Exhibit 10.4
EXECUTION COPY
MASTER RECEIVABLES PURCHASE AGREEMENT
between
HOUSEHOLD AUTOMOTIVE CREDIT CORPORATION,
as Seller
and
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
dated as of
August 8, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.............................................................................1
SECTION 1.1 General..........................................................................1
SECTION 1.2 Specific Terms...................................................................1
SECTION 1.3 Other Definitional Provisions....................................................2
SECTION 1.4 Certain References...............................................................2
SECTION 1.5 No Recourse......................................................................3
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY..........................3
SECTION 2.1 Purchase.........................................................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................5
SECTION 3.1 Representations and Warranties of Seller.........................................5
SECTION 3.2 Representations and Warranties of HARC...........................................7
ARTICLE IV COVENANTS OF SELLER....................................................................8
SECTION 4.1 Seller's Covenants...............................................................8
ARTICLE V REPURCHASES.............................................................................9
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty................................9
SECTION 5.2 Reassignment of Repurchased Receivables.........................................10
SECTION 5.3 Waivers.........................................................................10
ARTICLE VI MISCELLANEOUS.........................................................................11
SECTION 6.1 Liability of Seller.............................................................11
SECTION 6.2 Amendment.......................................................................11
SECTION 6.3 GOVERNING LAW...................................................................11
SECTION 6.4 Notices.........................................................................11
SECTION 6.5 Severability of Provisions......................................................11
SECTION 6.6 Assignment......................................................................11
SECTION 6.7 Acknowledgment and Agreement of Seller..........................................12
SECTION 6.8 Further Assurances..............................................................12
SECTION 6.9 No Waiver; Cumulative Remedies..................................................12
SECTION 6.10 Counterparts....................................................................12
SECTION 6.11 Binding Effect; Third-Party Beneficiaries.......................................12
SECTION 6.12 Merger and Integration..........................................................13
SECTION 6.13 Heading.........................................................................13
SECTION 6.14 Schedules and Exhibits..........................................................13
SECTION 6.15 Survival of Representations and Warranties......................................13
SECTION 6.16 Nonpetition Covenant............................................................13
i
EXHIBITS
EXHIBIT A Form of Receivables Purchase Agreement Supplement
SCHEDULE A Schedule of Related Master Sale and Servicing Agreements
ii
THIS
MASTER RECEIVABLES PURCHASE AGREEMENT, dated as of August 8,
2002, executed between
Household Auto Receivables Corporation, a Nevada
corporation, as purchaser ("HARC") and Household Automotive Credit
Corporation, a Delaware corporation, as seller ("SELLER").
W I T N E S S E T H :
WHEREAS, HARC has agreed to purchase from time to time from
Seller, and Seller, pursuant to this Agreement, has agreed to transfer from
time to time to HARC the Receivables and the Other Conveyed Property.
WHEREAS, HARC intends from time to time to transfer Receivables
and Other Conveyed Property to different Delaware business trusts, each of
which will issue notes and certificates secured by the Receivables and Other
Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is acknowledged, HARC and Seller,
intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 GENERAL. Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
related Master Sale and Servicing Agreement.
SECTION 1.2 SPECIFIC TERMS. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"AGREEMENT" means this
Master Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"CONVEYANCE" shall have the meaning specified in Section 2.1.
"CONVEYANCE PAPERS" shall have the meaning specified in Section 3.1.
"CUTOFF DATE" shall have the meaning assigned to such term in the
applicable Series Supplement or Receivables Purchase Agreement Supplement.
"MASTER SALE AND SERVICING AGREEMENT" means each agreement so
entitled set forth on Schedule A among HARC, Household Finance Corporation,
as Master Servicer, the indenture trustee named therein and the issuer named
therein, each as supplemented by a related series supplement among HARC,
Household Finance
1
Corporation, as Master Servicer, the indenture trustee named therein, the
issuer named therein and the owner trustee and Delaware trustee (if
necessary) named therein, pursuant to which Receivables are conveyed by HARC
to such issuer.
"OTHER CONVEYED PROPERTY" means all money, instruments, rights
and other property that are subject or intended to be subject to the lien and
security interest of the related Indenture (including all property and
interests granted to the related Indenture Trustee), including all proceeds
thereof, other than the Receivables.
"PURCHASE DATE" means, with respect to Receivables, any date, on
which Receivables are to be purchased by HARC pursuant to this Agreement and
a Receivables Purchase Agreement Supplement is executed and delivered by
Seller and HARC.
"RECEIVABLES" means the Receivables listed on the Schedules of
Receivables attached to a Receivables Purchase Agreement Supplement as
Schedule A.
"RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT" means an agreement
between HARC and Seller in connection with a Series, substantially in the
form of Exhibit A hereto.
"REPURCHASE EVENT" means a determination pursuant to Section 3.2
of the related Master Sale and Servicing Agreement that HARC is required to
repurchase a Receivable.
"SCHEDULE OF RECEIVABLES" means a schedule of Receivables sold
and transferred pursuant to this Agreement and a related Receivables Purchase
Agreement Supplement, which is attached as Schedule A to such related
Receivables Purchase Agreement Supplement.
SECTION 1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other documents, or Conveyance Paper
made or delivered pursuant hereto unless otherwise defined herein.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement or any Conveyance Paper shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Section, Subsection, Schedule and Exhibit references
contained in this Agreement are references to Sections, Subsections,
Schedules and Exhibits in or to this Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance
of any Receivable, and of any collections thereof, shall be made in
accordance with the related Master Sale and Servicing Agreement.
SECTION 1.4 CERTAIN REFERENCES. All references to the
Principal Balance of a Receivable as of any date of determination shall refer
to the close of
2
business on such day, or as of the first day of a Collection Period shall
refer to the opening of business on such day. All references to the last day
of a Collection Period shall refer to the close of business on such day.
SECTION 1.5 NO RECOURSE. Without limiting the obligations of
Seller hereunder, no recourse may be taken, directly or indirectly, under
this Agreement or any certificate or other writing delivered in connection
herewith or therewith, against any stockholder, officer or director, as such,
of Seller, or of any predecessor or successor of Seller.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
SECTION 2.1 PURCHASE.
(a) By execution of this Agreement and subject to the terms and
conditions of this Agreement, on a Purchase Date with respect to a Receivables
Purchase Agreement Supplement, Seller shall sell, transfer, assign, and
otherwise convey to HARC (each, a "CONVEYANCE") without recourse (but without
limitation of its obligations in this Agreement), and HARC shall purchase, all
right, title and interest of Seller in and to:
(i) each and every Receivable listed from time to time on
Schedule A to such related Receivables Purchase Agreement Supplement
and all monies paid or payable thereon or in respect thereof on or
after the related Cutoff Date (including amounts due on or before
the related Cutoff Date but received by Seller after such date);
(ii) the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Receivables and any other
interest of Seller in such Financed Vehicles;
(iii) all rights of Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with
respect to such Receivables repurchased by a Dealer pursuant to a
Dealer Agreement;
(v) all rights of Seller under any Service Contracts on the
related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with
respect to the related Receivables from claims on any physical
damage, loss, credit life or disability insurance policies, if any,
covering Financed Vehicles or Obligors, including rebates of
insurance premiums relating to
3
the Receivables and any proceeds from the liquidation of such
Receivables;
(vii) all items contained in the Receivables Files with
respect to such Receivables and any and all other documents that
Seller or Master Servicer keeps on file in accordance with its
customary procedures relating to the related Receivables, or the
related Financed Vehicles or Obligor;
(viii) all property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that
has been acquired by or on behalf of HARC pursuant to the
liquidation of such Receivable; and
(ix) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments
on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any
and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing.
(b) Simultaneously with each Conveyance, HARC will pay or cause
to be paid to or upon the order of Seller an amount equal to 100% of the
Principal Balance of the related Receivables on the books and records of
Seller, plus the present value of anticipated excess spread on such
Receivables, discounted to take into account any uncertainty as to future
performance matching historical performance, servicing fees, delinquencies,
pay down rates, yield and such other factors as may be mutually agreed upon
between Seller and HARC, by wire transfer of immediately available funds.
(c) In connection with each Conveyance, Seller further agrees
that it will, at its own expense, on or prior to the related Purchase Date
(i) indicate in its computer files or microfiche lists that the related
Receivables have been conveyed to HARC in accordance with this Agreement and
the related Receivables Purchase Agreement Supplement, and have been conveyed
by HARC to the related Indenture Trustee pursuant to the related Master Sale
and Servicing Agreement for the benefit of the related Secured Parties by
including in such computer files and microfiche lists the code identifying
each such Receivable and (ii) deliver to HARC (or to the related Indenture
Trustee if HARC so directs) a computer file or microfiche list containing a
true and complete list of all such Receivables specifying for each such
Receivable, as of the Cutoff Date (A) its account number and (B) the
outstanding balance of such Receivable. Such computer files or microfiche
lists shall be delivered to HARC (or to the related Indenture Trustee if so
directed by HARC) and marked as proprietary and confidential. Seller further
agrees not
4
to alter the code referenced in clause (i) of this paragraph with respect to
any Receivable during the term of this Agreement.
(d) The parties hereto intend that each Conveyance shall
constitute a sale of the Seller's right, title and interest in and to the
related Receivables and Other Conveyed Property, conveying good title free
and clear of any liens, claims, encumbrances or rights of others from Seller
to HARC and that the such Receivables and Other Conveyed Property subject to
such Conveyance shall not be part of Seller's estate in the event of the
insolvency of Seller or a conservatorship, receivership or similar event with
respect to Seller. It is the intention of the parties hereto that the
arrangements with respect to each Conveyance of Receivables and Other
Conveyed Property shall constitute a purchase and sale of such Receivables
and Other Conveyed Property and not a loan. In the event, however, that a
court of competent jurisdiction were to hold that the transactions evidenced
hereby constitute a loan and not a purchase and sale, it is the intention of
the parties hereto that this Agreement shall constitute a security agreement
under applicable law, and that Seller shall be deemed to have granted to HARC
a first priority perfected security interest in all of such Seller's right,
title and interest in and to the Receivables and Other Conveyed Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
makes the representations and warranties set forth in Section 3.1(b) through
(h) as of each Purchase Date on which HARC relies in purchasing the
Receivables and the Other Conveyed Property subject to the related Conveyance
and in transferring the Receivables and the Other Conveyed Property to the
Issuer under the related Master Sale and Servicing Agreement. The
representations set forth in Section 3.1(a), on which HARC relies in
purchasing the Receivables and the Other Conveyed Property subject to the
related Conveyance and in transferring the Receivables and the Other Conveyed
Property to the Issuer under the related Master Sale and Servicing Agreement,
are made with respect to Receivables and Other Conveyed Property conveyed
hereunder, as of the execution and delivery of the related Receivables
Purchase Agreement Supplement, but shall, together with the representations
and warranties set forth in Section 3.1(b) through (h), survive the sale,
transfer and assignment of the Receivables and the Other Conveyed Property
hereunder, and the sale, transfer and assignment thereof by HARC to the
Issuer under each Master Sale and Servicing Agreement. Seller and HARC agree
that HARC will assign to Issuer all HARC's rights under this Agreement and
each Receivables Purchase Agreement Supplement and that the Indenture Trustee
will thereafter be entitled to enforce this Agreement and each Receivables
Purchase Agreement Supplement against Seller in the Indenture Trustee's own
name on behalf of the Securityholders.
(a) ELIGIBILITY CRITERIA. Each of the Receivables which is to be
pledged as collateral for a Series of Notes will satisfy the applicable
Eligibility Criteria set forth in, or to be set forth in, Schedule I to the
Series Supplement establishing such Series.
5
(b) ORGANIZATION AND GOOD STANDING. Seller is a corporation duly
organized and validly existing in good standing under the laws of the state
of Delaware and has, in all material respects, full power and authority to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
(c) DUE OBLIGATION. Seller is duly qualified to do business and
is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Receivable unenforceable by Seller, HARC or
any Trust and (ii) have a material adverse effect on any Secured Parties.
(d) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and any other document or instrument delivered pursuant hereto
(such other documents and instruments, including, but not limited to, the
Receivables Purchase Agreement Supplement collectively, the "CONVEYANCE
PAPERS") and the consummation of the transactions provided for in this
Agreement or any other Conveyance Papers have been duly authorized by all
necessary corporate action on the part of Seller and constitute or will
constitute the legal, valid and binding obligation of Seller, enforceable in
accordance with their terms.
(e) NO CONFLICT. The execution and delivery of this Agreement and
the Conveyance Papers, the performance of the transactions contemplated by
this Agreement and the Conveyance Papers, and the fulfillment of the terms of
this Agreement and the Conveyance Papers applicable to Seller will not
conflict with, violate or result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which Seller is a party or by which it
or any of its properties are bound.
(f) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers and the fulfillment of the terms
contemplated herein and therein applicable to Seller will not conflict with
or violate any requirements of law applicable to Seller.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of Seller, threatened against Seller,
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement
or the Conveyance Papers, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or the Conveyance Papers,
(iii) seeking any determination or ruling that, in the reasonable judgment of
Seller, would materially and adversely affect the performance by Seller of
its obligations under this Agreement or the Conveyance Papers, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or the Conveyance Papers or (v)
seeking to affect adversely the income tax attributes of any Trust under
United States Federal, Nevada or California income tax systems.
6
(h) ALL CONSENTS. All authorizations, consents, orders,
approvals, registrations or declarations with, or of, any Governmental
Authority required to be obtained, effected or given by Seller in connection
with the execution and delivery by Seller of this Agreement or the Conveyance
Papers and the performance of the transactions contemplated by this Agreement
or the Conveyance Papers by Seller have been duly obtained, effected or given
and are in full force and effect.
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF HARC. HARC makes
the representations and warranties set forth in Section 3.2 (a) through (f)
as of each Purchase Date, on which Seller relies in selling, assigning,
transferring and conveying the Receivables and the Other Conveyed Property
subject to the related conveyance to HARC hereunder. The representations are
made with respect to Receivables and Other Conveyed Property conveyed
hereunder, as of the execution and delivery of the related Receivables
Purchase Agreement Supplement, but shall survive the sale, transfer and
assignment of the Receivables and the Other Conveyed Property hereunder and
the sale, transfer and assignment thereof by HARC to the related Issuer under
each Master Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. HARC is a corporation duly
organized and validly existing under the laws of the State of Nevada and has,
in all material respects, full power and authority to own its properties and
conduct its business as such properties are presently owned and such business
is presently conducted and to execute, deliver and perform its obligations
under this Agreement and the Conveyance Papers.
(b) DUE AUTHORIZATION. The execution and delivery of this
Agreement and the Conveyance Papers and the consummation of the transactions
provided for in this Agreement and the Conveyance Papers have been duly
authorized by HARC by all necessary corporate action on the part of HARC.
(c) NO CONFLICT. The execution and delivery of this Agreement and
the Conveyance Papers, the performance of the transactions contemplated by
this Agreement and the Conveyance Papers, and the fulfillment of the terms
hereof and thereof, will not conflict with, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which HARC is a
party or by which it or its properties is bound.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers by HARC and the fulfillment of the terms
contemplated herein and therein applicable to HARC will not conflict with or
violate any requirements of law applicable to HARC.
(e) NO PROCEEDING. There are no proceedings or investigations
pending or, to the best knowledge of HARC, threatened against HARC, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement
or the Conveyance Papers, (ii) seeking to
7
prevent the consummation of any of the transactions contemplated by this
Agreement or the Conveyance Papers, (iii) seeking any determination or ruling
that, in the reasonable judgment of HARC, would materially and adversely
affect the performance by HARC of its obligations under this Agreement or the
Conveyance Papers or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement or the Conveyance Papers.
(f) ALL CONSENTS. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by HARC in connection with the
execution and delivery by HARC of this Agreement and the Conveyance Papers
and the performance of the transactions contemplated by this Agreement and
the Conveyance Papers or the fulfillment of the terms of this Agreement and
the Conveyance Papers by HARC have been duly obtained.
In the event of any breach of a representation and warranty made
by HARC hereunder, Seller covenants and agrees that it will not take any
action to pursue any remedy that it may have hereunder, in law, in equity or
otherwise, until a year and a day have passed since the date on which all
Notes and Certificates issued by any Trust have been paid in full. Seller and
HARC agree that damages will not be an adequate remedy for such breach and
that this covenant may be specifically enforced by HARC, the related Issuer
or by the related Indenture Trustee on behalf of the related Secured Parties
and the related Owner Trustee on behalf of the related Certificateholders.
Seller agrees that with respect to its obligations in connection with a
Repurchase Event it will exercise no rights of offset with respect to any
claims it may have against HARC.
ARTICLE IV
COVENANTS OF SELLER
SECTION 4.1 SELLER'S COVENANTS. Seller hereby covenants and
agrees with HARC as follows:
(a) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Seller
will take no action to cause any Receivable to be evidenced by any instrument
(as defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder or
as otherwise provide herein, Seller will not sell, pledge, assign or transfer
to any other Person, or take any other action inconsistent with HARC's
ownership of the Receivables and Other Conveyed Property or grant, create,
incur, assume or suffer to exist any Lien on any Receivable or any Other
Conveyed Property, whether now existing or hereafter created, or any interest
therein, and Seller shall not claim any ownership interest in the Receivables
or any Other Conveyed Property and shall defend the right, title and interest
of HARC in and to the Receivables and Other Conveyed Property, whether now
existing or hereafter created, against all claims of third parties claiming
through or under Seller.
8
(c) SECURITY'S INTEREST. Except for the conveyances hereunder and
in connection with any transaction permitted pursuant to Section 6.6, Seller
hereby agrees not to transfer, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in the Receivables
or any Other Conveyed Property and any such attempted transfer, assignment,
exchange, conveyance, pledge, hypothecation or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. In the event that
Seller receives collections or recoveries with respect to the Receivables,
Seller agrees to pay to HARC (or to the Master Servicer if HARC so directs)
all such collections and recoveries to the extent such amounts are payable to
HARC as soon as practicable after receipt thereof.
(e) NOTICE OF LIENS. Seller shall notify HARC promptly after
becoming aware of any Lien on any Receivable or any Other Conveyed Property
other than the conveyances hereunder.
(f) DOCUMENTATION OF TRANSFER. Seller shall undertake to file the
documents which would be necessary to perfect and maintain the transfer of
the security interest in and to the Receivables and Other Conveyed Property.
(g) APPROVAL OF OFFICE RECORDS. Seller shall cause this Agreement
to be duly approved by Seller's Board of Directors, and Seller shall maintain
this Agreement as a part of the official records of Seller for the term of
this Agreement.
(h) MAINTENANCE OF SECURITY INTERESTS IN VEHICLES. In the event
that the assignment of a Receivable to HARC or any assignee thereof is
insufficient, without a notation on the related Financed Vehicle's
certificate of title, or without fulfilling any additional administrative
requirements under the laws of the state in which the Financed Vehicle is
located, to perfect a security interest in the related Financed Vehicle in
favor of HARC or any assignee thereof, Seller hereby agrees that the
designation of Seller or any Affiliate of Seller as the secured party on the
certificate of title is in its capacity as agent of HARC or the agent of any
assignee of HARC for such limited purpose.
ARTICLE V
REPURCHASES
SECTION 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY.
Upon the occurrence of a Repurchase Event, Seller shall, unless the breach
which is the subject of such Repurchase Event shall have been cured in all
material respects, repurchase the Receivable relating thereto from the
related Issuer under the related Master Sale and Servicing Agreement by the
last day of the first full calendar month following the discovery of such
breach by Seller or receipt by Seller of notice of such breach from any of
the Master Servicer, HARC, a Trust Officer of the related Indenture Trustee
or the related Owner Trustee and, simultaneously with the repurchase of the
Receivable, Seller shall deposit the Repurchase Amount in full, without
deduction or offset, in the Collection Account, pursuant to Section 3.2 of
the related Master Sale and
9
Servicing Agreement. It is understood and agreed that, except as set forth in
Section 6.1 hereof, the obligation of Seller to repurchase any Receivable, as
to which a breach occurred and is continuing, shall, if such obligation is
fulfilled, constitute the sole remedy against Seller for such breach
available to HARC, the related Issuer, the related Secured Parties, the
related Certificateholders, the related Indenture Trustee on behalf of the
related Noteholders or the related Owner Trustee on behalf of the related
Certificateholders. The provisions of this Section 5.1 are intended to grant
the related Indenture Trustee or the related Issuer a direct right against
Seller to demand performance hereunder, and in connection therewith, Seller
waives any requirement of prior demand against HARC with respect to such
repurchase obligation. Any such repurchase shall take place in the manner
specified in Section 3.2 of the related Master Sale and Servicing Agreement.
Notwithstanding any other provision of this Agreement or the related Master
Sale and Servicing Agreement to the contrary, the obligation of Seller under
this Section shall not terminate upon a termination of Household Finance
Corporation as Master Servicer under the related Master Sale and Servicing
Agreement and shall be performed in accordance with the terms hereof
notwithstanding the failure of the Master Servicer or HARC to perform any of
their respective obligations with respect to such Receivable under the
related Master Sale and Servicing Agreement.
SECTION 5.2 REASSIGNMENT OF REPURCHASED RECEIVABLES. Upon
deposit in the Collection Account of the Repurchase Amount of any Receivable
repurchased by Seller under Section 5.1 hereof, HARC and the related Issuer
shall take such steps as may be reasonably requested by Seller in order to
assign to Seller all of HARC's and the related Issuer's right, title and
interest in and to such Receivable and all security and documents and all
Other Conveyed Property conveyed to HARC and the related Issuer directly
relating thereto, without recourse, representation or warranty, except as to
the absence of liens, charges or encumbrances created by or arising as a
result of actions of HARC or the related Issuer. Such assignment shall be a
sale and assignment outright, and not for security. If, following the
reassignment of a Repurchased Receivable, in any enforcement suit or legal
proceeding, it is held that Seller may not enforce any such Receivable on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, HARC and the related Issuer shall, at the expense of
Seller, take such steps as Seller deems reasonably necessary to enforce the
Receivable, including bringing suit in HARC's or in the related Issuer's name.
SECTION 5.3 WAIVERS. No failure or delay on the part of HARC,
or the related Issuer as assignee of HARC, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other or future exercise thereof or the exercise of any other power, right or
remedy.
10
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 LIABILITY OF SELLER. Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
SECTION 6.2 AMENDMENT. This Agreement and any Conveyance
Papers and the rights and obligations of the parties hereunder may not be
changed orally, but only by an instrument in writing signed by HARC and
Seller in accordance with this Section 6.2. This Agreement and any Conveyance
Papers may be amended from time to time by HARC and Seller only with the
prior written consent of all of the Secured Parties.
SECTION 6.3 GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.4 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt
requested, to (a) in the case of Seller, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Chief Operating Officer, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: Director--Asset Securitization,
(b) in the case of HARC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Compliance Officer, with a copy to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer; or, as to each party, at such
other address as shall be designated by such party in a written notice to
each other party.
SECTION 6.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement or
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from
the remaining covenants, agreements, provisions, and terms of this Agreement
or any Conveyance Paper and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Conveyance
Paper.
SECTION 6.6 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, other than HARC's assignment of its rights, title,
and interests in, to, and under this Agreement to the Issuer specified in a
Master Sale and Servicing Agreement (which Issuer shall assign such rights,
title and interest in and to this Agreement to the related Indenture Trustee
for the benefit of the related Secured Parties), as contemplated by the
Master Sale and Servicing Agreement and Section 6.7 hereof, the Receivables,
the Other Conveyed Property, this Agreement and all other Conveyance
11
Papers may not be assigned by the parties hereto; PROVIDED, HOWEVER, that
Seller shall have the right to assign its rights, title and interests, in to
and under this Agreement to (i) any successor by merger or consolidation, or
any Person which acquires by conveyance, transfer or sale the properties and
assets of Seller or (ii) any Affiliate owned directly or indirectly by
Household International, Inc. The right granted in the foregoing proviso is
subject to the further condition that any such successor or other Person
shall expressly assume by written agreement, in form and substance
satisfactory to HARC, the obligations of Seller hereunder and under the
Conveyance Papers.
SECTION 6.7 ACKNOWLEDGMENT AND AGREEMENT OF SELLER. By
execution below, Seller expressly acknowledges and agrees that all of HARC's
right, title, and interest in, to, and under this Agreement, including,
without limitation, all of HARC's right title, and interest in and to the
Receivables purchased pursuant to this Agreement, shall be assigned by HARC
to an Issuer specified in a Master Sale and Servicing Agreement and by such
Issuer to the related Indenture Trustee for the benefit of the related
Secured Parties, and Seller consents to such assignment. Additionally, Seller
agrees for the benefit of such Indenture Trustee that any amounts payable by
Seller to HARC hereunder which are to be paid by HARC to such Indenture
Trustee for the benefit of the related Secured Parties shall be paid by
Seller, on behalf of HARC, directly to such Indenture Trustee. Any payment
required to be made on or before a specified date in same-day funds may be
made on the prior business day in next-day funds.
SECTION 6.8 FURTHER ASSURANCES. HARC and Seller agree to do
and perform, from time to time, any and all acts to authenticate any and
further records, to execute any and further instruments, in each case
required or reasonably requested by the other party more fully to effect the
purposes of this Agreement and the Conveyance Papers, including, without
limitation, the execution of any financing statements or continuation
statements or equivalent documents relating to the Receivables for filing
under the provisions of the UCC or other law of any applicable jurisdiction.
SECTION 6.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of HARC or Seller, any
right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
SECTION 6.10 COUNTERPARTS. This Agreement and all Conveyance
Papers may be executed in two or more counterparts (and by different parties
on separate counterparts), each of which shall be an original, but all of
which together shall constitute one and the same instrument.
SECTION 6.11 BINDING EFFECT; THIRD-PARTY BENEFICIARIES. This
Agreement and the Conveyance Papers will inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Each of the Indenture Trustee and Issuer with respect to a Master
Sale and Servicing Agreement and
12
the related Owner Trustee shall be considered a third-party beneficiary of
this Agreement.
SECTION 6.12 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement and the Conveyance Papers set forth
the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement and the Conveyance Papers. This Agreement and the Conveyance Papers
may not be modified, amended, waived or supplemented except as provided
herein.
SECTION 6.13 HEADING. The headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
SECTION 6.14 SCHEDULES AND EXHIBITS. The schedules and
exhibits attached hereto and referred to herein shall constitute a part of
this Agreement and are incorporated into this Agreement for all purposes.
SECTION 6.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements contained in this Agreement or
contained in any Conveyance Paper, shall remain operative and in full force
and effect and shall survive conveyance of the Receivables by HARC to the
Issuer pursuant to the Master Sale and Servicing Agreement and the pledge
thereof by the Issuer to the Indenture Trustee pursuant to the related
Indenture and the related Series Supplement.
SECTION 6.16 NONPETITION COVENANT. Until the date which is one
year and one day after payment in full of all the Notes of all Series,
neither HARC nor Seller shall petition or otherwise invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against Seller or any Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of Seller or any
Issuer or any substantial part of their respective properties, or ordering
the winding up or liquidation of the affairs of Seller or any Issuer. This
provision shall survive the termination of this Agreement.
[Signature Page Follows]
13
IN WITNESS WHEREOF, the parties have caused this
Master
Receivables Purchase Agreement to be duly executed by their respective
officers as of the day and year first above written.
HOUSEHOLD AUTOMOTIVE CREDIT CORPORATION
as Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By: /s/ ▇. ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President and Assistant Treasurer
14
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 August 8, 2002, between Household Automotive Credit Corporation, a
Delaware corporation ("SELLER") and
Household Auto Receivables Corporation, a
Nevada corporation ("HARC").
W I T N E S S E T H :
WHEREAS pursuant to the Purchase Agreement, Seller wishes to
convey Receivables and Other Conveyed Property to HARC; and
WHEREAS, HARC is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, Seller and HARC hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein shall
have the meanings ascribed to them in the Purchase Agreement unless
otherwise defined herein.
"CUTOFF DATE" shall mean with respect to the Receivables conveyed
hereby, the close of business on ___________________, 200_.
"MASTER SALE AND SERVICING AGREEMENT" means the agreement dated
as of ____________, _____ among HARC, Household Finance Corporation, as
Master Servicer, _______________, as indenture trustee and ________________,
as issuer.
"PURCHASE DATE" shall mean with respect to the Receivables
conveyed hereby, ___________________, 200_.
"PURCHASE PRICE" shall mean 100% of the Principal Balance of the
Receivables on the books and records of Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into
account any uncertainty as to future performance matching historical
performance, servicing fees, delinquencies, paydown rates, yield and such
other factors as may be mutually agreed upon by Seller and HARC.
"TRANSFER DATE" means, with respect to Receivables, the date on
which Receivables and Other Conveyed Property are to be transferred to the
Trust pursuant to the Master Sale and Servicing Agreement.
A-1
2. SCHEDULE OF RECEIVABLES. Annexed as Schedule A hereto is a
computer file which reflects the Receivables that constitute the Receivables
to be conveyed pursuant to this Agreement on the Purchase Date.
3. CONVEYANCE OF RECEIVABLES. In consideration of HARC's
delivery to or upon the order of Seller of the Purchase Price, Seller does
hereby sell, transfer, assign, set over and otherwise convey to HARC, without
recourse (except as expressly provided in the Purchase Agreement), all right,
title and interest of Seller in and to:
(i) each and every Receivable listed on Schedule A hereto and all
monies paid or payable thereon or in respect thereof on or after the
Cutoff Date (including amounts due on or before the Cutoff Date but
received by Seller after such date);
(ii) the security interests in the related Financed Vehicles granted
by Obligors pursuant to such Receivables and any other interest of Seller
in such Financed Vehicles;
(iii) all rights of Seller against Dealers pursuant to
Dealer Agreements or Dealer Assignments related to such
Receivables;
(iv) any proceeds and the right to receive proceeds with respect to
such Receivables repurchased by a Dealer pursuant to a Dealer Agreement;
(v) all rights of Seller under any Service Contracts on
the related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with respect to
the related Receivables from claims on any physical damage, loss, credit
life or disability insurance policies, if any, covering Financed Vehicles
or Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such Receivables;
(vii) all items contained in the Receivables Files with respect to
such Receivables and any and all other documents that Seller or the Master
Servicer keeps on file in accordance with its customary procedures
relating to the related Receivables, or the related Financed Vehicles or
Obligor;
(viii) all property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that has
been acquired by or on behalf of HARC pursuant to liquidation of such
Receivable;
(ix) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and
A-2
other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Purchase
Date, Seller hereby makes the representations and warranties to HARC that are
set forth in Section 3.1 of the Purchase Agreement with respect to the
Conveyance effected hereby to the same extent as if set forth in full herein.
5. REPRESENTATIONS AND WARRANTIES OF HARC. As of the Purchase
Date, HARC hereby makes the representations and warranties to seller that are
set forth in Section 3.2 of the Purchase Agreement with respect to the
Conveyance effected hereby to the same extent as if set forth in full herein.
In the event of any breach of a representation and warranty made by HARC
hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by the Trust have been paid in full. Seller and HARC
agree that damages will not be an adequate remedy for such breach and that
this covenant may be specifically enforced by HARC, the related Issuer or by
the related Indenture Trustee on behalf of the related Secured Parties and
the related Owner Trustee on behalf of the related Certificateholders.
6. CONDITIONS PRECEDENT. The obligation of HARC to
acquire the Receivables hereunder is subject to the satisfaction, on or
prior to the Purchase Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by Seller in Section 4 of this Agreement and in Section
3.1 of the
Master Receivables Purchase Agreement shall be true and correct as
of the date of this Agreement and as of the Purchase Date.
(b) ADDITIONAL INFORMATION. Seller shall have delivered to HARC such
information as was reasonably requested by HARC to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4 of this
Agreement and in Section 3.1 of the Purchase Agreement and (ii) the satisfaction
of the conditions set forth in this Section.
7. RATIFICATION OF AGREEMENT. As supplemented by this
Agreement, the Purchase Agreement is in all respects ratified and confirmed
and the Purchase Agreement as so supplemented by this Agreement shall be
read, taken and construed as one and the same instrument.
8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of
which shall be an original but all of which together shall constitute one and
the same instrument.
A-3
9. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED
PROPERTY TO THE ISSUER. Seller acknowledges that HARC intends, pursuant to
the related Master Sale and Servicing Agreement, to convey the Receivables
and the Other Conveyed Property, together with its rights under this
Agreement, to the related Issuer on the Transfer Date. The Seller
acknowledges and consents to such conveyance and pledge and waives any
further notice thereof and covenants and agrees that the representations and
warranties of the Seller contained in this Agreement and the rights of HARC
hereunder are intended to benefit the related Issuer, the related Owner
Trustee, the related Indenture Trustee, the related Secured Parties and the
related Certificateholders. In furtherance of the foregoing, the Seller
covenants and agrees to perform its duties and obligations hereunder, in
accordance with the terms hereof for the benefit of the related Issuer, the
related Owner Trustee, the related Indenture Trustee and the related Secured
Parties and that, notwithstanding anything to the contrary in this Agreement,
the seller shall be directly liable to the related Issuer, the related Owner
Trustee, the related Indenture Trustee and the related Secured Parties
(notwithstanding any failure by the Master Servicer or HARC to perform their
respective duties and obligations hereunder or under any Basic Document) and
that the related Indenture Trustee may enforce the duties and obligations of
Seller under this Agreement against Seller for the benefit of the related
Secured Parties and the related Owner Trustee.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-4
IN WITNESS WHEREOF, Seller and HARC have caused this Purchase
Agreement to be duly executed and delivered by their respective duly
authorized officers as of day and the year first above written.
HOUSEHOLD AUTOMOTIVE CREDIT CORPORATION,
as Seller
By:
-------------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Purchaser
By:
-------------------------------------------
Name:
Title:
A-5
SCHEDULE A
SCHEDULE OF RELATED MASTER SALE AND SERVICING AGREEMENTS
(1) Master Sale and Servicing Agreement dated as of August 8, 2002, among
Household Finance Corporation, as Master Servicer, Household Automotive Trust
2002-2, as Issuer,
Household Auto Receivables Corporation, as Seller and
JPMorgan Chase Bank, as Indenture Trustee.