services.
"Covenant Receivable" means, with respect to any
Collection Period, a Receivable which the Master Servicer is
required to purchase pursuant to Section 4.7.
"Cram Down Loss" means, with respect to a
Receivable, if a court of appropriate jurisdiction in an
insolvency proceeding shall have issued a Final Order
reducing the amount owed on a Receivable or otherwise
modifying or restructuring the scheduled payments to be made
on a Receivable, an amount equal to (i) the excess of the
principal balance of such Receivable immediately prior to
such order over the principal balance of such Receivable as
so reduced and/or (ii) if such court shall have issued an
order reducing the effective rate of interest on such
Receivable, the excess of the principal balance of such
Receivable immediately prior to such order over the net
present value (using as the discount rate the higher of the
APR on such Receivable or the rate of interest, if any,
specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of
such order.
"Cutoff Date" means, with respect to a Receivable
and the Transfer Date as of which such Receivable is
transferred to the Trust, (i) the Accounting Date
immediately preceding such Transfer Date or (ii) if such
Receivable is originated in the month of the related
Transfer Date, the date of origination.
"Dealer" means a dealer who sold a Financed
Vehicle and who originated and assigned the respective
Receivable, directly or indirectly, to HAFC or one of its
subsidiaries or an Unaffiliated Originator under a Dealer
Agreement or pursuant to a Dealer Assignment.
"Dealer Agreement" means any agreement between an
Unaffiliated Originator and a Dealer relating to the
acquisition of Receivables from a Dealer by an Unaffiliated
Originator.
"Dealer Assignment" means, with respect to a
Receivable, the executed assignment executed by a Dealer
conveying such Receivable to an Unaffiliated Originator.
"Dealer Underwriting Guide" means either, (i) the
underwriting guidelines used by or on behalf of HAFC or one
of its subsidiaries in the origination and purchase of
Receivables as amended from time to time or (ii) the
underwriting guidelines used in the origination of
Receivables as reviewed by HAFC or one of its subsidiaries
prior to the purchase of Receivables by HAFC.
"Defaulted Receivable" means, unless otherwise
provided in a Series Supplement, with respect to any
Distribution Date, a Receivable with respect to which: (i)
10% or more of a Scheduled Payment is 60 or more days
delinquent, (ii) the Servicer has repossessed the related
Financed Vehicle (and any applicable redemption period has
expired), (iii) such Receivable is delinquent and the Master
Servicer has determined in good faith that payments
thereunder are not likely to be resumed or (iv) the Obligor
has been identified on the records of the Master Servicer as
being the subject of a current bankruptcy proceeding.
"Delivery" means with respect to the Trust Account
Property:
(1) the perfection and priority of a
security interest in which is governed by the law of a
jurisdiction which has adopted the 1978 Revision to Article
Eight of the UCC:
(a) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other
obligations that constitute "instruments" within the
meaning of Section 9-105(1)(i) of the UCC (other than
certificated securities) and are susceptible of physical
delivery, transfer thereof to the Trustee by physical
delivery to the Trustee, endorsed to, or registered in
the name of, the Trustee or its nominee or endorsed in
blank and such additional or alternative procedures as
may hereafter become appropriate to effect the complete
transfer of ownership of any such Collateral to the
Trustee free and clear of any adverse claims, consistent
with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to a "certificated security" (as
defined in Section 8-102(1)(a) of the UCC), transfer
thereof:
(i) by physical delivery of such certificated
security to the Trustee, provided that if the
certificated security is in registered form, it shall
be endorsed to, or registered in the name of, the
Trustee or endorsed in blank;
(ii) by physical delivery of such certificated
security to a "financial intermediary" (as defined in
Section 8-313(4) of the UCC) of the Trustee specially
endorsed to or issued in the name of the Trustee;
(iii) by the sending by a financial intermediary, not a
"clearing corporation" (as defined in Section 8-102(3)
of the UCC), of a confirmation of the purchase and the
making by such financial intermediary of entries on
its books and records identifying as belonging to the
Trustee of (A) a specific certificated security in the
financial intermediary's possession, (B) a quantity of
securities that constitute or are part of a fungible
bulk of certificated securities in the financial
intermediary's possession, or c a quantity of
securities that constitute or are part of a fungible
bulk of securities shown on the account of the
financial intermediary on the books of another
financial intermediary; or
(iv) by the making by a clearing corporation of
appropriate entries on its books reducing the
appropriate securities account of the transferor and
increasing the appropriate securities account of the
Trustee or a Person designated by the Trustee by the
amount of such certificated security, provided that in
each case: (A) the clearing corporation identifies
such certificated security for the sole and exclusive
account of the Trustee or the Person designated by the
Trustee, (B) such certificated security shall be
subject to the clearing corporation's exclusive
control, c such certificated security is in bearer
form or endorsed in blank or registered in the name of
the clearing corporation or custodian bank or a
nominee of either of them, (D) custody of such
certificated security shall be maintained by such
clearing corporation or a "custodian bank" (as defined
in Section 8-102(4) of the UCC) or the nominee of
either subject to the control of the clearing
corporation and (E) such certificated security is
shown on the account of the transferor thereof on the
books of the clearing corporation prior to the making
of such entries; and such additional or alternative
procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such
Collateral to the Trustee free and clear of any
adverse claims, consistent with changes in applicable
law or regulations or the interpretation thereof;
(c) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or
by the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve
System pursuant to Federal book entry regulations, the
following procedures, all in accordance with applicable
law, including applicable Federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of
such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depositary" pursuant to
applicable Federal regulations and issuance by such
financial intermediary of a deposit advice or other
written confirmation of such book-entry registration to
the Trustee of the purchase by the financial
intermediary on behalf of the Trustee of such book-entry
security; the making by such financial intermediary of
entries in its books and records identifying such book-
entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging
to the Trustee and indicating that such financial
intermediary holds such book-entry security solely an
agent for the Trustee; and such additional or
alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of
any such Collateral to the Trustee free of any adverse
claims, consistent with changes in applicable law or
regulations or the interpretation thereof;
(d) with respect to any Trust Account Property that is
an "uncertificated security" (as defined in Section
8-102(1)(b) of the UCC) and that is not governed by
clause c above, transfer thereof:
(i) by registration of the transfer thereof to the
Trustee, on the books and records of the issuer
thereof;
(ii) by the sending of a confirmation by a financial
intermediary of the purchase, and the making by such
financial intermediary of entries on its books and
records identifying as belonging to the Trustee (A) a
quantity of securities which constitute or are part of
a fungible bulk of uncertificated securities
registered in the name of the financial intermediary
or (B) a quantity of securities which constitute or
are part of a fungible bulk of securities shown on the
account of the financial intermediary on the books of
another financial intermediary; or
(iii) by the making by a clearing corporation of
appropriate entries on its books reducing the
appropriate account of the transferor and increasing
the account of the Trustee or a person designated by
the Trustee by the amount of such uncertificated
security, provided that in each case: (A) the
clearing corporation identifies such uncertificated
security for the sole and exclusive use of the Trustee
or the Person designated by the Trustee, (B) such
uncertificated security is registered in the name of
the clearing corporation or a custodian bank or a
nominee of either, and c such uncertificated security
is shown on the account of the transferor on the books
of the clearing corporation prior to the making of
such entries; and
(e) in each case of delivery contemplated herein, the
Trustee shall make appropriate notations on its records,
and shall cause same to be made of the records of its
nominees, indicating that such securities are held in
trust pursuant to and as provided in this Agreement.
(2) the perfection and priority of a
security interest in which is governed by the law of a
jurisdiction which has adopted the 1994 Revision to Article
8 of the UCC:
(a) with respect to bankers' acceptances, commercial
paper, negotiable certificates of deposit and other
obligations that constitute "instruments" within the
meaning of Section 9-105(1)(i) of the UCC (other than
certificated securities) and are susceptible of physical
delivery, transfer thereof to the Trustee by physical
delivery to the Trustee, endorsed to, or registered in
the name of, the Trustee or its nominee or endorsed in
blank and such additional or alternative procedures as
may hereafter become appropriate to effect the complete
transfer of ownership of any such Collateral to the
Trustee free and clear of any adverse claims, consistent
with changes in applicable law or regulations or the
interpretation thereof;
(b) with respect to a "certificated security" (as
defined in Section 8-102(a)(4) of the UCC), transfer
thereof:
(i) by physical delivery of such certificated
security to the Trustee, provided that if the
certificated security is in registered form, it shall
be endorsed to, or registered in the name of, the
Trustee or endorsed in blank;
(ii) by physical delivery of such certificated
security in registered form to a "securities
intermediary" (as defined in Section 8-102(a)(14) of
the UCC) acting on behalf of the Trustee if the
certificated security has been specially endorsed to
the Trustee by an effective endorsement.
(c) with respect to any security issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or
by the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve
System pursuant to Federal book entry regulations, the
following procedures, all in accordance with applicable
law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of
such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a securities
intermediary which is also a "depositary" pursuant to
applicable federal regulations and issuance by such
securities intermediary of a deposit advice or other
written confirmation of such book-entry registration to
the Trustee of the purchase by the securities
intermediary on behalf of the Trustee of such book-entry
security; the making by such securities intermediary of
entries in its books and records identifying such book-
entry security held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging
to the Trustee and indicating that such securities
intermediary holds such book-entry security solely as
agent for the Trustee; and such additional or
alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of
any such Collateral to the Trustee free of any adverse
claims, consistent with changes in applicable law or
regulations or the interpretation thereof;
(d) with respect to any Trust Account Property that is
an "uncertificated security" (as defined in Section
8-102(a)(18) of the UCC) and that is not governed by
clause c above, transfer thereof:
(i) (A) by registration to the Trustee as the
registered owner thereof, on the books and records of
the issuer thereof.
(B) by another Person (not a securities intermediary)
either becomes the registered owner of the
uncertificated security on behalf of the Trustee, or
having become the registered owner acknowledges that
it holds for the Trustee.
(ii) the issuer thereof has agreed that it will comply
with instructions originated by the Trustee without
further consent of the registered owner thereof.
(e) in each case of delivery contemplated herein, the
Trustee shall make appropriate notations on its records,
and shall cause same to be made of the records of its
nominees, indicating that securities are held in trust
pursuant to and as provided in this Agreement.
(f) with respect to a "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC)
(i) if a securities intermediary (A) indicates by
book entry that a "financial asset" (as defined in Section
8-102(a)(9) of the UCC) has been credited to be the
Trustee's "securities account" (as defined in Section
8-501(a) of the UCC), (B) receives a financial asset (as so
defined) from the Trustee or acquires a financial asset for
the Trustee, and in either case, accepts it for credit to
the Trustee's securities account (as so defined), c becomes
obligated under other law, regulation or rule to credit a
financial asset to the Trustee's securities account, or (D)
has agreed that it will comply with "entitlement orders" (as
defined in Section 8-102(a)(8) of the UCC) originated by the
Trustee without further consent by the "entitlement holder"
(as defined in Section 8-102(a)(7) of the UCC), of a
confirmation of the purchase and the making by such
securities intermediary of entries on its books and records
identifying as belonging to the Trustee or (I) specific
certificated security in the securities intermediary's
possession, (II) a quantity of securities that constitute or
are part of a fungible bulk of certificated securities in
the securities intermediary's possession, or (III) a
quantity of securities that constitute or are part of a
fungible bulk of securities shown on the account of the
securities intermediary on the books of another securities
intermediary.
"Depositor" shall mean the Seller in its capacity
as Depositor under the Trust Agreement.
"Determination Date" means, unless otherwise
provided in a Series Supplement, the earlier of the fifth
calendar day (or if such day is not a Business Day, the next
preceding Business Day) or the third Business Day preceding
each Distribution Date.
"Distribution Date" means, unless otherwise
provided in a Series Supplement, with respect to each
Collection Period, the seventeenth day of the following
calendar month, or if such day is not a Business Day, the
immediately following Business Day.
"Electronic Ledger" means the electronic master
record of the retail installment sales contracts or
installment loans serviced by the Master Servicer.
"Eligibility Criteria" means with respect to a
Series, the criteria set forth in the related Schedule of
Eligibility Criteria.
"Eligible Bank" means, except as otherwise
provided in a Series Supplement, any depository institution
(which shall initially be the Trustee) organized under the
laws of the United States of America or any one of the
states thereof or the District of Columbia (or any United
States branch or agency of a foreign bank), which is subject
to supervision and examination by federal or state banking
authorities and which at all times (a) has a net worth in
excess of $50,000,000 and (b) has either (i) a rating of P-1
from Moody's and A-1 from Standard & Poor's with respect to
short-term deposit obligations, or such other lower ratings
acceptable to the Rating Agency, or (ii) if such institution
has issued long-term unsecured debt obligations, a rating
acceptable to the Rating Agency with respect to long-term
unsecured debt obligations.
"Eligible Deposit Account" means, except as
otherwise provided in a Series Supplement, either (a) a
segregated account with an Eligible Bank or (b) a segregated
trust account with the corporate trust department of a
depository institution with corporate trust powers organized
under the laws of the United States of America or any state
thereof or the District of Columbia (or any United States
branch or agency of a foreign bank), provided that such
institution also must have a rating of Baa3 or higher from
Moody's and a rating of BBB- or higher from Standard &
Poor's with respect to long-term deposit obligations, or
such other lower ratings acceptable to the Rating Agency.
"Eligible Investments" shall mean, except as
otherwise provided in a Series Supplement, negotiable
instruments or securities represented by instruments in
bearer or registered form, or, in the case of deposits
described below, deposit accounts held in the name of the
Trustee in trust for the benefit of the Holders of the
Securities of the relevant Series, subject to the exclusive
custody and control of the Trustee and for which the Trustee
has sole signature authority, which evidence:
(a) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or
certificates of deposit (having original maturities of no
more than 365 days) of depositary institutions or trust
companies incorporated under the laws of the United States
of America or any state thereof (or domestic branches of
foreign banks) and subject to supervision and examination by
federal or state banking or depositary institution
authorities; provided, that at the time of the Trust's
investment or contractual commitment to invest therein, the
short-term debt rating of such depository institution or
trust company shall be satisfactory to the Rating Agency;
(c) commercial paper (having original or
remaining maturities of not more than 30 days) having, at
the time of the Trust's investment or contractual commitment
to invest therein, a rating satisfactory to the Rating
Agency;
(d) investments in money market funds having, at
the time of the Trust's investment therein, a rating
acceptable to the Rating Agency;
(e) demand deposits, time deposits and
certificates of deposit which are fully insured by the FDIC
having, at the time of the Trust's investment therein, a
rating satisfactory to the Rating Agency;
(f) bankers' acceptances (having original
maturities of no more than 365 days) issued by a depository
institution or trust company referred to in (b) above;
(g) (x) time deposits (having maturities not
later than the succeeding Distribution Date) other than as
referred to in clause (e) above, with a Person the
commercial paper of which has a credit rating satisfactory
to the Rating Agency or (y) notes which are payable on
demand issued by Household; provided such notes will
constitute Eligible Investments only if the commercial paper
of Household has, at the time of the Trust's investment in
such notes, a rating satisfactory to the Rating Agency; or
(h) any other investment of a type or rating that
is acceptable to the Rating Agency.
Any of the foregoing Eligible Investments may be
purchased on or through the Trustee or through any Affiliate
of either of them.
"Eligible Servicer" means Household Finance
Corporation or any Person which at the time of its
appointment as Servicer, (i) is servicing a portfolio of
motor vehicle retail installment sales contracts and/or
motor vehicle installment loans, (ii) is legally qualified
and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to
service a portfolio of motor vehicle retail installment
sales contracts and/or motor vehicle installment loans
similar to the Receivables with reasonable skill and care,
(iv) is qualified and entitled to use, pursuant to a license
or other written agreement, and agrees to maintain the
confidentiality of, the software which the Master Servicer
uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties
and responsibilities under this Agreement and (v) has a net
worth of at least $50,000,000.
"Eligible Sub-Servicer" means Household Automotive
Finance Corporation or any wholly owned subsidiary of
Household or any Person which at the time of its appointment
as Sub-Servicer, (i) is servicing a portfolio of motor
vehicle retail installment sales contracts and/or motor
vehicle installment loans, (ii) is legally qualified and has
the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to
service a portfolio of motor vehicle retail installment
sales contracts and/or motor vehicle installment loans
similar to the Receivables with reasonable skill and care,
and (iv) is qualified and entitled to use, pursuant to a
license or other written agreement, and agrees to maintain
the confidentiality of, the software which the Master
Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties
and responsibilities under this Agreement.
"Insolvency Event" means, with respect to a
specified Person, (a) the filing of a petition against such
Person or the entry of a decree or order for relief by a
court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an
involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator, or similar official for
such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's
affairs, and such petition, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief
in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by, a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such
Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay
its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
"Insurance Policy" means, with respect to a
Receivable, any insurance policy (including the insurance
policies described in Section 4.4 hereof) benefiting the
holder of the Receivable providing loss or physical damage,
credit life, credit disability, theft, mechanical breakdown
or similar coverage with respect to the Financed Vehicle or
the Obligor.
"Interest Period" for any Class or Series of Notes
or Certificates, the meaning set forth in the related Series
Supplement.
"Interest Rate" for any Class or Series of Notes
or Certificates, the meaning set forth in the related Series
Supplement.
"Investment Earnings" means, with respect to any
Distribution Date and Trust Account, the investment earnings
(net of investment losses and expenses) on amounts on
deposit in such Trust Account on such Distribution Date.
"Issuer" means Household Automobile Revolving
Trust I, together with each other Trust designated as an
Issuer hereunder pursuant to a Series Supplement, in each
case so long as such Trust has not been terminated in
accordance with the terms of the related Trust Agreements.
"Lien" means a security interest, lien, charge,
pledge, equity, or encumbrance of any kind, other than tax
liens, mechanics' liens and any liens that attach to the
respective Receivable by operation of law as a result of any
act or omission by the related Obligor, provided that, any
assignment permitted by Section 2.1 hereof and the lien
created by this Agreement or the Indenture shall not be
deemed to constitute a Lien.
"Lien Certificate" means, with respect to a
Financed Vehicle, an original certificate of title,
certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured
party which indicates that the lien of the secured party on
the Financed Vehicle is recorded on the original certificate
of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor,
the term "Lien Certificate" shall mean only a certificate or
notification issued to a secured party.
