Exhibit 10.2
EXECUTION COPY
MASTER RECEIVABLES PURCHASE AGREEMENT
among
HOUSEHOLD BANK, F.S.B.,
as Seller
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
and
HOUSEHOLD FINANCE CORPORATION
as Master Servicer
dated as of December 18, 2001 and amended and restated as of May 15, 2002
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................1
SECTION 1.1 General..........................................................................1
SECTION 1.2 Specific Terms...................................................................1
SECTION 1.3 Other Definitional Provisions....................................................2
SECTION 1.4 Certain References...............................................................3
SECTION 1.5 No Recourse......................................................................3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY..........................3
SECTION 2.1 Purchase.........................................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................5
SECTION 3.1 Representations and Warranties of Seller.........................................5
SECTION 3.2 Representations and Warranties of HARC...........................................7
ARTICLE IV COVENANTS OF SELLER...................................................................10
SECTION 4.1 Seller's Covenants..............................................................10
ARTICLE V REPURCHASES............................................................................11
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty...............................11
SECTION 5.2 Reassignment of Repurchased Receivables.........................................11
SECTION 5.3 Waivers.........................................................................12
ARTICLE VI MISCELLANEOUS.........................................................................12
SECTION 6.1 Liability of Seller.............................................................12
SECTION 6.2 Amendment.......................................................................12
SECTION 6.3 GOVERNING LAW...................................................................12
SECTION 6.4 Notices.........................................................................12
SECTION 6.5 Severability of Provisions......................................................13
SECTION 6.6 Assignment......................................................................13
SECTION 6.7 Acknowledgment and Agreement of Seller..........................................13
SECTION 6.8 Further Assurances..............................................................13
SECTION 6.9 No Waiver; Cumulative Remedies..................................................14
SECTION 6.10 Counterparts....................................................................14
SECTION 6.11 Binding Effect; Third-Party Beneficiaries.......................................14
SECTION 6.12 Merger and Integration..........................................................14
SECTION 6.13 Heading.........................................................................14
SECTION 6.14 Schedules and Exhibits..........................................................14
SECTION 6.15 Survival of Representations and Warranties......................................14
SECTION 6.16 Nonpetition Covenant............................................................14
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EXHIBITS
EXHIBIT A Form of Receivables Purchase Agreement Supplement
SCHEDULE A Schedule of Receivables
ii
THIS
MASTER RECEIVABLES PURCHASE AGREEMENT, dated as of December 18,
2001 and amended and restated as of May 15, 2002, executed among
Household Auto
Receivables Corporation, a Nevada corporation, as purchaser ("HARC"), Household
Bank, f.s.b., a federal savings bank, as seller ("SELLER") and Household Finance
Corporation, as Master Servicer ("MASTER SERVICER").
W I T N E S S E T H :
WHEREAS, HARC has agreed to purchase from time to time from Seller,
and Seller, pursuant to this Agreement, has agreed to transfer from time to time
to HARC the Receivables and the Other Conveyed Property;
WHEREAS, the Master Servicer has agreed to repurchase all Receivables
required to be repurchased pursuant to this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, HARC, Seller and the Master Servicer,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
Master Sale and Servicing Agreement.
SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"AGREEMENT" means this
Master Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"CONVEYANCE" shall have the meaning specified in Section 2.1.
"CONVEYANCE PAPERS" shall have the meaning specified in Section 3.1.
"CUTOFF DATE" shall have the meaning assigned to such term in the
Master Sale and Servicing Agreement or applicable Receivables Purchase Agreement
Supplement.
"MASTER SALE AND SERVICING AGREEMENT" means the Master Sale and
Servicing Agreement dated as of December 18, 2001, by and among Household
Automotive Warehouse Trust, as Issuer, HARC, as Seller, Household Finance
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Corporation, as Master Servicer, and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as Indenture Trustee, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"OTHER CONVEYED PROPERTY" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture (including all property and interests granted
to the Indenture Trustee), including all proceeds thereof, other than the
Receivables.
"PURCHASE DATE" means, with respect to Receivables, any date, on which
Receivables are to be purchased by HARC pursuant to this Agreement and a
Receivables Purchase Agreement Supplement is executed and delivered by Seller,
HARC, and the Master Servicer.
"RECEIVABLES" means the Receivables listed on the Schedules of
Receivables attached to this Agreement or to each Receivables Purchase Agreement
Supplement as Schedule A.
"RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT" means an agreement among
HARC, Seller and the Master Servicer, substantially in the form of Exhibit A
hereto.
"REPURCHASE EVENT" means a determination pursuant to Section 3.2 and
Section 4.7 of the Master Sale and Servicing Agreement that HARC is required to
repurchase a Receivable.
"SCHEDULE OF RECEIVABLES" means the schedule of Receivables sold and
transferred pursuant to this Agreement and each related Receivables Purchase
Agreement Supplement from time to time, which schedule collectively includes the
schedules attached as Schedule A to this Agreement and Schedule A to each
related Receivables Purchase Agreement Supplement.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other documents, or Conveyance Paper made
or delivered pursuant hereto unless otherwise defined herein.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Master Sale and Servicing Agreement and the Series Supplement.
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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 a Collection Period shall
refer to the opening of business on such day. All references to the last day of
a Collection Period shall refer to the close of business on such day.
SECTION 1.5 NO RECOURSE. Without limiting the obligations of
Seller hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of Seller,
or of any predecessor or successor of Seller.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 PURCHASE.
(a) By execution of this Agreement and subject to the terms and
conditions of this Agreement, on each Purchase Date Seller shall sell, transfer,
assign, and otherwise convey to HARC (collectively, the "CONVEYANCE") without
recourse (but without limitation of its obligations in this Agreement), and HARC
shall purchase, all right, title and interest of Seller in and to:
(i) each and every Receivable listed from time to time on
Schedule A hereto or to each related Receivables Purchase Agreement
Supplement and all monies paid or payable thereon or in respect
thereof on or after the related Cutoff Date (including amounts due on
or before the related Cutoff Date but received by Seller 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 Seller in such Financed Vehicles;
(iii) all rights of Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with
respect to such Receivables repurchased by a Dealer, pursuant to a
Dealer Agreement;
(v) all rights of Seller under any Service Contracts on the
related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with
respect to the related Receivables from claims on any physical damage,
loss,
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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) all property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that
has been acquired by or on behalf of HARC pursuant to the liquidation
of such Receivable; and
(ix) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments
and other property which at any time constitute all or part of or are
included in the proceeds of any of the foregoing.
(b) Simultaneously with the conveyance of the Receivables and the
Other Conveyed Property to HARC by Seller, HARC has paid or caused to be paid to
or upon the order of Seller an amount equal to 100% of the Principal Balance of
the Receivables on the books and records of Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, pay down rates, yield and such other factors as
may be mutually agreed upon between Seller and HARC, by wire transfer of
immediately available funds.
(c) In connection with such Conveyance, Seller further agrees that it
will, at its own expense, on or prior to the Purchase Date (i) indicate in its
computer files or microfiche lists that the Receivables have been conveyed to
HARC in accordance with this Agreement and have been conveyed by HARC to the
Indenture Trustee pursuant to the Master Sale and Servicing Agreement for the
benefit of the Secured Parties by including in such computer files and
microfiche lists the code identifying each such Receivable and (ii) deliver to
HARC (or to the Indenture Trustee if HARC so directs) a computer file or
microfiche list containing a true and complete list of all such Receivables
specifying for each such Receivable, as of the Cutoff Date (A) its account
number and (B) the outstanding balance of such Receivable. Such computer files
or
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microfiche lists shall be delivered to HARC (or to the Indenture Trustee if
so directed by HARC) and marked as proprietary and confidential. Seller further
agrees not to alter the code referenced in clause (i) of this paragraph with
respect to any Receivable during the term of this Agreement.
(d) The parties hereto intend that the conveyance of Seller's right,
title and interest in and to the Receivables and Other Conveyed Property shall
constitute a sale, conveying good title free and clear of any liens, claims,
encumbrances or rights of others from Seller to HARC and that the Receivables
and Other Conveyed Property shall not be part of Seller's estate in the event of
the insolvency of Seller or a conservatorship, receivership or similar event
with respect to Seller. It is the intention of the parties hereto that the
arrangements with respect to the Receivables and Other Conveyed Property shall
constitute a purchase and sale of such Receivables and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that the
transactions evidenced hereby constitute a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that Seller shall be deemed to have
granted to HARC a first priority perfected security interest in all of such
Seller's right, title and interest in and to the Receivables and Other Conveyed
Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes
the following representations and warranties as of the date hereof on which HARC
relies in purchasing the Receivables and the Other Conveyed Property and in
transferring the Receivables and the Other Conveyed Property to the Issuer under
the Master Sale and Servicing Agreement. Such representations are made as of the
execution and delivery of this Agreement and as to Receivables and Other
Conveyed Property conveyed thereunder, as of the execution and delivery of each
Receivables Purchase Agreement Supplement, but shall survive the sale, transfer
and assignment of the Receivables and the Other Conveyed Property hereunder, and
the sale, transfer and assignment thereof by HARC to the Issuer under the Master
Sale and Servicing Agreement. Seller and HARC agree that HARC will assign to
Issuer all HARC's rights under this Agreement and each Receivables Purchase
Agreement Supplement and that the Indenture Trustee will thereafter be entitled
to enforce this Agreement and each Receivables Purchase Agreement Supplement
against Seller in the Indenture Trustee's own name on behalf of the
Securityholders.
(a) ELIGIBILITY CRITERIA. Each of the Receivables which is to be
pledged as collateral for the Notes will satisfy the Eligibility Criteria set
forth in Schedule I to the Series Supplement.
(b) ORGANIZATION AND GOOD STANDING. Seller is a federal savings bank
duly organized and validly existing in good standing under the laws of the
United States of America and has, in all material respects, full power and
authority to own its properties
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and conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(c) DUE OBLIGATION. Seller is duly qualified to do business and is in
good standing as a foreign corporation (or is exempt from such requirements) and
has obtained all necessary licenses and approvals, in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would (i) render
any Receivable unenforceable by Seller, HARC or the Trust and (ii) have a
material adverse effect on the Secured Parties.
(d) DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement and any other document or instrument delivered pursuant hereto (such
other documents and instruments, including, but not limited to, the Receivables
Purchase Agreement Supplement collectively, the "CONVEYANCE PAPERS") and the
consummation of the transactions provided for in this Agreement or any other
Conveyance Papers have been duly authorized by all necessary corporate action on
the part of Seller and constitute or will constitute the legal, valid and
binding obligation of Seller, enforceable in accordance with their terms, except
for the rights and remedies of creditors of thrifts, savings institutions or
national banking associations from time to time in effect, or as limited by the
powers of the Federal Deposit Insurance Company in its capacity as receiver or
conservator under the Federal Deposit Insurance Company Act of 1950.
(e) NO CONFLICT. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms of this
Agreement and the Conveyance Papers applicable to Seller will not conflict with,
violate or result in any breach of any of the material terms and provisions of,
or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which Seller is a party or by which it or any of its
properties are bound.
(f) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers and the fulfillment of the terms
contemplated herein and therein applicable to Seller will not conflict with or
violate any requirements of law applicable to Seller.
(g) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the best knowledge of Seller, threatened against Seller, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of Seller, would
materially and adversely affect the performance by Seller of its obligations
under this Agreement or the Conveyance Papers, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or the Conveyance Papers or (v) seeking to affect
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adversely the income tax attributes of the Trust under United States Federal,
Nevada or California income tax systems.
(h) ALL CONSENTS. All authorizations, consents, orders, approvals,
registrations or declarations with, or of, any Governmental Authority required
to be obtained, effected or given by Seller in connection with the execution and
delivery by Seller of this Agreement or the Conveyance Papers and the
performance of the transactions contemplated by this Agreement or the Conveyance
Papers by Seller have been duly obtained, effected or given and are in full
force and effect
(i) SALE ACCOUNTING TREATMENT. The transactions contemplated by the
Basic Documents result in a transfer which meets all conditions for sale
accounting treatment under generally accepted accounting principles, other than
the "Legal isolation" condition described in 12 C.F.R.Section.360.6.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF HARC. HARC makes the
following representations and warranties, on which Seller relies in selling,
assigning, transferring and conveying the Receivables and the Other Conveyed
Property to HARC hereunder. Such representations are made as of the execution
and delivery of this Agreement and as to Receivables and Other Conveyed Property
conveyed thereunder, as of the execution and delivery of each Receivables
Purchase Agreement Supplement, but shall survive the sale, transfer and
assignment of the Receivables and the Other Conveyed Property hereunder and the
sale, transfer and assignment thereof by HARC to the Issuer under the Master
Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. HARC is a corporation duly
organized and validly existing under the laws of the State of Nevada and has, in
all material respects, full power and authority to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations under
this Agreement and the Conveyance Papers.
(b) DUE AUTHORIZATION. The execution and delivery of this Agreement
and the Conveyance Papers and the consummation of the transactions provided for
in this Agreement and the Conveyance Papers have been duly authorized by HARC by
all necessary corporate action on the part of HARC.
(c) NO CONFLICT. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which HARC is a party or by which it or its
properties is bound.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers by HARC and the fulfillment of the terms
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contemplated herein and therein applicable to HARC will not conflict with or
violate any requirements of law applicable to HARC.
(e) NO PROCEEDING. There are no proceedings or investigations pending
or, to the best knowledge of HARC, threatened against HARC, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of HARC, would
materially and adversely affect the performance by HARC of its obligations under
this Agreement or the Conveyance Papers or (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or the Conveyance Papers.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental Authority required to be
obtained, effected or given by HARC in connection with the execution and
delivery by HARC of this Agreement and the Conveyance Papers and the performance
of the transactions contemplated by this Agreement and the Conveyance Papers or
the fulfillment of the terms of this Agreement and the Conveyance Papers by HARC
have been duly obtained.
In the event of any breach of a representation and warranty made by
HARC hereunder, the Seller covenants and agrees that it will not take any action
to pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by the Trust, have been paid in full. Seller and HARC agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by HARC, Issuer or by the Indenture
Trustee on behalf of the Noteholders and the Owner Trustee on behalf of the
Certificateholders.
SECTION 3.3 REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER.
The Master Servicer makes the following representations and warranties, on which
Seller relies in selling, assigning, transferring and conveying the Receivables
and the Other Conveyed Property to HARC hereunder. Such representations are made
as of the execution and delivery of this Agreement and as to Receivables and
Other Conveyed Property conveyed thereunder, as of the execution and delivery of
each Receivables Purchase Agreement Supplement, but shall survive the sale,
transfer and assignment of the Receivables and the Other Conveyed Property
hereunder and the sale, transfer and assignment thereof by HARC to the Issuer
under the Master Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer has been duly
organized and is validly existing under the laws of its jurisdiction of
organization and has, in all material respects, full power and authority to own
its properties and conduct its business as such properties are presently owned
and such business is presently conducted and to execute, deliver and perform its
obligations under this Agreement and the Conveyance Papers.
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(b) DUE AUTHORIZATION. The execution and delivery of this Agreement
and the Conveyance Papers and the consummation of the transactions provided for
in this Agreement and the Conveyance Papers have been duly authorized by the
Master Servicer by all necessary corporate action on the part of the Master
Servicer.
(c) NO CONFLICT. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Master Servicer is a party or by
which it or its properties is bound.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers by the Master Servicer and the fulfillment
of the terms contemplated herein and therein applicable to the Master Servicer
will not conflict with or violate any requirements of law applicable to the
Master Servicer.
(e) NO PROCEEDING. There are no proceedings or investigations pending
or, to the best knowledge of the Master Servicer, threatened against the Master
Servicer, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or the Conveyance Papers, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or the Conveyance Papers,
(iii) seeking any determination or ruling that, in the reasonable judgment of
the Master Servicer, would materially and adversely affect the performance by
the Master Servicer of its obligations under this Agreement or the Conveyance
Papers or (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement or the
Conveyance Papers.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Master Servicer in connection with the
execution and delivery by the Master Servicer of this Agreement and the
Conveyance Papers and the performance of the transactions contemplated by this
Agreement and the Conveyance Papers or the fulfillment of the terms of this
Agreement and the Conveyance Papers by the Master Servicer have been duly
obtained.
In the event of any breach of a representation and warranty made by
HARC hereunder, the Master Servicer covenants and agrees that it will not take
any action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes
and Certificates issued by the Trust, have been paid in full. The Master
Servicer agrees that damages will not be an adequate remedy for such breach and
that this covenant may be specifically enforced by HARC, Issuer or by the
Indenture Trustee on behalf of the Noteholders and the Owner Trustee on behalf
of the Certificateholders. The Master Servicer agrees that
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with respect to its obligations in connection with a Repurchase Event it will
exercise no rights of offset with respect to any claims it may have against
HARC.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 SELLER'S COVENANTS. Seller hereby covenants and agrees
with HARC as follows:
(a) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Seller will
take no action to cause any Receivable to be evidenced by any instrument (as
defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder or as
otherwise provided herein, Seller will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with HARC's ownership of
the Receivables or grant, create, incur, assume or suffer to exist any Lien on
any Receivable, whether now existing or hereafter created, or any interest
therein, and Seller shall not claim any ownership interest in the Receivables
and shall defend the right, title and interest of HARC in and to the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under Seller.
(c) SECURITY INTEREST. Except for the conveyances hereunder and in
connection with any transaction permitted pursuant to Section 6.6, Seller hereby
agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the Receivables and any
such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation
or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. In the event that Seller
receives collections or recoveries with respect to the Receivables, Seller
agrees to pay to HARC (or to the Master Servicer if HARC so directs) all such
collections and recoveries to the extent such amounts are payable to HARC as
soon as practicable after receipt thereof.
(e) NOTICE OF LIENS. Seller shall notify HARC promptly after becoming
aware of any Lien on any Receivable other than the conveyances hereunder.
(f) DOCUMENTATION OF TRANSFER. Seller shall undertake to file the
documents which would be necessary to perfect and maintain the transfer of the
security interest in and to the Receivables and Other Conveyed Assets.
(g) APPROVAL OF OFFICE RECORDS. Seller shall cause this Agreement to
be duly approved by Seller's Board of Directors, and Seller shall maintain the
Agreement as a part of the official records of Seller for the term of the
Agreement.
(h) MAINTENANCE OF SECURITY INTERESTS IN VEHICLES. In the event that
the assignment of a Receivable to HARC or any assignee thereof is insufficient,
without a
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notation on the related Financed Vehicle's certificate of title, or without
fulfilling any additional administrative requirements under the laws of the
state in which the Financed Vehicle is located, to perfect a security interest
in the related Financed Vehicle in favor of HARC or any assignee thereof, Seller
hereby agrees that the designation of Seller or any Affiliate of Seller as the
secured party on the certificate of title is in its capacity as agent of HARC or
the agent of any assignee of HARC for such limited purpose.
ARTICLE V
REPURCHASES
SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY. Upon
the occurrence of a Repurchase Event, the Master Servicer shall, unless the
breach which is the subject of such Repurchase Event shall have been cured in
all material respects, repurchase the Receivable relating thereto from the
Issuer by the last day of the first full calendar month following the discovery
of such breach by Seller or the Master Servicer or receipt by Seller or the
Master Servicer of notice of such breach from any of HARC, a Trust Officer of
the Indenture Trustee or the Owner Trustee and, simultaneously with the
repurchase of the Receivable, the Master Servicer shall deposit the Repurchase
Amount in full, without deduction or offset, in the Collection Account, pursuant
to Section 3.2 of the Master Sale and Servicing Agreement. It is understood and
agreed that, except as set forth in Section 6.1 hereof, the obligation of the
Master Servicer to repurchase any Receivable, as to which a breach occurred and
is continuing, shall, if such obligation is fulfilled, constitute the sole
remedy against the Master Servicer or the Seller for such breach available to
HARC, the Issuer, the Secured Parties, the Certificateholders, the Indenture
Trustee, on behalf of the Noteholders or the Owner Trustee on behalf of the
Certificateholders. The provisions of this Section 5.1 are intended to grant the
Indenture Trustee or the Issuer a direct right against the Master Servicer to
demand performance hereunder, and in connection therewith, the Master Servicer
waives any requirement of prior demand against HARC with respect to such
repurchase obligation. Any such repurchase shall take place in the manner
specified in Section 3.2 of the Master Sale and Servicing Agreement.
Notwithstanding any other provision of this Agreement or the Master Sale and
Servicing Agreement to the contrary, the obligation of the Master Servicer under
this Section shall not terminate upon a termination of Household Finance
Corporation as Master Servicer under the Master Sale and Servicing Agreement and
shall be performed in accordance with the terms hereof notwithstanding the
failure of the Master Servicer or HARC to perform any of their respective
obligations with respect to such Receivable under the Master Sale and Servicing
Agreement.
SECTION 5.2 REASSIGNMENT OF REPURCHASED RECEIVABLES. Upon deposit
in the Collection Account of the Repurchase Amount of any Receivable repurchased
by the Master Servicer under Section 5.1 hereof, HARC and the Issuer shall take
such steps as may be reasonably requested by the Master Servicer in order to
assign to the Master Servicer all of HARC's and the Issuer's right, title and
interest in and to such Receivable and all security and documents and all Other
Conveyed Property
11
conveyed to HARC and the Issuer directly relating thereto, without recourse,
representation or warranty, except as to the absence of liens, charges or
encumbrances created by or arising as a result of actions of HARC or the Issuer.
Such assignment shall be a sale and assignment outright, and not for security.
If, following the reassignment of a Repurchased Receivable, in any enforcement
suit or legal proceeding, it is held that the Master Servicer may not enforce
any such Receivable on the ground that it shall not be a real party in interest
or a holder entitled to enforce the Receivable, HARC and the Issuer shall, at
the expense of the Master Servicer, take such steps as the Master Servicer deems
reasonably necessary to enforce the Receivable, including bringing suit in
HARC's or in the Issuer's name.
SECTION 5.3 WAIVERS. No failure or delay on the part of HARC, or
the Issuer as assignee of HARC, in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIABILITY OF SELLER; MASTER SERVICER. Seller shall be
liable in accordance herewith only to the extent of the obligations in this
Agreement specifically undertaken by Seller and the representations and
warranties of Seller. The Master Servicer shall be liable in accordance herewith
only to the extent of the obligations in this Agreement specifically undertaken
by the Master Servicer.
SECTION 6.2 AMENDMENT. This Agreement and any Conveyance Papers and
the rights and obligations of the parties hereunder may not be changed orally,
but only by an instrument in writing signed by HARC, Seller and the Master
Servicer in accordance with this Section 6.2. This Agreement and any Conveyance
Papers may be amended from time to time, with the prior written consent of the
Administrative Agent, where one exists, or otherwise, the Managing Agents, by
HARC, Seller and the Master Servicer.
SECTION 6.3 GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS WHICH WOULD REQUIRE THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.4 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of Seller, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Operating
12
Officer, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director--Asset Securitization, (b) in the case of HARC, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Compliance Officer, with a
copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Treasurer, and (c) in the case of the Master Servicer, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Director- Asset Securitization; or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.
SECTION 6.5 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement or the Conveyance
Papers shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement or any Conveyance
Paper and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of any Conveyance Paper.
SECTION 6.6 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, other than HARC's assignment of its rights, title, and
interests in, to, and under this Agreement to the Issuer and by the Issuer to
the Indenture Trustee for the benefit of the Secured Parties, as contemplated by
the Master Sale and Servicing Agreement and Section 6.7 hereof, the Receivables,
the Other Conveyed Property, this Agreement and all other Conveyance Papers may
not be assigned by the parties hereto; PROVIDED, HOWEVER, that Seller shall have
the right to assign its rights, title and interests, in to and under this
Agreement to (i) any successor by merger or consolidation, or any Person which
acquires by conveyance, transfer or sale the properties and assets of Seller or
(ii) any Affiliate owned directly or indirectly by Household International, Inc.
The right granted in the foregoing proviso is subject to the further condition
that any such successor or other Person shall expressly assume by written
agreement, in form and substance satisfactory to HARC, the obligations of Seller
hereunder and under the Conveyance Papers.
SECTION 6.7 ACKNOWLEDGMENT AND AGREEMENT OF SELLER. By execution
below, Seller expressly acknowledges and agrees that all of HARC's right, title,
and interest in, to, and under this Agreement, including, without limitation,
all of HARC's right title, and interest in and to the Receivables purchased
pursuant to this Agreement, shall be assigned by HARC to the Issuer and by the
Issuer to the Indenture Trustee for the benefit of the Secured Parties, and
Seller consents to such assignment. Additionally, Seller agrees for the benefit
of the Indenture Trustee that any amounts payable by Seller to HARC hereunder
which are to be paid by HARC to the Indenture Trustee for the benefit of the
Secured Parties shall be paid by Seller, on behalf of HARC, directly to the
Indenture Trustee. Any payment required to be made on or before a specified date
in same-day funds may be made on the prior business day in next-day funds.
SECTION 6.8 FURTHER ASSURANCES. HARC and Seller agree to do and
perform, from time to time, any and all acts to authenticate any and further
records, to execute any and further instruments, in each case required or
reasonably requested by the other party more fully to effect the purposes of
this Agreement and the Conveyance
13
Papers, including, without limitation, the execution of any financing statements
or continuation statements or equivalent documents relating to the Receivables
for filing under the provisions of the UCC or other law of any applicable
jurisdiction.
SECTION 6.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of HARC or Seller, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
SECTION 6.10 COUNTERPARTS. This Agreement and all Conveyance Papers
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
SECTION 6.11 BINDING EFFECT; THIRD-PARTY BENEFICIARIES. This
Agreement and the Conveyance Papers will inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Each of the Indenture Trustee and the Owner Trustee shall be considered a
third-party beneficiary of this Agreement.
SECTION 6.12 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers. This Agreement and the Conveyance Papers may not be modified,
amended, waived or supplemented except as provided herein.
SECTION 6.13 HEADING. The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 6.14 SCHEDULES AND EXHIBITS. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this Agreement
and are incorporated into this Agreement for all purposes.
SECTION 6.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements contained in this Agreement or
contained in any Conveyance Paper, shall remain operative and in full force and
effect and shall survive conveyance of the Receivables by HARC to the Issuer
pursuant to the Master Sale and Servicing Agreement.
SECTION 6.16 NONPETITION COVENANT. Until the date which is one year
and one day after payment in full of all the Notes, neither HARC nor Seller
shall petition or otherwise invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against HARC,
Seller or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee,
14
trustee, custodian, sequestrator or other similar official of HARC, Seller or
the Issuer or any substantial part of their respective properties, or ordering
the winding up or liquidation of the affairs of HARC, Seller or the Issuer. This
provision shall survive the termination of this Agreement.
[Signature Page Follows]
15
IN WITNESS WHEREOF, the parties have caused this
Master Receivables
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.
HOUSEHOLD BANK, F.S.B.,
as Seller
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Assistant Treasurer
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Assistant Treasurer
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer
By: /s/ ▇. ▇. ▇▇▇▇, ▇▇.
-----------------------------------------
Name: ▇. ▇. ▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
16
EXHIBIT A
FORM OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT
Transfer No. __ of Receivables, dated as of ___________________,
pursuant to a
Master Receivables Purchase Agreement (the "PURCHASE AGREEMENT")
dated as of December 18, 2001 between Household Bank, f.s.b., a federal savings
bank (the "SELLER") and
Household Auto Receivables Corporation, a Nevada
corporation ("HARC") as amended and restated as of May 15, 2002 among the
Seller, HARC and Household Finance Corporation, a Delaware Corporation (the
"Master Servicer").
W I T N E S S E T H :
WHEREAS pursuant to the Purchase Agreement, Seller wishes to convey
Receivables and Other Conveyed Property to HARC; and
WHEREAS, HARC is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, Seller, HARC and the Master Servicer hereby agree as
follows:
1. DEFINED TERMS. Capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement unless otherwise defined
herein.
"CUTOFF DATE" shall mean with respect to the Receivables conveyed
hereby, the close of business on ___________________, 200_.
"PURCHASE DATE" shall mean with respect to the Receivables conveyed
hereby, ___________________, 200_.
"PURCHASE PRICE" shall mean 100% of the Principal Balance of the
Receivables on the books and records of the Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, paydown rates, yield and such other factors as
may be mutually agreed upon by Seller and HARC.
"TRANSFER DATE" means, with respect to Receivables, any date on which
Receivables are to be transferred to the Trust pursuant to the Master Sale and
Servicing Agreement and this Agreement.
2. SCHEDULE OF RECEIVABLES. Annexed as Schedule A hereto is a computer
file which reflects the Receivables that constitute the Receivables to be
conveyed pursuant to this Agreement on the Purchase Date.
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3. CONVEYANCE OF RECEIVABLES. In consideration of HARC's delivery to
or upon the order of the Seller of the Purchase Price, Seller does hereby sell,
transfer, assign, set over and otherwise convey to HARC, without recourse
(except as expressly provided in the Purchase Agreement), all right, title and
interest of the Seller in and to:
(i) each and every Receivable listed on Schedule A hereto and all
monies paid or payable thereon or in respect thereof on or after the Cutoff
Date (including amounts due on or before the Cutoff Date but received by
Seller 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, or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with respect to such
Receivables repurchased by a Dealer, pursuant to a Dealer Agreement;
(v) all rights of Seller under any Service Contracts on the related
Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with respect to the
related Receivables from claims on any physical damage, loss, credit life or
disability insurance policies, if any, covering Financed Vehicles or
Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such Receivables;
(vii) all items contained in the Receivables Files with respect to such
Receivables and any and all other documents that the Seller or the Master
Servicer keeps on file in accordance with its customary procedures relating
to the related Receivables, or the related Financed Vehicles or Obligor;
(viii) property (including the right to receive future Net Liquidation
Proceeds) that secures each related Receivable and that has been acquired by
or on behalf of HARC pursuant to liquidation of such Receivable;
(ix) all present and future claims, demands, causes and choses in action
in respect of any or all of the foregoing and all payments on or under and
all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and 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.
A-2
4. REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Purchase Date,
Seller hereby makes the representations and warranties to HARC that are set
forth in Section 3.1 of the Purchase Agreement with respect to the Conveyance
effected hereby to the same extent as if set forth in full herein.
5. REPRESENTATIONS AND WARRANTIES OF HARC. As of the Purchase Date,
HARC hereby makes the representations and warranties to Seller that are set
forth in Section 3.2 of the Purchase Agreement with respect to the Conveyance
effected hereby to the same extent as if set forth in full herein. In the event
of any breach of a representation and warranty made by HARC hereunder, each of
the Seller and the Master Servicer covenant and agree that it will not take any
action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all Notes
and Certificates issued by the Trust have been paid in full. The Seller, the
Master Servicer and HARC agree that damages will not be an adequate remedy for
such breach and that this covenant may be specifically enforced by HARC, the
Issuer or by the Indenture Trustee on behalf of the Noteholders and the Owner
Trustee on behalf of the Certificateholders.
6. CONDITIONS PRECEDENT. The obligation of HARC to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Purchase Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section 3.1
of the
Master Receivables Purchase Agreement shall be true and correct as of the
date of this Agreement and as of the Purchase Date.
(b) ADDITIONAL INFORMATION. Seller shall have delivered to HARC such
information as was reasonably requested by HARC to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4 of this
Agreement and in Section 3.1 of the Purchase Agreement and (ii) the satisfaction
of the conditions set forth in this Section.
7. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Purchase Agreement is in all respects ratified and confirmed and the Purchase
Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
9. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY TO
THE ISSUER. The Seller acknowledges that HARC intends, pursuant to the Master
Sale and Servicing Agreement, to convey the Receivables and the Other Conveyed
Property, together with its rights under this Agreement, to the Issuer on the
Transfer Date. The
A-3
Seller acknowledges and consents to such conveyance and pledge and waives any
further notice thereof and covenants and agrees that the representations and
warranties of the Seller contained in this Agreement and the rights of HARC
hereunder are intended to benefit the Issuer, the Owner Trustee, the Indenture
Trustee, the Secured Parties and the Certificateholders. In furtherance of the
foregoing, the Seller covenants and agrees to perform its duties and obligations
hereunder, in accordance with the terms hereof for the benefit of the Issuer,
the Owner Trustee, the Indenture Trustee and the Secured Parties and that,
notwithstanding anything to the contrary in this Agreement, the Seller shall be
directly liable to the Issuer, the Owner Trustee, the Indenture Trustee and the
Secured Parties (notwithstanding any failure by the Master Servicer or HARC to
perform their respective duties and obligations hereunder or under any Basic
Document) and that the Indenture Trustee may enforce the duties and obligations
of the Seller under this Agreement against Seller for the benefit of the Secured
Parties and the Owner Trustee.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-4
IN WITNESS WHEREOF, the Seller, HARC and the Master Servicer have
caused this Purchase Agreement to be duly executed and delivered by their
respective duly authorized officers as of day and the year first above written.
HOUSEHOLD BANK, F.S.B.,
as Seller
By:
----------------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By:
----------------------------------------------
Name:
Title:
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer
By:
----------------------------------------------
Name:
Title:
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SCHEDULE A
SCHEDULE OF RECEIVABLES
(COMPUTER FILE HELD AT THE OFFICES OF ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP)