1
[CAPTION]
HOUSEHOLD FINANCE CORPORATION,
as the Master Servicer,
together with
HOUSEHOLD AUTOMOTIVE TRUST IV,
as Issuer,
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Seller,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
SERIES 2000-1 SUPPLEMENT
Dated as of February 1, 2000
to the
INDENTURE
Dated as of February 1, 2000
MASTER SALE AND SERVICING AGREEMENT
Dated as of February 1, 2000
and to the
TRUST AGREEMENT
Dated as of February 1, 2000
TABLE OF CONTENTS
Page
ARTICLE I CREATION OF THE SERIES 2000-1 NOTES 1
SECTION 1.01. DESIGNATION. 1
SECTION 1.02. PLEDGE OF SERIES 2000-1 TRUST ESTATE. 1
SECTION 1.03. PAYMENTS AND COMPUTATIONS. 3
SECTION 1.04. DENOMINATIONS. 3
ARTICLE II DEFINITIONS 3
SECTION 2.01. DEFINITIONS. 3
2
ARTICLE III DISTRIBUTIONS AND STATEMENTS TO SERIES 2000-1
NOTEHOLDERS; SERIES SPECIFIC COVENANTS 11
SECTION 3.01. SERIES 2000-1 TRUST ACCOUNTS. 11
SECTION 3.02. RESERVE ACCOUNT. 12
SECTION 3.03. DISTRIBUTIONS. 12
SECTION 3.04. STATEMENTS TO NOTEHOLDERS. 14
SECTION 3.05. REPORTING REQUIREMENTS. 14
SECTION 3.06. COMPLIANCE WITH WITHHOLDING REQUIREMENTS. 15
SECTION 3.07. SPECIAL COVENANTS AND ACKNOWLEDGEMENTS. 15
SECTION 3.08. TAX CHARACTERIZATION. 15
ARTICLE IV EVENTS OF DEFAULT; REMEDIES 15
SECTION 4.01. EVENTS OF DEFAULT. 15
SECTION 4.02. RIGHTS UPON EVENT OF DEFAULT. 16
SECTION 4.03. REMEDIES. 17
SECTION 4.04. PRIORITIES. 18
ARTICLE V PREPAYMENT AND REDEMPTION 19
SECTION 5.01. OPTIONAL "CLEAN-UP" REDEMPTION. 19
ARTICLE VI MISCELLANEOUS 19
SECTION 6.01. RATIFICATION OF BASIC DOCUMENTS. 19
SECTION 6.02. COUNTERPARTS. 20
SECTION 6.03. GOVERNING LAW. 20
SECTION 6.04. AMENDMENTS WITHOUT CONSENT OF NOTEHOLDERS. 20
SECTION 6.05. AMENDMENTS WITH CONSENT OF THE SERIES 2000-
1 NOTEHOLDERS. 21
SECTION 6.06. AUTHORITY TO REGISTER NOTES AND FILE
REPORTS. 23
SECTION 6.07. AUTHORITY TO PERFORM DUTIES OF THE ISSUER. 23
Schedule I Schedule of Eligibility Criteria
Schedule II Schedule of Receivables
Exhibit A Form of Master Servicer's Certificate
This Series 2000-1 Supplement, dated as of February 1,
2000, is by and among Household Finance Corporation, a Delaware
corporation, as master servicer (the "Master Servicer"),
Household Automotive Trust IV, a Delaware business trust, as
Issuer (the "Issuer"), Household Auto Receivables Corporation, a
Nevada corporation, as Seller ("Seller"), Norwest Bank Minnesota,
National Association, as trustee for the Noteholders (the
"Indenture Trustee") and Wilmington Trust Company, a Delaware
banking corporation, as owner trustee (the "Owner Trustee") for
the Certificateholders.
RECITALS
This Series 2000-1 Supplement, is executed and
delivered by the parties hereto pursuant to Section 9.3 of the
Indenture dated as of February 1, 2000 (the "Indenture") among
the Issuer, the Master Servicer and the Indenture Trustee and
pursuant to Section 3.2 of the Amended and Restated Trust
Agreement (the "Trust Agreement") dated as of February 1, 2000
between the Seller and the Owner Trustee. In the event that any
term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the
Indenture or the Trust Agreement, the terms and provisions of
this Series 2000-1 Supplement shall govern with respect to Series
2000-1.
ARTICLE I
CREATION OF THE SERIES 2000-1 NOTES
SECTION 1.01. Designation.
(a) There is hereby created a Series of Notes to be issued
pursuant to the Indenture and this Series 2000-1 Supplement to be
known as "Household Automotive Trust IV, Series 2000-1 Notes" (as
used herein, the "Series 2000-1 Notes"). The Series 2000-1 Notes
shall be issued in four classes (each, a "Class"). The Class A-1
Notes in an aggregate initial principal amount of $142,000,000
(the "Class A-1 Notes"), the Class A-2 Notes in an aggregate
initial principal amount of $153,000,000 (the "Class A-2 Notes"),
the Class A-3 Notes in an aggregate initial principal amount of
$169,000,000 (the "Class A-3 Notes"), the Class A-4 Notes in an
aggregate initial principal amount of $163,452,000 (the "Class ▇-
▇ Notes" and together with Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes, the "Class A Notes").
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(b) There is hereby created a Series of Certificates to be
issued pursuant to the Trust Agreement and this Series 2000-1
Supplement to be known as the "Household Automotive Trust IV,
Series 2000-1 Certificates."
SECTION 1.02. Pledge of Series 2000-1 Trust Estate.
The Issuer hereby Grants to the Indenture Trustee, for
the benefit of the Holders of the Notes all of the Issuer's
right, title and interest (but none of its obligations) in and to
(a) each and every Receivable listed as a Series 2000-1
Receivable on the Schedule of Receivables attached hereto as
Schedule II and all monies paid or payable thereon or in respect
thereof after the Cutoff Date (including amounts due on or before
the Cutoff Date but received by HAFC, the Seller, the Master
Servicer or the Issuer after the Cutoff Date); (b) an assignment
of the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Series 2000-1 Receivables
and any other interest of the Issuer in the related Financed
Vehicles; (c) all rights of HAFC against Dealers pursuant to
Dealer Agreements or Dealer Assignments related to such Series
2000-1 Receivables; (d) any proceeds and the right to receive
proceeds with respect to such Series 2000-1 Receivables
repurchased by a Dealer, pursuant to a Dealer Agreement as a
result of a breach of representation or warranty in the related
Dealer Agreement; (e) all rights under any Service Contracts on
the related Financed Vehicles; (f) any proceeds and the right to
receive proceeds with respect to such Series 2000-1 Receivables
from claims on any physical damage, loss, credit life or
disability insurance policies covering the related Financed
Vehicles or Obligors including rebates of insurance premiums
relating to such Series 2000-1 Receivables; (g) all funds on
deposit from time to time in the Series 2000-1 Trust Accounts
(including all investments and proceeds thereof from time to time
allocable to the Series 2000-1 Reserve Account, but excluding all
investments and proceeds thereof allocable to the other Series
2000-1 Trust Accounts or allocable to the Master Collection
Account); (h) all rights of the Seller in and to the Master
Receivables Purchase Agreements, including the delivery
requirements, representations and warranties and the cure and
repurchase obligations of HAFC under the Master Receivables
Purchase Agreements and such Receivables Purchase Agreement
Supplements; (i) all property (including the right to receive
future Net Liquidation Proceeds) that secures such Series 2000-1
Receivables and that has been acquired by or on behalf of the
Issuer pursuant to liquidation of such Series 2000-1 Receivables;
(j) all items contained in the Receivable Files with respect to
such Series 2000-1 Receivables and any and all other documents
that the Master Servicer or HAFC keeps on file in accordance with
its customary procedures relating to such Series 2000-1
Receivables, or the related Financed Vehicles or Obligors; (k)
all rights of the Seller in and to the Master Sale and Servicing
Agreement and the Transfer Agreement or Transfer Agreements
related to Series 2000-1 (including all rights of the Seller
under the Master Receivables Purchase Agreements and the related
Receivables Purchase Agreement Supplements, assigned to the
Issuer pursuant to the Master Sale and Servicing Agreement and
the related Transfer Agreement or Transfer Agreements); (l) one
share of the Class SV Preferred Stock of the Seller; and (m) all
present and future claims, demands, causes and chooses in action
in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any
of the foregoing (collectively, the "Series 2000-1 Trust
Estate").
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The foregoing Grant is made in trust to the Indenture
Trustee for the benefit of the Holders of the Notes. The
Indenture Trustee hereby acknowledges such Grant, accepts the
trusts under the Indenture and this Series 2000-1 Supplement in
accordance with the provisions of the Indenture and this Series
2000-1 Supplement and agrees to perform its duties required in
the Indenture and in this Series 2000-1 Supplement in accordance
with the provisions hereof and of the Indenture to the best of
its ability to the end that the interests of such parties,
recognizing the priorities of their respective interests may be
adequately and effectively protected.
SECTION 1.03. Payments and Computations.
All amounts to be paid or deposited by any Person
hereunder shall be paid or deposited in accordance with the terms
hereof no later than 12:00 noon (New York City time) on the day
when due in immediately available funds. Notwithstanding the
foregoing, any amounts required to be paid by the Trustee
hereunder shall be paid in accordance with the terms hereof no
later than 3:00 p.m. (New York City time) on the day when due, in
immediately available funds.
SECTION 1.04. Denominations.
The Notes of each Class will be issued in denominations
of $100,000 and integral multiples of $1,000 in excess thereof,
except for one Note of each Class which may be issued in a
denomination other than an integral multiple of $1,000.
ARTICLE II
DEFINITIONS
SECTION 2.01. Definitions.
(a) Whenever used in this Series 2000-1 Supplement and when
used in the Series 2000-1 Related Documents with respect to the
Series 2000-1 Notes or the Series 2000-1 Certificates, the
following words and phrases shall have the following meanings,
and the definitions of such terms are applicable to the singular
as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms. Unless
otherwise defined in this Series 2000-1 Supplement, terms defined
in the Basic Documents are used herein as therein defined. A
term used herein preceded by the designation "Series 2000-1" but
not defined herein, shall have the meaning specified for such
term in the Basic Documents as such term relates to Series 2000-
1.
"Additional Class A Principal Distributable Amount"
means with respect to any Distribution Date, the excess of
(i) the aggregate of the Principal Balance of all Receivables
which became Liquidated Receivables during the immediately
preceding Collection Period over (ii) the sum of (x) the
aggregate amount of Net Liquidation Proceeds received by the
Indenture Trustee during the immediately preceding Collection
Period and (y) Excess Interest with respect to such Distribution
Date. The "Additional Class A Principal Distributable Amount"
shall in no event be less than zero.
"Aggregate Note Principal Balance" means, as of any
date, the aggregate outstanding principal amount of all the Notes
on such date.
"Aggregate Optimal Note Principal Balance" means, with
respect to any Distribution Date, the excess, if any, of (x) the
Pool Balance as of the close of business on the last day of the
prior Collection Period over (y) the Targeted
Overcollateralization Amount for such Distribution Date.
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"Available Funds" means, with respect to any Collection
Period, and the related Distribution Date, the sum of (i) the
Collected Funds for such Collection Period, (ii) investment
earnings realized on the Series 2000-1 Trust Accounts during the
related Collection Period, (iii) all Repurchase Amounts deposited
in the Collection Account during such Collection Period, (iv) any
proceeds of any liquidation, in whole or in part, of the assets
of the Trust and (v) the lesser of (a) the excess, if any, of the
aggregate amount distributable pursuant to Section 3.03(a)(i) -
(iv) on such Distribution Date, over the aggregate of the
amounts specified in clauses (i), (ii) and (iii) hereof with
respect to such Collection Period and (b) the Reserve Account
Balance; provided that with respect to any Distribution Date on
which amounts are payable with respect to the Class A-1 Notes
pursuant to clause (ii) of the definition of Class A Principal
Distributable Amount (or clause (iii) of such definition to the
extent such amount represents amounts not paid pursuant to
clause (ii) on a prior Distribution Date), Available Funds shall
not include amounts withdrawn from the Reserve Account necessary
to make such payment to the extent such withdrawal would result
in the Reserve Account Balance being less than $4,596,723.38.
"Base Servicing Fee" means, with respect to any
Collection Period, the fee payable to the Master Servicer for
services rendered during such Collection Period, which shall be
equal to one-twelfth of the Servicing Fee Rate multiplied by the
Aggregate Principal Balances of the Series 2000-1 Receivables, as
of the Accounting Date immediately preceding such Collection
Period.
"Basic Documents" means the Master Sale and Servicing
Agreement, the Indenture, the Trust Agreement, the Master
Receivables Purchase Agreements, and other documents and
certificates delivered therewith or pursuant thereto in
connection with Series 2000-1.
"Book Entry Notes" means any beneficial interest in the
Notes, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 2.10 of
the Indenture.
"Certificateholders" means the holders of Series 2000-1
Certificates.
"Certificateholders' Distributable Amount" means, with
respect to any Distribution Date, the amount payable pursuant to
Section 3.03 (a)(vii) hereof.
"Chase Warehouse Receivables Master Purchase Agreement"
means the Master Receivables Purchase Agreement dated as of
November 18, 1999 between HAFC and the Seller, as such agreement
may be amended or supplemented from time to time.
"Class A Distributable Amount" means, with respect to
any Distribution Date and each class of Class A Notes, the sum of
(i) the Class A Interest Distributable Amount for such
Distribution Date and (ii) the Class A Principal Distributable
Amount for such Distribution Date.
"Class A Interest Carryover Shortfall" means, with
respect to any Distribution Date and each Class of Class A Notes,
the sum of: (i) excess of (a) the related Class A Interest
Distributable Amount for the preceding Distribution Date, over
(b) the amount actually paid as interest to the Class A
Noteholders on such preceding Distribution Date, plus (ii)
interest on such excess, to the extent permitted by law, at a
rate per annum equal to the related Note Rate with respect to the
Class A Notes from such preceding Distribution Date to but
excluding the current Distribution Date.
"Class A Interest Distributable Amount" means, with
respect to any Distribution Date and each class of Class A Notes,
an amount equal to the sum of: (i) the aggregate amount of
interest accrued on the Class A Notes at the related Note Rate
from and including the preceding Distribution Date (or, in the
case of the initial Distribution Date, from and including the
Closing Date) to but excluding the current Distribution Date plus
(ii) the related Class A Interest Carryover Shortfall for the
current Distribution Date.
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"Class A Monthly Principal Distributable Amount" means
(i) with respect to any Distribution Date, prior to the
Distribution Date on which the principal balance of the Class A-1
Notes is reduced to zero, 100% of the Principal Distributable
Amount, (ii) with respect to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, the
sum of (x) 100% of the Principal Distributable Amount with
respect to that portion of the Principal Distributable Amount
required to reduce the principal balance of the Class A-1 Notes
to zero, plus (y) the excess of the amount described in clause
(iii) of this definition for such Distribution Date over the
amount described in clause (ii)(x) (taking into account payment
of the principal balance of the Class A-1 Notes on such
Distribution Date), (iii) with respect to any Distribution Date
after the Distribution Date on which the Principal Balance of the
Class A-1 Notes is reduced to zero until the Distribution Date on
which the Principal Balance of the Class A Notes is reduced to
zero, the excess of (x) the aggregate outstanding principal
balance of the Class A Notes over (y) (A) the outstanding Pool
Balance as of the end of the related Collection Period minus (B)
the Targeted Overcollateralization Amount for such Distribution
Date.
"Class A Noteholders" means the Holders of the Class A
Notes.
"Class A Principal Carryover Shortfall" means, with
respect to any Distribution Date after the Distribution Date on
which the principal balance of the Class A-1 Notes is reduced to
zero, the excess of the Class A Principal Distributable Amount
for the preceding Distribution Date over the amount that was
actually distributed in respect of principal of the Class A Notes
on such preceding Distribution Date.
"Class A Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of: (i) the Class A
Monthly Principal Distributable Amount for such Distribution
Date, (ii) the Additional Class A Principal Distributable Amount,
if any, for such Distribution Date and (iii) the Class A
Principal Carryover Shortfall for such Distribution Date;
provided, however, that (x) the sum of clauses (i), (ii) and
(iii) shall not exceed the outstanding principal amount of the
Class A Notes, and (y) on the Final Scheduled Distribution Date,
the Class A Principal Distributable Amount will include the
amount, to the extent of the remaining Available Funds, necessary
(after giving effect to other amounts having a higher payment
priority on such Distribution Date) to reduce the outstanding
principal amount of the Class A Notes to zero.
"Class A-1 Noteholders" means the Holders of the Class
A-1 Notes.
"Class A-1 Scheduled Maturity Date" means with respect
to the Class A-1 Notes, March 19, 2001.
"Class A-2 Noteholders" means the Holders of the Class
A-2 Notes.
"Class A-2 Scheduled Maturity Date" means with respect
to the Class A-2 Notes, March 17, 2003.
"Class A-3 Noteholders" means the Holders of the Class
A-3 Notes.
"Class A-3 Scheduled Maturity Date" means with respect
to the Class A-3 Notes, July 19, 2004.
"Class A-4 Noteholders" means the Holders of the Class
A-4 Notes.
"Class A-4 Scheduled Maturity Date" means with respect
to the Class A-4 Notes, December 18, 2006.
"Collected Funds" means, with respect to any Collection
Period, the amount of funds in the Collection Account
representing collections on the Receivables during such
Collection Period, including all Net Liquidation Proceeds
collected during such Collection Period (but excluding any
Purchase Amounts).
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"CSFB Warehouse Master Receivables Purchase Agreement"
means the Master Receivables Purchase Agreement dated as of
December 1, 1998 between HAFC and the Seller, as amended and
supplemented by the Master Succession and Assumption Agreement.
"Cutoff Date" means the opening of business on February
1, 2000.
"Definitive Notes" means the Notes that have been
certificated and fully registered in accordance with Section 2.12
of the Indenture.
"Distribution Date" means, with respect to each
Collection Period, the seventeenth day of the following calendar
month, or if such day is not a Business Day, the immediately
following Business Day, commencing on March 17, 2000.
"Eligibility Criteria" means the criteria for
eligibility for Eligible Receivables set forth on Schedule I
hereto.
"Eligible Receivable" or "Series 2000-1 Eligible
Receivable" means a Series 2000-1 Receivable that satisfies the
Eligibility Criteria set forth in Schedule I hereto.
"Event of Default" shall have the meaning assigned to
such term in Section 4.01.
"Excess Interest" means with respect to a Distribution
Date the excess of (i) interest collections on the Receivables
during the preceding Collection Period over (ii) amounts payable
on such Distribution Date pursuant to Section 3.03(a)(i)-(iii).
"Final Scheduled Distribution Date" means December 18,
2006.
"HAFC " means Household Automotive Finance Corporation.
"HFC" means Household Finance Corporation.
"Indenture" means the indenture dated as of February 1,
2000 between the Issuer and Norwest Bank Minnesota, National
Association, as indenture trustee, as supplemented by the Series
2000-1 Supplement.
"Initial Reserve Account Deposit" means 1% of the Pool
Balance as of the Cutoff Date.
"Interest Period" means, with respect to any
Distribution Date, the period from and including the prior
Distribution Date (or, in the case of the first Distribution
Date, from and including the Series 2000-1 Closing Date) through
(and including) the day preceding such Distribution Date.
"Master Receivables Purchase Agreements" means
collectively the CSFB Warehouse Master Receivables Purchase
Agreement and the Chase Warehouse Master Receivables Purchase
Agreement.
"Master Servicer's Certificate" means, with respect to
Series 2000-1, a report in substantially the form of Exhibit A
hereto (appropriately completed), furnished by the Master
Servicer to the Indenture Trustee and the Owner Trustee pursuant
to the Master Sale and Servicing Agreement.
"Master Succession and Assumption Agreement" means the
Master Succession and Assumption Agreement dated as of September
1, 1999 by and among the Master Servicer, Household Automotive
Funding Trust 1999-A, Household Automotive Funding Trust 1999-A,
the Seller, Credit Suisse First Boston, New York Branch, as agent
and purchaser, Alpine Securitization Corp., Gramercy Capital
Corporation, The Chase Manhattan Bank, as indenture trustee, and
the Owner Trustee.
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"Maximum Reserve Account Deposit Amount" for any
Distribution Date is equal to that portion of Collected Funds
representing interest collections on the Receivables (including
amounts representing Net Liquidation Proceeds for such Collection
Period) for the related Collection Period less the sum of: the
Base Servicing Fee paid to any Master Servicer other than HFC,
the fees due to the Indenture Trustee and Owner Trustee, to the
extent not paid by the Master Servicer, plus, the Class A
Interest Distributable Amounts for such Distribution Date, plus
the aggregate Principal Balances of all Receivables which became
Liquidated Receivables during the related Collection Period, plus
the aggregate amount of Cram Down Losses during such Collection
Period.
"Note Rate" means the per annum rate of interest due
with respect to each Class of Notes as set forth below for the
respective Class of Note:
Class A-1 Notes: 6.09%
Class A-2 Notes: 6.85%
Class A-3 Notes: 7.30%
Class A-4 Notes: 7.48%
Interest on the Class A-1 Notes will be calculated on
the basis of a 360-day year and the actual number of days elapsed
in an applicable Interest Period. Interest on the Class A-2 ,
Class A-3 and Class A-4 Notes will be calculated on the basis of
a 360-day year consisting of twelve 30-day months. The amount of
interest payable on the Class A-2, Class A-3 and Class A-4 Notes
for the initial Interest Period will be computed on the basis of
the actual number of days elapsed in the 30-day months.
"Notes" means the Class A Notes.
"Original Pool Balance" means the aggregate of the
Principal Balance of the Receivables as of the Cutoff Date.
"Owner Trust Estate" has the meaning assigned to such
term in the Trust Agreement.
"Owner Trustee" means Wilmington Trust Company, not in
its individual capacity but solely as trustee under the Trust
Agreement.
"Pledge" means the Grant by the Issuer hereunder to the
Indenture Trustee for the benefit of the Holders of Notes in
accordance with Section 1.02 hereof in and to specified Pledged
Property related thereto.
"Pledged Property" means, with respect to the Series
2000-1 Trust Estate, each Series 2000-1 Receivable, together with
all associated property and rights with respect thereto described
in the definition of Series 2000-1 Trust Estate.
"Pool Balance" means, as of any date of determination,
the aggregate of the outstanding Principal Balances of the
Receivables, unless otherwise specified, as of the close of
business on the preceding Business Day.
"Principal Amount Available" means, with respect to any
Distribution Date, the amount remaining in the Series 2000-1
Collection Account on such Distribution Date after the payment of
the amounts required to be paid pursuant to clause (i) through
(iii) of Section 3.03(a) on such Distribution Date minus the
Reserve Account Deposit Amount for such Distribution Date.
"Principal Distributable Amount" means, with respect to
any Distribution Date, the lesser of (A) the Principal Amount
Available for such Distribution Date and (B) the excess, if any,
of (i) the Aggregate Note Principal Balance immediately prior to
such Distribution Date over (ii) the Aggregate Optimal Note
Balance for such Distribution Date.
"Rating Agencies" means Standard & Poor's and ▇▇▇▇▇'▇.
If such organization or a successor does not maintain a rating on
the Notes, "Rating Agency" shall be a nationally recognized
statistical rating organization or other comparable Person
designated by the Seller, notice of which designation shall be
given to the Indenture Trustee, the Owner Trustee and the Master
Servicer.
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"Redemption Price" has the meaning specified in Section
5.01 hereof.
"Reserve Account" means the Series 2000-1 Reserve
Account which shall be an Eligible Deposit Account created
pursuant to Section 3.01 hereof, which initially shall be account
no. ▇▇▇▇▇▇▇ for further credit, account no. ▇▇▇▇▇▇▇▇, reference
Household Automotive Trust IV Reserve Account at the Indenture
Trustee, ABA No. ▇▇▇▇▇▇▇▇▇.
"Reserve Account Balance" means, with respect to a
Distribution Date, the amount on deposit in the Reserve Account
as of the opening of business on such Distribution Date.
"Reserve Account Deposit Amount" means, with respect to
any Distribution Date, the lesser of: (x) the Maximum Reserve
Account Deposit Amount for such Distribution Date and (y) the
Reserve Account Shortfall Amount for such Distribution Date.
"Reserve Account Shortfall Amount" means, with respect
to any Distribution Date, the excess of: (x) the Targeted
Reserve Account Balance for such Distribution Date over (y) the
Reserve Account Balance for such Distribution Date.
"Schedule of Receivables" means the schedule of all
retail installment sales contracts and promissory notes held as
part of the Series 2000-1 Trust Estate attached hereto as
Schedule II.
"Series 2000-1 Certificates" means the Certificates (as
defined in the Trust Agreement).
"Series 2000-1 Closing Date" means February 24, 2000.
"Series 2000-1 Collected Funds" means, with respect to
a date of determination, the amount of Collected Funds with
respect to the Collection Period immediately preceding such date
of determination, including all Net Liquidation Proceeds
collected during the related Collection Period (but excluding any
Purchase Amounts).
"Series 2000-1 Collection Account" means the Eligible
Deposit Account created pursuant to Section 3.01 hereof which
initially shall be account no. ▇▇▇▇▇▇▇, for further credit,
account no. ▇▇▇▇▇▇▇▇, reference Household Automotive Trust IV
Collection Account at the Indenture Trustee, ABA No. ▇▇▇▇▇▇▇▇▇.
"Series 2000-1 Eligible Investments" means, with
respect to funds in the Series 2000-1 Collection Account and
Reserve Account, "Eligible Investments" as defined in the Master
Sale and Servicing Agreement, except that (i) all references in
such definition to "rating satisfactory to the Rating Agency" or
words of similar import shall mean ratings of not less than "A-
1+" by Standard & Poor's and "P-1" by ▇▇▇▇▇'▇ (whichever is
applicable), and (ii) all such investments shall have maturities
at the time of the acquisition thereof occurring no later than
the Business Day immediately preceding the Distribution Date
following such date of acquisition.
"Series 2000-1 Receivables" means each Receivable
listed on the Schedule of Receivables, which (a) has not been
released from the Series 2000-1 Trust Estate as provided herein
or in the Indenture and (b) is not a Liquidated Receivable.
"Series 2000-1 Related Documents" means the Basic
Documents, this Series 2000-1 Supplement, the Master Receivables
Purchase Agreements, each Transfer Agreement related to the
Series 2000-1 Trust Estate, the Series 2000-1 Notes, the Series
2000-1 Certificates and other documents and certificates
delivered in connection therewith.
"Series 2000-1 Reserve Account" means the Reserve
Account.
"Series 2000-1 Secured Obligations" means all amounts
and obligations which the Issuer may at any time owe to the
Holders of the Series 2000-1 Notes.
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"Series 2000-1 Securities" means the Series 2000-1
Notes and the Series 2000-1 Certificates.
"Series 2000-1 Supplement" means this Series 2000-1
Supplement to the Indenture, Master Sale and Servicing Agreement
and the Trust Agreement.
"Series 2000-1 Support" means, with respect to the
Series 2000-1 Notes, the Series 2000-1 Certificates.
"Series 2000-1 Trust Accounts" means the Series 2000-1
Collection Account and the Series 2000-1 Reserve Account.
"Series 2000-1 Trust Estate" means the property Granted
to the Indenture Trustee pursuant to Section 1.02.
"Servicing Fee Rate" means 3% per annum, or, if the
Indenture Trustee is the successor Master Servicer, the rate
determined in accordance with Section 10.3(c) of the Master Sale
and Servicing Agreement.
"Supplemental Servicing Fee" means, with respect to any
Collection Period, (i) all administrative fees, expenses and
charges actually paid by or on behalf of Obligors, including late
fees, prepayment fees and liquidation fees collected on the
Series 2000-1 Receivables during such Collection Period, and (ii)
the net realized investment earnings of funds on deposit in the
Series 2000-1 Collection Account or on deposit in the Master
Collection Account and allocable to the investment of Available
Funds with respect to Series 2000-1.
"Targeted Credit Enhancement Amount" means, with
respect to any Distribution Date, 38% of the Pool Balance as of
the of last day of the related Collection Period.
"Targeted Overcollateralization Amount" means, with
respect to any Distribution Date, the excess (but not less than
zero), if any, of: (i) the Targeted Credit Enhancement Amount
over (ii) the Targeted Reserve Account Balance.
"Targeted Reserve Account Balance" means, with respect
to any Distribution Date, the lesser of: (i) the greater of (a)
3% of the outstanding Pool Balance as of the end of the related
Collection Period, and (b) $18,386,893.51 (2% of the Pool Balance
as of the Cutoff Date) and (ii) the Aggregate Note Principal
Balance.
"Trust" means the Issuer.
"Trust Agreement" means the Trust Agreement, dated as
of February 1, 2000, between the Seller and the Owner Trustee, as
amended and restated as of February 1, 2000 and as supplemented
by the Series 2000-1 Supplement.
ARTICLE III
DISTRIBUTIONS AND STATEMENTS TO
SERIES 2000-1 NOTEHOLDERS; SERIES SPECIFIC COVENANTS
SECTION 3.01. Series 2000-1 Trust Accounts.
(a) The Indenture Trustee, for the benefit of the Holders
of the Series 2000-1 Securities, shall establish and maintain an
account (the "Series 2000-1 Collection Account") as a segregated
trust account in the Indenture Trustee's corporate trust
department, identified as the "Collection Account for Household
Automotive Trust IV, in trust for the registered Holders of the
Series 2000-1 Securities." The Indenture Trustee shall make or
permit withdrawals from the Series 2000-1 Collection Account only
as provided in this Series 2000-1 Supplement. Notwithstanding
anything in the Series 2000-1 Related Documents to the contrary,
at least one Business Day prior to each Distribution Date the
Master Servicer and the Issuer shall deposit Collected Funds
(which shall be immediately available) directly into the Series
2000-1 Collection Account without any prior deposit into the
Master Collection Account.
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(b) The Indenture Trustee for the benefit of the Holders of
the Series 2000-1 Notes shall establish and maintain an account
(the "Series 2000-1 Reserve Account") as a segregated trust
account in the Indenture Trustee's corporate trust department,
identified as the "Series 2000-1 Reserve Account for Household
Automotive Trust IV, in trust for the registered Holders of the
Series 2000-1 Notes." The Indenture Trustee shall make or permit
withdrawals from the Reserve Account only as provided in this
Series 2000-1 Supplement. On the Series 2000-1 Closing Date, the
Series 2000-1 Reserve Account will be funded with the Initial
Reserve Account Deposit.
(c) In the event that any Series 2000-1 Trust Account
ceases to be an Eligible Deposit Account, the Indenture Trustee,
as applicable, within five Business Days, shall establish a new
Eligible Deposit Account. No withdrawals may be made of funds in
any Series 2000-1 Trust Account except as provided in this Series
2000-1 Supplement. Except as specifically provided in this
Series 2000-1 Supplement, funds in the Series 2000-1 Trust
Accounts shall not be commingled with any other moneys. All
moneys deposited from time to time in each of the Series 2000-1
Trust Accounts shall be invested and reinvested by the Indenture
Trustee in Series 2000-1 Eligible Investments selected in writing
by the Master Servicer (pursuant to standing instructions or
otherwise) which, absent any instruction shall be the investments
specified in clause (d) of the definition of Eligible Investment.
The provisions of Section 5.1 of the Master Sale and Servicing
Agreement shall apply to the investment of funds in the Series
2000-1 Trust Accounts to the same extent as they apply to the
Master Collection Account.
SECTION 3.02. Reserve Account.
On the earlier of (x) the maturity date of the Series
2000-1 Notes (whether by acceleration or otherwise) or (y) the
Final Scheduled Distribution Date, the amount on deposit in the
Reserve Account shall be withdrawn from the Reserve Account and
distributed in accordance with Section 4.04.
SECTION 3.03. Distributions.
(a) On each Distribution Date, the Indenture Trustee shall
(based solely on the information contained in the Master
Servicer's Certificate delivered with respect to such
Distribution Date) distribute the following amounts from
Available Funds with respect to such Distribution Date, and in
the following order of priority:
(i) to the Master Servicer, any Supplemental Servicing Fees
for the related Collection Period and, if HFC is no longer acting
as Master Servicer, the Base Servicing Fee for the related
Collection Period;
(ii) to the Indenture Trustee and the Owner Trustee, any
accrued and unpaid trustees' fees and any unreimbursed costs and
expenses (including, if the Indenture Trustee is the successor
Master Servicer, reasonable transition expenses in an amount not
to exceed $100,000) (in each case, to the extent such fees have
not been previously paid by the Master Servicer);
(iii) to the Class A Noteholders, the Class A Interest
Distributable Amount;
(iv) (i) to the Class A-1 Noteholders, 100% of the Class A
Principal Distributable Amount until the outstanding principal
amount of the Class A-1 Notes has been reduced to zero; and (ii)
on and after the Distribution Date on which the outstanding
principal amount of the Class A-1 Notes has been reduced to zero,
the Class A Principal Distributable Amount will be allocated to
payment of the Class A-2, Class A-3 and Class A-4 Notes, in
"sequential pay" fashion, beginning with the Class A-2 Notes, in
each case, until the respective outstanding principal amount of
the Class A-2, Class A-3 and Class A-4 Notes are paid in full;
(v) to the Reserve Account, the Reserve Account Deposit
Amount, if any, required to increase the amount therein to the
Targeted Reserve Account Balance;
(vi) if HFC is acting as the Master Servicer, the Base
Servicing Fee for the related Collection Period or if the
Indenture Trustee is the successor Master Servicer, reasonable
transition expenses in excess of the amounts paid in priority
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(ii) above; and
(vii) to the holders of the Series 2000-1 Certificates, any
remaining Available Funds.
(b) If on a Distribution Date, the Master Servicer's
Certificate delivered with respect to such Distribution Date
indicates that the amount specified in clauses (i) through (iv)
of the definition of Available Funds with respect to such
Distribution Date is less than the sum of the amounts required to
be distributed pursuant to clauses (i) through (iv) of paragraph
(a) above on such Distribution Date, the Indenture Trustee shall
withdraw from the Series 2000-1 Reserve Account an amount up to
the amount of such deficiency and distribute such amount as a
component of Available Funds.
(c) Each Series 2000-1 Certificateholder by its acceptance
of its Certificate will be deemed to have consented to the
provisions of paragraph (a) above relating to the priority of
distributions, and will be further deemed to have acknowledged
that no property rights in any amount or the proceeds of any such
amount shall vest in such Certificateholder until such amounts
have been distributed to such Certificateholder pursuant to such
provisions; provided, that the foregoing shall not restrict the
right of any Certificateholder, upon compliance with the
provisions hereof, from seeking to compel the performance of the
provisions hereof by the parties hereto. Each Series 2000-1
Certificateholder, by acceptance of its Certificate, further
specifically acknowledges that it has no right to or interest in
any monies at any time held in the Series 2000-1 Reserve Account,
such monies being held in trust for the benefit of the Series
2000-1 Noteholders.
(d) Amounts on deposit in the Reserve Account on any
Distribution Date (after giving effect to all distributions made
on such Distribution Date and the related Distribution Date) in
excess of the Targeted Reserve Account Balance for such
Distribution Date shall be released first, to the Master Servicer
for any Servicing Fees and Supplemental Servicing Fees then due,
and any remainder to the Seller.
(e) In the event that the Series 2000-1 Collection Account
is maintained with an institution other than the Indenture
Trustee, the Master Servicer shall instruct and cause such
institution to transfer the amounts to be withdrawn therefrom in
accordance with Section 3.03(b) to the Indenture Trustee for
distribution pursuant to Section 3.03(a) one Business Day Prior
to the related Distribution Date.
(f) Unless Definitive Notes are issued pursuant to Section
2.12 of the Indenture, with respect to Notes registered on the
related Record Date in the name of a nominee of the Clearing
Agency, payment will be made by wire transfer to an account
designated by such nominee, without presentation or surrender of
the Series 2000-1 Notes or the making of any notation thereon.
(g) If not theretofore paid in full, all amounts
outstanding with respect to the Class A-1 Notes shall be due and
payable on the Class A-1 Scheduled Maturity Date, if not
theretofore paid in full, all amounts outstanding with respect to
the Class A-2 Notes shall be due and payable on the Class A-2
Scheduled Maturity Date, if not theretofore paid in full, all
amounts outstanding with respect to the Class A-3 Notes shall be
due and payable on the Class A-3 Scheduled Maturity Date, and if
not theretofore paid in full, all amounts outstanding with
respect to the Class A-4 Notes shall be due and payable on the
Class A-4 Scheduled Maturity Date.
SECTION 3.04. Statements to Noteholders.
On or prior to each Determination Date, the Master
Servicer shall provide to the Indenture Trustee (with a copy to
the Rating Agencies) for the Indenture Trustee to forward to each
Noteholder of record, and to each Certificateholder of record, a
statement setting forth at least the following information as to
the Notes to the extent applicable:
(i) the amount of such distribution allocable to principal
of each Class of Notes;
(ii) the amount of such distribution allocable to interest
on or with respect to each Class of Notes;
(iii) the aggregate outstanding principal amount of each
Class of the Notes after giving effect to payments allocated to
principal reported under (i) above;
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(iv) the Class A Interest Carryover Shortfall, the Class A
Principal Carryover Shortfall, if any, and the change in such
amounts from the preceding statement.
(v) the amount of the Base Servicing Fee paid to the Master
Servicer with respect to such Collection Period; and
(vi) the Targeted Reserve Account Balance and the amount on
deposit in the Reserve Account at the end of such Distribution
Date.
Each amount set forth pursuant to paragraph (i) through (iv)
above shall be expressed as a dollar amount per $1,000 of the
initial principal balance of the applicable Class of Notes.
SECTION 3.05. Reporting Requirements.
(a) The Master Servicer's Certificate shall be in the form
attached as Exhibit A hereto.
(b) By January 31 of each calendar year, commencing January
31, 2001, the Master Servicer on behalf of the Issuer shall
prepare and distribute to the Indenture Trustee a statement
containing such information as is required to be provided by an
issuer of indebtedness under the Code and such other customary
information as is necessary to enable the Noteholders to prepare
their tax returns.
(c) If an Event of Default occurs and is continuing and if
it is either known by, or written notice of the existence thereof
has been delivered to, a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder
notice of the Default within 30 days after such knowledge or
notice occurs.
SECTION 3.06. Compliance With Withholding Requirements.
Notwithstanding any other provisions of this Series
2000-1 Supplement or the Indenture to the contrary, the Indenture
Trustee, shall comply with all Federal withholding requirements
respecting payments (or advances thereof) to the Noteholders as
may be applicable to instruments constituting indebtedness for
Federal income tax purposes. Any amounts so withheld shall be
treated as having been paid to the applicable Noteholders for all
purposes of the Indenture. In no event shall the consent of any
Noteholder be required for any such withholding.
SECTION 3.07. Special Covenants and Acknowledgements.
With respect to the Series 2000-1 Notes, the Issuer
hereby represents and warrants, as of the Series 2000-1 Closing
Date:
(i) Valid Pledge. It is the intention of the Issuer that
each pledge herein contemplated constitutes the Grant of a
perfected, first priority security interest in all Pledged
Property to the Indenture Trustee for the benefit of the Series
2000-1 Noteholders.
(ii) Governmental Authorization. Other than the filing of
the financing statements required hereunder, no authorization or
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by the Issuer of this Series
2000-1 Supplement, the Indenture, and each Series 2000-1 Related
Document to which it is a party.
SECTION 3.08. Tax Characterization.
It is the intent of the parties hereto that, for all
Federal, state, local and foreign taxes, the Series 2000-1 Notes
will be evidence of indebtedness. To the extent permitted by
law, the parties hereto, and each owner of a beneficial interest
in the Series 2000-1 Notes by acceptance of such interest, agrees
to treat the Series 2000-1 Notes for purposes of all Federal,
state, local and foreign taxes as indebtedness secured by the
Series 2000-1 Trust Estate.
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ARTICLE IV
EVENTS OF DEFAULT; REMEDIES
SECTION 4.01. Events of Default.
"Event of Default", wherever used herein, means any one
of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue
for a period of five calendar days; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes
due and payable, and such default shall continue for a period of
five calendar days; or
(iii) default in the observance or performance of any
covenant or agreement of the Issuer made in the Series 2000-1
Related Documents (other than a covenant or agreement, a default
in the observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or
warranty of the Issuer made in the Series 2000-1 Related
Documents or in any certificate or other writing delivered
pursuant thereto or in connection therewith proving to have been
incorrect in any material respect as of the time when the same
shall have been made and has a material adverse effect on the
Noteholders, and such default shall continue or not be cured, or
the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 60 days after
there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Holders of at least 25% of the
Outstanding Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it
to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or
any substantial part of the Trust Property in an involuntary case
under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for any substantial part of
the Trust Property, or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by
the Issuer to the entry of an order for relief in an involuntary
case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the Trust Property, or
the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to
pay its debts as such debts become due, or the taking of action
by the Issuer in furtherance of any of the foregoing.
SECTION 4.02. Rights Upon Event of Default.
(a) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee in its discretion may, or if so
requested in writing by Holders holding Notes representing at
least 66 2/3% of the Outstanding Amount of the Notes shall,
declare by written notice to the Issuer that the Notes have
become due and payable, whereupon they shall become, immediately
due and payable at 100% of the outstanding principal balance of
the Notes, and accrued interest thereon (together with interest
accrued at the relevant Note Rate on such overdue interest).
15
(b) At any time after such declaration of acceleration of
maturity has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture
Trustee, the Holders of Notes representing a majority of the
Outstanding Amount of the Notes, by written notice to the Issuer
and the Indenture Trustee, may rescind and annul such declaration
and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section
5.9 of the Indenture.
No such rescission shall affect any subsequent default or impair
any right consequent thereto.
SECTION 4.03. Remedies.
If an Event of Default shall have occurred and be
continuing, the Indenture Trustee, subject to Section 11.17 of
the Indenture, may exercise any of the remedies specified in
Article V of the Indenture and, in addition, may do one or more
of the following.
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable
on the Notes or under the Indenture with respect thereto, whether
by declaration or otherwise, enforce any judgment obtained, and
collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of the Indenture with respect to
the Trust Property;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Holders of
the Notes; and
(iv) sell the Trust Property or any portion thereof or
rights or interest therein, at one or more public or private
sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or
otherwise liquidate the Trust Property following an Event of
Default unless:
(x) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to
discharge in full all amounts then due and unpaid
upon such Notes for principal and interest, or
(y) the Indenture Trustee determines that
the Trust Property will not continue to provide
sufficient funds for the payment of principal of
and interest on the Notes as they would have
become due if the Notes had not been declared due
and payable, and the Indenture Trustee obtains the
consent of Holders of 66-2/3% of the Outstanding
Amount of the Notes, or
(z) the Indenture Trustee has not determined
that the Trust Property will not continue to
provide sufficient funds for the principal of and
interest on the Notes and the proceeds of such
sale or liquidation distributable to the
Noteholders are not sufficient to discharge in
full all amounts then due and unpaid upon such
Notes for principal and interest, and the
Indenture Trustee obtains the consent of Holders
of 100% of the Outstanding Amount of the Notes.
16
In determining such sufficiency or insufficiency with
respect to clause (y) and (z), the Indenture Trustee may, but
need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the
sufficiency of the Trust Property for such purpose.
SECTION 4.04. Priorities.
(a) On and after the maturity date of the Series 2000-1
Notes (by acceleration or otherwise) all Available Funds, all
amounts on deposit in the Reserve Account withdrawn in accordance
with Section 3.02 and any proceeds of the liquidation of all or
any portion of the Series 2000-1 Trust Estate pursuant to Section
4.03(iv), shall be applied by the Indenture Trustee on the
related Distribution Date in the following order of priority:
FIRST: amounts due and owing and required to be distributed to
the Master Servicer, the Owner Trustee and the Indenture Trustee,
respectively, pursuant to priorities (i) and (ii) of Section 3.03
hereof and not previously distributed, in the order of such
priorities and without preference or priority of any kind within
such priorities;
SECOND: to Class A Noteholders for amounts due and unpaid
on the Class A Notes for interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Class A Notes for interest;
THIRD: to the Class A Noteholders for amounts due and unpaid
on the Class A Notes for principal, ratably, without preference
or priority of any kind, according to the amounts due and payable
on the Class A Notes for principal;
FOURTH: to the Servicer for any Servicing Fees and
Supplemental Servicing Fees then due;
FIFTH: to the Series 2000-1 Certificateholders, any remaining
Available Funds.
(b) The Indenture Trustee may fix a record date and
distribution date for any payment to Series 2000-1 Noteholders
pursuant to this Section 4.04. At least 15 days before such
record date, the Indenture Trustee shall mail to the Noteholders
a notice that states the record date, the Distribution Date and
the amount to be paid.
ARTICLE V
PREPAYMENT AND REDEMPTION
SECTION 5.01. Optional "Clean-Up" Redemption.
On any Distribution Date occurring on or after the date
upon which the aggregate outstanding principal balance of the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes shall have been reduced to an amount which is
less than or equal to 10% of the aggregate outstanding principal
balance of such Classes of Notes as of the Series 2000-1 Closing
Date, the Master Servicer and the Seller on behalf of the Issuer,
shall each have the option to redeem the outstanding Series 2000-
1 Notes at a redemption price (the "Redemption Price") which is
not less than the then Aggregate Note Principal Balance, plus all
accrued and unpaid interest thereon and all fees and other
amounts owing to the Indenture Trustee, the Owner Trustee and the
Master Servicer (if other than HFC) under the Series 2000-1
Related Documents. The Master Servicer and the Seller, on behalf
of the Issuer, shall give the Master Servicer (if other than
HFC), the Indenture Trustee, and the Owner Trustee at least 10
days' irrevocable prior written notice of the date on which the
Master Servicer or the Seller, as applicable intends to exercise
such option to purchase. Not later than 12:00 P.M., New York
City time, on the day prior to such Distribution Date, the Master
Servicer or the Seller, as applicable, shall deposit such amount
in the Collection Account in immediately available funds for
distribution pursuant to Section 3.03 against the presentment of
the Notes for cancellation. Such purchase option is subject to
payment in full of the Redemption Price.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Ratification of Basic Documents.
Each of the Basic Documents, and to the extent
appropriate, as supplemented by this Series 2000-1 Supplement, is
in all respects ratified and confirmed and each of the Basic
Documents, as so supplemented by this Series 2000-1 Supplement
shall be read, taken and construed as one and the same
instrument.
SECTION 6.02. Counterparts.
This Series 2000-1 Supplement may be executed in one or
more counterparts, each of which so executed shall be deemed to
be an original, but all of which shall together constitute but
one and the same instrument.
SECTION 6.03. GOVERNING LAW.
THIS SERIES 2000-1 SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 6.04. Amendments Without Consent of Noteholders.
(a) Without the consent of the Noteholders but with prior
written notice to the Rating Agencies, as evidenced to the
Indenture Trustee and the Issuer, when authorized by an Issuer
Order, at any time and from time to time, the parties hereto may
enter into one or more amendments hereto, in form satisfactory to
the Indenture Trustee and the Owner Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of the Indenture as supplemented
by this Series 2000-1 Supplement, or better to assure, convey and
confirm unto the Indenture Trustee, if any, any property subject
or required to be subjected to the lien of the Indenture as
supplemented by this Series 2000-1 Supplement, or to subject to
the lien of the Indenture as supplemented by this Series 2000-1
Supplement additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer,
and the assumption by any such successor of the covenants of the
Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Noteholders, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee, if any;
(v) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other
provision herein or to make any other provisions with respect to
matters or questions arising under the Indenture, the Trust
Agreement or in this Series 2000-1 Supplement; provided that such
action shall not adversely affect the interests of the Series
2000-1 Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder and under the Indenture by a successor
indenture trustee with respect to the Notes and to add to or
change any of the provisions of the Indenture or of this Series
2000-1 Supplement as shall be necessary to facilitate the
administration of the trusts hereunder by more than one indenture
trustee, pursuant to the requirements of Article VI of the
Indenture; or
(vii) to modify, eliminate or add to the provisions of the
Indenture or of this Series 2000-1 Supplement to such extent as
shall be necessary to effect the qualification of the Indenture
under the TIA or under any similar federal statute hereafter
enacted and to add to the Indenture such other provisions as may
be expressly required by the TIA.
Each of the Indenture Trustee and the Owner Trustee is
hereby authorized to join in the execution of any amendment and
to make any further appropriate agreements and stipulations that
may be therein contained.
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(b) Except as otherwise provided herein, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, may, also
without the consent of any of the Series 2000-1 Noteholders but
with prior written notice to the Rating Agencies by the Issuer,
as evidenced to the Indenture Trustee, enter into an amendment
hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, the
Indenture or of this Series 2000-1 Supplement of modifying in any
manner the rights of the Series 2000-1 Noteholders under the
Indenture or under this Series 2000-1 Supplement; provided,
however, that such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the
interests of any Series 2000-1 Noteholder.
SECTION 6.05. Amendments With Consent of the Series 2000-1
Noteholders.
Except as otherwise provided herein, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order provided by
the Master Servicer, also may, upon satisfaction of the Rating
Agency Condition and with the consent of the Holders of not less
than a majority of the Outstanding Amount of each Class of
affected Series 2000-1 Notes, by Act of such Holders delivered to
the Issuer and the Indenture Trustee, enter into an amendment
hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this
Series 2000-1 Supplement or of modifying in any manner the rights
of the Series 2000-1 Noteholders under the Indenture or under
this Series 2000-1 Supplement; provided, however, that no such
amendment shall, without the consent of the Holder of each
Outstanding Series 2000-1 Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Series 2000-1 Note, or reduce the
principal amount thereof, the interest rate thereon, change the
provision of the Indenture relating to the application of
collections on, or the proceeds of the sale of, all or any
portion of any Series 2000-1 Trust Estate to payment of principal
of or interest on the Series 2000-1 Notes, or change any place of
payment where, or the coin or currency in which, any Series 2000-
1 Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement
of the provisions of the Indenture requiring the application of
funds available therefor, as provided in Article V of the
Indenture, to the payment of any such amount due on the Series
2000-1 Notes on or after the respective due dates thereof;
(iii) reduce the percentage of the Outstanding Amount of the
Series 2000-1 Notes, the consent of the Holders of which is
required for this Series 2000-1 Supplement, or the consent of the
Holders of which is required for any waiver of compliance with
certain provisions of the Indenture or certain defaults hereunder
and their consequences provided for in the Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to direct the Issuer to sell
or liquidate the Series 2000-1 Trust Estate pursuant to Section
5.4 of the Indenture;
(vi) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain
additional provisions of the Indenture or the Basic Documents
cannot be modified or waived without the consent of the Holder of
each Outstanding Series 2000-1 Note affected thereby;
(vii) modify any of the provisions of the Indenture in such
manner as to affect the calculation of the amount of any payment
of interest or principal due on any Series 2000-1 Note on any
Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the
rights of the Holders of Series 2000-1 Notes to the benefit of
any provisions for the mandatory redemption of the Series 2000-1
Notes contained herein; or
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(viii) permit the creation of any lien ranking prior to or on
a parity with the lien of the Indenture with respect to any part
of the a Series 2000-1 Trust Estate or, except as otherwise
permitted or contemplated herein or the Series 2000-1 Related
Documents, terminate the lien of the Indenture on any property at
any time subject hereto or deprive the Holder of any Series 2000-
1 Note of the security provided by the lien of the Indenture.
It shall not be necessary for any Act of Noteholders
under this Section to approve the particular form of an amendment
to this Series 2000-1 Supplement, but it shall be sufficient if
such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the
Indenture Trustee of an amendment to this Series 2000-1
Supplement, the Indenture Trustee shall mail to the Series 2000-1
Noteholders a notice setting forth in general terms the substance
hereof. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any amendment to the Series 2000-
1 Supplement.
Prior to the execution of any amendment to this
Supplement, the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of
such amendment is authorized or permitted by this Supplement.
The Indenture Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Indenture Trustee's own
rights, duties or immunities under this Supplement.
By its acceptance of its interest in the Series 2000-1
Notes, each owner of a beneficial interest in a Note shall be
deemed to have agreed that prior to the date which is one year
and one day after the termination of the Indenture, such Person
shall not acquiesce, petition or otherwise invoke or cause the
Issuer or the Seller to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case
against the Seller or 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 or for the Issuer or the Seller or any
substantial part of its property or ordering the winding-up or
liquidation of the affairs of the Issuer or the Seller.
SECTION 6.06. Authority to Register Notes and File Reports.
The Issuer hereby authorizes the Seller to prepare and
execute on behalf of the Issuer, filings with the Securities and
Exchange Commission and any applicable state agencies of
documents required to register or qualify the Notes for public
distribution and to file on a periodic basis, such documents as
may be required by rules and regulations prescribed by such
authorities.
SECTION 6.07. Authority to Perform Duties of the Issuer.
(a) The Issuer hereby designates the Master Servicer its
agent and attorney-in-fact to execute any financing statement,
continuation statement or other instrument required by the
Trustee pursuant to Section 3.5 of the Indenture, provided that,
such designation shall not be deemed to create a duty in the
Trustee to monitor the compliance of the Master Servicer with
respect to its duties under Section 3.5 of the Indenture or the
adequacy of any financing statement, continuation statement or
other instrument prepared by the Master Servicer.
(b) The Issuer hereby appoints the Master Servicer to
assist the Issuer in performing its duties under the Series 2000-
1 Related Documents, including, but not limited to, Sections 2.13
and 3.9 of the Indenture, and the Master Servicer hereby accepts
such appointment.
20
IN WITNESS WHEREOF, the parties hereto have caused this
Series 2000-1 Supplement to be fully executed by their respective
officers as of the day and year first above written.
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer
By
Name: ▇.▇. ▇▇▇▇, ▇▇.
Title: Vice President
HOUSEHOLD AUTOMOTIVE TRUST IV,
as Issuer
By WILMINGTON TRUST COMPANY
Not in its individual capacity but
solely as Owner Trustee
By
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
By
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Indenture Trustee
By
Name:
Title:
[Signature Page for Series 2000-1 Supplement]
WILMINGTON TRUST COMPANY,
as Owner Trustee
By
Name:
Title:
21
Schedule I
Eligibility Criteria
"Eligible Receivable" means a Series 2000-1 Receivable with
respect to which each of the following is true as of the Cutoff
Date:
(a) that (i) was originated directly by HAFC (or any
predecessor or Affiliate of HAFC) with the consumer or was
originated by a Dealer for the retail sale of a Financed Vehicle
in the ordinary course of such Dealer's business and (A) in the
case of a Dealer originated receivable, such Dealer had all
necessary licenses and permits to originate receivables in the
state where such Dealer was located, and such receivable was
purchased by HAFC (or any predecessor or Affiliate of HAFC) from
such Dealer under an existing Dealer Agreement with HAFC (or any
predecessor or Affiliate of HAFC), and (B) in the case of a
Dealer originated receivable or a receivable originated by HAFC
(or any predecessor or Affiliate of HAFC) such receivable was
purchased (x) by HARC pursuant to the terms of the Master
Receivables Purchase Agreements, (y) by the Issuer pursuant to
the Master Sale and Servicing Agreement; and each Series 2000-1
Receivable was validly assigned (1) if Dealer originated, by such
Dealer to HAFC (or any predecessor or Affiliate of HAFC), (2) by
HAFC to HARC pursuant to the terms of the Master Receivables
Purchase Agreements, (3) by HARC to the Issuer pursuant to the
Master Sale and Servicing Agreement and (4) by the Issuer to the
Trustee pursuant to the Indenture, (ii) was fully and properly
executed by the parties thereto, (iii) contains customary and
enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for realization against the
collateral security, and (iv) is fully amortizing and provides
for level monthly payments (provided that the first and final
payment of the Series 2000-1 Receivable may be minimally
different from the level payment) which, if made when due, shall
fully amortize the Amount Financed over the original term;
(b) that if originated by a Dealer, was sold by the
Dealer to HAFC (or any predecessor or Affiliate of HAFC) without
any fraud or material misrepresentation on the part of such
Dealer in either case or on the part of the Obligor;
(c) with respect to which all requirements of
applicable federal, state and local laws, and regulations
thereunder (including, without limitation, usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Fair Debt Collection Practices Act, the Federal Trade Commission
Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇ Warranty Act, the Federal Reserve Board's
Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief
Act of 1940 and state adaptations of the National Consumer Act
and of the Uniform Consumer Credit Code and other consumer credit
laws and equal credit opportunity and disclosure laws) in respect
of all of the Series 2000-1 Receivables, each and every sale of
Financed Vehicles and the sale of any physical damage, loss,
credit life and credit accident and health insurance and any
extended service contracts, have been complied with in all
material respects, and each Series 2000-1 Receivable and the sale
of the Financed Vehicle evidenced by each Series 2000-1
Receivable and the sale of any physical damage, loss, credit life
and credit accident and health insurance and any extended service
contracts complied at the time it was originated or made and now
complies in all material respects with all applicable legal
requirements;
(d) that was originated in the United States of
America and, at the time of origination materially conformed to
all requirements of the Dealer Underwriting Guides (or such
similar guidelines of any predecessor or affiliate of HAFC)
applicable thereto;
22
(e) which represents the genuine, legal, valid and
binding payment obligation of the Obligor thereon, enforceable by
the holder thereof in accordance with its terms, except (A) as
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law
and (B) as such Receivable may be modified by the application of
the Soldiers' and Sailors' Civil Relief Act of 1940, as amended;
and all parties thereto had full legal capacity to execute and
deliver such Receivable and all other documents related thereto
and to grant the security interest purported to be granted
thereby;
(f) which is not due from the United States of America
or any state or from any agency, department, subdivision or
instrumentality thereof;
(g) which (i) had an original maturity of at least 18
months but not more than 72 months, (ii) had an original Amount
Financed of at least $3,000 and not more than $30,000, (iii) had
an Annual Percentage Rate of at least 10.50% and not more than
27%, (iv) was not more than 30 days past due, (v) no funds have
been advanced by the Issuer, the Master Servicer, HAFC, any
predecessor or Affiliate of HAFC, any Dealer, or anyone acting on
behalf of any of them in order to cause such Series 2000-1
Receivable to qualify under subclause (iv) of this clause (g) and
(vi) had no provision thereof waived, altered or modified in any
respect since its origination;
(h) with respect to which the information pertaining
to such Series 2000-1 Receivable set forth in each Schedule of
Receivables is true and correct in all material respects;
(i) with respect to which HAFC will have caused the
portions of HAFC's and the Master Servicer's servicing records
relating to such Series 2000-1 Receivable to be clearly and
unambiguously marked to show that such Series 2000-1 Receivable
has been transferred by HAFC to HARC in accordance with the terms
of the Master Receivables Purchase Agreements and by HARC to the
Issuer pursuant to the Master Sale and Servicing Agreement, and
by the Issuer to the Indenture Trustee pursuant to the Indenture;
(j) with respect to which the computer tape or listing
to be made available by HAFC to HARC, the Master Servicer or the
Trustee is complete and accurate and includes a description of
the same Series 2000-1 Receivables that are, or will be,
described in the related Schedule of Receivables;
(k) which constitutes chattel paper within the meaning
of the UCC;
(l) of which there is only one original executed copy;
(m) with respect to which there exists a Receivable
File and such Receivable File contains, without limitation, (a) a
fully executed original of such Receivable, (b) a certificate of
insurance, application form for insurance signed by the Obligor,
or a signed representation letter from the relevant Obligor named
pursuant to which the Obligor has agreed to obtain physical
damage insurance for the related Financed Vehicle, (c) the
original Lien Certificate or application therefor showing HAFC
(or any predecessor or Affiliate of HAFC) as first lienholder and
by HAFC (or any predecessor or Affiliate of HAFC) to HARC and by
HARC to the Issuer and by the Issuer to the Trustee) and (d) an
original credit application signed by the Obligor; and (x) each
of the documents relating thereto which is required to be signed
by the Obligor has been signed by the Obligor in the appropriate
spaces and (y) all blanks on any form relating thereto by HAFC
(or any predecessor or Affiliate of HAFC) to be completed have
been properly filled in and each form has otherwise been
correctly prepared; and, notwithstanding the above, with respect
to which, a copy of the complete Receivable File for such Series
2000-1 Receivable, which fulfills the documentation requirements
of the Dealer Underwriting Guides as in effect at the time of
purchase is in the possession of the Master Servicer or Sub-
Servicer;
23
(n) which has not been satisfied, subordinated or
rescinded, and the Financed Vehicle securing such Series 2000-1
Receivable has not been released from the lien of such Series
2000-1 Receivable in whole or in part;
(o) which was not originated in, and is not subject to
the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the sale, transfer and assignment of
such Series 2000-1 Receivable and with respect to which neither
HAFC (nor any predecessor or affiliate of HAFC) nor the Issuer
has entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of any portion
of such Series 2000-1 Receivable;
(p) which has not been sold, transferred, assigned or
pledged to any Person other than to (i) HAFC (or any predecessor
or Affiliate of HAFC) by a Dealer, (ii) HARC by HAFC pursuant to
the terms of the Master Receivables Purchase Agreements,
(iii) the Issuer by HARC pursuant to the terms of the Master Sale
and Servicing Agreement and (iv) the Trustee by the Issuer
pursuant to the terms of the Indenture. No Dealer has a
participation in, or other right to receive, proceeds of any
Series 2000-1 Receivable and with respect to which neither HAFC
(nor any predecessor or Affiliate of HAFC), HARC nor the Issuer
has taken any action to convey any right to any Person that would
result in such Person having a right to payments received under
the related Insurance Policy or the related Dealer Agreement or
Dealer Assignment or to payments due under such Series 2000-1
Receivable;
(q) which creates or shall create a valid, binding and
enforceable first priority security interest in favor of HAFC in
the Financed Vehicle;
(r) which is secured by an enforceable and perfected
first priority security interest in the Financed Vehicle in favor
of HAFC as secured party, which security interest is prior to all
other Liens upon and security interests in such Financed Vehicle
which now exist or may hereafter arise or be created (except, as
to priority, for any Lien for taxes, labor or materials affecting
a Financed Vehicle); and, with respect to which there are no
Liens or claims for taxes, work, labor or materials affecting the
related Financed Vehicle which are or may be Liens prior or equal
to the lien of such Receivable;
(s) as to which all filings (including, without
limitation, UCC filings) required to be made by any Person and
actions required to be taken or performed by any Person in any
jurisdiction to give the Trustee a first priority perfected lien
on, or ownership interest in, the Series 2000-1 Receivables and
the proceeds thereof have been made, taken or performed;
(t) as to which HAFC (or any predecessor or Affiliate
of HAFC), HARC or the Issuer has not done anything to convey any
right to any Person that would result in such Person having a
right to payments due under such Series 2000-1 Receivable or
otherwise to impair the rights of the Trustee, the Noteholders or
the Certificateholders in such Series 2000-1 Receivable or the
proceeds thereof;
(u) which is not assumable by another Person in a
manner which would release the Obligor thereof from such
Obligor's obligations with respect to such Receivable;
(v) which is not subject to any right of rescission,
setoff, counterclaim or defense and no such right has been
asserted or threatened with respect thereto;
(w) as to which there has been no default, breach,
violation or event permitting acceleration under the terms of
such Series 2000-1 Receivable (other than payment delinquencies
of not more than 30 days) and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event
permitting acceleration under the terms of such Series 2000-1
Receivable, and there has been no waiver of any of the foregoing,
and with respect to which the related Financed Vehicle had not
been repossessed;
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(x) at the time of the origination of which, the
related Financed Vehicle was covered by a comprehensive and
collision insurance policy (i) in an amount at least equal to the
lesser of (a) its maximum insurable value and (b) the principal
amount due from the Obligor thereunder, (ii) naming HAFC (or any
predecessor or Affiliate of HAFC) and its successors and assigns
as loss payee and (iii) insuring against loss and damage due to
fire, theft, transportation, collision and other risks generally
covered by comprehensive and collision coverage and with respect
to which the Obligor is required to maintain physical loss and
damage insurance, naming HAFC (or any predecessor or Affiliate of
HAFC) and its successors and assigns as additional insured
parties, and such Receivable permits the holder thereof to obtain
physical loss and damage insurance at the expense of the Obligor
if the Obligor fails to do so;
(y) with respect to which the following is true:
The Lien Certificate for the related Financed Vehicle
shows, or if a new or replacement Lien Certificate is being
applied for with respect to such Financed Vehicle the Lien
Certificate will be received within 180 days of the Series 2000-1
Closing Date and will show, HAFC (or any predecessor or Affiliate
of HAFC) named as the original secured party under such Series
2000-1 Receivable and, accordingly, HAFC will be the holder of a
first priority security interest in such Financed Vehicle. With
respect to each Series 2000-1 Receivable for which the Lien
Certificate has not yet been returned from the Registrar of
Titles, HAFC has received written evidence from the related
Dealer or the Obligor that such Lien Certificate showing HAFC as
first lienholder has been applied for. If the Series 2000-1
Receivable was originated in a state in which a filing or
recording is required of the secured party to perfect a security
interest in motor vehicles, such filings or recordings have been
duly made to show HAFC named as the original secured party under
the related Series 2000-1 Receivable; and
(z) as to which no selection procedures adverse to the
Noteholders or the Certificateholder have been utilized in
selecting such Series 2000-1 Receivable from all other similar
Receivables purchased by HAFC or any predecessor or Affiliate of
HAFC.
Schedule II
Schedule of Receivables on File in Electronic Form
at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Exhibit A
Form of Master Servicer's Certificate