"Liquidated Receivable" means, with respect to any
Collection Period, a Receivable as to which (i) such
Receivable has been liquidated by the Master Servicer
through the sale of the Financed Vehicle, (ii) 90 days have
elapsed since the Master Servicer repossessed the Financed
Vehicle, (iii) proceeds have been received in respect of
such Receivable which, in the Master Servicer's reasonable
judgment, constitute the final amounts recoverable in
respect of such Receivable or (iv) 10% or more of a
Scheduled Payment shall have become 150 or more days
delinquent (or, in the case where the Obligor of such
Receivable is subject to an Insolvency Event, 10% or more of
a Scheduled Payment shall have become 210 or more days
delinquent), except in the case of a repossessed Financed
Vehicle. Any Receivable that becomes a Repurchased
Receivable on or before the related Accounting Date shall
not be a Liquidated Receivable.
"Master Collection Account" means the account
designated as such, established and maintained pursuant to
Section 5.1.
"Master Servicer" means Household Finance
Corporation, as the servicer of the Receivables, and each
successor Master Servicer pursuant to Section 10.3.
"Master Servicer Credit Facility" means the credit
facility maintained by the Master Servicer with a Master
Servicer Credit Facility Issuer pursuant to Section 4.2(d).
"Master Servicer Credit Facility Issuer" means a
depository institution or insurance company that qualifies
pursuant to Section 4.2(d).
"Master Servicer Termination Event" means an event
specified in Section 10.1.
"Master Servicer's Certificate" means an Officers'
Certificate of the Master Servicer delivered pursuant to
Section 4.9, substantially in the form of Exhibit A hereto.
"Monthly Records" means all records and data
maintained by the Master Servicer with respect to the
Receivables, including the following with respect to each
Receivable: the account number; the originating Dealer;
Obligor name; Obligor address; Obligor home phone number;
Obligor business phone number; original Principal Balance;
original term; Annual Percentage Rate; current Principal
Balance; current remaining term; origination date; first
payment date; final scheduled payment date; next payment due
date; date of most recent payment; new/used classification;
collateral description; days currently delinquent; number of
contract extensions (months) to date; amount of Scheduled
Payment; current Insurance Policy expiration date; and past
due late charges.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.,
or its successor.
"Net Liquidation Proceeds" means, with respect to
a Liquidated Receivable, all amounts realized with respect
to such Receivable (other than amounts withdrawn from any
Series Support) net of (i) reasonable expenses, which
expenses shall not include any deficiency balances or post-
disposition recoveries collected, incurred by the Master
Servicer in connection with the collection of such
Receivable and the repossession and disposition of the
Financed Vehicle and (ii) amounts that are required to be
refunded to the Obligor on such Receivable; provided,
however, that the Liquidation Proceeds with respect to any
Receivable shall in no event be less than zero; provided,
further, that, so long as amounts cannot be traced to
specific Receivables the Master Servicer shall reasonably
estimate, on or prior to each Accounting Date, the amount of
Net Liquidation Proceeds attributable to each Series Trust
Estate.
"Noteholder" means the Person in whose name a Note
is registered on the Note Register.
"Noteholders' Distributable Amount" means, with
respect to any Distribution Date, the sum of the
Noteholders' Principal Distributable Amount and the
Noteholders' Interest Distributable Amount.
"Noteholders' Interest Distributable Amount" has
the meaning assigned to such term in the related Series
Supplement.
"Noteholders' Principal Distributable Amount" has
the meaning assigned to such term in the related Series
Supplement.
"Notes" has the meaning assigned to such term in
the Indenture.
"Obligor" on a Receivable means the purchaser or
co-purchasers of the Financed Vehicle and any other Person
who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed
by the chairman of the board, the president, any executive
vice president or any vice president, any treasurer,
assistant treasurer, secretary or assistant secretary of the
Seller or the Master Servicer, as appropriate.
"Opinion of Counsel" means an opinion of counsel
who may be counsel to the Master Servicer or the Seller,
acceptable to the Trustee.
""Other Conveyed Property" means all property
conveyed by the Seller to the Trust pursuant to Section
2.1(a)(ii) through (x) of this Agreement.
"Outstanding" has the meaning assigned to such
term in the Indenture.
"Outstanding Amount" means, with respect to any
Series, the aggregate principal amount of all Notes of such
Series which are Outstanding at the date of determination
after giving effect to all distributions of principal on
such date of determination.
"Owner Trust Estate" has the meaning assigned to
such term in the Trust Agreement.
"Owner Trustee" means Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, its successors-in-interest or any
successor Owner Trustee under the Trust Agreement.
"Payment Record" means the record maintained by
the Master Servicer for the Trust as provided in Section
4.2(d) hereof.
"Person" means any individual, corporation,
estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to
such term in the definition of "Delivery" above.
"Principal Balance" means, with respect to any
Receivable, as of any date, the Amount Financed minus (i)
that portion of all amounts received on or prior to such
date and allocable to principal in accordance with the
Actuarial Method, or the Simple Interest Method, as
appropriate, and (ii) any Cram Down Loss in respect of such
Receivable. The "Principal Balance" of a Repurchased
Receivable or Liquidated Receivable shall be deemed to be
zero.
"Purchase Agreement" means the Master Receivables
Purchase Agreement between the Seller and HAFC, dated as of
March 1, 1998, pursuant to which the Seller acquired the
Receivables, as such agreement may be amended or
supplemented from time to time.
"Purchase Agreement Supplement" means any
Receivables Purchase Agreement Supplement to the Purchase
Agreement.
"Rating Agency" means, with respect to any
outstanding Series or Class, each Rating Agency specified in
the Series Supplement.
"Rating Agency Condition" means, with respect to
any action with respect to a Series, that each Rating Agency
shall have received prior notice thereof and that each
Rating Agency shall have notified the Master Servicer in
writing (who shall then immediately notify the Seller, the
Owner Trustee and the Trustee in writing) that such action
will not result in a reduction or withdrawal of the then
current rating of any Class of Notes.
"Realized Losses" means, with respect to any
Receivable that becomes a Liquidated Receivable, the excess
of the Principal Balance of such Liquidated Receivable over
Net Liquidation Proceeds to the extent allocable to
principal.
"Receivable" means any Contract listed on Schedule
A to a Transfer Agreement (which Schedule may be in an
acceptable electronic format), except Liquidated Receivables
and Receivables released from the Owner Trust Estate.
"Receivable Files" means the documents specified
in Section 3.3.
"Record Date" with respect to each Distribution
Date means the Business Day immediately preceding such
Distribution Date, unless otherwise specified in the
applicable Series Supplement.
"Registrar of Titles" means, with respect to any
state, the governmental agency or body responsible for the
registration of, and the issuance of certificates of title
relating to, motor vehicles and liens thereon.
"Repurchase Amount" means, with respect to a
Receivable, the Principal Balance and all accrued and unpaid
interest on the Receivable, after giving effect to the
receipt of any moneys collected (from whatever source) on
such Receivable, if any, as of the date of purchase,
provided that, reductions in the Principal Balance resulting
from such Receivable becoming a Liquidated Receivable shall
be disregarded.
"Repurchased Receivable" means a Receivable
purchased by the Master Servicer pursuant to Section 4.7 or
repurchased by the Seller pursuant to Section 3.2 or the
Seller or HAFC pursuant to Section 11.1(a).
"Schedule of Eligibility Criteria" means the
Schedule of Eligibility Criteria attached as Schedule 1 to a
Series Supplement.
"Schedule of Receivables" means, with respect to
each Series Trust Estate, the schedule of all retail
installment sales contracts and promissory notes originally
held as part of the Trust which is attached as Schedule A to
the Transfer Agreements relating to such Series Trust
Estate.
"Scheduled Payment" means, with respect to any
Collection Period for any Receivable, the amount set forth
in such Receivable as required to be paid by the Obligor in
such Collection Period. If after the Closing Date, the
Obligor's obligation under a Receivable with respect to a
Collection Period has been modified so as to differ from the
amount specified in such Receivable as a result of (i) the
order of a court in an insolvency proceeding involving the
Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil
Relief Act of 1940, as amended, or (iii) modifications or
extensions of the Receivable permitted by Sections 4.2(b)
and c, the Scheduled Payment with respect to such Collection
Period shall refer to the Obligor's payment obligation with
respect to such Collection Period as so modified.
"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders and the
Certificateholders.
"Seller" means Household Auto Receivables
Corporation, a Nevada corporation, and its successors in
interest to the extent permitted hereunder.
"Series" means, with respect to any Notes, Notes
issued pursuant to the same Series Supplement and with
respect to any Certificates, Certificates issued pursuant to
the same Series Supplement, or the Notes and Certificates
issued pursuant to the same Series Supplement, as the
context may require.
"Series Closing Date" means, with respect to any
Series, the date designated in the related Series Supplement
as the closing date for such Series.
"Series Collection Account" means, with respect to
any Series, the collection account designated in the related
Series Supplement.
"Series of Certificates" means the Certificates
issued in connection with a Series of Notes.
"Series Related Documents" with respect to a
Series, has the meaning specified therefor in the related
Series Supplement.
"Series Supplement" means, with respect to any
Series, a Series Supplement to the Indenture and the Trust
Agreement, executed and delivered in connection with the
original issuance of the Notes and Certificates of such
Series, and all amendments thereof and supplements thereto.
"Series Support" means the rights and benefits
provided to the Trustee or the Noteholders of any Series or
Class pursuant to any letter of credit, surety bond, cash
collateral account, spread account, guaranteed rate
agreement, maturity liquidity facility, interest rate swap
agreement, tax protection agreement or other similar
arrangement. The subordination of any Series or Class to
another Series or Class shall be deemed to be a Series
Support. Notwithstanding that such Series Support may be
held by or in favor of the Trustee for the benefit of any
Series or Class, only those Series or Classes to which such
Series Support relates shall have any rights with respect
thereto and all payments thereunder received by the Trustee
shall be distributed exclusively as prescribed in the Series
Supplement relating to such Series or Class.
"Series Support Provider" means the Person, if
any, designated in the related Series Supplement, as
providing any Series Support, other than Household or any of
its Affiliates or the Noteholders of any Series or Class
which is subordinated to another Class or Series.
"Series Trust Accounts" has the meaning with
respect to each Series specified in the related Series
Supplement.
"Series Termination Date" has the meaning with
respect to each Series specified in the related Series
Supplement.
"Series Trust Estate" has the meaning with respect
to each Series specified in the related Series Supplement.
"Service Contract" means, with respect to a
Financed Vehicle, the agreement, if any, financed under the
related Receivable that provides for the repair of such
Financed Vehicle.
"Servicing Fee Rate" means 3% per annum unless
otherwise specified in a Series Supplement with respect to
the related Series Trust Estate.
"Simple Interest Method" means the method of
allocating a fixed level payment on an obligation between
principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the
product of the fixed rate of interest on such obligation
multiplied by the period of time (expressed as a fraction of
a year, based on the actual number of days in the calendar
month and 365 days in the calendar year) elapsed since the
preceding payment under the obligation was made.
"Simple Interest Receivable" means a Receivable
under which the portion of the payment allocable to interest
and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
"Standard & Poor's" means Standard & Poor's
Ratings Services, or its successor.
"Sub-Servicer" means any Eligible Sub-Servicer
with whom the Master Servicer has entered into an agreement
relating to subservicing the Receivables. Initially, the
Sub-Servicer will be HAFC.
"Supplemental Servicing Fee" means, with respect
to any Collection Period, (i) all administrative fees,
expenses and charges paid by or on behalf of Obligors,
including late fees, prepayment fees and liquidation fees
collected on the Receivables during such Collection Period,
and (ii) the net realized Investment Earnings of funds on
deposit in the Master Collection Account.
"Support Default" shall mean a default relating to
the Insolvency or performance of a Series Support Provider.
"Transfer Agreement" means the agreement among the
Issuer, the Seller and the Master Servicer, substantially in
the form of Exhibit B.
"Transfer Date" means, with respect to
Receivables, any date on which Receivables are to be
transferred to a Trust pursuant to this Agreement and a
related Transfer Agreement.
"Trust" means the respective Issuers,
individually.
"Trust Account Property" means the Trust Accounts
and each Series Trust Account, all amounts and investments
held from time to time in any Trust Account and each Series
Trust Account (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto
in Section 5.1.
"Trust Agreement" means the Trust Agreement dated
as of March 1, 1998, between the Seller and the Owner
Trustee, as the same may be amended and supplemented from
time to time.
"Trust Officer" means, (i) in the case of the
Trustee, the chairman or vice-chairman of the board of
directors, the chairman or vice-chairman of the executive
committee of the board of directors, the president, any vice
president, assistant vice-president or managing director,
the secretary, any assistant secretary or any other officer
of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and
also means, with respect to a particular corporate trust
matter and having direct responsibility for the
Administration of this Agreement, and (ii) in the case of
the Owner Trustee, any officer in the corporate trust office
of the Owner Trustee or any agent of the Owner Trustee under
a power of attorney with direct responsibility for the
administration of this Agreement or any of the Basic
Documents or Series Related Documents on behalf of the Owner
Trustee.
"Trustee" means the Person acting as Trustee under
the Indenture, its successors in interest and any successor
trustee under the Indenture.
"Trustee Fee" means the fees due to the Trustee as
may be set forth in that certain fee agreement dated as of
the date hereof between the Master Servicer and The Chase
Manhattan Bank.
"Unaffiliated Originator" means a third-party
originator or owner of Receivables not affiliated with the
Seller or HAFC.
"Unaffiliated Originator Receivables Purchase
Agreements" means, collectively, the agreements pursuant to
which HAFC acquired certain of the Receivables, directly or
indirectly, from Unaffiliated Originators, as any of such
agreements may be amended, supplemented or otherwise
modified from time to time in accordance with the terms
thereof.
"UCC" means the Uniform Commercial Code as in
effect in the relevant jurisdiction on the date of the
Agreement.
"Warranty Receivable" With respect to any
Collection Period, a Receivable which the Seller has become
obligated to repurchase pursuant to Section 3.2.
SECTION 1.2. Other Interpretive Provisions
(a) . (a) Capitalized terms used
herein and not otherwise defined herein have the meanings
assigned to them in the Indenture, or, if not defined
therein, in the Trust Agreement. Cross referenced
definitions may include a Series designation.
(b) All terms defined in this Agreement
shall have the defined meanings when used in any instrument
governed hereby and in any certificate or other document
made or delivered pursuant hereto unless otherwise defined
therein.
(c) As used in this Agreement, in any
instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any
such instrument, certificate or other document, and
accounting terms partly defined in this Agreement or in any
such instrument, certificate or other document to the extent
not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in
effect on the date of this Agreement or any such instrument,
certificate or other document, as applicable. To the extent
that the definitions of accounting terms in this Agreement
or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in
this Agreement or in any such instrument, certificate or
other document shall control.
(d) Any agreement, instrument or
statute defined or referred to herein or in any instrument
or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time
amended, modified or supplemented and includes (in the case
of agreements or instruments) references to all attachments
thereto and instruments incorporated therein.
(e) Any term defined herein, which is
otherwise defined in a Series Supplement, shall have the
meaning with respect to such Series specified therefor in
such Series Supplement, whether or not the definition in
this Agreement includes a phrase to the effect that such
term may be otherwise defined in a Series Supplement.
(f) In the event that with respect to a
Series there is no Series Support Provider, any references
herein or in any other of the Basic Documents to the consent
of, or acceptability to, the Series Support Provider shall
be deemed to be deleted.
SECTION 1.3. Usage of Terms
. With respect to all terms used in this Agreement, the
singular includes the plural and the plural includes the
singular; words importing any gender include the other
gender; references to "writing" include printing, typing,
lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their
respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and
assigns; the terms "include" or "including" mean "include
without limitation" or "including without limitation;" the
words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision, and
Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of
Schedules and Exhibits to this 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
business on such day, or as of the first day of an Interest
Period shall refer to the opening of business on such day.
All references to the last day of an Interest Period shall
refer to the close of business on such day.
SECTION 1.5. No Recourse
. Without limiting the obligations of the Master Servicer
or 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
the Master Servicer or Seller, or of any of their respective
Affiliates, predecessors or successors.
SECTION 1.6. Action by or Consent of
Noteholders
. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders, such provision
shall be deemed to refer to the Noteholders of record as of
the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders.
Solely for the purposes of any action to be taken, or
consented to, by Noteholders, any Note registered in the
name of HAFC or any Affiliate thereof shall be deemed not to
be outstanding; provided, however, that, solely for the
purpose of determining whether the Trustee is entitled to
rely upon any such action or consent, only Notes which the
Trust Officer of the Trustee actually knows to be so owned
shall be so disregarded.
SECTION 1.7. Material Adverse Effect
. Whenever a determination is to be made under this
Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have
a material adverse effect on the Noteholders (or any similar
or analogous determination), such determination shall be
made without taking into account any Series Support.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables
(a) . (a) Subject to the conditions
set forth in paragraph (b) below, in consideration of the
Issuer's delivery to or upon the order of the Seller on a
Transfer Date of the net proceeds from the sale of a Series
of Notes and any Additional Principal Amount thereunder and
the other amounts to be distributed from time to time to the
Seller in accordance with the terms of this Agreement and
the related Series Supplement, the Seller shall, from time
to time, sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (subject to the
obligations set forth herein), all right, title and interest
of the Seller in and to:
(i) each and every Receivables listed
on Schedule A to the related Transfer
Agreement and all monies paid or payable
thereon or in respect thereof after the
related Transfer Date (including amounts due
on or before the Cutoff Date but received by
HAFC, the Seller or the Issuer on or after
the Cutoff Date);
(ii) the security interests in the
related Financed Vehicles granted by Obligors
pursuant to the related Receivables and any
other interest of the Seller in such Financed
Vehicles;
(iii) all rights of the Seller
against the Dealers pursuant to Dealer
Agreements; or Unaffiliated Originator
Receivables Purchase Agreements (as may be
limited with respect to a Series in the
applicable Series Related Documents);
(iv) any proceeds and the right to
receive proceeds with respect to such
Receivables repurchased by either (i) a
Dealer, pursuant to a Dealer Agreement, or
(ii) an Unaffiliated Originator, pursuant to
an Unaffiliated Originator Receivables
Purchase Agreement as a result of a breach of
representation or warranty in the related
Dealer Agreement or Unaffiliated Originator
Receivables Purchase Agreement, as
applicable;
(v) all rights under any Service
Contracts on the related Financed Vehicles:
(vi) any proceeds and the right to
receive proceeds with respect to such
Receivables from claims on any physical
damage, credit life or disability insurance
policies covering the related Financed
Vehicles or Obligors, including rebates of
insurance premiums relating to the
Receivables;
(vii) all items contained in the
related Receivables Files with respect to the
Receivables; and any and all other documents
that HAFC keeps on file in accordance with
its customary procedures relating to the
related Receivables, the Obligors or the
Financed Vehicles;
(viii) all funds on deposit from time
to time in the Trust Accounts (including all
investments and proceeds thereof);
(ix) property (including the right to
receive future Net Liquidation Proceeds) that
secures a Receivable and that has been
acquired by or on behalf of the Trust
pursuant to liquidation of such Receivable;
(x) all of the Seller's right, title
and interest in its rights and benefits, but
none of its obligations or burdens, under
each of the Purchase Agreements and Purchase
Agreement Supplements, including the delivery
requirements, representations and warranties
and the cure and repurchase obligations of
HAFC under each of the Purchase Agreements
and Purchase Agreement Supplements, on or
after the related Cutoff Date; and
(xi) all present and future claims,
demands, causes and chooses 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) The Seller shall transfer to the
Issuer the Receivables and the other property and rights
related thereto described in paragraph (a) above only upon
the satisfaction of each of the following conditions on or
prior to the related Transfer Date:
(i) the Seller shall have provided the
Trustee and the Owner Trustee with an
Addition Notice not later than five days
prior to such Transfer Date (which Addition
Notice will designate the Series Trust Estate
which the Receivables will be a part of, if
any) and shall have provided any information
reasonably requested by any of the foregoing
with respect to the related Receivables;
(ii) the Seller shall have delivered to
the Owner Trustee and the Trustee a duly
executed Transfer Agreement which shall
include supplements to Schedule A (which may
be in electronic format), listing the
Receivables to be transferred;
(iii) the Seller shall, to the
extent required by Section 4.2, have
deposited in the Master Collection Account
all collections received after the related
Cutoff Date in respect of the Receivables to
be transferred;
(iv) as of each Transfer Date, (A) the
Seller shall not be insolvent and shall not
become insolvent as a result of the transfer
of Receivables on such Transfer Date, (B) the
Seller shall not intend to incur or believe
that it shall incur debts that would be
beyond its ability to pay as such debts
mature, c such transfer shall not have been
made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the
Seller shall not constitute unreasonably
small capital to carry out its business as
conducted;
(v) each of the representations and
warranties made by the Seller pursuant to
Section 3.1 with respect to the Receivables
to be transferred on such Transfer Date shall
be true and correct as of the related
Transfer Date, and the Seller shall have
performed all obligations to be performed by
it hereunder on or prior to such Transfer
Date;
(vi) the Seller shall, at its own
expense, on or prior to the Transfer Date
indicate in its computer files that the
Receivables identified in the Transfer
Agreement have been sold to the Trust
pursuant to this Agreement;
(vii) the Seller shall have taken
any action necessary or, if required by the
Trustee, advisable to maintain the first
priority perfected ownership interest of the
Trust in the Owner Trust Estate and the first
perfected security interest of the Trustee in
the Series Trust Estate;
(viii) no selection procedures
adverse to the interests of the related
Series shall have been utilized in selecting
the related Receivables;
(ix) the addition of any such
Receivables shall not result in a material
adverse tax consequence to the Trust or the
Noteholders;
(x) if required by any of the related
Series Related Documents, the Seller shall
simultaneously transfer to the Trustee any
amounts required to be deposited in the
related Trust Accounts with respect to the
Receivables transferred on such Transfer
Date; and
(xi) the Seller shall have delivered to
the Trustee an Officers' Certificate
confirming the satisfaction of each condition
precedent specified in this paragraph (b).
The Seller covenants that in the event any of the
foregoing conditions precedent are not satisfied with
respect to any Receivable on the date required as specified
above, the Seller will immediately repurchase such
Receivable from the Trust, at a price equal to the
Repurchase Amount thereof, in the manner specified in
Section 3.2.
It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement and
each related Transfer Agreement shall constitute a sale of
the related Series Trust Estate from the Seller to the
Issuer and the beneficial interest in and title to the
related Series Trust Estate shall not be part of the
Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law.
In the event that, notwithstanding the intent of the Seller,
the transfer and assignment contemplated hereby and thereby
is held not to be a sale, this Agreement and the related
Transfer Agreement shall constitute a grant of a security
interest in the property referred to in this Section 2.1 for
the benefit of the Noteholders.
SECTION 2.2. Further Encumbrance of Series
Trust Estate
(a) . (a) Immediately upon the
conveyance to the Trust by the Seller of any item of the
related Series Trust Estate pursuant to Section 2.1, all
right, title and interest of the Seller in and to such
Series Trust Estate shall terminate, and all such right,
title and interest shall vest in the Issuer, in accordance
with the Trust Agreement and Sections 3802 and 3805 of the
Business Trust Statute (as defined in the Trust Agreement).
(b) Immediately upon the vesting of the
related Series Trust Estate in the Trust, the Trust shall
have the sole right to pledge or otherwise encumber, such
related Series Trust Estate. Pursuant to the Indenture and
a Series Supplement, the Trust will grant a security
interest in the Series Trust Estate to secure the repayment
of a related Series of Notes. The related Series of
Certificates shall represent the beneficial ownership
interest in the related Series Trust Estate, and the related
Series of Certificateholders shall be entitled to receive
distributions with respect thereto as set forth in the
related Series Supplement.
(c) The Trustee shall hold the related
Series Trust Estate for the benefit of the related Series
Securityholders. Following the payment in full of the
related Series of Notes and the release and discharge of the
Indenture and the related Series Supplement, all covenants
of the Issuer under Article III of the Indenture and the
related Series Supplement shall, until payment in full of
the Certificates, remain as covenants of the Issuer for the
benefit of the related Series of Certificateholders,
enforceable by the related Series of Certificateholders to
the same extent as such covenants were enforceable by the
related Series of Noteholders prior to the discharge of the
Indenture. Any rights of the Trustee under Article III of
the Indenture and the related Series Supplement, following
the discharge of the Indenture and the related Series
Supplement, shall vest in related Series of
Certificateholders.
(d) The Trustee shall, at such time as
there are no Securities of a Series outstanding and all sums
due to the Trustee or any agent or counsel thereof pursuant
to the Indenture as supplemented by the related Series
Supplement, have been paid, pursuant to Section 4.1 of the
Indenture, and subject to satisfaction of the conditions set
forth therein, release the Lien of the related Series
Supplement and the Indenture with respect to the related
Series Trust Estate.
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties
of Seller
. The Seller represents and warrants as to the related
Receivables that the representations and warranties set
forth on the Schedule of Eligibility Criteria with respect
to a Series are, or will be, true and correct as of the
respective dates specified in such Schedule. The Issuer is
deemed to have relied on such representations and warranties
in acquiring the related Receivables and the related
Securityholders shall be deemed to rely on such
representations and warranties in purchasing the Notes
including any Additional Principal Amounts. Such
representations and warranties shall survive the sale,
transfer and assignment of the related Series Trust Estate
to the Issuer and any pledge thereof to the Trustee pursuant
to the Indenture and the related Series Supplement.
SECTION 3.2. Repurchase upon Breach
(a) . (a) The Seller, the Master
Servicer, any Trust Officer of the Trustee or the Owner
Trustee, as the case may be, shall inform each of the other
parties to this Agreement promptly, in writing, upon the
discovery of any breach of the Seller's representations and
warranties made pursuant to Section 3.1; provided, however,
that the failure to give any such notice shall not derogate
from any obligations of the Seller under this Section 3.2.
As of the last day of the second (or, if the Seller so
elects, the first, or with respect to any exceptions
appearing on any exception report delivered by the Trustee,
the first) month following the discovery by the Seller or
receipt by the Seller of notice of such breach (or such
longer period not in excess of 120 days, as may be agreed
upon by the Trustee and the Master Servicer), unless such
breach is cured by such date, the Seller shall have an
obligation to repurchase or cause HAFC to repurchase any
Receivable in which the interests of the related Series
Securityholders are materially and adversely affected by any
such breach. In consideration of and simultaneously with
the repurchase of the Receivables, the Seller shall remit,
or cause HAFC to remit, to the related Series Collection
Account the Repurchase Amount in the manner specified in
Section 5.4 and the Issuer shall execute such assignments
and other documents reasonably requested by such person in
order to effect such repurchase. The sole remedy of the
Issuer, the Owner Trustee, the Trustee and the related
Series Securityholders with respect to a breach of
representations and warranties pursuant to Section 3.1 and
the agreement contained in this Section shall be the
repurchase of the Receivables pursuant to this Section,
subject to the conditions contained herein or to enforce the
obligation of HAFC to the Seller to repurchase such
Receivables pursuant to the Purchase Agreement. Neither the
Owner Trustee nor the Trustee shall have a duty to conduct
any affirmative investigation as to the occurrence of any
conditions requiring the repurchase of any Receivable
pursuant to this Section.
(b) Pursuant to Section 2.1 of this
Agreement and pursuant to the related Transfer Agreement,
the Seller conveyed to the Trust all of the Seller's right,
title and interest in its rights and benefits, but none of
its obligations or burdens, under the Purchase Agreement and
the related Purchase Agreement Supplement, including the
Seller's rights under the Purchase Agreement and the
delivery requirements, representations and warranties and
the cure or repurchase obligations of HAFC thereunder. The
Seller hereby represents and warrants to the Trust that such
assignment is valid, enforceable and effective to permit the
Trust to enforce such obligations of HAFC under the Purchase
Agreement.
SECTION 3.3. Custody of Receivables Files
. In connection with the sale, transfer and assignment of
the Receivables, if any, to the Trust pursuant to this
Agreement and pursuant to the related Transfer Agreement,
the Master Servicer shall act as custodian for the benefit
of the Trustee of the following documents or instruments
with respect to each Receivable:
(i) The fully executed original of the
Receivable (together with any agreements
modifying the Receivable, including, without
limitation, any extension agreements);
(ii) The original credit application, or
a copy thereof, of each Obligor, fully
executed by each such Obligor on HAFC's or
the applicable Unaffiliated Originator's
customary form, or on a form approved by
HAFC, for such application; and
(iii) The original certificate of
title (when received) and otherwise such
documents, if any, that HAFC keeps on file in
accordance with its customary procedures
indicating that the Financed Vehicle is owned
by the Obligor and subject to the interest of
(x) HAFC (or any predecessor corporation to
HAFC, or any Affiliate of HAFC or such
predecessor corporation) as first lienholder
or secured party (including any Lien
Certificate received by HAFC), or, (y) an
Unaffiliated Originator as first lienholder
or secured party or, if such original
certificate of title has not yet been
received, a copy of the application therefor,
showing either HAFC (or any predecessor
corporation to HAFC, or any Affiliate of HAFC
or such predecessor corporation), or an
Unaffiliated Originator as secured party; and
(iv) Documents evidencing or relating to
any Insurance Policy, to the extent such
documents are maintained by or on behalf of
the Seller or HAFC.
Notwithstanding the foregoing, the Master Servicer may
appoint a Sub-Servicer as subcustodian, which subcustodian
may hold physical possession of some or all of the
Receivable Files. The Trustee shall have no liability for
the acts or omissions of any such custodian or subcustodian.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of the Master Servicer
. The Master Servicer is hereby authorized to act as agent
for the Trust (and also on behalf of the Trustee and the
Noteholders) and in such capacity shall manage, service,
administer and make collections on the Receivables, and
perform the other actions required by the Master Servicer
under this Agreement. The Master Servicer agrees that its
servicing of the Receivables shall be carried out in
accordance with customary and usual procedures of
institutions which service motor vehicles retail installment
sales contracts and, to the extent more exacting, the degree
of skill and attention that the Master Servicer exercises
with respect to all comparable motor vehicle receivables
that it services for itself or others. In performing such
duties, so long as Household is the Master Servicer, it
shall comply with the standard and customary procedures for
servicing all of its comparable motor vehicle receivables.
The Master Servicer's duties shall include, without
limitation, collection and posting of all payments,
responding to inquiries of Obligors on the Receivables,
investigating delinquencies, sending payment coupons to
Obligors, reporting any required tax information to
Obligors, monitoring the collateral, accounting for
collections and furnishing monthly and annual statements to
the Trustee with respect to distributions, monitoring the
status of Insurance Policies with respect to the Financed
Vehicles and performing the other duties specified herein.
The Master Servicer shall also administer and enforce all
rights and responsibilities of the holder of the Receivables
provided for in the Dealer Agreements (and Household shall
make efforts to obtain possession of the Dealer Agreements,
to the extent it is necessary to do so), the Dealer
Assignments, the Purchase Agreements, the Unaffiliated
Originator Receivables Purchase Agreements and the Insurance
Policies, to the extent that such Dealer Agreements, Dealer
Assignments, the Purchase Agreements, Unaffiliated
Originator Receivables Purchase Agreements and Insurance
Policies relate to the Receivables, the Financed Vehicles or
the Obligors. To the extent consistent with the standards,
policies and procedures otherwise required hereby, the
Master Servicer shall follow its customary standards,
policies, and procedures and shall have full power and
authority, acting alone, to do any and all things in
connection with such managing, servicing, administration and
collection that it may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master
Servicer is hereby authorized and empowered by the Trust to
execute and deliver, on behalf of the Trust, any and all
instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable
instruments, with respect to the Receivables and with
respect to the Financed Vehicles; provided, however, that
notwithstanding the foregoing and subject to Section 4.3
hereof, the Master Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any
Receivable or waive the right to collect the unpaid balance
of any Receivable from the Obligor. The Master Servicer is
hereby authorized to commence, in it's own name or in the
name of the Trust, a legal proceeding to enforce a
Receivable pursuant to Section 4.3 or to commence or
participate in any other legal proceeding (including,
without limitation, a bankruptcy proceeding) relating to or
involving a Receivable, an Obligor or a Financed Vehicle.
If the Master Servicer commences or participates in such a
legal proceeding in its own name, the Trust shall thereupon
be deemed to have automatically assigned such Receivable to
the Master Servicer solely for purposes of commencing or
participating in any such proceeding as a party or claimant,
and the Master Servicer is authorized and empowered by the
Trust to execute and deliver in the Master Servicer's name
any notices, demands, claims, complaints, responses,
affidavits or other documents or instruments in connection
with any such proceeding. The Trustee and the Owner Trustee
shall furnish the Master Servicer with any powers of
attorney and other documents which the Master Servicer may
reasonably request and which the Master Servicer deems
necessary or appropriate and take any other steps which the
Master Servicer may deem reasonably necessary or appropriate
to enable the Master Servicer to carry out its servicing and
administrative duties under this Agreement.
SECTION 4.2. Collection of Receivable
Payments; Modifications of Receivables
(a) . (a) Consistent with the
standards, policies and procedures required by this
Agreement, the Master Servicer shall make reasonable efforts
to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall
become due, and shall follow such collection procedures as
it follows with respect to all comparable automobile
receivables that it services for itself or others and
otherwise act with respect to the Receivables, the Dealer
Agreements, the Dealer Assignments, the Purchase Agreements,
the Unaffiliated Originator Receivables Purchase Agreements,
the Insurance Policies and the Other Conveyed Property in
such manner as will, in the reasonable judgment of the
Master Servicer, maximize the amount to be received by the
Trust with respect thereto. The Master Servicer is
authorized in its discretion to waive any prepayment charge,
late payment charge or any other similar fees that may be
collected in the ordinary course of servicing any
Receivable.
(b) The Master Servicer may at any time
agree to a modification or amendment of a Receivable in
order to (i) change the Obligor's regular due date to a date
within 30 days of when such due date occurs or (ii) re-
amortize the scheduled payments on the Receivable following
a partial prepayment of principal; provided, however, that
no such change shall extend the maturity date of any
Receivable.
(c) The Master Servicer may grant
payment extensions on, or other modifications or amendments
to, a Receivable (including those modifications permitted by
Section 4.2(b)) in accordance with its customary procedures
if the Master Servicer believes in good faith that such
extension, modification or amendment is necessary to avoid a
default on such Receivable, will maximize the amount to be
received with respect to such Receivable, and is otherwise
in the best interests of the Trust; provided, however, that
unless otherwise specified in any Series Supplement:
(i) The aggregate period of all
extensions on a Receivable shall not exceed
six months; provided, however, that not more
than two months can be in any consecutive
twelve month period;
(ii) In no event may a Receivable be
extended by the Master Servicer beyond the
Collection Period immediately preceding the
Final Scheduled Distribution Date of the
Notes with respect to the related Series; and
(iii) As of any Determination Date
the number of Receivables included in a
Series Trust Estate the term of which have
been extended during the preceding 12-month
period shall not exceed 8% of the number of
Receivables in such Series Trust Estate at
the beginning of the preceding 12-month
period.
(d) Except as otherwise provided below,
the Master Servicer shall deposit collections on or with
respect to Receivables into the Master Collection Account as
promptly as possible after the date of processing of such
collections, but in no event later than the second Business
Day following the date of processing. Subject to the
express terms of any Series Supplement, but notwithstanding
anything else in this Agreement to the contrary, for so long
as (i) Household remains the Master Servicer and maintains a
commercial paper rating of not less than A-1 by Standard &
Poor's and P-1 by Moody's (or such other rating below A-1 or
P-1, as the case may be, which is satisfactory to the Rating
Agency) and for five Business Days following any reduction
of any such rating or (ii) a Master Servicer Credit Facility
is maintained in effect by the Master Servicer acceptable in
form and substance to the Rating Agency (such acceptability
to be evidenced in writing by the Rating Agency to the
effect that failure to make the aforementioned deposit on
the basis of the maintenance of the Master Servicer Credit
Facility will not adversely affect the then current rating
of the Notes), issued by a depository institution or
insurance having a rating on its (A) short-term obligations
of at least P-1 by Moody's and A-1 by Standard & Poor's and
(B) long term obligations of at least A2 by Moody's and A by
Standard & Poor's or other ratings approved by the Rating
Agency, the Master Servicer shall not be required to make
deposits of collections on or with respect to Receivables as
provided in the preceding sentence, but may make one or more
deposits of such collections with respect to a Collection
Period into the Master Collection Account in immediately
available funds not later than 1:00 P.M., Central time, on
the Business Day immediately preceding the related
Distribution Date. In the event that a Master Servicer
Credit Facility is maintained, the Master Servicer shall
within two Business Days of the date of processing of
collections on or with respect to Receivables notify the
Trustee and the Master Servicer Credit Facility Issuer in
writing of the amounts that would otherwise be deposited in
the Collection Account and the Master Servicer shall
establish and maintain for the Trust a Payment Record in
which the payments on or with respect to the Receivables
shall be credited and the Master Servicer shall notify the
Trustee and the Master Servicer Credit Facility Issuer in
writing as promptly as practicable (but in any event prior
to the Determination Date for the following Distribution
Date) of the amounts so credited on or with respect to the
Receivables that are to be included in Collected Funds for
the related Distribution Date and of the amounts so credited
which will constitute a part of Collected Funds for the
second following Distribution Date. The Payment Record
shall be made available for inspection during normal
business hours of the Master Servicer upon request of the
Trustee, or any Master Servicer Credit Facility Issuer. The
Master Servicer shall give written notice to the Trustee if
it is required to deposit funds in accordance with the first
sentence of this paragraph.
SECTION 4.3. Realization Upon Receivables
(a) . (a) Consistent with the
standards, policies and procedures required by this
Agreement, the Master Servicer shall use its best efforts to
repossess (or otherwise comparably convert the ownership of)
and liquidate any Financed Vehicle securing a Receivable
with respect to which the Master Servicer has determined
that payments thereunder are not likely to be resumed, as
soon as is practicable after default on such Receivable but
in no event later than the date on which 10% or more of a
Scheduled Payment has become 120 days delinquent (other than
in the case of Financed Vehicles where neither the Financed
Vehicle nor the Obligor can be physically located by the
Master Servicer (using procedures consistent with the
standards, policies and procedures of the Master Servicer
required by this Agreement) and other than in the case of an
Obligor who is subject to a bankruptcy proceeding);
provided, however, that the Master Servicer may elect not to
repossess a Financed Vehicle within such time period if in
its good faith judgment it determines that the proceeds
ultimately recoverable with respect to such Receivable would
be increased by forbearance. The Master Servicer is
authorized to follow such customary practices and procedures
as it shall deem necessary or advisable, consistent with the
standard of care required by Section 4.1, which practices
and procedures may include reasonable efforts to realize
upon any recourse to Dealers, the sale of the related
Financed Vehicle at public or private sale, the submission
of claims under an Insurance Policy and other actions,
including, without limitation, entering into settlements
with Obligors, by the Master Servicer in order to realize
upon such a Receivable. The foregoing is subject to the
provision that, in any case in which the Financed Vehicle
shall have suffered damage, the Master Servicer shall not
expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall
determine in its discretion that such repair and/or
repossession shall increase the proceeds of liquidation of
the related Receivable by an amount greater than the amount
of such expenses. The Master Servicer shall be entitled to
recover all reasonable expenses incurred by it in the course
of repossessing and liquidating a Financed Vehicle but only
from the liquidation proceeds of the vehicle or under the
related Dealer Agreement. The Master Servicer shall recover
such reasonable expenses based on the information contained
in the Master Servicer's Certificate delivered on the
related Determination Date. The Master Servicer shall pay
on behalf of the Trust any personal property taxes assessed
on repossessed Financed Vehicles. The Master Servicer shall
be entitled to reimbursement of any such tax from Net
Liquidation Proceeds with respect to such Receivable.
(b) If the Master Servicer elects to
commence a legal proceeding to enforce a Dealer Agreement,
Dealer Assignment or Unaffiliated Originator Receivables
Purchase Agreement, the act of commencement shall be deemed
to be an automatic assignment from the Trust to the Master
Servicer of the rights under such Dealer Agreement and
Dealer Assignment for purposes of collection only. If,
however, in any enforcement suit or legal proceeding it is
held that the Master Servicer may not enforce a Dealer
Agreement, Dealer Assignment or Unaffiliated Originator
Receivables Purchase Agreement on the grounds that it is not
a real party in interest or a Person entitled to enforce the
Dealer Agreement, Dealer Assignment or Unaffiliated
Receivables Purchase Agreement, the Owner Trustee, at the
Master Servicer's written direction and expense, or the
Seller, at the Seller's expense, shall take such steps as
the Master Servicer deems reasonably necessary to enforce
the Dealer Agreement, Dealer Assignment or Unaffiliated
Originator Receivables Purchase Agreement, including
bringing suit in its name or the name of the Seller or of
the Trust and the Owner Trustee for the benefit of the
Securityholders. All amounts recovered shall be remitted
directly by the Master Servicer as provided in Section
4.2(d).
(c) The Master Servicer agrees that
prior to delivering any repossessed Finance Vehicle for sale
to any dealer, it shall make such filings and effect such
notices as are necessary under Section 9-114(1) of the UCC
to preserve the Trust's ownership interest (or security
interest, as the case may be) in such repossessed Financed
Vehicle.
SECTION 4.4. Insurance
(a) . (a) The Master Servicer shall
require, in accordance with its customary servicing policies
and procedures, that each Financed Vehicle be insured by the
related Obligor under an insurance policy covering physical
loss and damage to the related Financed Vehicle and shall
monitor the status of such physical loss and damage
insurance coverage thereafter, in accordance with its
customary servicing procedures. Each Receivable requires
the Obligor to obtain such physical loss and damage
insurance, naming HAFC and its successors and assigns as
loss payee, and with respect to liability coverage,
additional insureds, and permits the holder of such
Receivable to obtain physical loss and damage insurance at
the expense of the Obligor if the Obligor fails to maintain
such insurance. If the Master Servicer shall determine that
an Obligor has failed to obtain or maintain a physical loss
and damage Insurance Policy covering the related Financed
Vehicle which satisfies the conditions set forth in the
related Eligibility Criteria (including, without limitation,
during the repossession of such Financed Vehicle) the Master
Servicer shall be diligent in carrying out its customary
servicing procedures to enforce the rights of the holder of
the Receivable under the Receivable to require the Obligor
to obtain such physical loss and damage insurance in
accordance with its customary servicing policies and
procedures.
(b) The Master Servicer may ▇▇▇ to
enforce or collect upon the Insurance Policies, in its own
name, if possible, or as agent of the Trust. If the Master
Servicer elects to commence a legal proceeding to enforce an
Insurance Policy, the act of commencement shall be deemed to
be an automatic assignment of the rights of the Trust under
such Insurance Policy to the Master Servicer for purposes of
collection only. If, however, in any enforcement suit or
legal proceeding it is held that the Master Servicer may not
enforce an Insurance Policy on the grounds that it is not a
real party in interest or a holder entitled to enforce the
Insurance Policy, the Owner Trustee, at the Master
Servicer's written direction and expense, or the Seller, at
the Seller's expense, shall take such steps as the Master
Servicer deems reasonably necessary to enforce such
Insurance Policy, including bringing suit in its name or the
name of the Trust and the Owner Trustee for the benefit of
the Noteholders.
SECTION 4.5. Maintenance of Security
Interests in Vehicles
. Consistent with the policies and procedures required by
this Agreement, the Master Servicer shall take such steps on
behalf of the Trust as are necessary to maintain perfection
of the security interest created by each Receivable in the
related Financed Vehicle on behalf of the Trust as the
Trustee shall reasonably request, including, but not limited
to, obtaining the execution by the Obligors and the
recording, registering, filing, re-recording, re-filing, and
re-registering of all security agreements, financing
statements and continuation statements as are necessary to
maintain the security interest granted by the Obligors under
the respective Receivables. The Owner Trustee, on behalf of
the Trust, hereby authorizes the Master Servicer, and the
Master Servicer agrees, to take any and all steps necessary
to re-perfect such security interest on behalf of the Trust
as necessary because of the relocation of a Financed Vehicle
or for any other reason. In the event that the assignment
of a Receivable to the Trust 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 the Trust, HAFC
hereby agrees that the designation of any of HAFC, a
predecessor company to HAFC, or any Affiliate of any of the
foregoing as the secured party on the certificate of title
is in its capacity as agent of the Trust for such limited
purpose.
SECTION 4.6. Covenants, Representations,
and Warranties of Master Servicer
. By its execution and delivery of this Agreement, the
Master Servicer makes the following representations,
warranties and covenants on which the Trustee relies in
accepting the related Receivables, on which the Trustee
relies in authenticating each Series of Notes, on which the
Noteholders rely on in purchasing a Series of Notes and any
Additional Principal Amount thereon on which the Owner
Trustee relies in executing each Series of Certificates.
The Master Servicer covenants as follows:
(i) Liens in Force. The Financed
Vehicle securing each Receivable shall not be
released in whole or in part from the
security interest granted by the Receivable,
except upon payment in full of the Receivable
or as otherwise contemplated herein;
(ii) No Impairment. The Master Servicer
shall do nothing to impair the rights of the
Trust or the related Series of Noteholders
in the Receivables, the Dealer Agreements,
the Dealer Assignments, the Purchase
Agreements, the Unaffiliated Originator
Receivables Purchase Agreements, the
Insurance Policies or the Other Conveyed
Property;
(iii) No Amendments. The Master
Servicer shall not extend or otherwise amend
the terms of any Receivable, except in
accordance with Section 4.2;
(iv) Restrictions on Liens. The Master
Servicer shall not (i) create, incur or
suffer to exist, or agree to create, incur or
suffer to exist, or consent to cause or
permit in the future (upon the happening of a
contingency or otherwise) the creation,
incurrence or existence of any Lien or
restriction on transferability of the
Receivables except for the Lien in favor of
the Trustee for the benefit of the related
Series Securityholders, and the restrictions
on transferability imposed by this Agreement
or (ii) sign or file under the Uniform
Commercial Code of any jurisdiction any
financing statement which names HAFC, the
Master Servicer or any Affiliate thereof as a
debtor, or sign any security agreement
authorizing any secured party thereunder to
file such financing statement, with respect
to the Receivables, except in each case any
such instrument solely securing the rights
and preserving the Lien of the Trustee;
(v) Servicing of Receivables. The
Master Servicer shall service the Receivables
as required by the terms of this Agreement
and in material compliance with its standard
and customary procedures for servicing all
its other comparable motor vehicle
receivables and in compliance with applicable
law; and
(vi) The Master Servicer shall notify
the Trustee of any relocation of the Master
Servicer's principal office set forth in
Section 13.3 hereof and all Receivables Files
shall be maintained by the Master Servicer in
the United States.
SECTION 4.7. Repurchase of Receivables Upon
Breach of Covenant
. Upon discovery by any of the Master Servicer, the Seller,
a Trust Officer of the Owner Trustee or of the Trustee of a
breach of any of the covenants set forth in Sections 4.5 or
4.6, the party discovering such breach shall give prompt
written notice to the others; provided, however, that the
failure to give any such notice shall not affect any
obligation of the Master Servicer under this Section 4.7.
As of the second Accounting Date following its discovery or
receipt of notice of any breach of any covenant set forth in
Sections 4.5 or 4.6 which materially and adversely affects
the interests of the related Series Securityholders in any
Receivable (including any Liquidated Receivable) (or, at the
Master Servicer's election, the first Accounting Date so
following) or the related Financed Vehicle, the Master
Servicer shall, unless such breach shall have been cured in
all material respects, repurchase from the Trust the
Receivable affected by such breach and, on the date
specified in Section 5.4, the Master Servicer shall pay the
related Repurchase Amount and deposit such Repurchase
Amounts into the Master Collection Account in accordance
with Section 5.3 hereof. It is understood and agreed that
the obligation of the Master Servicer to repurchase any
Receivable (including any Liquidated Receivable) with
respect to which such a breach has occurred and is
continuing shall, if such obligation is fulfilled,
constitute the sole remedy against the Master Servicer for
such breach;
SECTION 4.8. Total Servicing Fee; Payment
of Certain Expenses by Master Servicer
. As compensation for its activities, the Master Servicer
shall be entitled to retain out of amounts otherwise to be
deposited in the Master Collection Account with respect to a
Collection Period, the Base Servicing Fee and any
Supplemental Servicing Fee for each Series for such
Collection Period. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its
activities under this Agreement (including taxes imposed on
the Master Servicer, expenses incurred in connection with
distributions and reports made by the Master Servicer to
Securityholders and all fees and expenses of the Owner
Trustee or the Trustee), except taxes levied or assessed
against the Trust, and claims against the Trust in respect
of indemnification, which taxes and claims in respect of
indemnification against the Trust are expressly stated to be
for the account of Household. The Master Servicer shall be
liable for the fees, charges and expenses of the Owner
Trustee, the Trustee, any Sub-Servicer and their respective
agents.
SECTION 4.9. Master Servicer's Certificate
. No later than 10:00 a.m. Central time on each
Determination Date, the Master Servicer shall deliver, or
cause to be delivered, to the Trustee and the Owner Trustee,
a Master Servicer's Certificate executed by a responsible
officer or agent of the Master Servicer containing among
other things, all information necessary to enable the
Trustee to make the allocations required by Section 5.5 and
the distributions with respect to such Distribution Date
pursuant to each Series Supplement. Upon request, the
Master Servicer will also provide a listing of all Warranty
Receivables and Covenant Receivables repurchased as of the
related Determination Date, identifying the Receivables so
purchased. Such list will identify Receivables repurchased
by the Master Servicer or by the Seller on the related
Determination Date and each Receivable which became a
Liquidated Receivable or which was paid in full during the
related Collection Period by account number. In addition to
the information set forth in the preceding sentence, the
Master Servicer's Certificate shall also contain the
information required by any Series Supplement.
SECTION 4.10. Annual Statement as to
Compliance, Notice of Master Servicer Termination Event
(a) . (a) The Master Servicer shall
deliver or cause to be delivered to the Trustee and the
Owner Trustee on or before April 30 (or 120 days after the
end of the Master Servicer's fiscal year, if other than
December 31) of each year, beginning on April 30, 2000, an
Officer's Certificate signed by any responsible officer of
the Master Servicer, or such Eligible Sub-Servicer who is
performing the servicing duties of the Master Servicer,
dated as of December 31 (or other applicable date) of the
immediately preceding year, stating that (i) a review of the
activities of the Master Servicer, or such Eligible Sub-
Servicer who is performing the servicing duties of the
Master Servicer, during the preceding 12-month period and of
its performance under this Agreement has been made under
such officer's supervision, and (ii) to such officer's
knowledge, based on such review, the Master Servicer, or
such Eligible Sub-Servicer who is performing the servicing
duties of the Master Servicer, has in all material respects
fulfilled all its obligations under this Agreement
throughout such period, or, if there has been a default in
the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status
thereof.
(b) The Master Servicer, or such
Eligible Sub-Servicer who is performing the servicing duties
of the Master Servicer, shall deliver to the Trustee and the
Owner Trustee and, in the event that such notice is
delivered by the Sub-Servicer, to the Master Servicer,
promptly after having obtained knowledge thereof, but in no
event later than two (2) Business Days thereafter, written
notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become
a Master Servicer Termination Event under Section 10.1(a).
The Seller or the Master Servicer shall deliver to the
Trustee, the Owner Trustee, the Master Servicer or the
Seller (as applicable) promptly after having obtained
knowledge thereof, but in no event later than two (2)
Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Master Servicer
Termination Event under any other clause of Section 10.1.
SECTION 4.11. Annual Independent
Accountants' Report
(a) . (a) The Master Servicer shall
cause a firm of nationally recognized independent certified
public accountants (the "Independent Accountants"), who may
also render other services to the Master Servicer or to the
Seller, to deliver to the Trustee and the Owner Trustee on
or before April 30 (or 120 days after the end of the Master
Servicer's fiscal year, if other than December 31) of each
year, beginning on April 30, 2000, with respect to the
twelve months ended the immediately preceding December 31
(or other applicable date), a report to the effect that they
have examined certain documents and records relating to the
servicing of Receivables under this Agreement and each
Series Supplement, compared the information contained in the
Master Servicer's Certificates delivered pursuant to Section
4.9 during the period covered by such report with such
documents and records and that, on the basis of such
examination, such accountants are of the opinion that the
servicing has been conducted in compliance with the terms
and conditions as set forth in Articles IV and V of this
Agreement and the applicable provisions of each Series
Supplement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth
in such statement. Such report shall acknowledge that the
Trustee shall be a "non-participating party" with respect to
such report, or words to similar effect. The Trustee shall
have no duty to make any independent inquiry or
investigation as to, and shall have no obligation or
liability in respect of, the sufficiency of such procedures.
(b) On or before April 30 of each
calendar year, beginning with April 30, 2000, the Master
Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other
services to the Master Servicer or Seller) to furnish a
report to the Trustee, the Master Servicer and each Rating
Agency to the effect that they have compared the
mathematical calculations of each amount set forth in the
Master Servicer's Certificates delivered pursuant to Section
4.9 during the period covered by such report with the Master
Servicer's computer reports which were the source of such
amounts and that on the basis of such comparison, such
accountants are of the opinion that such amounts are in
agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth
in such statement. Such report shall acknowledge that the
Trustee shall be a "non-participating party" with respect to
such report, or words to similar effect. The Trustee shall
have no duty to make any independent inquiry or
investigation as to, and shall have no obligation or
liability in respect of, the sufficiency of such procedures.
SECTION 4.12. Access to Certain
Documentation and Information Regarding Receivables
. The Master Servicer shall provide to representatives of
the Trustee and the Owner Trustee reasonable access to the
documentation regarding the Receivables. In each case, such
access shall be afforded without charge but only upon
reasonable request and during normal business hours.
Nothing in this Section shall derogate from the obligation
of the Master Servicer to observe any applicable law
prohibiting disclosure of information regarding the
Obligors, and the failure of the Master Servicer to provide
access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
SECTION 4.13. Fidelity Bond and Errors and
Omissions Policy
. The Master Servicer or such Eligible Sub-Servicer that is
performing the servicing duties of the Master Servicer, has
obtained, and shall continue to maintain in full force and
effect, a Fidelity Bond and Errors and Omissions Policy of a
type and in such amount as is customary for servicers
engaged in the business of servicing automobile receivables.
SECTION 4.14. Year 2000 Compliance
. The Master Servicer covenants that its computer and other
systems used in servicing the Receivables will be modified
to operate in a manner such that on and after January 1,
2000 (i) the Master Servicer can service the Receivables in
accordance with the terms of this Agreement and (ii) the
Master Servicer can operate its business in the same manner
as it is operating on the date hereof.
ARTICLE V
Trust Accounts; Distributions;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust
Accounts
(a) . (a) (i) The Master Servicer,
on behalf of the Noteholders with respect to each Series,
the holders of the Series Trust Certificates of each Series
and the holders of the Owner Trust Certificates, shall
establish and maintain in the name of the Trustee, a trust
account which is an Eligible Deposit Account (the "Master
Collection Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Series Noteholders with respect to the
Household Automobile Revolving Trusts, holders of the Series
Trust Certificates of each Series and the holders of the
Owner Trust Certificates. The Master Collection Account
shall initially be established with the Trustee. The
Trustee shall possess all right, title and interest in all
funds on deposit from time to time in, and shall have sole
dominion and control with respect to, the Master Collection
Account and in all proceeds thereof for the benefit of the
Series Noteholders, the holders of the Series Trust
Certificates of each Series and the holders of the Owner
Trust Certificates. Except as expressly provided in this
Agreement, the Master Servicer agrees that it shall have no
right of setoff or banker's lien against, and no right to
otherwise deduct from, any funds held in the Master
Collection Account for any amount owed to it by the Trust.
(ii) With respect to each Series, the Master
Servicer shall establish and maintain the Series Trust
Accounts required to be established and maintained pursuant
to the related Series Supplement.
(b) Funds on deposit in the Master
Collection Account and any Series Trust Accounts
(collectively, the "Trust Accounts") shall be invested by
Trustee (or any custodian with respect to funds on deposit
in any such account) in Eligible Investments selected in
writing by the Master Servicer (pursuant to standing
instructions or otherwise) which absent any instruction
shall be the investments specified in clause (d) of the
definition of Eligible Investments set forth herein. Funds
on deposit in any Trust Account shall be invested in
Eligible Investments that will mature so that such funds
will be available at the close of business on the Business
Day immediately preceding the following Distribution Date.
Funds deposited in a Trust Account on the day immediately
preceding a Distribution Date and representing the proceeds
of Eligible Investments are not required to be invested
overnight. All Eligible Investments will be held to
maturity.
(c) All investment earnings of monies
deposited in the Trust Accounts shall be deposited (or
caused to be deposited) by the Trustee in the Master
Collection Account or the related Series Collection Account
no later than the close of business on the Business Day
immediately preceding the related Distribution Date, and any
loss resulting from such investments shall be charged to the
Master Collection Account. The Master Servicer will not
direct the Trustee to make any investment of any funds held
in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be
perfected in such investment, in either case without any
further action by any Person, and, in connection with any
direction to the Trustee to make any such investment, if
necessary, the Master Servicer shall deliver to the Trustee
an Opinion of Counsel to such effect.
(d) The Trustee shall not in any way be
held liable by reason of any insufficiency in any of the
Trust Accounts resulting from any loss on any Eligible
Investment included therein except for losses attributable
to the Trustee's negligence or bad faith or its failure to
make payments on such Eligible Investments issued by the
Trustee in its commercial capacity as principal obligor and
not as Trustee in accordance with their terms.
(e) If (i) the Master Servicer shall
have failed to give investment directions for any funds on
deposit in the Trust Accounts to the Trustee by 2:00 p.m.
Eastern Time (or such other time as may be agreed by the
Issuer and the Trustee) on any Business Day; or (ii) an
Event of Default shall have occurred and be continuing with
respect to a Series of Notes, the Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the
Trust Accounts in one or more Eligible Investments in
accordance with paragraph (b) above; provided that, if
following an Event of Default amounts are to be distributed
to Securityholders other than on a Distribution Date,
investments shall mature on the Business Day preceding any
such proposed date of distribution.
(f) The Trustee, in its respective
capacities with respect to the various Series shall possess
all right, title and interest in all funds on deposit from
time to time in the Trust Accounts and in all proceeds
thereof (excluding all Investment Earnings on the Master
Collection Account and the Series Collection Accounts) and
all such funds, investments, proceeds and income shall be
part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole
dominion and control of the Trustee for the benefit of the
related Noteholders. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the
Trustee (or the Master Servicer on its behalf) shall within
five Business Days (or such longer period as to which each
Rating Agency may consent) establish a new Trust Account as
an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Trust Account. In
connection with the foregoing, the Master Servicer agrees
that, in the event that any of the Trust Accounts are not
accounts with the Trustee, the Master Servicer shall notify
the Trustee in writing promptly upon any of such Trust
Accounts ceasing to be an Eligible Deposit Account.
Pursuant to the authority granted to the Master Servicer
under this Agreement, the Master Servicer shall have the
revocable power, granted by the Trustee to make withdrawals
and payments from the Master Collection Account and to
instruct the Trustee to make withdrawals and payments from
the Master Collection Account for the purposes of carrying
out the Master Servicer's duties hereunder. The Master
Servicer may net against any deposits required to be made to
the Master Collection Account on the Business Day before any
Determination Date amounts that the Seller, as
Certificateholder or otherwise, is entitled to receive as
distributions directly or indirectly from the Master
Collection Account on such Determination Date.
SECTION 5.2. Certain Reimbursements to the
Master Servicer
. The Master Servicer shall be entitled to withhold from
amounts otherwise required to be remitted to the Master
Collection Account with respect to a Collection Period an
amount in respect of funds deposited with respect to prior
Collection Periods in the Master Collection Account but
later determined by the Master Servicer to have resulted
from mistaken deposits or postings or checks returned for
insufficient funds; provided, that, such withholding may be
made only following certification by the Master Servicer of
such amounts and the provision of such information to the
Trustee, as may be necessary in the opinion of the Trustee
to verify the accuracy of such certification.
SECTION 5.3. Application of Collections
. All collections for the Collection Period shall be
applied by the Master Servicer as follows:
With respect to each Simple Interest Receivable
(other than a Repurchased Receivable), payments by or on
behalf of the Obligor, (other than Supplemental Servicing
Fees with respect to such Receivable, to the extent
collected) shall be applied to interest and principal in
accordance with the Simple Interest Method. With respect to
each Actuarial Receivable, (other than a Repurchased
Receivable), payments by or on behalf of the Obligor, (other
than Supplemental Servicing Fees with respect to such
Receivable, to the extent collected) shall be applied to
interest and principal in accordance with the Actuarial
Method.
SECTION 5.4. Additional Deposits
. HAFC and the Seller, as applicable, shall deposit or
cause to be deposited in the Master Collection Account for
distribution to the appropriate Series Collection Account on
the Business Day preceding the Determination Date following
the date on which such obligations are due the aggregate
Repurchase Amount with respect to Repurchased Receivables.
SECTION 5.5. Distributions
(a) . (a) On each Distribution Date,
the Trustee, shall transfer Collected Funds with respect to
a Series Trust Estate in the respective amounts set forth in
the Master Servicer's Certificates with respect to each
Series from the Master Collection Account to the related
Series Collection Account for further application and
distribution as set forth in the related Series Supplement.
On each Distribution Date, the Trustee shall also distribute
to the Certificate Paying Agent, amounts on deposit in the
Master Collection Account representing Collected Funds with
respect to the Unpledged Trust Estate for further
application and distribution pursuant to Section 3.11 of the
Trust Agreement.
(b) In the event that the Master
Collection Account is maintained with an institution other
than the Trustee, the Master Servicer shall instruct and
cause such institution to make all deposits and
distributions pursuant to Section 5.5(a) on the related
Distribution Date.
ARTICLE VI
RESERVED
ARTICLE VII
RESERVED
ARTICLE VIII
The Seller
SECTION 8.1. Representations of Seller
. The Seller makes the following representations on which
each Series Support Provider shall be deemed to have relied
in providing the Series Support and on which the Issuer is
deemed to have relied in acquiring the Receivables and on
which the Noteholders are deemed to have relied on in the
purchasing of Notes and any Additional Principal Amount in
connection with the Series Trust Estate. The
representations speak as of the execution and delivery of
this Agreement and each Transfer Agreement and as of each
Transfer Date and each Series Closing Date and shall survive
each sale of the Receivables to the Issuer and each pledge
thereof to the Trustee pursuant to the Indenture and each
Series Supplement.
(a) Schedule of Representations. The
representations and warranties set forth on the Schedule of
Representations attached as Schedule B to the related
Transfer Agreement are true and correct.
(b) Organization and Good Standing.
The Seller has been duly organized and is validly existing
as a corporation in good standing under the laws of the
State of Nevada, with power and authority to own its
properties and to conduct its business as such properties
are currently owned and such business is currently
conducted, and had at all relevant times, and now has,
power, authority and legal right to acquire, own and sell
each Series Trust Estate transferred to the Trust.
(c) Due Qualification. The Seller is
duly qualified to do business as a foreign corporation in
good standing and has obtained all necessary licenses and
approvals in all jurisdictions where the failure to do so
would materially and adversely affect Seller's ability to
transfer the Receivables and the Other Conveyed Property to
the Trust pursuant to this Agreement, or the validity or
enforceability of the Series Trust Estate or to perform
Seller's obligations hereunder and under the Basic Documents
to which the Seller is a party.
(d) Power and Authority. The Seller
has the power and authority to execute and deliver this
Agreement and its Basic Documents and to carry out its terms
and their terms, respectively; the Seller has full power and
authority to sell and assign each Series Trust Estate to be
sold and assigned to and deposited with the Trust by it and
has duly authorized such sale and assignment to the Trust by
all necessary corporate action; and the execution, delivery
and performance of this Agreement and the Basic Documents to
which the Seller is a party have been duly authorized by the
Seller by all necessary corporate action.
(e) Valid Sale, Binding Obligations.
This Agreement and each related Transfer Agreement effects a
valid sale, transfer and assignment of the related Series
Trust Estate, enforceable against the Seller and creditors
of and purchasers from the Seller; and this Agreement and
the Basic Documents to which the Seller is a party, when
duly executed and delivered, shall constitute legal, valid
and binding obligations of the Seller enforceable in
accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The consummation of
the transactions contemplated by this Agreement and the
Basic Documents and the fulfillment of the terms of this
Agreement and the Basic Documents shall not conflict with,
result in any breach of any of the terms and provisions of
or constitute (with or without notice, lapse of time or
both) a material default under the certificate of
incorporation or by-laws of the Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to
which the Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument,
other than this Agreement, or violate any law, order, rule
or regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction
over the Seller or any of its properties.
(g) No Proceedings. There are no
proceedings or investigations pending or, to the Seller's
knowledge, threatened against the Seller, before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the
Seller or its properties (A) asserting the invalidity of
this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of any Securities or the consummation
of any of the transactions contemplated by this Agreement or
any of the Basic Documents, c seeking any determination or
ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any of the
Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax
attributes of the Securities.
(h) Approvals. All approvals,
authorizations, consents, orders or other actions of any
person, corporation or other organization, or of any court,
governmental agency or body or official, required in
connection with the execution and delivery by the Seller of
this Agreement and the consummation of the transactions
contemplated hereby have been or will be taken or obtained
on or prior to the Closing Date and each Transfer Date.
(i) No Consents. The Seller is not
required to obtain the consent of any other party or any
consent, license, approval or authorization, or registration
or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement
which has not already been obtained.
(j) Chief Executive Office. The chief
executive office of the Seller is at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 8.2. Corporate Existence
(a) . (a) During the term of this
Agreement, the Seller will keep in full force and effect its
existence, rights and franchises as a corporation under the
laws of the jurisdiction of its incorporation and will
obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or
agreement necessary or appropriate to the proper
administration of this Agreement and the transactions
contemplated hereby.
(b) During the term of this Agreement,
the Seller shall observe the applicable legal requirements
for the recognition of the Seller as a legal entity separate
and apart from its Affiliates, including as follows:
(i) the Seller shall not engage in any
other business other than as provided in
Article THIRD of Seller's Articles of
Incorporation;
(ii) the Seller shall maintain corporate
records and books of account separate from
those of its Affiliates;
(iii) except as otherwise provided
in this Agreement, the Seller shall not
commingle its assets and funds with those of
its Affiliates;
(iv) the Seller shall hold such
appropriate meetings of its Board of
Directors as are necessary to authorize all
the Seller's corporate actions required by
law to be authorized by the Board of
Directors, shall keep minutes of such
meetings and of meetings of its
stockholder(s) and observe all other
customary corporate formalities (and any
successor Seller not a corporation shall
observe similar procedures in accordance with
its governing documents and applicable law);
(v) the Seller shall at all times hold
itself out to the public under the Seller's
own name as a legal entity separate and
distinct from its Affiliates;
(vi) the Seller shall not become
involved in the day-to-day management of any
other Person;
(vii) the Seller shall not guarantee
any other Person's obligations or advance
funds to any other Person for the payment of
expenses or otherwise;
(viii) the Seller shall not act as an
agent of any other Person in any capacity;
(ix) the Seller shall not dissolve or
liquidate, in whole or in part; and
(x) all transactions and dealings
between the Seller and its Affiliates will be
conducted on an arm's-length basis.
(c) During the term of this Agreement,
the Seller will comply with the limitations on its business
and activities, as set forth in its Certificates of
Incorporation, and will not incur indebtedness other than
pursuant to or as expressly permitted by the Basic Documents
or the Series Related Documents with respect to each Series.
SECTION 8.3. Liability of Seller;
Indemnities
. The Seller shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken under
this Agreement by the Seller and the representations made by
the Seller under this Agreement.
(a) The Seller shall indemnify, defend
and hold harmless the Issuer, the Owner Trustee, the Trust
and the Trustee from and against any taxes that may at any
time be asserted against any such Person with respect to the
transactions contemplated in this Agreement and any of the
Basic Documents (except any income taxes arising out of fees
paid to the Owner Trustee, the Trustee and each Series
Support Provider and except any taxes to which the Owner
Trustee or the Trustee may otherwise be subject to),
including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but,
in the case of the Issuer, not including any taxes asserted
with respect to, federal or other income taxes arising out
of distributions on the Certificates and the Notes) and
costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend
and hold harmless the Issuer, the Owner Trustee and the
Trustee against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this
Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the
Seller's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of
the Notes.
(c) The Seller shall indemnify, defend
and hold harmless the Owner Trustee and the Trustee and
their respective officers, directors, employees and agents
from and against any and all costs, expenses, losses,
claims, damages and liabilities arising out of, or incurred
in connection with, the acceptance or performance of the
trusts and duties set forth herein and in the Basic
Documents, except to the extent that such cost, expense,
loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in
judgment) of the Person seeking indemnification.
Indemnification under this Section shall survive
the resignation or removal of the Owner Trustee or the
Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and other
expenses of litigation. If the Seller shall have made any
indemnity payments pursuant to this Section and the Person
to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person
shall promptly repay such amounts to the Seller, without
interest.
SECTION 8.4. Merger or Consolidation of, or
Assumption of the Obligations of, Seller
. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or
consolidation to which the Seller shall be a party or c
which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the
foregoing cases (x) has a certificate of incorporation
containing provisions relating to limitations on business
and other matters substantially identical to those contained
in the Seller's certificate of incorporation and (y)
executes an agreement of assumption to perform every
obligation of the Seller under this Agreement, the other
Basic Documents and the applicable Series Related Documents
shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however,
that the Rating Agency Condition shall have been satisfied
with respect to such transaction.
SECTION 8.5. Limitation on Liability of
Seller and Others
. (a) The Seller and any director or officer or employee
or agent of the Seller may rely in good faith on the written
advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person
respecting any matters arising under any Basic Document.
The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that
in its opinion may involve it in any expense or liability.
Except as provided in Section 8.3 hereof, neither the Seller
nor any of the directors, officers, employees or agents of
the Seller acting in such capacities shall be under any
liability to the Trust, the Securityholders, any Series
Support Provider or any other Person for any action taken or
for refraining from the taking of any action in good faith
in such capacities pursuant to this Agreement; provided,
however, that this provision shall not protect the Seller or
any such person against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder.
(b) All obligations of the Seller under this
Agreement (including, but not limited to, repurchase and
indemnification obligations) and under any of the Basic
Documents shall be limited in recourse to property, if any,
which the Seller may hold from time to time, not subject to
any Lien.
SECTION 8.6. Seller May Own Certificates or
Notes
. The Seller and any Affiliate thereof may in its
individual or any other capacity become the owner or pledgee
of Certificates or Notes with the same rights as it would
have if it were not the Seller or an Affiliate thereof,
except as expressly provided herein or in any Basic
Document. Notes or Certificates so owned by the Seller or
such Affiliate shall have an equal and proportionate benefit
under the provisions of the Basic Documents, without
preference, priority, or distinction as among all of the
Notes or Certificates; provided, however, except in the
event that all outstanding Notes and Certificates are owned
by the Seller and/or any Affiliate thereof, that any Notes
or Certificates owned by the Seller or any Affiliate
thereof, during the time such Notes or Certificates are
owned by them, shall be without voting rights for any
purpose set forth in the Basic Documents and any such Notes
will not be entitled to the benefits of any financial
guaranty insurance policy. The Seller shall notify the
Owner Trustee and the Trustee promptly after it or any of
its Affiliates become the owner or pledgee of a Certificate
or a Note.
ARTICLE IX
The Master Servicer
SECTION 9.1. Representations of Master
Servicer
. The Master Servicer makes the following representations
on which each Series Support Provider shall be deemed to
have relied in executing and delivering the Series Support
and on which the Issuer is deemed to have relied in
acquiring the Receivables and on which the Noteholders are
deemed to have relied on in the purchasing of Notes and any
Additional Principal Amount in connection with the Series
Trust Estate. The representations speak as of the execution
and delivery of this Agreement and each Series Supplement,
each Series Closing Date and as of each Transfer Date and
shall survive each sale of the Series Trust Estate to the
Issuer and each pledge thereof to the Trustee pursuant to
the Indenture.
(i) Organization and Good Standing.
The Master Servicer has been duly organized
and is validly existing and in good standing
under the laws of its jurisdiction of
organization, with power, authority and legal
right to own its properties and to conduct
its business as such properties are currently
owned and such business is currently
conducted, and had at all relevant times, and
now has, power, authority and legal right to
enter into and perform its obligations under
this Agreement and the other Basic Documents
to which it is a party;
(ii) Due Qualification. The Master
Servicer is duly qualified to do business as
a foreign corporation in good standing and
has obtained all necessary licenses and
approvals, in all jurisdictions in which the
ownership or lease of property or the conduct
of its business (including the servicing of
the Receivables as required by this
Agreement) requires or shall require such
qualification; except where the failure to
qualify or obtain licenses or approvals would
not have a material adverse effect on its
ability to perform its obligations as Master
Servicer under this Agreement and the other
Basic Documents to which it is a party;
(iii) Power and Authority. The
Master Servicer has the power and authority
to execute and deliver this Agreement and its
Basic Documents and to carry out its terms
and their terms, respectively, and the
execution, delivery and performance of this
Agreement and the Basic Documents to which
the Master Servicer is a party have been duly
authorized by the Master Servicer by all
necessary corporate action;
(iv) Binding Obligation. This Agreement
and the Basic Documents to which the Master
Servicer is a party shall constitute legal,
valid and binding obligations of the Master
Servicer enforceable in accordance with their
respective terms, except as enforceability
may be limited by bankruptcy, insolvency,
reorganization, or other similar laws
affecting the enforcement of creditors'
rights generally and by equitable limitations
on the availability of specific remedies,
regardless of whether such enforceability is
considered in a proceeding in equity or at
law;
(v) No Violation. The consummation of
the transactions contemplated by this
Agreement and the Basic Documents to which
the Master Servicer is a party, and the
fulfillment of the terms of this Agreement
and the Basic Documents to which the Master
Servicer is a party, shall not conflict with,
result in any breach of any of the terms and
provisions of, or constitute (with or without
notice or lapse of time) a material default
under, the articles of incorporation or
bylaws of the Master Servicer, or any
indenture, agreement, mortgage, deed of trust
or other instrument to which the Master
Servicer is a party or by which it is bound,
or result in the creation or imposition of
any Lien upon any of its properties pursuant
to the terms of any such indenture,
agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or
violate any law, order, rule or regulation
applicable to the Master Servicer of any
court or of any federal or state regulatory
body, administrative agency or other
governmental instrumentality having
jurisdiction over the Master Servicer or any
of its properties, or any way materially
adversely affect the interest of the
Noteholders or the Trust in any Receivable or
affect the Master Servicer's ability to
perform its obligations under this Agreement;
(vi) No Proceedings. There are no
proceedings or investigations pending or, to
the Master Servicer's knowledge, threatened
against the Master Servicer, before any
court, regulatory body, administrative agency
or other tribunal or governmental
instrumentality having jurisdiction over the
Master Servicer or its properties (A)
asserting the invalidity of this Agreement or
any of the Basic Documents, (B) seeking to
prevent the issuance of the Securities or the
consummation of any of the transactions
contemplated by this Agreement or any of the
Basic Documents, or c seeking any
determination or ruling that might materially
and adversely affect the performance by the
Master Servicer of its obligations under, or
the validity or enforceability of, this
Agreement or any of the Basic Documents or
(D) seeking to adversely affect the federal
income tax or other federal, state or local
tax attributes of the Securities;
(vii) Approvals. All approvals,
authorizations, consents, orders or other
actions of any person, corporation or other
organization, or of any court, governmental
agency or body or official, required in
connection with the execution and delivery by
the Master Servicer of this Agreement and the
consummation of the transactions contemplated
hereby have been or will be taken or obtained
on or prior to the Closing Date.
(viii) No Consents. The Master
Servicer is not required to obtain the
consent of any other party or any consent,
license, approval or authorization, or
registration or declaration with, any
governmental authority, bureau or agency in
connection with the execution, delivery,
performance, validity or enforceability of
this Agreement which has not already been
obtained.
(ix) Chief Executive Office. The chief
executive office of the Master Servicer is
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 9.2. Liability of Master Servicer;
Indemnities
(a) . (a) The Master Servicer (in its
capacity as such) shall be liable hereunder only to the
extent of the obligations in this Agreement specifically
undertaken by the Master Servicer and the representations
made by the Master Servicer.
(b) The Master Servicer shall defend,
indemnify and hold harmless the Trust, the Trustee, the
Owner Trustee and their respective officers, directors,
agents and employees, from and against any and all costs,
expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of
litigation arising out of or resulting from the use,
ownership or operation of, or lien on, any Financed Vehicle;
(c) The Master Servicer (when the
Master Servicer is Household or an Affiliate of Household)
shall indemnify, defend and hold harmless the Trust, the
Trustee, the Owner Trustee and their respective officers,
directors, agents and employees and from and against any
taxes that may at any time be asserted against any of such
parties with respect to the transactions contemplated in
this Agreement, including, without limitation, any sales,
gross receipts, tangible or intangible personal property,
privilege or license taxes (but not including any federal or
other income taxes, including franchise taxes asserted with
respect to, and as of the date of, the sale of the
Receivables and the Other Conveyed Property to the Trust or
the issuance and original sale of any Series of the Notes)
and costs and expenses in defending against the same, except
to the extent that such costs, expenses, losses, damages,
claims and liabilities arise out of the negligence or
willful misconduct of such parties;
The Master Servicer (when the Master Servicer is
not Household) shall indemnify, defend and hold harmless the
Trust, the Trustee, the Owner Trustee and their respective
officers, directors, agents and employees from and against
any taxes with respect to the sale of Receivables in
connection with servicing hereunder that may at any time be
asserted against any of such parties with respect to the
transactions contemplated in this Agreement, including,
without limitation, any sales, gross receipts, tangible or
intangible personal property, privilege or license taxes
(but not including any federal or other income taxes,
including franchise taxes asserted with respect to, and as
of the date of, the sale of the Series Trust Estate to the
Trust or the issuance and original sale of the Securities)
and costs and expenses in defending against the same; and
(d) The Master Servicer shall
indemnify, defend and hold harmless the Trust, the Trustee,
the Owner Trustee, each Series Support Provider and their
respective officers, directors, agents and employees from
and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or
was imposed upon the Trust or the Trustee by reason of the
breach of this Agreement by the Master Servicer, the
negligence, misfeasance, or bad faith of the Master Servicer
in the performance of its duties under this Agreement or any
Series Supplement or by reason of reckless disregard of its
obligations and duties under this Agreement or any Series
Supplement, except to the extent that such costs, expenses,
losses, damages, claims, and liabilities arise out of the
negligence or willful misconduct of the Person seeking
indemnification.
(e) The Master Servicer shall
indemnify, defend and hold harmless the Trust, the Trustee,
the Owner Trustee and their respective officers, directors,
agents and employees from and against any loss, liability or
expense incurred by reason of the violation by Master
Servicer of federal or state securities laws in connection
with the registration or the sale of the Securities, except
to the extent that such costs, expenses, losses, damages,
claims, and liabilities arise out of the negligence or
willful misconduct of such parties.
(f) Indemnification under this Article
shall survive the termination of this Agreement and will
survive the early resignation or removal of any of the
parties hereto and shall include, without limitation,
reasonable fees and expenses of counsel and expenses of
litigation. If the Master Servicer has made any indemnity
payments pursuant to this Article and the recipient
thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts collected to the
Master Servicer, without interest. Notwithstanding any
other provision of this Agreement, the obligations of the
Master Servicer shall not terminate or be deemed released
upon the resignation or termination of Household as the
Master Servicer and shall survive any termination of this
Agreement.
SECTION 9.3. Merger or Consolidation of, or
Assumption of the Obligations of the Master Servicer
(a) . (a) Any Person (i) into which
the Master Servicer may be merged or consolidated, (ii)
resulting from any merger or consolidation to which the
Master Servicer shall be a party, (iii) which acquires by
conveyance, transfer, or lease substantially all of the
assets of the Master Servicer, or (iv) succeeding to the
business of the Master Servicer, in any of the foregoing
cases shall execute an agreement of assumption to perform
every obligation of the Master Servicer under this Agreement
and each Basic Document and Series Related Document and,
whether or not such assumption agreement is executed, shall
be the successor to the Master Servicer under this Agreement
and each Basic Document and Series Related Document without
the execution or filing of any paper or any further act on
the part of any of the parties to this Agreement and each
Series Supplement, anything in this Agreement and each
Series Supplement to the contrary notwithstanding.
Notwithstanding the foregoing, the Master Servicer shall not
merge or consolidate with any other Person or permit any
other Person to become a successor to the Master Servicer's
business, unless (x) the Master Servicer shall have
delivered to the Owner Trustee, the Rating Agencies and the
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section
9.3(a) and that all conditions precedent, if any, provided
for in this Agreement relating to such transaction have been
complied with, and (y) the Rating Agency Condition shall
have been satisfied with respect to such assignment or
succession.
SECTION 9.4. Limitation on Liability of
Master Servicer and Others
(a) . (a) Neither the Master
Servicer, the Trustee nor any of the directors or officers
or employees or agents of the Master Servicer or the Trustee
shall be under any liability to the Trust, except as
provided in this Agreement and each Basic Document or Series
Related Document, for any action taken or for refraining
from the taking of any action pursuant to this Agreement and
each Basic Document or Series Related Document; provided,
however, that this provision shall not protect the Master
Servicer, the Trustee or any such person against any
liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (excluding
errors in judgment) in the performance of duties (including
negligence with respect to the Master Servicer's
indemnification obligations hereunder), by reason of
reckless disregard of obligations and duties under this
Agreement and each Basic Document or Series Related Document
or any violation of law by the Master Servicer, the Trustee
or such person, as the case may be; provided, further, that
this provision shall not affect any liability to indemnify
the Trustee and the Owner Trustee for costs, taxes,
expenses, claims, liabilities, losses or damages paid by the
Trustee and the Owner Trustee, in their individual
capacities. The Master Servicer, the Trustee and any
director, officer, employee or agent of the Master Servicer
may rely in good faith on the written advice of counsel or
on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising
under this Agreement. The Trustee shall not be required to
expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity
against such risk or liability is not reasonably assured to
it in writing prior to the expenditure of risk of such funds
or incurrence of financial liability.
(b) Notwithstanding anything herein to
the contrary, the Trustee shall not be liable for any
obligation of the Master Servicer contained in this
Agreement and each Basic Document and Series Related
Document, and the Owner Trustee, the Seller and the
Noteholders shall look only to the Master Servicer to
perform such obligations.
(c) The parties expressly acknowledge
and consent to The Chase Manhattan Bank acting in the
potential dual capacity of successor Master Servicer and in
the capacity as Trustee. The Chase Manhattan Bank may, in
such dual or other capacity, discharge its separate
functions fully, without hindrance or regard to conflict of
interest principles, duty of loyalty principles or other
breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by The Chase
Manhattan Bank of express duties set forth in this Agreement
in any of such capacities, all of which defenses, claims or
assertions are hereby expressly waived by the other parties
hereto and the Noteholders except in the case of negligence
and willful misconduct by The Chase Manhattan Bank.
SECTION 9.5. Delegation of Duties
. In the ordinary course of business, the Master Servicer
at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to
conduct such duties in accordance with standards employed by
the Master Servicer in compliance with Section 4.1. Such
delegation shall not relieve the Master Servicer of its
liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of
Section 9.6. The Master Servicer shall provide each Rating
Agency and the Trustee with written notice prior to the
delegation of any of its duties to any Person other than any
of the Master Servicer's Affiliates or their respective
successors and assigns.
SECTION 9.6. Master Servicer Not to Resign
. Subject to the provisions of Section 9.3, the Master
Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the
performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material
conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or
Affiliates, the other activities of the Master Servicer so
causing such a conflict being of a type and nature carried
on by the Master Servicer or its subsidiaries or Affiliates
at the date of this Agreement or (ii) upon satisfaction of
the following conditions: (a) the Master Servicer has
proposed a successor servicer to the Trustee in writing and
such proposed successor servicer is reasonably acceptable to
the Trustee; (b) the Rating Agency shall have delivered a
letter to the Trustee stating that the appointment of such
proposed successor servicer as Master Servicer hereunder
will satisfy the Rating Agency Condition; and c such
proposed successor servicer has agreed in writing to assume
the obligations of Master Servicer hereunder and under each
relevant Basic Document and Series Related Document and (d)
the Master Servicer has delivered to the Trustee an Opinion
of Counsel to the effect that all conditions precedent to
the resignation of the Master Servicer and the appointment
of and acceptance by the proposed successor servicer have
been satisfied; provided, however, that, in the case of
clause (i) above, no such resignation by the Master Servicer
shall become effective until the Trustee shall have assumed
the Master Servicer's responsibilities and obligations
hereunder or the Trustee shall have designated a successor
servicer in accordance with Section 10.3 which shall have
assumed such responsibilities and obligations. Any such
resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in
Sections 10.1 and 10.3 as obligations that survive the
resignation or termination of the Master Servicer. Any such
determination permitting the resignation of the Master
Servicer pursuant to clause (i) above shall be evidenced by
an Opinion of Counsel to such effect delivered to the
Trustee.
SECTION 9.7. Sub-Servicing Agreements
Between Master Servicer and Sub-Servicers
. The Master Servicer may enter into agreements for any
subservicing and administration of Receivables with any
institution which is an Eligible Subservicer and is in
compliance with the laws of each state necessary to enable
it to perform the obligations of the Master Servicer
pursuant to this Agreement. For purposes of this Agreement
and each Basic Document and Series Related Document, the
Master Servicer shall be deemed to have received payments on
Receivables when any Sub-Servicer has received such
payments. Any such agreement shall be consistent with and
not violate the provisions of this Agreement. The Master
Servicer shall not be relieved of its obligations under this
Agreement and each Basic Document and Series Related
Document notwithstanding any agreement relating to
subservicing and the Master Servicer shall be obligated to
the same extent and under the same terms and conditions as
if it alone were servicing and administering the
Receivables. The Issuer shall have no liability to the
Master Servicer except for payment of the Base Servicing Fee
and any Supplemental Servicing Fee. The Issuer shall have
no obligation to indemnify the Master Servicer for costs or
expenses, except with respect to the preceding sentence.
The parties hereto acknowledge that with respect to
statements or certificates required to be delivered by the
Master Servicer in accordance with this Agreement and each
Series Supplement, including, but not limited to, Sections
4.9, 4.10 and 4.11 hereof, that a statement or certificate
delivered by the Sub-Servicer shall be sufficient to
discharge the Master Servicer's obligation to deliver such
certificate or statement.
SECTION 9.8. Successor Sub-Servicers
. The Master Servicer may terminate any Sub-Servicer and
either directly service the related Receivables itself or
enter into an agreement with a successor Sub-Servicer that
is an Eligible Sub-Servicer. None of the Owner Trustee or
the Trustee shall have no duty or obligation to monitor or
supervise the performance of any Sub-Servicer.
ARTICLE X
Default
SECTION 10.1. Master Servicer Termination
Event
. For purposes of this Agreement, each of the following
shall constitute a "Master Servicer Termination Event", but
shall only constitute a Master Servicer Termination Event
with respect to the Series and the related Series Trust
Estates with respect to which such event arose:
(a) Any failure by the Master Servicer
to deliver, or cause to be delivered, to the Trustee for
distribution pursuant to the terms of this Agreement any
proceeds or payment required to be so delivered under the
terms of this Agreement (including deposits of the
Repurchase Amount pursuant to Section 3.2 and Section 4.7)
that continues unremedied for a period of five Business Days
after written notice is received by the Master Servicer from
the Trustee or after discovery of such failure by a
responsible Officer of the Master Servicer (but in no event
later than five Business Days after the Master Servicer is
required to make such delivery or deposit);
(b) Failure on the part of the Master
Servicer duly to observe or perform any other covenants or
agreements of the Master Servicer set forth in this
Agreement and each Basic Document or Series Related
Document, which failure (i) materially and adversely affects
the rights of Noteholders of a Series (determined without
regard to the availability of funds under any Series
Support) and (ii) continues unremedied for a period of 60
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Master Servicer by the Trustee;
(c) The entry of a decree or order for
relief by a court or regulatory authority having
jurisdiction in respect of the Master Servicer in an
involuntary case under the federal bankruptcy laws, as now
or hereafter in effect, or another present or future,
federal bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Master
Servicer or of any substantial part of its property or
ordering the winding up or liquidation of the affairs of the
Master Servicer or the commencement of an involuntary case
under the federal bankruptcy laws, as now or hereinafter in
effect, or another present or future federal or state
bankruptcy, insolvency or similar law and such case is not
dismissed within 60 days; or
(d) The commencement by the Master
Servicer of a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any other present or
future, federal or state, bankruptcy, insolvency or similar
law, or the consent by the Master Servicer to the
appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Master Servicer or of any
substantial part of its property or the making by the Master
Servicer of an assignment for the benefit of creditors or
the failure by the Master Servicer generally to pay its
debts as such debts become due or the taking of corporate
action by the Master Servicer in furtherance of any of the
foregoing; or
(e) Any representation, warranty or
certification of the Master Servicer made in this Agreement
or any Series Supplement or any certificate, report or other
writing delivered pursuant hereto or thereto shall prove to
be incorrect in any material respect as of the time when the
same shall have been made, and the incorrectness of such
representation, warranty or statement has a material adverse
effect on the interests of the Trust in the related Series
Trust Estate and, within 60 days after written notice
thereof shall have been given to the Master Servicer by the
Trustee the circumstances or condition in respect of which
such representation, warranty or statement was incorrect
shall not have been eliminated or otherwise cured; or
(f) Notwithstanding the foregoing, a
delay in or failure of performance under Section 10.1(a) for
a period of five Business Days or under Section 10.1(b) for
a period of 60 days, shall not constitute a Master Servicer
Termination Event if such delay or failure could not be
prevented by the exercise of reasonable diligence by the
Master Servicer and such delay or failure was caused by an
act of God, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar
causes. The preceding sentence shall not relieve the Master
Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms
of this Agreement, and the Master Servicer shall provide the
Trustee and the Seller with an Officers' Certificate giving
prompt notice of such failure or delay by it, together with
a description of its efforts to so perform its obligations.
SECTION 10.2. Consequences of a Master
Servicer Termination Event
. If a Master Servicer Termination Event shall occur and be
continuing, the Trustee (to the extent a Trust Officer of
the Trustee has actual knowledge thereof) at the direction
of the Trustee, by notice given in writing to the Master
Servicer may terminate all of the rights and obligations of
the Master Servicer under this Agreement and the other Basic
Documents as they relate to a Series and a Series Trust
Estate out of which such Servicer Termination Event arose.
On or after the receipt by the Master Servicer of such
written notice, all authority, power, obligations and
responsibilities of the Master Servicer under this
Agreement, whether with respect to the Notes or the Other
Conveyed Property or otherwise, automatically shall pass to,
be vested in, and become obligations and responsibilities,
of the Trustee (or such other successor Master Servicer
appointed by Trustee pursuant to Section 10.3); provided,
however, that the successor Master Servicer shall (i) have
no liability with respect to any obligation which was
required to be performed by the terminated Master Servicer
prior to the date that the successor Master Servicer becomes
the Master Servicer or any claim of a third party based on
any alleged action or inaction of the terminated Master
Servicer and (ii) no obligation to perform any repurchase or
advancing obligations, if any, of the terminated Master
Servicer.
The successor Master Servicer is authorized and
empowered by this Agreement to execute and deliver, on
behalf of the terminated Master Servicer, as attorney-in-
fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and
endorsement of the Series Trust Estate and related documents
to show the Trust as lienholder or secured party on the
related Lien Certificates, or otherwise. The terminated
Master Servicer agrees to cooperate with the successor
Master Servicer in effecting the termination of the
responsibilities and rights of the terminated Master
Servicer under this Agreement as they relate to the Series
Trust Estate with respect to which such termination has been
effected , including, without limitation, the transfer to
the successor Master Servicer for administration by it of
all cash amounts that shall at the time be held by the
terminated Master Servicer for deposit, or have been
deposited by the terminated Master Servicer, in the Master
Collection Account or thereafter received with respect to
the Receivables in the subject Series Trust Estate and the
delivery to the successor Master Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer
tape in readable form as of the most recent Business Day
containing all information necessary to enable the successor
Master Servicer to service such Series Trust Estate. If
requested by the Trustee, the successor Master Servicer
shall direct the Obligors to make all payments under the
Receivables directly to the successor Master Servicer (in
which event the successor Master Servicer shall process such
payments in accordance with Section 4.2(d)). The terminated
Master Servicer shall grant the Trustee and the successor
Master Servicer reasonable access to the terminated Master
Servicer's premises at the terminated Master Servicer's
expense.
SECTION 10.3. Appointment of Successor
(a) . (a) On and after the time the
Master Servicer receives a notice of termination pursuant to
Section 10.2 or upon the resignation of the Master Servicer
pursuant to Section 9.6, the Master Servicer shall continue
to perform all servicing functions under this Agreement
until the date specified in such termination notice or until
such resignation becomes effective or until a date mutually
agreed upon by the Master Servicer and the Trustee. The
Trustee shall as promptly as possible after such termination
or resignation appoint an Eligible Servicer as a successor
servicer (the "Successor Master Servicer"), and such
Successor Master Servicer shall accept its appointment by a
written assumption in a form acceptable to the Trustee. In
the event that a Successor Master Servicer has not been
appointed or has not accepted its appointment at the time
when the Master Servicer ceases to act as Master Servicer,
the Trustee without further action shall automatically be
appointed the Master Successor Servicer. The Trustee may
delegate any of its servicing obligations to an Affiliate or
agent in accordance with Section 9.6. Notwithstanding the
foregoing, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint
any established institution qualifying as an Eligible
Servicer as the Successor Master Servicer hereunder. The
Trustee shall give prompt notice to each Rating Agency upon
the appointment of a Successor Master Servicer. The Trustee
or the Successor Master Servicer, as the case may be, shall
be the successor in all respects to the Master Servicer in
its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement,
and shall be subject to all the rights, responsibilities,
restrictions, duties, liabilities and termination provisions
relating thereto placed on the Master Servicer by the terms
and provisions of this Agreement, except as otherwise stated
herein. The Trustee or the Successor Master Servicer, as
the case may be, shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such
succession. The Successor Master Servicer shall be subject
to termination under Section 10.2 upon the occurrence of any
Master Servicer Termination Event applicable to it as Master
Servicer.
(b) Subject to Section 9.6, no
provision of this Agreement shall be construed as relieving
the Trustee of its obligation to succeed as successor Master
Servicer upon the termination of the Master Servicer
pursuant to Section 10.2 or the resignation of the Master
Servicer pursuant to Section 9.6.
(c) Any successor Master Servicer shall
be entitled to such compensation (whether payable out of the
Master Collection Account or otherwise) equal to the greater
of (a) the compensation the Master Servicer would have been
entitled to under this Agreement if the Master Servicer had
not resigned or been terminated hereunder and (b)
compensation calculated with a Servicing Fee Rate equal to
the then-current "market rate" fee for servicing assets
comparable to the Receivables, which rate shall be
determined by averaging three fee bids obtained by the
Trustee from third party servicers selected by the Trustee.
In addition, any successor Master Servicer shall be entitled
to reasonable transition expenses incurred in acting as
successor Master Servicer payable by the outgoing Master
Servicer, and to the extent such transition expenses have
not been paid by the outgoing Master Servicer, such
successor Master Servicer shall be entitled to reimbursement
for such reasonable expenses pursuant to the related Series
Supplement.
SECTION 10.4. Notification to Noteholders
and Certificateholders
. Upon any termination of, or appointment of a successor
to, the Master Servicer or the Trustee shall give prompt
written notice thereof to each Noteholder.
SECTION 10.5. Waiver of Past Defaults
. A majority of the Noteholders may, on behalf of all
Securityholders, waive any default by the Seller or the
Master Servicer in the performance of their obligations
hereunder and its consequences, except the failure to make
any distributions required to be made to Noteholders or to
make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
SECTION 10.6. Successor to Master Servicer
(a) . (a) The Trustee, in its
capacity as successor to the Master Servicer, shall perform
such duties and only such duties as are specifically set
forth in this Agreement and each Basic Document and Series
Related Document with respect to the assumption of any
servicing duties and no implied covenants or obligations
shall be read into this Agreement against the Trustee.
(b) In the absence of bad faith or
negligence on its part, the Trustee may conclusively rely as
to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements
of this Agreement and each Series Supplement; but in the
case of any such certificates or opinions, which by any
provision hereof are specifically required to be furnished
to the Trustee , the Trustee shall be under a duty to
examine the same and to determine whether or not they
conform to the requirements of this Agreement and each
Series Supplement.
(c) The Trustee shall have no liability
for any actions taken or omitted by the terminated Master
Servicer.
ARTICLE XI
Termination
SECTION 11.1. Optional Purchase of All
Receivables
(a) . (a) To the extent and under the
circumstances provided in a Series Supplement, the Master
Servicer and the Seller each shall have the option to
purchase the related Series Trust Estate, other than the
Trust Accounts; provided, however, that the amount to be
paid for such purchase shall be sufficient to pay the full
amount of principal, premium, if any, and interest then due
and payable on the Notes of such Series and all other
amounts due to the Series Securityholders, the Trustee and
Owner Trustee under the related Series Supplement and Note
Purchase Agreement. To exercise such option, the Master
Servicer or the Seller, as the case may be, shall deposit
pursuant to Section 5.3 in the Master Collection Account an
amount equal to the aggregate Repurchase Amount for the
related Receivables, plus the appraised value of any other
property constituting such Series Trust Estate, such value
to be determined by an appraiser mutually agreed upon by the
Master Servicer and the Trust, and shall succeed to all
interests in and to the related Series Trust Estate.
(b) Upon any sale of the assets of the
Trust pursuant to Article IV of the Indenture , the Master
Servicer shall instruct the Trustee to deposit the proceeds
from such sale after all payments and reserves therefrom
(including the expenses of such sale) have been made (the
"Insolvency Proceeds") in the Master Collection Account.
(c) Notice of any termination of the
Trust shall be given by the Master Servicer to the Owner
Trustee, the Trustee and the Rating Agencies as soon as
practicable after the Master Servicer has received notice
thereof.
(d) Following the satisfaction and
discharge of the Indenture, the payment in full of the
principal of and interest on the Notes, the termination of
any Series Support (as provided therein) and the surrender
of any Series Support to the Series Support Provider, the
Certificateholders will succeed to the rights of the
Noteholders hereunder and the Owner Trustee will succeed to
the rights of, and assume the obligations of, the Trustee
pursuant to this Agreement.
ARTICLE XII
Administrative Duties of the Master Servicer
SECTION 12.1. Administrative Duties.
(a) Duties with Respect to the
Indenture. The Master Servicer shall perform all its duties
and the duties of the Issuer under the Indenture. In
addition, the Master Servicer shall consult with the Owner
Trustee as the Master Servicer deems appropriate regarding
the duties of the Issuer under the Indenture. The Master
Servicer shall monitor the performance of the Issuer and
shall advise the Owner Trustee when action is necessary to
comply with the Issuer's duties under the Indenture. The
Master Servicer shall prepare for execution by the Issuer or
shall cause the preparation by other appropriate Persons of
all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the
Indenture. In furtherance of the foregoing, the Master
Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the Indenture, including,
without limitation, pursuant to Sections 2.7, 3.5, 3.6, 3.7,
3.9, 3.10, 3.17, 5.1, 5.4, 7.3, 8.3, 9.2, 9.3, 11.1 and
11.15 of the Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the
Master Servicer set forth in this Agreement
or any of the Basic Documents, the Master
Servicer shall perform such calculations and
shall prepare for execution by the Issuer or
the Owner Trustee or shall cause the
preparation by other appropriate Persons of
all such documents, reports, filings,
instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner
Trustee to prepare, file or deliver pursuant
to this Agreement or any of the Basic
Documents or under state and federal tax and
securities laws, and at the request of the
Owner Trustee shall take all appropriate
action that it is the duty of the Issuer to
take pursuant to this Agreement or any of the
Basic Documents, including, without
limitation, pursuant to Sections 2.6 and 2.11
of the Trust Agreement. In accordance with
the directions of the Issuer or the Owner
Trustee, the Master Servicer shall
administer, perform or supervise the
performance of such other activities in
connection with the Trust Estate (including
the Basic Documents) as are not covered by
any of the foregoing provisions and as are
expressly requested by the Issuer or the
Owner Trustee and are reasonably within the
capability of the Master Servicer.
(ii) Notwithstanding anything in this
Agreement or any of the Basic Documents to
the contrary, the Master Servicer shall be
responsible for promptly notifying the Owner
Trustee and the Trustee in the event that any
withholding tax is imposed on the Issuer's
payments (or allocations of income) to an
Owner (as defined in the Trust Agreement) as
contemplated by this Agreement. Any such
notice shall be in writing and specify the
amount of any withholding tax required to be
withheld by the Owner Trustee and the Trustee
pursuant to such provision.
(iii) Notwithstanding anything in
this Agreement or the Basic Documents to the
contrary, the Master Servicer shall be
responsible for performance of the duties of
the Issuer or the Seller set forth in Section
5.1(a), (b), c and (d) of the Trust Agreement
with respect to, among other things,
accounting and reports to Owners (as defined
in the Trust Agreement); provided, however,
that once prepared by the Master Servicer,
the Depositor shall retain responsibility
under Section 5.1(g) of the Trust Agreement
for the distribution of the Schedule K-1s
necessary to enable each Certificateholder to
prepare its federal and state income tax
returns.
(iv) The Master Servicer shall perform
the duties of the Depositor specified in
Section 10.2 of the Trust Agreement required
to be performed in connection with the
resignation or removal of the Owner Trustee,
and any other duties expressly required to be
performed by the Master Servicer under this
Agreement or any of the Basic Documents.
(v) The Master Servicer, on behalf of
the Seller, shall direct the Issuer to
request the tender of all or a portion of the
Notes of any Series in accordance with the
Indenture or any Series Supplement.
(vi) In carrying out the foregoing
duties or any of its other obligations under
this Agreement, the Master Servicer may enter
into transactions with or otherwise deal with
any of its Affiliates; provided, however,
that the terms of any such transactions or
dealings shall be in accordance with any
directions received from the Issuer and shall
be, in the Master Servicer's opinion, no less
favorable to the Issuer in any material
respect.
(c) Tax Matters. The Master Servicer
shall prepare and file, on behalf of the Seller, all tax
returns, tax elections, financial statements and such annual
or other reports of the Issuer as are necessary for
preparation of tax reports as provided in Article V of the
Trust Agreement, including without limitation forms 1099 and
1066. All tax returns will be signed by the Seller.
(d) Non-Ministerial Matters. With
respect to matters that in the reasonable judgment of the
Master Servicer are non-ministerial, the Master Servicer
shall not take any action pursuant to this Article XII
unless within a reasonable time before the taking of such
action, the Master Servicer shall have notified the Owner
Trustee and the Trustee of the proposed action and the Owner
Trustee and the Trustee shall not have withheld consent or
provided an alternative direction. For the purpose of the
preceding sentence, "non-ministerial matters" shall include:
(A) the initiation of any claim or lawsuit by the
Issuer and the compromise of any action, claim or
lawsuit brought by or against the Issuer (other
than in connection with the collection of the
Receivables);
(B) the appointment of successor Note Registrars,
successor Paying Agents and successor Trustees
pursuant to the Indenture or the consent to the
assignment by the Note Registrar, Paying Agent or
Trustee of its obligations under the Indenture;
and
(C) the removal of the Trustee.
(e) Exceptions. Notwithstanding
anything to the contrary in this Agreement, except as
expressly provided herein or in the other Basic Documents,
the Master Servicer, in its capacity hereunder, shall not be
obligated to, and shall not, (1) make any payments to the
Noteholders or Certificateholders under the Basic Documents,
(2) sell any Trust Property pursuant to Section 5.5 of the
Indenture, (3) take any other action that the Issuer directs
the Master Servicer not to take on its behalf or (4) in
connection with its duties hereunder assume any
indemnification obligation of any other Person.
(f) Neither the Trustee nor any
successor Master Servicer shall be responsible for any
obligations or duties of the Master Servicer under Section
12.1.
SECTION 12.2. Records
. The Master Servicer shall maintain appropriate books of
account and records relating to services performed under
this Agreement, which books of account and records shall be
accessible for inspection by the Issuer and the Trustee at
any time during normal business hours.
SECTION 12.3. Additional Information to be
Furnished to the Issuer
. The Master Servicer shall furnish to the Issuer and the
Trustee from time to time such additional information
regarding any Series Trust Estate as the Issuer and the
Trustee shall reasonably request.
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.1. Amendments
(a) . (a) This Agreement may be
amended by the parties hereto at any time when no Series of
Securities or commitment to purchase a Series of Securities
is outstanding without the requirement of any consents or
the satisfaction of any conditions set forth below.
(b) Except as otherwise provided with
respect to a Series in a Series Supplement, this Agreement
may be amended from time to time by the parties hereto, by a
written instrument signed by each of the parties hereto,
without the consent of any of the Securityholders, provided
that (i) an Opinion of Counsel for the Seller (which Opinion
of Counsel may, as to factual matters, rely upon officers'
certificates of the Seller or the Master Servicer) is
addressed and delivered to the Trustee, dated the date of
any such amendment, to the effect that the conditions
precedent to any such amendment have been satisfied and (ii)
the Seller shall have delivered to the Trustee and each
Rating Agency, an Officer's Certificate dated the date of
any such Amendment, stating that the Seller reasonably
believes that such amendment will not have a material
adverse effect on the rights of the Noteholders.
(c) Except as otherwise provided with
respect to a Series in a Series Supplement, this Agreement
may also be amended from time to time by the Servicer, the
Seller and the Trustee, with the consent of the Noteholders
evidencing in each case not less than a majority of the
outstanding principal amount of the Notes of each affected
Series for which the Seller has not delivered an Officer's
Certificate stating that there is no adverse effect on the
rights of Noteholders of each Series, for the purpose of
adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) reduce
in any manner the amount of or delay the timing of any
distributions to be made to Securityholders or deposits of
amounts to be so distributed or the amount available under
any Series Support without the consent of each affected
Securityholder, (ii) change the definition of or the manner
of calculating the interest of any Securityholder without
the consent of each affected Securityholder, (iii) reduce
the aforesaid percentage required to consent to any such
amendment without the consent of each Securityholder or (iv)
adversely affect any rating of a Series by each Rating
Agency without the consent of the Noteholders evidencing not
less than a majority of the outstanding principal amount of
the outstanding Notes of such Series.
Promptly after the execution of any such amendment
or supplement, the Trustee shall furnish written
notification of the substance of such amendment or
supplement to each Securityholder.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section
to approve the particular form of any amendment, but it
shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents
(and any other consents of Noteholders or Certificateholders
provided for in this Agreement) and of evidencing the
authorization of any action by Noteholders or
Certificateholders shall be subject to such reasonable
requirements as the Trustee or the Owner Trustee, as
applicable, may prescribe, including the establishment of
record dates.
The Owner Trustee and the Trustee may, but shall
not be obligated to, enter into any amendment which affects
the Issuer's, the Owner Trustee's or the Trustee's, as
applicable, own rights, duties or immunities under this
Agreement or otherwise.
Prior to the execution of any amendment to this
Agreement, the Trustee shall be entitled to receive or rely
upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Agreement
and that all conditions precedent to the execution and
delivery of such amendment have been satisfied.
SECTION 13.2. Protection of Title to Trust
(a) . (a) The Seller shall execute
and file such financing statements and cause to be executed
and filed such continuation statements, all in such manner
and in such places as may be required by law fully to
preserve, maintain and protect the interest of the Issuer
and the interests of the Trustee on behalf of the related
Series Securityholders in the related Series Trust Estate
and in the proceeds thereof.
(b) Neither the Seller nor the Master
Servicer shall change its name, identity or corporate
structure in any manner that would, could or might make any
financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading
within the meaning of 9-402(7) of the UCC, unless it shall
have given the Owner Trustee and the Trustee at least thirty
days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed
financing statements or continuation statements.
(c) Each of the Seller and the Master
Servicer shall have an obligation to give the Owner Trustee
and the Trustee prompt notice of any relocation of its
principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement and shall promptly file any such amendment. The
Master Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Master Servicer shall maintain
accounts and records as to each Receivable accurately and in
sufficient detail to permit (i) the reader thereof to know
at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Receivable and the
amounts from time to time deposited in the Master Collection
Account in respect of such Receivable.
(e) The Master Servicer shall maintain
or cause to be maintained, a computer system so that, from
and after the time of sale under this Agreement and each
Transfer Agreement of the Receivables to the Issuer, such
master computer records (including any backup archives) that
refer to a Receivable shall indicate clearly the interest of
the Trust in such Receivable and that such Receivable is
owned by the Trust and to which Series Trust Estate such
Receivable has been pledged pursuant to the Indenture.
Indication of the Trust's interest in a Receivable shall be
deleted from or modified on such computer systems when, and
only when, the related Receivable shall have been paid in
full or repurchased by HAFC or the Seller.
(f) If at any time the Seller or HAFC
shall propose to sell, grant a security interest in or
otherwise transfer any interest in automotive receivables to
any prospective purchaser, lender or other transferee, the
Master Servicer shall give to such prospective purchaser,
lender or other transferee computer tapes, records or
printouts (including any restored from backup archives)
that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has
been sold and is owned by the Trust unless such Receivable
has been paid in full or repurchased by HAFC or the Seller.
(g) With respect to any Series Trust
Estate, upon request, the Master Servicer shall furnish or
cause to be furnished to the related Series Support Provider
(only in the event that there is a Series Support Provider
with respect to such Series), the Owner Trustee or to the
Trustee, within five Business Days, a list of all
Receivables (by contract number) then held as part of the
related Series Trust Estate, together with a reconciliation
of such list to the related Schedule of Receivables and to
each of the Master Servicer's Certificates furnished before
such request indicating removal of Receivables from the
related Series Trust Estate. The Trustee shall hold any
such list and Schedule of Receivables for examination by
interested parties during normal business hours at the
Corporate Trust Office upon reasonable notice by such
Persons of their desire to conduct an examination.
(h) The Master Servicer shall deliver
to the Owner Trustee and the Trustee:
(1) simultaneously with the execution and
delivery of the Agreement and, if required pursuant to
Section 13.1, of each amendment, an Opinion of Counsel
stating that, in the opinion of such Counsel, in form
and substance reasonably satisfactory to the addressees
of such Opinion, either (A) all financing statements
and continuation statements have been executed and
filed that are necessary fully to preserve and protect
the interest of the Trust and the Trustee in the
Receivables then held as part of the related Series
Trust Estate, or (B) no such action shall be necessary
to preserve and protect such interest or c any action
which is necessary to preserve and protect such
interest during the following 12-month period; and
(2) within 90 days after the beginning of
each calendar year beginning in 1999, dated as of a
date during such 90-day period, stating that, in the
opinion of such counsel, either (A) all financing
statements and continuation statements have been
executed and filed that are necessary fully to preserve
and protect the interest of the Trust and the Trustee
in the Series Trust Estate or (B) no such action shall
be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (1)
or (2) above shall specify any action necessary (as of the
date of such opinion) to be taken in the following year to
preserve and protect such interest.
SECTION 13.3. Notices
. All demands, notices and communications upon or to the
Seller, the Master Servicer, the Owner Trustee, the Trustee
or the Rating Agencies under this Agreement shall be in
writing, personally delivered, or mailed by certified mail,
or sent by confirmed telecopier transmission and shall be
deemed to have been duly given upon receipt (a) in the case
of the Seller to Household Auto Receivables Corporation,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, with a copy
to Household International, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attn: Treasurer (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇), (b) in the case of the Master Servicer
to Household Finance Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer,
Telecopier # (▇▇▇) ▇▇▇-▇▇▇▇, c in the case of the Issuer or
the Owner Trustee, at the Corporate Trust Office of the
Owner Trustee, Telecopier # ▇▇▇-▇▇▇-▇▇▇▇, (d) in the case of
the Trustee at the Corporate Trust Office, Telecopier #
(▇▇▇) ▇▇▇-▇▇▇▇, (e) in the case of the Series Support
Provider to the address set forth in the related Series
Supplement, and (f) in the case of any Rating Agency, to the
address set forth in the related Series Supplement. Any
notice required or permitted to be mailed to a Noteholder or
Certificateholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in
the Certificate Register or Note Register, as applicable.
Any notice so mailed within the time prescribed in the
Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder or Noteholder
shall receive such notice.
SECTION 13.4. Assignment
. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective
successors and permitted assigns. Notwithstanding anything
to the contrary contained herein, except as provided in
Sections 8.4 and 9.3 and as provided in the provisions of
this Agreement concerning the resignation of the Master
Servicer, this Agreement may not be assigned by the Seller
or the Master Servicer without the prior written consent of
the Owner Trustee and the Trustee. In the event that a
successor Issuer with respect to a Series is formed as
contemplated in the related Series Supplement, such Issuer
shall succeed to all of the rights and obligations of the
predecessor Issuer hereunder; and all references to the
Issuer hereunder shall thereafter be deemed to be references
to such successor Issuer.
SECTION 13.5. Limitations on Rights of
Others
. The provisions of this Agreement are solely for the
benefit of the parties hereto and for the benefit of the
Certificateholders (including the Seller) and the Trustee,
as third-party beneficiaries. Each Series Support Provider
and its successors and assigns shall be a third-party
beneficiary to the provisions of this Agreement and to each
Series Supplement with respect to each Series for which they
are providing Series Support, and shall be entitled to rely
upon and directly enforce such provisions of this Agreement
and to each Series Supplement with respect to each Series
for which they are providing Series Support, so long as no
default with respect to such Series Support Provider shall
have occurred and be continuing. Nothing in this Agreement
or in any Series Supplement, whether express or implied,
shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 13.6. Severability
. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
SECTION 13.7. Separate Counterparts
. This Agreement and each Transfer Agreement may be
executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an
original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 13.8. Headings
. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 13.9. Governing Law
. THIS AGREEMENT AND EACH TRANSFER 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.
SECTION 13.10. Assignment to Trustee
. The Seller hereby acknowledges and consents to any
mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the
Indenture, as supplemented by a Series Supplement for the
benefit of the related Series Securityholders of all right,
title and interest of the Issuer in, to and under the
applicable Series Trust Estate.
SECTION 13.11. Nonpetition Covenants
(a) . (a) Notwithstanding any prior
termination of this Agreement or any Series Supplement, the
Master Servicer and the Seller shall not, prior to the date
which is one year and one day after the termination of this
Agreement or any Series Supplement with respect to the
Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case
against the 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 the Issuer or any substantial part
of its property, or ordering the winding up or liquidation
of the affairs of the Issuer.
(b) Notwithstanding any prior
termination of this Agreement or any Series Supplement, the
Master Servicer shall not, prior to the date that is one
year and one day after the termination of this Agreement or
any Series Supplement with respect to the Seller, acquiesce
to, petition or otherwise invoke or cause the Seller to
invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the
Seller under any federal or state bankruptcy, insolvency or
similar law, appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official
of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 13.12. Limitation of Liability of
Owner Trustee
(a) . (a) Notwithstanding anything
contained herein to the contrary, this Agreement and each
Series Supplement has been countersigned by Wilmington Trust
Company not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event
shall Wilmington Trust Company in its individual capacity
or, except as expressly provided in the Trust Agreement, as
Owner Trustee have any liability for the representations,
warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer.
For all purposes of this Agreement and each Series
Supplement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject
to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust
Agreement.
(b) In no event shall Wilmington Trust
Company, in any of its capacities hereunder, be deemed to
have assumed any duties of the Owner Trustee under the
Delaware Business Trust Statute, common law, or the Trust
Agreement.
SECTION 13.13. Independence of the Master
Servicer
. For all purposes of this Agreement, the Master Servicer
shall be an independent contractor and shall not be subject
to the supervision of the Issuer, the Trustee or the Owner
Trustee with respect to the manner in which it accomplishes
the performance of its obligations hereunder. Unless
expressly authorized by this Agreement or any Series
Supplement, the Master Servicer shall have no authority to
act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer
or the Owner Trustee.
SECTION 13.14. No Joint Venture
. Nothing contained in this Agreement or any Series
Supplement (i) shall constitute the Master Servicer and
either of the Issuer or the Owner Trustee as members of any
partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall
be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any
express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
IN WITNESS WHEREOF, the parties hereto have caused
this Master Sale and Servicing Agreement to be duly executed
and delivered by their respective duly authorized officers
as of the day and the year first above written.
HOUSEHOLD AUTOMOBILE REVOLVING TRUST I
by Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
by
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
by
Name:
Title:
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer,
by
Name:
Title:
THE CHASE MANHATTAN BANK
not in its individual capacity but
solely as Trustee,
by
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page for Master Sale and Servicing Agreement]
EXHIBIT A
FORM OF MASTER SERVICER'S CERTIFICATE
EXHIBIT B
FORM OF TRANSFER AGREEMENT
TRANSFER No. OF Receivables
pursuant to the Amended and Restated Master Sale and
Servicing Agreement dated as of November 1, 1998 (the "Sale
and Servicing Agreement"), among HOUSEHOLD AUTOMOBILE
REVOLVING TRUST I, a Delaware business trust (the "Issuer"),
HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada corporation
(the "Seller"), HOUSEHOLD FINANCE CORPORATION, a Delaware
corporation (the "Master Servicer"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, in its capacity as
Trustee (the "Trustee ").
W I T N E S S E T H:
WHEREAS pursuant to the Master Sale and Servicing
Agreement, the Seller wishes to convey the Receivables to
the Issuer; and
WHEREAS, the Issuer is willing to accept such
conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller, the Master
Servicer and the Trustee hereby agree as follows:
1. Defined Terms. Capitalized terms used
herein shall have the meanings ascribed to them in the Sale
and Servicing Agreement unless otherwise defined herein.
"Cutoff Date" shall mean, with respect to the
Receivables conveyed hereby, _______________, 1998.
"Transfer Date" shall mean. with respect to the
Receivables conveyed hereby, _____________, 1998.
2. Schedule of Receivables. Annexed hereto
is a supplement to Schedule A to the Master Sale and
Servicing Agreement listing the Receivables that constitute
the Receivables to be conveyed pursuant to this Agreement on
the Transfer Date. The Receivables conveyed pursuant to
this Agreement shall be a component of the Series __ Trust
Estate.
3. Conveyance of Receivables. The Seller
does hereby sell, transfer, assign, set over and otherwise
convey to the Issuer, without recourse (except as expressly
provided in the Master Sale and Servicing Agreement), all
right, title and interest of the Seller in and to:
(i) each and every Receivable listed on
Schedule A to the 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 the Seller on or
after such date);
(ii) the security interests in the related
Financed Vehicles granted by Obligors pursuant to such
Receivables and any other interest of the Seller in
such Financed Vehicles;
(iii) all rights of the Seller against Dealers
pursuant to Dealer Agreements, Dealer Assignments or
Unaffiliated Originator Receivables Purchase Agreements
related to such Receivables;
(iv) any proceeds and the right to receive
proceeds with respect to such Receivables repurchased
by either (i) a Dealer, pursuant to a Dealer Agreement,
or (ii) an Unaffiliated Originator, pursuant to an
Unaffiliated Originator Receivables Purchase Agreement
as a result of a breach of representation or warranty
in the related Dealer Agreement or Unaffiliated
Originator Receivables Purchase Agreement, as
applicable;
(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, 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 Master Servicer keeps on
file in accordance with its customary procedures
relating to the related Receivables, or the related
Financed Vehicles or Obligor;
(viii) 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 chooses 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.
4. Representations and Warranties of the
Seller. The Seller hereby represents and warrants to the
Issuer as of the date of this Agreement and as of the
Transfer Date that:
Organization and Good Standing. The Seller has
been duly organized and is validly existing as a
corporation in good standing under the laws of the
State of Nevada, with power and authority to own its
properties and to conduct its business as such
properties are currently owned and such business is
currently conducted, and had at all relevant times, and
now has, power, authority and legal right to acquire,
own and sell the Receivables and the Other Conveyed
Property transferred to the Trust.
Due Qualification. The Seller is duly qualified
to do business as a foreign corporation in good
standing and has obtained all necessary licenses and
approvals in all jurisdictions where the failure to do
so would materially and adversely affect Seller's
ability to transfer the Receivables and the Other
Conveyed Property to the Trust pursuant to this
Agreement, or the validity or enforceability of the
Receivables and the Other Conveyed Property or to
perform Seller's obligations hereunder and under the
Seller's Basic Documents.
Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and its
Basic Documents and to carry out its terms and their
terms, respectively; the Seller has full power and
authority to sell and assign the Receivables and the
Other Conveyed Property to be sold and assigned to and
deposited with the Trust by it and has duly authorized
such sale and assignment to the Trust by all necessary
corporate action; and the execution, delivery and
performance of this Agreement and the Seller's Basic
Documents have been duly authorized by the Seller by
all necessary corporate action.
Valid Sale, Binding Obligations. This Agreement
effects a valid sale, transfer and assignment of the
Receivables and the Other Conveyed Property,
enforceable against the Seller and creditors of and
purchasers from the Seller; and this Agreement and the
Seller's Basic Documents, when duly executed and
delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance
with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by
equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
No Violation. The consummation of the
transactions contemplated by this Agreement and the
Basic Documents and the fulfillment of the terms of
this Agreement and the Basic Documents shall not
conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without
notice, lapse of time or both) a default under the
certificate of incorporation or by-laws of the Seller,
or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by
which it is bound, or result in the creation or
imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than
this Agreement, or violate any law, order, rule or
regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative
agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge,
threatened against the Seller, before any court,
regulatory body, administrative agency or other
tribunal or governmental instrumentality having
jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of
the Basic Documents, (B) seeking to prevent the
issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement or
any of the Basic Documents, c seeking any determination
or ruling that might materially and adversely affect
the performance by the Seller of its obligations under,
or the validity or enforceability of, this Agreement or
any of the Basic Documents, or (D) seeking to adversely
affect the federal income tax or other federal, state
or local tax attributes of the Securities.
Approvals. All approvals, authorizations,
consents, order or other actions of any person,
corporation or other organization, or of any court,
governmental agency or body or official, required in
connection with the execution and delivery by the
Seller of this Agreement and the consummation of the
transactions contemplated hereby have been or will be
taken or obtained on or prior to the Closing Date.
No Consents. The Seller is not required to obtain
the consent of any other party or any consent, license,
approval or authorization, or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this
Agreement which has not already been obtained.
Chief Executive Office. The chief executive
office of the Seller is at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
Principal Balance. The aggregate Principal
Balance of the Receivables listed on the supplement to
Schedule A annexed hereto and conveyed to the Issuer
pursuant to this Agreement as of the Cutoff Date is
$____________.
5. Conditions Precedent. The obligation of
the Issuer to acquire the Receivables hereunder is subject
to the satisfaction, on or prior to the Transfer Date, of
the following conditions precedent:
Representations and Warranties. Each of the
representations and warranties made by the Seller in
Section 4 of this Agreement and in Section 3.1 of the
Sale and Servicing Agreement shall be true and correct
as of the date of this Agreement and as of the Transfer
Date.
Sale and Servicing Agreement Conditions. Each of
the conditions set forth in Section 2.1(b) to the Sale
and Servicing Agreement shall have been satisfied.
Additional Information. The Seller shall have
delivered to the Issuer such information as was
reasonably requested by the Issuer to satisfy itself as
to (i) the accuracy of the representations and
warranties set forth in Section 4 of this Agreement and
in Section 6.1 of the Sale and Servicing Agreement and
(ii) the satisfaction of the conditions set forth in
this Section 5.
6. Ratification of Agreement. As
supplemented by this Agreement, the Sale and Servicing
Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the
same instrument.
7. 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.
8. 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.
1.
IN WITNESS WHEREOF, the Issuer, the Seller and the
Master Servicer have caused this Agreement to be duly
executed and delivered by their respective duly authorized
officers as of day and the year first above written.
HOUSEHOLD AUTOMOBILE REVOLVING TRUST I
by Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
by
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
by
Name:
Title:
HOUSEHOLD FINANCE CORPORATION, Master
Servicer,
by
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as Trustee
by
Name:
Title:
EXHIBIT C
REQUEST FOR RELEASE AND RECEIPT OF DOCUMENTS
To: The Chase Manhattan Bank
Re: Amended and Restated Sale and Servicing Agreement
(the "Servicing Agreement, dated as of November 1,
1998 between Household Auto Receivables Corporation
(the "Seller"), Household Automobile Revolving Trust
I (the "Trust"), Household Finance Corporation
individually and in its capacity as Servicer (the
"Servicer"), and The Chase Manhattan Bank, as
Trustee (the "Trustee")
In connection with the administration of the
Receivables held by you as the Trustee, we request the
release, and acknowledged receipt, of the Receivable and
related Receivable File described below, for the reason
indicated.
Obligor's Name, Customer Account Number and Vehicle
Identification Number
1. Receivable Paid in Full. All amounts
received in connection with such payments
have been deposited as required pursuant to
Section 3.3(b) of the Master Servicing
Agreement
2. Receivable Purchased from Trust pursuant to
Section 3.2 or 4.7 of the Servicing
Agreement.
3. Receivable is being serviced or subject to
enforcement of rights and remedies pursuant
to Section 3.3(b) of the Servicing Agreement.
4. Other (explain)
If item 1 or 2 above is checked, and if all or part of the
Receivable or Receivable File was previously released to us,
please release to us any additional documents in your
possession to the above specified Receivable.
If Item 3 or 4 above is checked, upon our return of all of
the above documents to you as the Indenture Trustee, please
acknowledge your receipt by signing in the space indicated
below and returning this form.
[ ] HOUSEHOLD FINANCE CORPORATION
as Servicer
By:
Name:
Title:
Date:
DOCUMENTS RETURNED TO THE TRUSTEE
The Chase Manhattan Bank
By:
Name:
Title:
Date:
EXHIBIT D
TRUSTEE'S ACKNOWLEDGEMENT
The Chase Manhattan Bank (the "Trustee"), holds on
behalf of the [Securityholders] certain "Receivable Files,"
as described in the Sale and Servicing Agreement, dated as
of _____________ (the "Sale and Servicing Agreement"), among
[Household] Automobile Revolving Trust, [Household] Auto
Receivables Corp., as Seller, [Household] Auto Finance
Corporation, as Master Servicer, and the Trustee, hereby
acknowledges receipt of the Receivable File for each
Receivable listed in the Schedule of Receivables attached as
Schedule A to said Sale and Servicing Agreement except as
noted in the Exception List attached as Schedule I hereto.
IN WITNESS WHEREOF, The Chase Manhattan Bank has
caused this acknowledgement to be executed by its duly
authorized officer as of this ___________________.
THE CHASE MANHATTAN BANK, as Trustee
by
Name:
Title: