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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report February 24, 2000
HOUSEHOLD AUTOMOTIVE TRUST IV, SERIES 2000-1
(Exact name of registrant as specified in its charter)
HOUSEHOLD FINANCE CORPORATION
(Master Servicer of the Trust)
(Exact name as specified in Master Servicer's charter)
Not
Delaware 333-84129 Applicable
(State or other juris- (Commission File Numbers) (IRS Employer
diction of incorpora- Identification
tion of Master Servicer) Number of
Registrant)
2700 Sanders Road, Prospect Heights, Illinois 60070
(Address of principal executive offices of (Zip Code)
Master Servicer)
Master Servicer's telephone number, including area code847/564-5000
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Item 5. OTHER EVENTS
On February 24, 2000, the Registrant issued and sold its Series 2000-1 Notes.
Attached as exhibits hereto are copies of certain of the executed principal
agreements relating to the issuance, offering and sale of the Notes, forms of
which were filed as exhibits to the Registration Statement (File Nos. 333-
84129).
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
1. Underwriting Agreement.
4.1 Amended and Restated Trust Agreement between the Seller and
the Owner Trustee.
4.2 Indenture between the Issuer and the Indenture Trustee.
4.3 Series 2000-1 Supplement to the Indenture, the Master Sale
and Servicing Agreement and the Trust Agreement.
4.4 Master Sale and Servicing Agreement among the Seller, the
Master Servicer, the Issuer and the Indenture Trustee.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Master Servicer has duly caused this report to be signed on behalf of the
undersigned hereunto duly authorized.
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer of and on behalf of the
HOUSEHOLD AUTOMOTIVE TRUST IV,
SERIES 2000-1
(Registrant)
By: /s/ P. D. Schwartz
P. D. Schwartz
Authorized Representative
Dated: March 2, 2000
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EXHIBIT INDEX
Exhibit
Number Exhibit
1. Underwriting Agreement.
4.1 Amended and Restated Trust Agreement between the Seller and
the Owner Trustee.
4.2 Indenture between the Issuer and the Indenture Trustee.
4.3 Series 2000-1 Supplement to the Indenture, the Master Sale
and Servicing Agreement and the Trust Agreement.
4.4 Master Sale and Servicing Agreement among the Seller, the
Master Servicer, the Issuer and the Indenture Trustee.
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[CAPTION]
ADVANTA CONDUIT RECEIVABLES, INC.
Mortgage Loan Asset-Backed Notes, Series 1999-4
UNDERWRITING AGREEMENT
November 5, 1999
BEAR, STEARNS & CO. INC.
As Representative of the Underwriters (the "Representative")
named in Schedule I
245 Park Avenue, New York, NY 10167
Ladies and Gentlemen:
Advanta Conduit Receivables, Inc. (the "Company") has
authorized the issuance and sale by Advanta Mortgage Loan Trust
1999-4, a Delaware business trust (the "Trust"), of Mortgage Loan
Asset-Backed Notes, Series 1999-4 (the "Notes") and Trust
Certificates (the "Trust Certificates", and together with the
Notes, the "Securities"). Only the Notes are offered by the
Underwriters.
The Notes will be issued by the Trust, and will be
secured by the trust estate (the "Trust Estate") which will
consist primarily of a pool of closed-end adjustable-rate, first
lien sub-prime residential mortgage loans (the "Mortgage Loans"),
amounts on deposit with Bankers Trust Company of California,
N.A., as Indenture Trustee of the Trust (the "Indenture Trustee")
in an account to be used to acquire additional mortgage loans
following the Closing Date (as hereinafter defined) for the Trust
(the "Pre-Funding Account") and certain related property. The
Mortgage Loans shall have, on or about November 17, 1999 (the
"Closing Date"), an aggregate principal balance of approximately
$133,943,952 and the Pre-Funding Account shall have approximately
$71,100,000, which amount may be applied to the purchase of
additional loans during the period from the Closing Date to on or
before February 29, 1999.
The Notes are to be issued pursuant to an Indenture, to
be dated as of November 1, 1999 (the "Indenture"), between the
Trust and the Indenture Trustee. The Trust, the Indenture
Trustee, Advanta Holding Trust 1999-4 (the "Holding Trust"), the
Company and Advanta Mortgage Corp. USA, as Master Servicer will
also enter into a Sale and Servicing Agreement, dated as of
November 1, 1999 (the "Sale and Servicing Agreement").
On or prior to the date of issuance of the Notes, the
Company will obtain a financial guaranty insurance policy (the
"Policy") issued by Ambac Assurance Corporation (the "Insurer")
which will unconditionally and irrevocably guarantee to the
Indenture Trustee for the benefit of the holders of the Notes an
amount equal to the Insured Amount (as defined in the Annex A to
the Sale and Servicing Agreement).
The Notes are more fully described in a Registration
Statement which the Company has furnished to the Underwriters.
Capitalized terms used but not defined herein shall have the
meanings given to them in the Annex A to the Sale and Servicing
Agreement.
Simultaneously with the execution of the Indenture and
the Sale and Servicing Agreement, the Company will enter into a
conveyance agreement pursuant to the Mortgage Loan Transfer
Agreement dated on or about November 1, 1999 among the Company
and the Originators named therein (together, the "Purchase
Agreement"), pursuant to which the Originators will transfer to
the Company all of their right, title and interest in and to the
Mortgage Loans as of the Closing Date.
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The Company will also enter into a Trust Agreement (the
"Trust Agreement"), dated as of November 1, 1999, among the
Wilmington Trust Company, as Owner Trustee (the "Owner Trustee"),
the Holding Trust and the Company, pursuant to which the Trust
will be formed.
The Company will also enter into an Indemnification
Agreement (the "Indemnification Agreement") dated as of November
5, 1999 among the Underwriters and the Insurer.
Section 1. Representations and Warranties of the
Company
. The Company represents and warrants to, and agrees
with the Underwriters that:
a. A Registration Statement on Form S-3
(registration statement number 333-75295), as amended by
Post-Effective Amendments thereto, has (i) been prepared by
the Company in conformity with the requirements of the
Securities Act of 1933 (the "Securities Act") and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the respective rules and regulations (the "Rules
and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been
filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such
Registration Statement has been delivered by the Company to
the Underwriters. As used in this Agreement, "Effective
Time" means the date and the time as of which such
Registration Statements, or the most recent post-effective
amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective
Time; "Registration Statement" means such registration
statement, as amended by all Post-Effective Amendments
thereto heretofore filed with the Commission, at the
Effective Time, including any documents incorporated by
reference therein at such time; and "Prospectus" means each
Prospectus included in such Registration Statement or
amendments thereof and any prospectus filed with the
Commission by the Company with the consent of the
Underwriters pursuant to Rule 424(a) of the Rules and
Regulations and as supplemented by a final prospectus
supplement (the "Prospectus Supplement") relating to the
Notes, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Reference made herein to the Prospectus shall
be deemed to refer to and include any documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the date of such Prospectus, as
the case may be, and any reference to any amendment or
supplement to the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") after the date of
such Prospectus, as the case may be, and incorporated by
reference in such Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement
shall be deemed to include any report of the Company filed
with the Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement.
There are no contracts or documents of the Company which are
required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and
Regulations which have not been so filed or incorporated by
reference therein on or prior to the Effective Date of the
Registration Statement. The conditions for use of Form S-3,
as set forth in the General Instructions thereto, have been
satisfied.
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To the extent that any Underwriter (i) has
provided to the Company Collateral Term Sheets (as
hereinafter defined) that such Underwriter has provided to a
prospective investor, the Company has filed such Collateral
Term Sheets as an exhibit to a report on Form 8-K within two
business days of its receipt thereof, or (ii) has provided
to the Company Structural Term Sheets or Computational
Materials (each as defined below) that such Underwriter has
provided to a prospective investor, the Company will file or
cause to be filed with the Commission a report on Form 8-K
containing such Structural Term Sheet and Computational
Materials, as soon as reasonably practicable after the date
of this Agreement, but in any event, not later than the date
on which the Prospectus is filed with the Commission
pursuant to Rule 424 of the Rules and Regulations.
b. The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, as the
case may be, conform in all respects to the requirements of
the Securities Act, the Trust Indenture Act and the Rules
and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
The Prospectus as of its date, and as amended or
supplemented as of the Closing Date does not and will not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided that no
representation or warranty is made as to information
contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with
written information furnished to the Company in writing by
the Underwriters expressly for use therein.
c. The documents incorporated by reference in
the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to
the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
d. Since the respective dates as of which
information is given in the Prospectus, there has not been
any material adverse change in the general affairs,
management, financial condition, or results of operations of
the Company, otherwise than as set forth or contemplated in
the Prospectus as supplemented or amended as of the Closing
Date.
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e. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, is duly qualified
to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires
such qualification, and has all power and authority
necessary to own or hold its properties, to conduct the
business in which it is engaged and to enter into and
perform its obligations under this Agreement, the Sale and
Servicing Agreement, an Insurance and Indemnity Agreement,
dated as of November 17, 1999, between the Insurer, Advanta
Mortgage Corp. USA, as Master Servicer , the Company, the
Trust, the Holding Trust and the Indenture Trustee (the
"Insurance Agreement"), the Trust Agreement, and the
Purchase Agreement, and to cause the Notes to be issued.
f. There are no actions, proceedings or
investigations pending before or threatened by any court,
administrative agency or other tribunal to which the Company
is a party or of which any of its properties is the subject
(a) which if determined adversely to the Company would have
a material adverse effect on the business or financial
condition of the Company, (b) which asserts the invalidity
of this Agreement, the Sale and Servicing Agreement, the
Insurance Agreement, the Purchase Agreement, the Trust
Agreement or the Notes, (c) which seeks to prevent the
issuance of the Notes or the consummation by the Company of
any of the transactions contemplated by the Indenture, the
Sale and Servicing Agreement, the Insurance Agreement, the
Purchase Agreement, the Trust Agreement or this Agreement,
as the case may be, or (d) which might materially and
adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, the
Sale and Servicing Agreement, the Insurance Agreement, the
Purchase Agreement, the Trust Agreement, this Agreement or
the Notes.
g. This Agreement has been, and the Sale and
Servicing Agreement, the Insurance Agreement, the Trust
Agreement and the Purchase Agreement when executed and
delivered as contemplated hereby and thereby will have been,
duly authorized, executed and delivered by the Company, and
this Agreement constitutes, the Sale and Servicing
Agreement, the Insurance Agreement, the Trust Agreement and
the Purchase Agreement when executed and delivered as
contemplated herein, will constitute, legal, valid and
binding instruments enforceable against the Company in
accordance with their respective terms, subject as to
enforceability to (x) applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting
creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law), and (z) with respect to
rights of indemnity under this Agreement and limitations of
public policy under applicable securities laws.
h. The execution, delivery and performance of
this Agreement, the Sale and Servicing Agreement, the
Insurance Agreement, the Trust Agreement and the Purchase
Agreement by the Company and the consummation of the
transactions contemplated hereby, thereby and in the
Indenture, and the issuance and delivery of the Notes do not
and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company is a party, by which the Company is bound
or to which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the articles of
incorporation or by-laws of the Company or any statute or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any
of its properties or assets.
i. Arthur Andersen LLP are independent public
accountants with respect to the Company as required by the
Securities Act and the Rules and Regulations.
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j. The direction by the Company to the Indenture
Trustee to execute, authenticate, issue and deliver the
Notes has been duly authorized by the Company, and assuming
the Indenture Trustee has been duly authorized to do so,
when executed, authenticated, issued and delivered by the
Indenture Trustee in accordance with the Indenture, the
Notes will be validly issued and outstanding and will be
entitled to the benefits provided by the Indenture.
k. No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body of the United States is required
for the issuance of the Notes and the sale of the Notes to
the Underwriters, or the consummation by the Company of the
other transactions contemplated by this Agreement, the
Indenture, the Sale and Servicing Agreement, the Insurance
Agreement, the Trust Agreement and the Purchase Agreement,
except such consents, approvals, authorizations,
registrations or qualifications as may be required under
State securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Underwriters
or as have been obtained.
l. The Company possesses all material licenses,
certificates, authorities or permits issued by the
appropriate State, Federal or foreign regulatory agencies or
bodies necessary to conduct the business now conducted by it
and as described in the Prospectus, and the Company has not
received notice of any proceedings relating to the
revocation or modification of any such license, certificate,
authority or permit which if decided adversely to the
Company would, singly or in the aggregate, materially and
adversely affect the conduct of its business, operations or
financial condition.
m. At the time of execution and delivery of the
Indenture and the Sale and Servicing Agreement, the Company
will or will cause the Trust to: (i) have good title to the
interest in the Mortgage Loans, free and clear of any lien,
mortgage, pledge, charge, encumbrance, adverse claim or
other security interest (collectively, "Liens"); (ii) not
have assigned to any person any of its right, title or
interest in the Mortgage Loans, in the Purchase Agreement,
in the Indenture, in the Sale and Servicing Agreement, in
the Trust Agreement or in the Notes being issued pursuant
thereto; and (iii) have the power and authority to sell its
interest in or cause the sale of the Mortgage Loans to the
Indenture Trustee, on behalf of the Trust, and to sell the
Notes to the Underwriters. Upon execution and delivery of
the Sale and Servicing Agreement by the Trust, the Trust
will have acquired beneficial ownership of all of the
Company's right, title and interest in and to the Mortgage
Loans. Upon delivery to the Underwriters of the Notes, the
Underwriters will have good title to the Notes, free of any
Liens.
n. The Trust's pledge of the Mortgage Loans to
the Indenture Trustee pursuant to the Indenture will vest in
the Indenture Trustee, for the benefit of the Noteholders, a
first priority perfected security interest therein, subject
to no prior lien, mortgage, security interest, pledge,
adverse claim, charge or other encumbrance.
o. As of the opening of business on November 1,
1999 (the "Cut-Off Date"), and on each Subsequent Cut-Off
Date (as defined in the Annex A to the Sale and Servicing
Agreement) each of the Mortgage Loans will meet the
eligibility criteria described in the Prospectus and will
conform to the descriptions thereof contained in the
Prospectus.
p. None of the Company, the Holding Trust or the
Trust is an "investment company" within the meaning of such
term under the Investment Company Act of 1940, as amended
(the "1940 Act") and the rules and regulations of the
Commission thereunder.
q. At the Closing Date, the Notes, the Indenture
and the Sale and Servicing Agreement will conform in all
material respects to the descriptions thereof contained in
the Prospectus.
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r. At the Closing Date, the Notes shall have
been rated in the highest rating category by at least two
nationally recognized rating agencies.
s. Any taxes, fees and other governmental
charges in connection with the execution, delivery and
issuance of this Agreement, the Indenture, the Sale and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement, the Trust
Agreement and the Securities have been paid or will be paid
at or prior to the Closing Date.
t. At the Closing Date, each of the
representations and warranties of the Company set forth in
the Sale and Servicing Agreement will be true and correct in
all material respects.
Any certificate signed by an officer of the Company and
delivered to the Representative or counsel for the Underwriters
in connection with an offering of the Notes shall be deemed, and
shall state that it is, a representation and warranty as to the
matters covered thereby to each person to whom the
representations and warranties in this Section 1 are made.
Section 2. Purchase and Sale
. The commitment of the Underwriters to purchase the
Notes pursuant to this Agreement shall be deemed to have been
made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein
set forth. The Company agrees to instruct the Indenture Trustee
to issue and agrees to sell to the Underwriters, and the
Underwriters agree (except as provided in Sections 10 and 11
hereof) to purchase from the Company the aggregate initial
principal amounts of Notes set forth on Schedule A, at the
purchase price or prices set forth in Schedule A.
The obligations of the Underwriters hereunder to
purchase the Notes shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate
principal amount of Notes as is indicated with respect to each
Underwriter under the caption "Underwriting" in the Prospectus.
The rights of the Company and a non-defaulting Underwriter shall
be as set forth in Section 13 hereof.
Section 3. Delivery and Payment
. Delivery of and payment for the Notes to be
purchased by the Underwriters shall be made at the offices of
Dewey Ballantine LLP, 1301 Sixth Avenue, New York, New York
10019, or at such other place as shall be agreed upon by the
Representative and the Company at 10:00 A.M. New York City time
on November 17, 1999 or at such other time or date as shall be
agreed upon by the Representative and the Company. Payment shall
be made to the Company by wire transfer of same day funds payable
to the account of the Company. Delivery of the Notes shall be
made to the Representative for the accounts of the Underwriters
against payment of the purchase price thereof. The Notes shall
be in such denominations and registered in such names as the
Company and the Representative have agreed upon at least two
business days prior to the Closing Date. The Notes will be made
available for examination by the Representative no later than
2:00 p.m. New York City time on the first business day prior to
the Closing Date.
Section 4. Offering by the Underwriters
. It is understood that, subject to the terms and
conditions hereof, the Underwriters propose to offer the Notes
for sale to the public as set forth in the Prospectus.
Section 5. Covenants of the Company
. The Company agrees as follows:
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a. (i) To prepare the Prospectus Supplement in a
form approved by the Representative and to file such
Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of
business on the second business day following the execution
and delivery of this Agreement; (ii) to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus prior to the Closing Date except as
permitted herein; (iii) to advise the Representative,
promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish the
Representative with copies thereof; (iv) to file promptly
all reports and any definitive proxy or information
statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus
and, for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Notes; and
(v) to promptly advise the Representative of its receipt of
notice of the issuance by the Commission of any stop order
or of: (w) any order preventing or suspending the use of
the Prospectus; (x) the suspension of the qualification of
the Notes for offering or sale in any jurisdiction; (y) the
initiation of or threat of any proceeding for any such
purpose; (z) any request by the Commission for the amending
or supplementing of the Registration Statement or the
Prospectus or for additional information. In the event of
the issuance of any stop order or of any order preventing or
suspending the use of the Prospectus or suspending any such
qualification, the Company promptly shall use its best
efforts to obtain the withdrawal of such order or
suspension.
b. To furnish promptly to the Representative and
to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the
Commission, and of each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith.
c. To deliver promptly to the Representative
such number of the following documents as the Representative
shall reasonably request: (i) conformed copies of the
Registration Statement as originally filed with the
Commission and each amendment thereto (in each case
including exhibits); (ii) the Prospectus and any amended or
supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto).
If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the Effective
Time in connection with the offering or sale of the Notes,
and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period
to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the
Exchange Act, the Company shall notify the Representative
and, upon the Representative's request, shall file such
document and prepare and furnish without charge to the
Underwriters and to any dealer in securities as many copies
as the Representative may from time to time reasonably
request of an amended Prospectus or a supplement to the
Prospectus which corrects such statement or omission or
effects such compliance, and in case any of the Underwriters
are required to deliver a Prospectus in connection with
sales of any of the Notes at any time nine months or more
after the Effective Time, upon the request of the
Representative but at the expense of such Underwriter, the
Company shall prepare and deliver to such Underwriter as
many copies as such Underwriter may reasonably request of an
amended or supplemented Prospectus complying with Section
10(a)(3) of the Securities Act.
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d. To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment
of the Company or the Representative, be required by the
Securities Act or requested by the Commission.
e. Prior to filing with the Commission any (i)
amendment to the Registration Statement or supplement to the
Prospectus, or document incorporated by reference in the
Prospectus, or (ii) Prospectus pursuant to Rule 424 of the
Rules and Regulations, to give at least three business days
prior notification to the Representative and to furnish a
copy thereof to the Representative and counsel for the
Underwriters, provided, however, that if any of the
foregoing filings referred to in (i) or (ii), relate to the
Notes, the Company shall obtain the consent of the
Representative to such filing, which consent shall not be
unreasonably withheld.
f. [Reserved].
g. To use its best efforts, in cooperation with
the Representative, to qualify the Notes for offering and
sale under the applicable securities laws of such states and
other jurisdictions of the United States as the
Representative may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may
be required for the distribution of the Notes. The Company
will file or cause the filing of such statements and reports
as may be required by the laws of each jurisdiction in which
the Notes have been so qualified.
h. The Company shall not, without the
Representative's prior written consent, which consent shall
not be unreasonably withheld, publicly offer or sell or
contract to sell any mortgage pass-through securities,
collateralized mortgage obligations or other similar
securities representing interests in or secured by other
mortgage-related assets originated or owned by the Company
for a period of 5 business days following the commencement
of the offering of the Notes to the public.
i. So long as the Notes shall be outstanding, to
deliver to the Representative as soon as such statements are
furnished to the Indenture Trustee: (i) the annual statement
as to compliance delivered to the Indenture Trustee pursuant
to Article IV of the Sale and Servicing Agreement ; (ii) the
annual statement of a firm of independent public accountants
furnished to the Indenture Trustee pursuant to Article IV of
the Sale and Servicing Agreement; and (iii) the Monthly
Statement furnished to the Noteholders pursuant to Article
VIII of the Indenture.
j. To apply the net proceeds from the sale of
the Notes in the manner set forth in the Prospectus.
Section 6. Conditions to the Underwriters'
Obligations
. The obligations of the Underwriters to purchase the
Notes pursuant to this Agreement are subject to: (i) the accuracy
on and as of the Closing Date of the representations and
warranties on the part of the Company herein contained; (ii) the
performance in all material respects by the Company of all of
their respective obligations hereunder; and (iii) the following
conditions as of the Closing Date:
a. The Representative shall have received
confirmation of the effectiveness of the Registration
Statement. No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request
of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus shall have been
complied with.
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b. None of the Underwriters shall have
discovered and disclosed to the Company on or prior to the
Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains
an untrue statement of a fact or omits to state a fact
which, in the opinion of Fried, Frank, Harris, Shriver &
Jacobson, counsel for the Underwriters, is material and is
required to be stated therein or is necessary to make the
statements therein not misleading.
c. All corporate proceedings and other legal
matters relating to the authorization, form and validity of
this Agreement, the Indenture, the Sale and Servicing
Agreement, the Purchase Agreement, the Insurance Agreement,
the Indemnification Agreement, the Trust Agreement, the
Notes, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in
all respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable
them to pass upon such matters.
d. The Representative shall have received the
favorable opinion of Dewey Ballantine LLP, special counsel
to the Company with respect to the following items, dated
the Closing Date, to the effect that:
1. The Company has been duly organized and
is validly existing as a corporation in good standing
under the laws of the State of Nevada, and is qualified
to do business in each state necessary to enable it to
perform its obligations as Sponsor under the Sale and
Servicing Agreement. The Company has the requisite
power and authority to execute and deliver, engage in
the transactions contemplated by, and perform and
observe the conditions of, this Agreement, the Sale and
Servicing Agreement, the Insurance Agreement, the Trust
Agreement and the Purchase Agreement.
2. This Agreement, the Notes, the Sale and
Servicing Agreement, the Insurance Agreement, the Trust
Agreement and the Purchase Agreement have been duly and
validly authorized, executed and delivered by the
Company, all requisite corporate action having been
taken with respect thereto, and each (other than the
Securities) constitutes the valid, legal and binding
agreement of the Company.
3. Neither the transfer of the Mortgage
Loans to the Trust Estate, the issuance or sale of the
Notes nor the execution, delivery or performance by the
Company of the Sale and Servicing Agreement, this
Agreement, the Insurance Agreement, the Trust Agreement
or the Purchase Agreement (A) conflicts or will
conflict with or results or will result in a breach of,
or constitutes or will constitute a default under, (i)
any term or provision of the certificate of
incorporation or bylaws of the Company; (ii) any term
or provision of any material agreement, contract,
instrument or indenture, to which the Company is a
party or is bound and known to such counsel; or (iii)
any order, judgment, writ, injunction or decree of any
court or governmental agency or body or other tribunal
having jurisdiction over the Company and known to such
counsel; or (B) results in, or will result in the
creation or imposition of any lien, charge or
encumbrance upon the Trust Estate or upon the Notes,
except as otherwise contemplated by the Indenture or
the Sale and Servicing Agreement.
<PAGE>
<PAGE> 10
4. With respect to the Mortgage Loans, the
endorsement and delivery of each Mortgage Note, and the
preparation, delivery and recording of an Assignment in
each case with respect to each Mortgage is sufficient
to fully transfer to the Trust for the benefit of the
owners of the Notes all right, title and interest of
the Company in the Mortgage Note and Mortgage, as
noteholder and mortgagee or assignee thereof, subject
to any exceptions set forth in such opinion, and will
be sufficient to permit the Trust to avail itself of
all protection available under applicable law against
the claims of any present or future creditors of the
Company and to prevent any other sale, transfer,
assignment, pledge or other encumbrance of the Mortgage
Loans by the Company from being enforceable.
5. No consent, approval, authorization or
order of, registration or filing with, or notice to,
courts, governmental agency or body or other tribunal
is required under the laws of the State of New York,
for the execution, delivery and performance of the Sale
and Servicing Agreement, this Agreement, the Insurance
Agreement, the Purchase Agreement, the Trust Agreement
or the offer, issuance, sale or delivery of the Notes
or the consummation of any other transaction
contemplated thereby by the Company, except such which
have been obtained.
6. There are no actions, proceedings or
investigations, to such counsel's knowledge, pending or
threatened against the Company before any court,
governmental agency or body or other tribunal (i)
asserting the invalidity of the Sale and Servicing
Agreement, the Insurance Agreement, this Agreement, the
Purchase Agreement, the Trust Agreement or the Notes,
(ii) seeking to prevent the issuance of the Notes or
the consummation of any of the transactions
contemplated by the Indenture, the Sale and Servicing
Agreement, the Indemnification Agreement, the Insurance
Agreement, the Trust Agreement or this Agreement, or
(iii) which would materially and adversely affect the
performance by the Company of obligations under, or the
validity or enforceability of, the Sale and Servicing
Agreement, the Insurance Agreement, the Notes, the
Purchase Agreement, the Trust Agreement or this
Agreement.
7. To the best of the knowledge of such
counsel, the Commission has not issued any stop order
suspending the effectiveness of the Registration
Statement or any order directed to any prospectus
relating to the Notes (including the Prospectus), and
has not initiated or threatened any proceeding for that
purpose.
8. The Registration Statement and the
Prospectus (other than the financial and statistical
data included therein, as to which such counsel need
express no opinion), including the Incorporated
Documents, as of the date on which the Registration
Statement was declared effective and as of the date
hereof, comply as to form in all material respects with
the requirements of the Securities Act and the rules
and regulations thereunder and the Exchange Act and the
rules and regulations thereunder, and such counsel does
not know of any amendment to the Registration Statement
required to be filed, or of any contracts, indentures
or other documents of a character required to be filed
as an exhibit to the Registration Statement or required
to be described in the Registration Statement which has
not been filed or described as required.
9. The Indenture, when executed and
delivered, will have been duly qualified under the
Trust Indenture Act. The registration of the Trust
under the Investment Company Act of 1940, as amended is
not presently required.
<PAGE>
<PAGE> 11
10. The Indenture, upon execution and
delivery, is effective to create a valid and
enforceable security interest in favor of the Indenture
Trustee, for the benefit of the Noteholders and the
Insurer, in all of the Trust's right, title and
interest in the Mortgage Loans. The security interest
in favor of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, will constitute a
first priority perfected security interest upon the
delivery of the Mortgage Files to the Indenture
Trustee, on behalf of the Noteholders, and the
recording of instruments in accordance with the
provisions of the Sale and Servicing Agreement.
11. The statements in the Prospectus set
forth under the captions "DESCRIPTION OF THE
SECURITIES," "THE AGREEMENTS" and the statements in the
Prospectus Supplement set forth under the caption
"DESCRIPTION OF THE NOTES," to the extent such
statements purport to summarize certain provisions of
the Notes or of the Indenture or the Sale and Servicing
Agreement, are fair and accurate in all material
respects.
12. The statements in the Prospectus and
Prospectus Supplement set forth under the captions
"ERISA CONSIDERATIONS," "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES," and the statements in the Prospectus set
forth under the caption "LEGAL ASPECTS OF MORTGAGE
LOANS," to the extent that they constitute matters of
federal, New York, California or Nevada law, or
federal, New York, California or Nevada legal
conclusions provide a fair and accurate summary of such
law or conclusions.
13. The opinions of Dewey Ballantine LLP,
special counsel to the Company, expressed or referred
to under the captions "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES" of the Prospectus and Prospectus
Supplement are hereby confirmed.
14. Such opinion shall also relate to
comparable matters with respect to the Originators and
Advanta Mortgage Holding Company.
15. No information has come to such
counsel's attention which causes them to believe that
the Prospectus (other than the financial statement and
other financial and statistical data contained therein,
as to which such counsel need express no opinion), as
of the date thereof, contained any untrue statement of
a material fact or omitted to state a material fact
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading.
16. Such other matters as the Representative
may reasonably request.
In rendering its opinions, the counsel described above
may rely, as to matters of fact, on certificates of responsible
officers of the Company, the Indenture Trustee and public
officials. Such opinions may also assume the due authorization,
execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
e. The Representative shall have received
letters, including bring-down letters, from Arthur Andersen
LLP, dated on or before the Closing Date, in form and
substance satisfactory to the Representative and counsel for
the Underwriters, to the effect that they have performed
certain specified procedures requested by the Representative
with respect to the information set forth in the Prospectus
and certain matters relating to the Company.
<PAGE>
<PAGE> 12
f. The Notes shall have received the ratings
listed on Schedule A hereto, and such ratings shall not have
been rescinded or downgraded as of the Closing Date. The
Representative and counsel for the Underwriters shall have
received copies of any opinions of counsel supplied to the
rating organizations relating to any matters with respect to
the Notes. Any such opinions shall be dated the Closing
Date and addressed to the Underwriters or accompanied by
reliance letters to the Underwriters or shall state that the
Underwriters may rely upon them.
g. The Representative shall have received from
the Company a certificate, signed by the president, a senior
vice president or a vice president of the Company, dated the
Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration
Statement, the Indenture, the Sale and Servicing Agreement
and this Agreement and that, to the best of his or her
knowledge based upon reasonable investigation:
1. the representations and warranties of
the Company in this Agreement, as of the Closing Date,
and in the Sale and Servicing Agreement, the Insurance
Agreement, the Purchase Agreement, the Trust Agreement
and in all related agreements, as of the date specified
in such agreements, are true and correct, and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
2. except as set forth in the Prospectus,
there are no actions, suits or proceedings pending, or
to the best of such officer's knowledge, threatened
against or affecting the Company which if adversely
determined, individually or in the aggregate, would be
reasonably likely to adversely affect the Company's
obligations under the Sale and Servicing Agreement, the
Insurance Agreement, this Agreement, the Trust
Agreement or the Purchase Agreement in any material
way; and no merger, liquidation, dissolution or
bankruptcy of the Company is pending or contemplated;
3. the information contained in the
Registration Statement and the Prospectus relating to
the Company, the Mortgage Loans or the servicing
procedures of it or its affiliates or subservicer is
true and accurate in all material respects and nothing
has come to his or her attention that would lead such
officer to believe that the Registration Statement or
Prospectus includes any untrue statement of a material
fact or omits to state a material fact necessary to
make the statements therein not misleading;
4. the information set forth in the
Schedule of Mortgage Loans required to be furnished
pursuant to the Sale and Servicing Agreement is true
and correct in all material respects;
5. there has been no amendment or other
document filed affecting the articles of incorporation
or bylaws of the Company since December 31, 1998, and
no such amendment has been authorized. No event has
occurred since September 30, 1999, which has affected
the good standing of the Company under the laws of the
State of Nevada;
6. there has not occurred any material
adverse change or, except as set forth in the
Prospectus, any development involving a prospective
material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole,
from September 30, 1999;
<PAGE>
<PAGE> 13
7. on or prior to the Closing Date, there
has been no downgrading, nor has any notice been given
of (A) any intended or potential downgrading or (B) any
review or possible changes in rating the direction of
which has not been indicated, if any, accorded the
Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized
statistical rating organization," as such term is
defined for purposes of the Securities Act; and
8. each person who, as an officer or
representative of the Company, signed or signs the
Registration Statement, the Sale and Servicing
Agreement, the Insurance Agreement, the Trust
Agreement, this Agreement, or any other document
delivered pursuant hereto, on the date of such
execution, or on the Closing Date, as the case may be,
in connection with the transactions described in the
Indenture, the Sale and Servicing Agreement, the
Insurance Agreement, the Purchase Agreement, the Trust
Agreement and this Agreement was, at the respective
times of such signing and delivery, and is now, duly
elected or appointed, qualified and acting as such
officer or representative, and the signatures of such
persons appearing on such documents are their genuine
signatures.
The Company shall attach to such certificate a true and
correct copy of its certificate or articles of incorporation, as
appropriate, and bylaws which are in full force and effect on the
date of such certificate and a certified true copy of the
resolutions of its Board of Directors with respect to the
transactions contemplated herein.
h. The Representative shall have received a
favorable opinion of counsel to the Indenture Trustee, dated
the Closing Date and in form and substance satisfactory to
the Representative, to the effect that:
1. the Indenture Trustee is a national
banking association duly organized, validly existing
and in good standing under the laws of the United
States and has the power and authority to enter into
and to take all actions required of it under the
Indenture and the Sale and Servicing Agreement;
2. the Indenture and the Sale and Servicing
Agreement have been duly authorized, executed and
delivered by the Indenture Trustee and the Indenture
and the Sale and Servicing Agreement constitute the
legal, valid and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in
accordance with its terms, except as enforceability
thereof may be limited by (A) bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally, as such
laws would apply in the event of a bankruptcy,
insolvency or reorganization or similar occurrence
affecting the Indenture Trustee, and (B) general
principles of equity regardless of whether such
enforcement is sought in a proceeding at law or in
equity;
3. no consent, approval, authorization or
other action by any governmental agency or body or
other tribunal is required on the part of the Indenture
Trustee in connection with its execution and delivery
of the Indenture and the Sale and Servicing Agreement
or the performance of its obligations thereunder;
4. the Notes have been duly executed,
authenticated and delivered by the Indenture Trustee;
and
<PAGE>
<PAGE> 14
5. the execution and delivery of, and
performance by the Indenture Trustee of its obligations
under, the Indenture and the Sale and Servicing
Agreement do not conflict with or result in a violation
of any statute or regulation applicable to the
Indenture Trustee, or the charter or bylaws of the
Indenture Trustee, or to the best knowledge of such
counsel, any governmental authority having jurisdiction
over the Indenture Trustee or the terms of any
indenture or other agreement or instrument to which the
Indenture Trustee is a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the
Company, the Indenture Trustee and public officials. Such
opinion may also assume the due authorization, execution and
delivery of the instruments and documents referred to therein by
the parties thereto other than the Indenture Trustee.
i. The Representative shall have received from
the Indenture Trustee a certificate, signed by the
President, a senior vice president or a vice president of
the Indenture Trustee, dated the Closing Date, to the effect
that each person who, as an officer or representative of the
Indenture Trustee, signed or signs the Notes, the Indenture,
the Sale and Servicing Agreement or any other document
delivered pursuant hereto, on the date hereof or on the
Closing Date, in connection with the transactions described
in the Indenture and the Sale and Servicing Agreement was,
at the respective times of such signing and delivery, and is
now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such
persons appearing on such documents are their genuine
signatures.
j. The Representative shall have received a
favorable opinion of Richards, Layton & Finger, counsel to
the Trust, dated the Closing Date and in form and substance
satisfactory to the Representative, to the effect that:
1. The Trust has been duly formed and is
validly existing as a business trust
under the laws of the State of Delaware,
12 Del. C. Section 3801, et seq., and
has the power and authority to own its
properties, to conduct its business as
described in the Trust Agreement, to
execute, deliver and perform the
Indenture, the Insurance Agreement and
the Sale and Servicing Agreement and to
issue, execute and deliver the Notes and
the Certificate (as defined in the Trust
Agreement).
2. The Indenture, the Insurance Agreement
and the Sale and Servicing Agreement
have been duly authorized, executed and
delivered by the Trust.
3. The Trust Agreement constitutes a legal,
valid and binding obligation of the
Depositor (as defined in the Trust
Agreement), enforceable against the
Depositor, in accordance with its terms.
4. The Trust has the power and authority to
pledge the Mortgage Loans as security
for the Notes and has duly authorized
such pledge by all necessary trust
action. The Notes have been duly
authorized, executed and delivered by
the Trust.
<PAGE>
<PAGE> 15
5. No consent, approval or other
authorization of, or registration,
declaration or filing with, any court or
governmental agency or commission of the
State of Delaware is required by or with
respect to the Trust for the issuance
and sale of the Notes or the valid
execution and delivery of the Indenture,
the Insurance Agreement and the Sale and
Servicing Agreement, or for the validity
or enforceability thereof, or for the
payment of any amounts by the Trust
thereunder.
6. Neither the execution and delivery by
the Trust of the Indenture, the
Insurance Agreement and the Sale and
Servicing Agreement, nor the issuance,
execution and delivery by the Trust of
the Notes, nor the consummation of the
transactions contemplated thereby, nor
compliance with the terms thereof, will
(i) conflict with or result in a breach
of, or constitute a default under the
provisions of any law, rule or
regulation of the State of Delaware
applicable to the Trust or, to our
knowledge, without independent
investigation, any judgment or order
applicable to the Trust or its
properties or, to our knowledge, without
independent investigation, any
indenture, mortgage, contract or other
agreement or instrument to which the
Trust is a party or by which it is bound
or (ii) to our knowledge, result in the
creation or imposition of any lien,
charge or encumbrance upon the Trusts
properties (other than the lien of the
Indenture).
7. To our knowledge, without independent
investigation, there are no pending or
threatened actions, suits or proceedings
affecting the Trust before any court or
other government authority which, if
adversely decided, would materially and
adversely affect the ability of the
Trust to carry out the transactions
contemplated by the Indenture, the
Insurance Agreement and the Sale and
Servicing Agreement.
8. To our knowledge, the Trust is not
required to obtain any material permits,
licenses, authorizations and approvals
necessary under the laws of the State of
Delaware to conduct its activities as
now conducted and as described in the
Trust Agreement and the Indenture.
k. The Representative shall have received a
favorable opinion of Richards, Layton & Finger, counsel to
the Owner Trustee, dated the Closing Date and in form and
substance satisfactory to the Representative, to the effect
that:
1. Owner Trustee is duly incorporated and
validly existing as a banking
corporation under the laws of the State
of Delaware and has the power and
authority to execute and deliver the
Trust Agreement.
2. The Trust Agreement has been duly
authorized, executed and delivered by
the Owner Trustee, and the Trust
Agreement constitutes a legal, valid and
binding agreement of the Owner Trustee,
enforceable against the Owner Trustee,
in accordance with its terms.
<PAGE>
<PAGE> 16
3. No consent, approval or other
authorization of, or registration,
declaration or filing with, any court or
governmental agency or commission of the
State of Delaware or the United States
or America, involving the banking and
trust powers of the Owner Trustee is
required by or with respect to the Owner
Trustee for the valid execution and
delivery of the Trust Agreement or for
the validity or enforceability thereof.
4. Neither the execution and delivery by
the Owner Trustee of the Trust
Agreement, nor the consummation of the
transactions contemplated thereby, nor
compliance with the terms thereof, will
(i) conflict with or result in a breach
of, or constitute a default under the
provisions of the Trust Agreement or the
certificate of incorporation of the
Owner Trustee or, any law, rule or
regulation of the State of Delaware
applicable to the Owner Trustee or, to
our knowledge, without independent
investigation, any judgment or order
applicable to the Owner Trustee or its
properties or any indenture, mortgage,
contract or other agreement or
instrument to which the Owner Trustee is
a party or by which it is bound or (ii)
to our knowledge, without independent
investigation, result in the creation or
imposition of any lien, charge or
encumbrance upon the Owner Trustee's
properties.
5. To our knowledge, without independent
investigation, there are no pending or
threatened actions, suits or proceedings
affecting the Owner Trustee before any
court or other government authority
which, if adversely decided, would
materially and adversely affect the
ability of the Owner Trustee to carry
out the transactions contemplated by the
Trust Agreement.
l. The Policy relating to the Notes shall have
been duly executed and issued at or prior to the Closing
Date and shall conform in all material respects to the
description thereof in the Prospectus.
m. The Representative shall have received a
favorable opinion of in-house counsel to the Insurer, dated
the Closing Date and in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
1. The Insurer is a stock insurance company
duly organized and validly existing under the laws of
the State of Wisconsin and duly qualified to conduct an
insurance business in the State of California and the
State of New York. The Insurer is validly licensed and
authorized to issue the Policy and perform its
obligations under the Policy in accordance with the
terms thereof under the laws of the State of
California, State of New York and the State of
Wisconsin.
2. The Insurer has full corporate power and
authority to execute and deliver the Policy and the
Policy has been duly authorized, executed and delivered
by the Insurer and constitutes a legal, valid and
binding obligation of the Insurer enforceable in
accordance with its terms except to the extent that the
enforceability (but not the validity) of such
obligation may be limited by any applicable bankruptcy,
insolvency, liquidation, rehabilitation or other
similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights and by
general principles of equity.
<PAGE>
<PAGE> 17
3. The execution and delivery by the
Insurer of the Policy, the Insurance Agreement and the
Indemnification Agreement will not, and the
consummation of the transactions contemplated thereby
and the satisfaction of the terms thereof will not,
conflict with or result in a breach of any of the
terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of the Insurer, or any
restriction contained in any contract, agreement or
instrument to which the Insurer is a party or by which
it is bound or constitute a default under any of the
foregoing.
4. Proceedings legally required for the
issuance of the Policy, and the execution, delivery and
performance of the Insurance Agreement and the
Indemnification Agreement have been taken by the
Insurer and licenses, orders, consents or other
authorizations or approvals of any governmental boards
or bodies legally required for the enforceability of
the Policy have been obtained; any proceedings not
taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the
Policy, the Insurance Agreement and the Indemnification
Agreement.
5. The Policy is exempt from registration
under the Securities Act.
6. There is no action, suit or proceeding
pending against or affecting the Insurer in any court,
or before or by any governmental body, which is likely
to affect or impair the validity or enforceability of
the Policy, the Insurance Agreement or the
Indemnification Agreement.
7. The statements contained in the
Prospectus Supplement under the heading "THE NOTE
INSURER" and "THE POLICY", insofar as such statements
constitute summaries of the matters referred to
therein, accurately reflect and fairly present the
information purported to be shown and, insofar as such
statements describe the Insurer, fairly and accurately
describe the Insurer, other than any financial or
statistical information contained or incorporated by
reference therein, as to which no opinion is expressed.
8. The Insurer is authorized to deliver the
Insurance Agreement and the Indemnification Agreement,
and each of the Insurance Agreement and the
Indemnification Agreement has been duly executed and is
the valid and binding obligation of the Insurer
enforceable in accordance with its terms except to the
extent that the enforceability (but not the validity)
of such obligation may be limited by any applicable
bankruptcy, insolvency, liquidation, rehabilitation or
other similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights and by
general principles of equity and subject to principles
of public policy limiting the right to enforce the
indemnification provisions contained therein insofar as
such provisions relate to indemnification for
liabilities arising under the securities laws.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the
Company, the Indenture Trustee, the Insurer and public officials.
Such opinion may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by
the parties thereto other than the Insurer.
The Insurer shall attach to such opinion a true and
correct copy of its certificate or articles of incorporation, as
appropriate, and its bylaws, all of which are in full force and
effect on the date of such certificate.
<PAGE>
<PAGE> 18
n. On or prior to the Closing Date, there has
been no downgrading, nor has any notice been given of (A)
any intended or potential downgrading or (B) any review or
possible changes in rating the direction of which has not
been indicated, in the rating, if any, accorded the
Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of the Securities Act.
o. On or prior to the Closing Date, there has
been no downgrading, nor has any notice been given of (A)
any intended or potential downgrading or (B) any review or
possible changes in rating the direction of which has not
been indicated, in the rating, if any, accorded the Company
or in any rating accorded any securities of the Company, if
any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the
Securities Act.
p. There has not occurred any change, or any
development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, since September 30, 1999, of (A)
the Company and its subsidiaries or (B) the Insurer, that is
in the Representative's judgment material and adverse and
that makes it in the Representative's judgment impracticable
to market the Notes on the terms and in the manner
contemplated in the Prospectus.
r. The Representative shall have received from
Dewey Ballantine LLP, special counsel to the Company, a
survey in form and substance satisfactory to the
Representative, indicating the requirements of applicable
local law which must be complied with in order to transfer
and service the Mortgage Loans pursuant to the Sale and
Servicing Agreement and the Indenture and the Company shall
have complied with all such requirements.
s. The Representative shall have received from
Fried, Frank, Harris, Shriver & Jacobson, special counsel to
the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the
Notes, the Prospectus and such other related matters as the
Representative shall reasonably require.
t. The Representative and counsel for the
Underwriters shall have received copies of any opinions of
counsel to the Company supplied to the Indenture Trustee
relating to matters with respect to the Notes. Any such
opinions shall be dated the Closing Date and addressed to
the Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely
thereon.
u. The Representative shall have received such
further information, certificates and documents as the
Representative may reasonably have requested not fewer than
three (3) full business days prior to the Closing Date.
v. There shall have been executed and delivered
by Advanta Mortgage Holding Company, the indirect corporate
parent of the Company ("AMHC"), a letter agreement with the
Indenture Trustee and the Insurer, pursuant to which AMHC
agrees to become jointly and severally liable with the
Company and Advanta Mortgage Corp. USA for the payment of
the Joint and Several Obligations (as defined in such letter
agreement).
w. There shall have been executed and delivered
by AMHC, the indirect corporate parent of the Company, a
letter agreement with the Underwriters and the Insurer,
pursuant to which AMHC agrees to become jointly and
severally liable with the Company and Advanta Mortgage Corp.
USA for the payment of the Joint and Several Obligations (as
defined in such letter agreement).
<PAGE>
<PAGE> 19
x. Prior to the Closing Date, counsel for the
Underwriters shall have been furnished with such documents
and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the
Notes as herein contemplated and related proceedings or in
order to evidence the accuracy and completeness of any of
the representations and warranties, or the fulfillment of
any of the conditions, herein contained, and all proceedings
taken by the Company in connection with the issuance and
sale of the Notes as herein contemplated shall be
satisfactory in form and substance to the Representative and
counsel for the Underwriters.
y. Subsequent to the execution and delivery of
this Agreement none of the following shall have occurred:
(i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the over-the-
counter market shall have been suspended or minimum prices
shall have been established on either of such exchanges or
such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having
jurisdiction; (ii) a banking moratorium shall have been
declared by Federal or state authorities; (iii) the United
States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United
States or there shall have been a declaration of a national
emergency or war by the United States; or (iv) there shall
have occurred such a material adverse change in general
economic, political or financial conditions (or the effect
of international conditions on the financial markets of the
United States shall be such) as to make it, in the judgment
of the Representative, impractical or inadvisable to proceed
with the public offering or delivery of the Notes on the
terms and in the manner contemplated in the Prospectus.
z. The Notes shall have received the ratings set
forth on Schedule A hereto.
If any condition specified in this Section 6 shall not
have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to
the Company at any time at or prior to the Closing Date, and such
termination shall be without liability of any party to any other
party except as provided in Section 7.
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the
Underwriters.
Section 7. Payment of Expenses
. The Company agrees to pay: (a) the costs incident
to the authorization, issuance, sale and delivery of the Notes
and any taxes payable in connection therewith; (b) the costs
incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and any amendments
and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in
each case, exhibits), the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by
reference therein, all as provided in this Agreement; (d) the
fees and expenses of qualifying the Notes under the securities
laws of the several jurisdictions as provided in Section 5(g)
hereof and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related fees
and expenses of counsel to the Underwriters); (e) any fees
charged by securities rating services for rating the Notes; (f)
the costs and expenses of Dewey Ballantine LLP, counsel to the
Company; and (g) all other costs and expenses incident to the
performance of the obligations of the Company; provided that,
except as provided in this Section 7, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of
Fried, Frank, Harris, Shriver & Jacobson, any transfer taxes on
the Notes which they may sell and the expenses of advertising any
offering of the Notes made by the Underwriters.
<PAGE>
<PAGE> 20
If this Agreement is terminated by the Representative,
in accordance with the provisions of Section 6 or Section 10, the
Company shall reimburse the Underwriters for their respective
reasonable out-of-pocket expenses, including fees and
disbursements of Fried, Frank, Harris, Shriver & Jacobson,
counsel for the Underwriters.
Section 8. Indemnification and Contribution.
a. The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities
Act from and against any and all loss, claim, damage or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the
Notes), to which such Underwriter or any such controlling person
may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) any untrue
statement or alleged untrue statement of a material fact
contained in the Prospectus or (iv) the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
and shall reimburse such Underwriter and each such controlling
person promptly upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in , the
Prospectus or the Registration Statement in reliance upon and in
conformity with written information (including any Derived
Information) furnished to the Company through the Representative
specifically for inclusion therein; and provided, further, that
as to any Collateral Term Sheets or Computational Materials this
indemnity shall not inure to the benefit of any Underwriter or
any controlling person on account of any loss, claim, damage,
liability or action arising from the sale of the Notes to any
person by such Underwriter if such Underwriter failed to send or
give a copy of the Prospectus, as amended or supplemented, to
that person within the time required by the Securities Act, and
the untrue statement or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
in the Collateral Term Sheets, Structural Term Sheets or
Computational Materials was corrected in the Prospectus, unless
such failure resulted from non-compliance by the Company with
Section 5(c). The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any
Underwriters or any controlling person of such Underwriter.
b. Each Underwriter agrees severally, and not jointly
to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act against
any and all loss, claim, damage or liability, or any action in
respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus, or (iv)
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or
<PAGE>
<PAGE> 21
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of
such Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably
incurred by the Company or any director, officer or controlling
person in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Underwriter
may otherwise have to the Company or any such director, officer
or controlling person.
c. Promptly after receipt by any indemnified party
under this Section 8 of notice of any claim or the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party
under this Section 8, notify the indemnifying party in writing of
the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced
by such failure, and provided, further, that the failure to
notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise
than under this Section 8.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
Any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless: (i) the
employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall
have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or
additional to those available to the indemnifying party and in
the reasonable judgment of such counsel it is advisable for such
indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it
being understood, however, the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of more than one separate firm
of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in
writing by the Underwriters, if the indemnified parties under
this Section 8 consist of the Underwriters or any of their
controlling persons, or by the Company, if the indemnified
parties under this Section 8 consist of the Company or any of the
Company's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity
agreements contained in Section 8(a) and (b), shall use its best
efforts to cooperate with the indemnifying party in the defense
of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by
reason of such settlement or judgment.
<PAGE>
<PAGE> 22
Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the
date of such settlement.
d. Each Underwriter agrees to deliver to the Company
no later than the date on which the Prospectus Supplement is
required to be filed pursuant to Rule 424 with a copy of its
Derived Information (as defined below) for filing with the
Commission on Form 8-K.
e. Each Underwriter agrees, assuming all Company-
Provided Information (defined below) is accurate and complete in
all material respects, to severally and not jointly indemnify and
hold harmless the Company, each of the Company's officers and
directors and each person who controls the Company within the
meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue statement of a material fact contained in the Derived
Information provided by such Underwriter, or arise out of or are
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, and agrees to reimburse
each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss,
claim, damage, liability or action as such expenses are incurred.
The obligations of each of the Underwriters under this Section
8(e) shall be in addition to any liability which such Underwriter
may otherwise have.
The procedures set forth in Section 8(c) shall be
equally applicable to this Section 8(e).
f. For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information
delivered to the Company pursuant to Section 8(d) for filing with
the Commission on Form 8-K as:
(i) is not contained in the Prospectus
without taking into account information
incorporated therein by reference;
(ii) does not constitute Company-Provided
Information; and
(iii) is of the type of information
defined as Collateral Term Sheets,
Structural Term Sheets or Computational
Materials (as such terms are interpreted
in the No-Action Letters).
"Company-Provided Information" means any computer tape
furnished to the Underwriters by the Company concerning the
Mortgage Loans comprising all or a portion of the Trust Estate.
The terms "Collateral Term Sheet" and "Structural Term
Sheet" shall have the respective meanings assigned to them in the
February 13, 1995 letter (the "PSA Letter") of Cleary, Gottlieb,
Steen & Hamilton on behalf of the Public Securities Association
(which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term
Sheet that reflects a substantive change in the information
presented. The term "Computational Materials" has the meaning
assigned to it in the May 17, 1994 letter (the "Kidder letter"
and together with the PSA Letter, the "No-Action Letters") of
Brown & Wood on behalf of Kidder, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly
available May 20, 1994).
<PAGE>
<PAGE> 23
g. If the indemnification provided for in this
Section 8 shall for any reason be unavailable to or insufficient
to hold harmless an indemnified party under Section 8(a) or (b)
in respect of any loss, claim, damage or liability, or any action
in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the
indemnified party failed to give the notice required under
Section 8(c), in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other
relevant equitable considerations.
The relative benefits of the Underwriters and the
Company shall be deemed to be in such proportion as the total net
proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and
commissions.
The relative fault of the Underwriters and the Company
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied
by the Company or by one of the Underwriters, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and
other equitable considerations.
The Company and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this
Section 8(g) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(g) shall be deemed to
include, for purposes of this Section 8(g), any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim.
h. For purposes of this Section 8, in no case shall
any Underwriter be responsible for any amount in excess of (x)
the amount received by such Underwriter in connection with its
resale of the Notes over (y) the amount paid by such Underwriter
to the Company for the Notes purchased by such Underwriter
hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
g. The Underwriters severally confirm that the
information set forth (i) in the Prospectus Supplement relating
to market making and (ii) in the third paragraph under the
caption "Underwriting" in the Prospectus Supplement, together
with the Derived Information, is correct and constitutes the only
information furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
Section 9. Representations, Warranties and
Agreements to Survive Delivery
. All representations, warranties and agreements
contained in this Agreement or contained in certificates of
officers of the Company submitted pursuant hereto shall remain
operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or
controlling persons thereof, or by or on behalf of the Company
and shall survive delivery of any Notes to the Underwriters.
<PAGE>
<PAGE> 24
Section 10. Termination of Agreement
. The Representative may terminate this Agreement
immediately upon notice to the Company, at any time at or prior
to the Closing Date if any of the events or conditions described
in Section 6(y) of this Agreement shall occur and be continuing.
In the event of any such termination, the covenant set forth in
Section 5(g), the provisions of Section 7, the indemnity
agreement set forth in Section 8, and the provisions of Sections
8 and 9 shall remain in effect.
Section 11. Notices
. All statements, requests, notices and agreements
hereunder shall be in writing, and:
a. if to the Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Bear,
Stearns & Co., Inc., as Representative of the Underwriters,
Asset-Backed Securities Group, 245 Park Avenue, 4th Floor,
New York, NY, 10167, Attention: General Counsel (fax: (212)
272-7294);
b. if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to Advanta Conduit
Receivables, Inc., 10790 Rancho Bernardo Road, San Diego,
California 92127, Attention: General Counsel (Fax: (858)
674-3592).
Section 12. Persons Entitled to the Benefit of this
Agreement
. This Agreement shall inure to the benefit of and be
binding upon the Underwriters and the Company, and their
respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons,
except that the representations, warranties, indemnities and
agreements contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control the
Underwriters within the meaning of Section 15 of the Securities
Act, and for the benefit of directors of the Company, officers of
the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15
of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any
provision contained herein.
Section 13. Default by One of the Underwriters
. If one of the Underwriters shall fail on the Closing
Date to purchase the Notes which it is obligated to purchase
hereunder (the "Defaulted Securities"), the remaining
Underwriter(s) (the "Non-Defaulting Underwriter"), shall have the
right, but not the obligation within one (1) Business Day
thereafter, to make arrangements to purchase all, but not less
than all, of the Defaulted Securities upon the terms herein set
forth; if, however, the Non-Defaulting Underwriter shall not have
completed such arrangements within such one (1) Business Day
period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section 13 shall
relieve the defaulting Underwriter from liability in respect of
its default.
In the event of any such default which does not result
in a termination of this Agreement, either the Non-Defaulting
Underwriter or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
<PAGE>
<PAGE> 25
Section 14. Survival
. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters
contained in this Agreement, or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Notes and shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
Section 15. Definition of the Term "Business Day"
. For purposes of this Agreement, "Business Day" means
any day that is not a Saturday or Sunday or other day on which
any of the Insurer, Advanta Mortgage Corp. USA or the Company is
closed or commercial banking institutions in the States of New
York, California or Delaware or in the city in which the
principal corporate trust office of the Indenture Trustee is
located, are authorized or obligated by law or executive order to
be closed.
Section 16. GOVERNING LAW
. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW, SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME.
Section 17. Counterparts
. This Agreement may be executed in counterparts and,
if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same
instrument.
Section 18. Headings
. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
Section 19. Representations of Underwriters
. The Representative will act for the several
Underwriters in connection with the transactions contemplated by
this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all of the Underwriters.
If the foregoing correctly sets forth the agreement
between the Company and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
ADVANTA CONDUIT RECEIVABLES, INC.
By:
Name: Susan A. McVeigh
Title: Vice-President
CONFIRMED AND ACCEPTED, as of
the date first above written:
BEAR, STEARNS & CO., INC.
as Representative of the Underwriters
By:
Name: Thomas S. Dunstan
Title: Managing Director
315962
<PAGE>
<PAGE> 26
SCHEDULE A
Initial
Principal Purchase Price
Amount of Notes to Underwriters
Required Purchased by disregarding
Notes Ratings Underwriters Coupon accrued interest
S&P/Moody's
Notes AAA /Aaa $200,000,000 LIBOR $199,500,000
+.375% 1,2
SCHEDULE I
Underwriter Principal Amount of Notes:
Bear, Stearns & Co. Inc. $120,000,000
SG Cowen Securities Corporation $ 80,000,000
Total for Notes $200,000,000
_______________________________
1 Notes are subject to the Available Funds Cap Rate as
defined in the Prospectus Supplement.
2 Notes are subject to an increase in the note interest
rate on the payment date immediately following the
month in which the clean-up call may first be
exercised, as defined in the Prospectus Supplement.
<PAGE> 1
<TABLE>
<CAPTION>
EXECUTION COPY
NY-116326.1
Execution Copy
AMENDED AND RESTATED
TRUST AGREEMENT
between
HOUSEHOLD AUTO RECEIVABLES CORPORATION
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of February 1, 2000
TABLE OF CONTENTS
<S> <C>
Page
ARTICLE I Definitions 1
Section 1.1. Capitalized Terms 1
Section 1.2. Other Definitional Provisions 2
Section 1.3. Action by or Consent of Noteholders and Certificate-holders
3
Section 1.4. Material Adverse Effect 3
ARTICLE II Organization 4
Section 2.1. Name 4
Section 2.2. Office 4
Section 2.3. Purposes and Powers 4
Section 2.4. Appointment of Owner Trustee 5
Section 2.5. Initial Capital Contribution of Trust Estate 5
Section 2.6. Declaration of Trust 5
Section 2.7. Liability 5
Section 2.8. Title to Trust Property 5
Section 2.9. Situs of Trust 6
Section 2.10. Representations and Warranties of the Depositor6
Section 2.11. Federal Income Tax Allocations 7
Section 2.12. Covenants of the Depositor 8
Section 2.13. Covenants of the Certificateholders 9
<PAGE>
<PAGE> 2
ARTICLE III Certificates and Transfer of Interests 10
Section 3.1. Initial Ownership 10
Section 3.2. The Certificates 10
Section 3.3. Authentication of Certificates 11
Section 3.4. Registration of Transfer and Exchange of Certificates12
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates 13
Section 3.6. Persons Deemed Certificateholders 13
Section 3.7. Access to List of Certificateholders' Names and Addresses 13
Section 3.8. Maintenance of Office or Agency 14
Section 3.9. ERISA Restrictions 14
Section 3.10. Securities Matters 14
Section 3.11. Distributions 14
Section 3.12. Paying Agent 14
ARTICLE IV Voting Rights and Other Actions 15
Section 4.1. Prior Notice to Holders with Respect to Certain Matters 15
Section 4.2. Action by Certificateholders with Respect to Certain Matters
16
Section 4.3. Action by Certificateholders with Respect to Bankruptcy 16
Section 4.4. Restrictions on Certificateholders' Power 16
Section 4.5. Majority Control 17
ARTICLE V Certain Duties 17
Section 5.1. Accounting and Records to the Noteholders, Certificate-holders,
the Internal Revenue Service and Others 17
Section 5.2. Signature on Returns; Tax Matters Partner 17
ARTICLE VI Authority and Duties of Owner Trustee 18
Section 6.1. General Authority 18
Section 6.2. General Duties 18
Section 6.3. Action upon Instruction 18
Section 6.4. No Duties Except as Specified in this Agreement or in
Instructions 19
Section 6.5. No Action Except under Specified Documents or Instructions20
Section 6.6. Restrictions 20
ARTICLE VII Concerning the Owner Trustee 20
Section 7.1. Acceptance of Trusts and Duties 20
Section 7.2. Furnishing of Documents 22
Section 7.3. Representations and Warranties 22
Section 7.4. Reliance; Advice of Counsel 22
Section 7.5. Not Acting in Individual Capacity 23
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables 23
Section 7.7. Owner Trustee May Own Certificates and Notes 24
Section 7.8. Payments from Owner Trust Estate 24
Section 7.9. Doing Business in Other Jurisdictions 24
ARTICLE VIII Compensation of Owner Trustee 24
Section 8.1. Owner Trustee's Fees and Expenses 24
Section 8.2. Indemnification 25
Section 8.3. Payments to the Owner Trustee 25
Section 8.4. Non-recourse Obligations 25
ARTICLE IX Termination of Agreement 25
Section 9.1. Termination of Agreement 25
ARTICLE X Successor Owner Trustees and Additional Owner
Trustees 27
Section 10.1. Eligibility Requirements for Owner Trustee 27
Section 10.2. Resignation or Removal of Owner Trustee 27
Section 10.3. Successor Owner Trustee 28
Section 10.4. Merger or Consolidation of Owner Trustee 29
Section 10.5. Appointment of Co-Trustee or Separate Trustee 29
<PAGE>
<PAGE> 3
ARTICLE XI Miscellaneous 30
Section 11.1. Supplements and Amendments 30
Section 11.2. No Legal Title to Owner Trust Estate in Certificateholders
31
Section 11.3. Limitations on Rights of Others 31
Section 11.4. Notices 31
Section 11.5. Severability 32
Section 11.6. Separate Counterparts 32
Section 11.7. Assignments; Series Support Provider 32
Section 11.8. Covenants of the Depositor 32
Section 11.9. No Petition 32
Section 11.10. No Recourse 33
Section 11.11. Headings 33
Section 11.12. GOVERNING LAW 33
Section 11.13. Master Servicer 33
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
</TABLE>
<PAGE>
<PAGE> 4
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated
as of February 1, 2000, between HOUSEHOLD AUTO RECEIVABLES
CORPORATION, a Nevada corporation (the "Depositor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as
Owner Trustee (the "Owner Trustee") amends and restates in
its entirety that certain Agreement, dated as of February 1,
2000, between the Depositor and the Owner Trustee.
ARTICLE I
Definitions
Section 1.1. Capitalized Terms
. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Agreement" shall mean this Amended and Restated
Agreement, as the same may be amended and supplemented from
time to time.
"Benefit Plan" shall have the meaning assigned to
such term in 3.9.
"Business Trust Statute" shall mean Chapter 38 of
Title 12 of the Delaware Code, 12 Del. Code 3801 et seq.
as the same may be amended from time to time.
"Certificates" means, if the Depositor elects (i)
to evidence its interest in certificated form pursuant to
Section 3.2, the certificate substantially in the form of
Exhibit A or (ii) to have its interest be uncertified
pursuant to Section 3.2, such uncertificated interest.
"Certificate Majority" shall have the meaning
assigned to such term in Section 4.1.
"Certificate Paying Agent" means Norwest Bank
Minnesota, National Association.
"Certificate Register" and "Certificate Registrar"
shall mean the register mentioned and the registrar
appointed pursuant to 3.4.
"Certificate of Trust" shall mean the Certificate
of Trust in the form of Exhibit B to be filed for the Trust
pursuant to 3810(a) of the Business Trust Statute.
"Code" shall mean the Internal Revenue Code of
1986, as amended.
"Corporate Trust Office" shall mean, with respect
to the Owner Trustee, the principal corporate trust office
of the Owner Trustee located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration, or at such other
address as the Owner Trustee may designate by notice to the
Certificateholders and the Depositor, or the principal
corporate trust office of any successor Owner Trustee (the
address of which the successor owner trustee will notify the
Certificateholders and the Depositor).
"Depositor" shall mean Household Auto Receivables
Corporation in its capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such
term in 3.9.
"Expenses" shall have the meaning assigned to such
term in 8.2.
"Holder" or "Certificateholder" shall mean a
Person in whose name a Certificate is registered on the
Certificate Register.
"Household" shall mean Household Finance
Corporation.
"Indemnified Parties" shall have the meaning
assigned to such term in 8.2.
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"Owner Trust Estate" shall mean all right, title
and interest of the Trust in and to the property and rights
assigned to the Trust pursuant to Article II of the Master
Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and all other property of the
Trust from time to time, including any rights of the Owner
Trustee and the Trust pursuant to the Master Sale and
Servicing Agreement, each Basic Document and each Series
Related Document.
"Owner Trustee" shall mean Wilmington Trust
Company, a Delaware banking corporation, not in its
individual capacity but solely as owner trustee under this
Agreement, and any successor Owner Trustee hereunder.
"Percentage Interest" shall mean, with respect to
a Certificate, the portion of the interests in the Trust
represented by a Certificate, as reflected in the
Certificate Register.
"Secretary of State" shall mean the Secretary of
State of the State of Delaware.
"Securities Act" shall have the meaning assigned
to such term in Section 3.4.
"Series Trust Estate" shall mean the property
granted to the Owner Trustee on behalf of the Trust pursuant
to Section 1.02 of the Series 2000-1 Supplement.
"Treasury Regulations" shall mean regulations,
including proposed or temporary regulations, promulgated
under the Code. References herein to specific provisions of
proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" shall mean the trust established by this
Agreement.
Section 1.2. Other Definitional Provisions
(a) . (a) Capitalized terms used herein and not
otherwise defined have the meanings assigned to them in the
Master Sale and Servicing Agreement or, if not defined
therein, in the Indenture, provided that, as used herein,
Series means only the Series of Notes and Series of
Certificates with respect to which the Trust is the Issuer
and only such Series Trust Estates included in the Owner
Trust Estate.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any Certificate or other
document made or delivered pursuant hereto unless otherwise
defined therein.
(c) As used in this Agreement and in any Certificate
or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in this Agreement or
in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined,
shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other
document, as applicable. To the extent that the definitions
of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and
words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified;
and the term "including" shall mean "including without
limitation."
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(e) The definitions contained in this Agreement 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.
Section 1.3. Action by or Consent of Noteholders and
Certificate-holders
. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders or
Certificateholders, such provision shall be deemed to refer
to the Certificateholder or Noteholder, as the case may be,
of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given,
by Noteholders or Certificateholders. Solely for the
purposes of any action to be taken, or consented to, by
Noteholders, any Note registered in the name of the
Depositor or any Affiliate thereof shall be deemed not to be
outstanding; provided, however, that, solely for the purpose
of determining whether the Trustee is entitled to rely upon
any such action or consent, only Notes which the Owner
Trustee or the Trustee knows to be so owned shall be so
disregarded.
Section 1.4. Material Adverse Effect
. Whenever a determination is to be made under this
Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have
a material adverse effect on the Noteholders or
Certificateholders (or any similar or analogous
determination), such determination shall be made without
taking into account the funds available from claims under
any policy or other Series Support.
ARTICLE II
Organization
Section 2.1. Name
. There is hereby formed a trust to be known as "Household
Automotive Trust IV", in which name the Owner Trustee may
conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and
sue and be sued.
Section 2.2. Office
. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other
address as the Owner Trustee may designate by written notice
to the Certificateholders and the Depositor.
Section 2.3. Purposes and Powers
(a) . (a) The purpose of the Trust is, and the Trust
shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture and each
Series Supplement and the Certificates pursuant to this
Agreement and each Series Supplement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to fund the
expense of obtaining any Series Support and to pay the
organizational, start-up and transactional expenses of the
Trust and to pay the balance to the Depositor pursuant to
the Master Sale and Servicing Agreement;
(iii) with respect to each Series Trust Estate, to
assign, grant, transfer, pledge, mortgage and convey each
Series Trust Estate to the Trustee pursuant to the Indenture
and the related Series Supplement for the benefit of the
Noteholders;
(iv) to enter into and perform its obligations under the
Basic Documents and the Series Related Documents with
respect to each Series, in each case, to which it is a
party;
(v) to acquire, hold and manage the Owner Trust Estate;
(vi) to make distributions on the Certificates in accordance
with their respective terms;
(vii) to own Class SV Preferred Stock of the Depositor;
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(viii) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or
connected therewith; and
(ix) subject to compliance with the Basic Documents and the
Series Related Documents with respect to each Series, to
engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and
the making of distributions to the Certificateholders and
the Noteholders.
(b) The Trust is hereby authorized to engage in the
foregoing activities. The Trust shall not engage in any
activity other than in connection with the foregoing or
other than as required or authorized by the terms of this
Agreement, the Basic Documents or any Series Related
Documents.
Section 2.4. Appointment of Owner Trustee
. The Depositor hereby appoints the Owner Trustee as
trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
Section 2.5. Initial Capital Contribution of Trust Estate
. The Depositor hereby sells, assigns, transfers, conveys
and sets over to the Owner Trustee, on behalf of the Trust,
as of the date hereof, the sum of $1,000 and one share of
Class SV Preferred Stock of the Depositor. The Owner
Trustee hereby acknowledges receipt in trust from the
Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust
Estate. The Depositor shall pay organizational expenses of
the Trust as they may arise.
Section 2.6. Declaration of Trust
. The Owner Trustee hereby declares that it will hold the
Owner Trust Estate in trust upon and subject to the
conditions set forth herein, on behalf of the Trust, for the
use and benefit of the Certificateholders, subject to the
obligations of the Trust under the Basic Documents and the
Series Related Documents with respect to each Series. It is
the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute
and that this Agreement constitute the governing instrument
of such business trust. It is the intention of the parties
hereto that, solely for income and franchise tax purposes,
the Trust shall be treated as a branch; provided, however,
that in the event Certificates are owned by more than one
Certificateholder, it is the intention of the parties hereto
that, solely for income and franchise tax purposes, the
Trust shall then be treated as a partnership and that,
unless otherwise required by appropriate tax authorities,
only after such time the Trust will file or cause to be
filed annual or other necessary returns, reports and other
forms consistent with the characterization of the Trust as a
partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and to the extent not inconsistent
herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee
shall file the Certificate of Trust with the Secretary of
State.
Section 2.7. Liability
(a) . (a) The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
(b) No Holder, other than to the extent set forth in
clause (a), shall have any personal liability for any
liability or obligation of the Trust.
Section 2.8. Title to Trust Property
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<PAGE> 8
(a) . (a) Legal title to all the Owner Trust Estate
shall be vested at all times in the Trust as a separate
legal entity except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall
be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The holders of the Certificates shall not have
legal title to any part of the related Series Trust Estate.
The Holders of the Certificates shall be entitled to receive
distributions with respect to their undivided ownership
interest therein in accordance with the terms hereof and the
related Series Supplement. No transfer, by operation of law
or otherwise, of any right, title or interest by any
Certificateholder of its ownership interest in the Owner
Trust Estate shall operate to terminate this Agreement or
the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any
part of any Series Trust Estate.
Section 2.9. Situs of Trust
. The Trust will be located and administered in the State
of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located with the
Certificate Paying Agent in the State of New York. Payments
will be received by the Certificate Paying Agent on behalf
of the Trust in New York and payments will be made by the
Trust from New York. The Trust shall not have any employees
in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee,
the Master Servicer or any agent of the Trust from having
employees within or without the State of Delaware. The only
office of the Trust will be at the Corporate Trust Office in
Delaware.
Section 2.10. Representations and Warranties of the
Depositor
. The Depositor makes the following representations and
warranties on which the Owner Trustee relies in accepting
the Owner Trust Estate in trust and executing the
Certificates and Notes and upon which any Series Support
Provider relies in providing any Series Support. Each of
the following representations and warranties shall be deemed
to be made on each date on which a Series Trust Estate is
pledged under the Indenture.
(a) Organization and Good Standing. The Depositor is
duly organized and validly existing as a Nevada corporation
with power and authority to own its properties and to
conduct its business as such properties are currently owned
and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic
Documents.
(b) Due Qualification. It is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of
its obligations under this Agreement and the Basic Documents
requires such qualification and in which the failure to so
qualify would have a material adverse effect on the
business, properties, assets or condition (financial or
otherwise) of the Depositor.
(c) Power and Authority. The Depositor has the
corporate power and authority to execute and deliver this
Agreement and to carry out its terms; the Depositor has full
power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust; the
Depositor has duly authorized such sale, assignment and
deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary
corporate action.
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<PAGE> 9
(d) Binding Obligations. This Agreement, when duly
executed and delivered, shall constitute legal, valid and
binding obligations of the Depositor enforceable against the
Depositor in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) No Consent Required. To the best knowledge of
the Depositor, no consent, license, approval or
authorization or registration or declaration with, any
Person or with any governmental authority, bureau or agency
is required in connection with the execution, delivery or
performance of this Agreement, the Basic Documents and the
applicable Series Related Documents, except for such as have
been obtained, effected or made or as to which a failure to
obtain, effect or make would not have a material adverse
effect on the business, properties, assets or condition
(financial or other) of the Depositor.
(f) No Violation. The consummation of the
transactions contemplated by this Agreement and the
fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or by-laws of
the Depositor, or any material indenture, agreement or other
instrument to which the Depositor is a party or by which it
is bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than
pursuant to the Basic Documents or any applicable Series
Related Documents); nor violate any law or, to the best of
the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal
or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Depositor or its properties.
(g) No Proceedings. To the best of the Depositor's
knowledge, there are no proceedings or investigations
pending or, to its knowledge threatened against it before
any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction
over it or its properties (A) asserting the invalidity of
this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely
affect its performance of its obligations under, or the
validity or enforceability of, this Agreement, any of the
Basic Documents or any Series Related Documents, or (D)
seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of any of the Notes
or Certificates.
Section 2.11. Federal Income Tax Allocations
(a) . (a) For so long as the Trust has a single
owner for federal income tax purposes, it will, pursuant to
Treasury Regulations promulgated under section 7701 of the
Code, be disregarded as an entity distinct from the
Certificateholder for all federal income tax purposes.
Accordingly, for federal income tax purposes, the
Certificateholder will be treated as (i) owning all assets
owned by the Trust, (ii) having incurred all liabilities
incurred by the Trust, and (iii) all transactions between
the Trust and the Certificateholder will be disregarded.
(b) Neither the Owner Trustee nor any
Certificateholder will, under any circumstances, and at any
time, make an election on IRS Form 8832 or otherwise, to
classify the Trust as an association taxable as a
corporation for federal, state or any other applicable tax
purpose.
(c) In the event that the Trust has two equity owners
for federal income tax purposes, the Trust will be treated
as a partnership. At any such time that the Trust has two
equity owners, this Agreement will be amended, in accordance
with Section 11.1 herein, and appropriate provisions will be
added so as to provide for treatment of the Trust as a
partnership.
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Section 2.12. Covenants of the Depositor
. The Depositor agrees and covenants for the
benefit of the Owner Trustee and the Trustee for the benefit
of the Noteholders, during the term of this Agreement, and
to the fullest extent permitted by applicable law, that:
(a) (i) it shall not create, incur or suffer to exist
any indebtedness or (ii) engage in any business, except (x)
as permitted by its certificate of incorporation, the Basic
Documents and the Series Related Documents, (y) in
connection with Household Automobile Revolving Trust 1998-1
and the transaction and the documents related thereto, or
(z) in connection with a securitization transaction and the
related documents in which the related indebtedness is
issued pursuant to an indenture having a provision
substantially similar to Section 11.18 of the Indenture;
provided however, that no other Series shall be issued under
the Basic Documents and the Series Related Documents so long
as the Series 2000-1 Notes are outstanding;
(b) it shall not, for any reason, institute
proceedings for the Trust to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any
applicable federal or state law relating to the bankruptcy
of the Trust, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the
property of the Trust or cause or permit the Trust to make
any assignment for the benefit of creditors, or admit in
writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a
moratorium on the debt of the Trust or take any action in
furtherance of any such action;
(c) it shall obtain from each counterparty to each
Basic Document to which it or the Trust is a party and each
other agreement entered into on or after the date hereof to
which it or the Trust is a party, an agreement by each such
counterparty that prior to the occurrence of the event
specified in 9.1(e) such counterparty shall not institute
against, or join any other Person in instituting against, it
or the Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar
proceedings under the laws of the United States or any state
of the United States; and
(d) it shall not, for any reason, withdraw or attempt
to withdraw from this Agreement, dissolve, institute
proceedings for it to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against it, or file a petition
seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official)
of it or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing
its inability to pay its debts generally as they become due,
or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.
Section 2.13. Covenants of the Certificateholders
. Each Certificateholder agrees:
(a) to be bound by the terms and conditions of the
related Certificates, of this Agreement and, with respect to
the holders of Certificates, of the related Series
Supplement, including any supplements or amendments hereto
and to perform the obligations of a Certificateholder as set
forth therein or herein, in all respects as if it were a
signatory hereto. This undertaking is made for the benefit
of the Trust, the Owner Trustee and the Noteholders;
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(b) to hereby appoint the Depositor as such
Certificateholder's agent and attorney-in-fact to sign any
federal income tax information return filed on behalf of the
Trust, if any, and agree that, if requested by the Trust, it
will sign such federal income tax information return in its
capacity as holder of an interest in the Trust. Each
Certificateholder also hereby agrees that in its tax returns
it will not take any position inconsistent with those taken
in any tax returns that may be filed by the Trust;
(c) if such Certificateholder is other than an
individual or other entity holding its Certificate through a
broker who reports securities sales on Form 1099-B, to
notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of
the date of the transfer;
(d) until the completion of the events specified in
9.1(e), not to, for any reason, institute proceedings for
the Trust or the Depositor to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official)
of the Trust or a substantial part of its property, or cause
or permit the Trust to make any assignment for the benefit
of its creditors, or admit in writing its inability to pay
its debts generally as they become due, or declare or effect
a moratorium on its debt or take any action in furtherance
of any such action; and
(e) that there shall not be more than 98 other holders
of Certificates.
ARTICLE III
Certificates and Transfer of Interests
Section 3.1. Initial Ownership
. Upon the formation of the Trust by the contribution by
the Depositor pursuant to 2.5, the Trust shall issue an
uncertificated ownership interest in the Trust (the
"Uncertificated Certificate") to the Depositor. Unless and
until the Depositor transfers all or a portion of the
Percentage Interest represented by such Uncertificated
Certificate, such Uncertificated Certificate shall represent
one hundred percent (100%) of the Percentage Interest.
Section 3.2. The Certificates
(a) . (a) The Certificates shall be in
uncertificated form with records of interest ownership
maintained by the Certificate Registrar in the Certificate
Register. If, on or after the Closing Date, the holder of
any Uncertificated Certificate delivers to the Owner Trustee
a written request that the Uncertificated Certificate
specified in such request be issued in certificated form (a
related "Certification Request"), the Owner Trustee shall
promptly issue such Certificate to the holder thereof in
certificated form. If a Certification Request has been
delivered, the Certificate will be issued in registered
form, substantially in the form of Exhibit A, and shall upon
issue, be executed and delivered by the Depositor to the
Owner Trustee for authentication and redelivery as provided
in Section 3.3.
(b) If the Certificates are in certificated form, they
shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner
Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to
the benefit of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates.
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(c) A transferee of a Certificate (whether in
certificated or uncertificated form) shall become a
Certificateholder, and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder,
upon due registration of such Certificate in such
transferee's name pursuant to 3.4.
(d) No Certificates shall be issued under this
Agreement unless such Certificates have been authorized
pursuant to a Series Supplement and all conditions precedent
to the issuance thereof, as specified in the related Series
Supplement shall have been satisfied. All Certificates of
each Series issued under this Agreement shall be in all
respects entitled to the benefits hereof and of the related
Series Trust Estate.
(e) Upon the written direction of the Depositor, the
Owner Trustee and the Depositor shall enter into one or more
Supplements, providing for the issuance of separate Series
of Certificates. Each Series shall be a separate Series of
the Trust within the meaning of Section 3806(b)(2) of the
Business Trust Statute. Separate and distinct records
(including tax records) shall be maintained for each Series
and the Owner Trust Estate associated with each such Series
shall be maintained for each Series and the Owner Trust
Estate associated with each such Series shall be held in
Trust and accounted for separately from the Owner Trust
Estate of any other Series. Except as specified in this
Agreement or in any Supplement, the Owner Trust Estate of
any Series shall not be subject to claims, debts,
liabilities, expenses or obligations arising from or with
respect to the Trust or any other Series. The debts,
obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Series shall
be enforceable against the related Owner Trust Estate only
and not against the assets of the Trust generally or any
other Series. Notice of this limitation on inter-series
liabilities shall be set forth in the Certificate of Trust
(whether originally or by amendment) as filed with the
Secretary of State pursuant to the Business Trust Statute,
and upon the giving of such notice in the Certificate of
Trust, the statutory provisions of Section 3804 of the
Business Trust Statute relating to limitations on inter-
series liabilities (and the statutory effect under Section
3804 of setting forth such notice in the Certificate of
Trust) shall become applicable to the Trust and each Series
of Certificates.
(f) Each Supplement shall contain provisions requiring
that neither the Depositor nor any Holder of a Certificate
of the related Series of Certificates shall direct the Owner
Trustee to (i) take any action that would cause the Owner
Trust Estate of the related Series to be substantively
consolidated into any other Owner Trust Estate of any other
Series such that it will have its separate existence
disregarded in the event of an insolvency event with respect
to any Certificateholder of such Series, the Trust or
another Series, (ii) to commingle any of the Owner Trust
Estate of the related Series with the Owner Trust Estate of
any other Series, (iii) to maintain the corporate, financial
and accounting books and records and statements of the
related Series, if any, in a manner such that they cannot be
separated from those of any other Series, (iv) to take any
action that would cause (a) the funds and other assets of
the related Series, if any, not to be identifiable or the
bank accounts, corporate records and books of account, if
any, of the related Series not to be inseparable from those
of any other Series and (b) the Trust to pay, other than
from assets of the related Series, any obligations or
indebtedness of any kind incurred by the related Series and
payable by the Trust pursuant to this Agreement, (v) to
maintain the assets and liabilities of the related Series so
that they are not readily ascertainable from those of any
other Series and subject to segregation without requiring
substantial time or expense to effect and account for such
segregated assets and liabilities, (vi) to take any actions
with respect to the related Series except in its capacity as
Owner Trustee in respect of such Series. The Master
Servicer shall have the right to take any action on behalf
of the Trust to enforce the foregoing provisions of each
Supplement for the benefit of the Trust and of each Series.
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(g) Each Certificateholder shall hold an exclusive,
divided beneficial interest in the Owner Trust Estate of its
related Series of Certificates.
(h) The Certificateholders of any Series of
Certificates shall be entitled to receive distributions with
respect to their undivided ownership interest therein only
in accordance with the provisions of Section 3.11 and the
related Supplement.
Section 3.3. Authentication of Certificates
. If the Certificates are in certificated form, the Owner
Trustee shall cause the related Certificates to be executed
on behalf of the Trust, authenticated and delivered to or
upon the written order of the Depositor, signed by its
chairman of the board, its president or any vice president,
its treasurer or any assistant treasurer without further
corporate action by the Depositor, in authorized
denominations. No Certificate shall entitle its holder to
any benefit under this Agreement or, with respect to a
Series, the related Series Supplement, or shall be valid for
any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or its
authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the
date of their authentication.
Section 3.4. Registration of Transfer and Exchange of
Certificates
(a) . (a) The Certificate Registrar shall keep or
cause to be kept, at the office or agency maintained
pursuant to 3.8, a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the
Owner Trustee shall provide for the registration of
Certificates (whether in certificated or uncertificated
form) and of transfers and exchanges of Certificates
(whether in certificated or uncertificated form) as herein
provided. The Owner Trustee shall be the initial
Certificate Registrar .
(b) The Certificate Registrar shall provide the
Trustee with a list of the names and addresses of the
Certificateholders on each Series Closing Date in the form
which such information is provided to the Certificate
Registrar by the Depositor. Upon any transfers of
Certificates, the Certificate Registrar shall notify the
Trustee of the name and address of the transferee in
writing, by facsimile, on the day of such transfer.
(c) If a Certificate is in certificated form, upon
surrender for registration of transfer of any Certificate to
the Certificate Registrar at the office or agency maintained
pursuant to 3.8, the Owner Trustee shall execute,
authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of
the same Series in the aggregate Percentage Interest to be
transferred, dated the date of authentication by the Owner
Trustee or any authenticating agent. If a Certificate is in
uncertificated form, upon representation of such Certificate
in accordance with Section 3.2, the Certificate Registrar
shall reflect in the Certificate Registrar the transfer of
the relevant Percentage Interest. If a Certificate is in
certificated form, at the option of the Holder thereof, such
Certificate may be exchanged for one or more other
Certificates of the same Series in authorized denominations
of a like Percentage Interest upon surrender of the
Certificates of the same Series, to be exchanged at the
office or agency maintained pursuant to 3.8. Certificates
may be issued in any Percentage Interest not to exceed 100%.
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(d) Every Certificate presented or, in the case of
certificated Certificates, surrendered for registration of
transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner
Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's
Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Exchange Act. Each certificated
Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by
the Owner Trustee in accordance with its customary practice.
(e) No service charge shall be made for any
registration of transfer or exchange of Certificates, but
the Owner Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer
or exchange of Certificates.
Section 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates
. If (a) any mutilated Certificate shall be
surrendered to the Certificate Registrar, or if the
Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any
Certificate and (b) there shall be delivered to the
Certificate Registrar and the Owner Trustee, such security
or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such
Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall
execute and the Owner Trustee or its authenticating agent
shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Series principal
balance. In connection with the issuance of any new
Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this section shall constitute
conclusive evidence of an ownership interest in the Trust,
as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 3.6. Persons Deemed Certificateholders
. Every Person by virtue of becoming a Certificateholder in
accordance with this Agreement and the rules and regulations
of the Certificate Registrar shall be deemed to be bound by
the terms of this Agreement. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar and any agent of the Owner Trustee
and the Certificate Registrar may treat the Person in whose
name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of
receiving distributions pursuant hereto, the Indenture or
any Series Supplement (in the case of a Certificate) and for
all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar, nor any agent of the
Owner Trustee or the Certificate Registrar shall be bound by
any notice to the contrary.
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Section 3.7. Access to List of Certificateholders' Names
and Addresses
. The Owner Trustee or the Certificate Registrar shall
furnish or cause to be furnished to the Master Servicer, the
Depositor or Owner Trustee within 15 days after receipt by
the Owner Trustee or the Certificate Registrar of a request
therefor from such Person in writing, a list, of the names
and addresses of the Certificateholders as of the most
recent Record Date. If three or more Holders of
Certificates or one or more Holders of Certificates
evidencing not less than 25% of the Percentage Interest
apply in writing to the Owner Trustee or the Certificate
Registrar, and such application states that the applicants
desire to communicate with other Certificateholders with
respect to their rights under this Agreement, under the
Certificates of such Series or under the related Series
Supplement and such application is accompanied by a copy of
the communication that such applicants propose to transmit,
then the Owner Trustee or the Certificate Registrar shall,
within five Business Days after the receipt of such
application, afford such applicants access during normal
business hours to the current list of Certificateholders of
such Series. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any
of the Depositor, the Master Servicer, the Owner Trustee or
any agent thereof accountable by reason of the disclosure of
its name and address, regardless of the source from which
such information was derived.
Section 3.8. Maintenance of Office or Agency
. The Owner Trustee or the Certificate Registrar shall
maintain in Wilmington, Delaware, an office or offices or
agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the
Certificates and the Basic Documents may be served. The
Owner Trustee initially designates its Corporate Trust
Office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor, the
Certificateholders and (unless a Support Default shall have
occurred and be continuing) any Series Support Provider of
any change in the location of the Certificate Register or
any such office or agency.
Section 3.9. ERISA Restrictions
. The Certificates may not be acquired by or for the
account of (i) an employee benefit plan (as defined in
3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan (as defined in
4975(e)(1) of the Code) that is subject to Section 4975 of
the Code or (iii) any entity whose underlying assets include
assets of a plan described in (i) or (ii) by reason of such
plan's investment in the entity (each, a "Benefit Plan").
The Certificate Registrar shall not register the transfer of
a Certificate unless the transferee has delivered to the
Owner Trustee a representation letter in form and substance
satisfactory to the Owner Trustee to the effect that the
transferee is not, and is not acquiring the Certificate for
the account of, a Benefit Plan.
Section 3.10. Securities Matters
. Notwithstanding anything contained herein to the
contrary, the Owner Trustee shall not be responsible for
ascertaining whether any transfer complies with the
registration provisions or exemptions from the Securities
Act, the Exchange Act, applicable state securities law or
the Investment Company Act; provided, however, that if a
certificate is specifically required to be delivered to the
Owner Trustee by a purchaser or transferee of a Certificate,
the Owner Trustee shall be under a duty to examine the same
to determine whether it conforms to the requirements of this
Agreement and shall promptly notify the party delivering the
same if such certificate does not so conform.
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Section 3.11. Distributions
. Distributions shall be made from time to time
by the Owner Trustee or the Certificate Paying Agent in
accordance with the Percentage Interests of the
Certificateholders.
Section 3.12. Paying Agent
. Distributions to be made in respect of the Certificates
pursuant to this Agreement, or any Series Supplement shall
be made by the Certificate Paying Agent, by wire transfer or
check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender
of the Certificate or the making of any notation thereon,
except as provided in Section 9.1(c) with respect to the
final distribution on a Certificates.
ARTICLE IV
Voting Rights and Other Actions
Section 4.1. Prior Notice to Holders with Respect to
Certain Matters
. With respect to the following matters, the Owner Trustee
shall not take action unless at least 30 days before the
taking of such action, the Owner Trustee shall have notified
the Certificateholders in writing of the proposed action and
Certificateholders holding, in the aggregate, greater than
50% of the Percentage Interests (a "Certificate Majority")
shall not have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided
alternative direction:
(a) the election by the Trust to file an amendment to
the Certificate of Trust, which amendment shall have
satisfied the Rating Agency Condition (unless such amendment
is required to be filed under the Business Trust Statute or
unless such amendment would not materially and adversely
affect the interests of the Holders);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is not required and such amendment materially
adversely affects the interest of the Certificateholders; or
(d) except pursuant to 13.1(b) of the Master Sale
and Servicing Agreement, the amendment, change or
modification of the Master Sale and Servicing Agreement,
except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not
materially adversely affect the interests of the
Certificateholders.
(e) the Depositor shall not, without the unanimous
consent of the holders of the Class SV Preferred Stock of
the Depositor, institute proceedings to be adjudicated
insolvent, or consent to the institution of any bankruptcy
or insolvency case or proceedings against it, or file or
consent to a petition under any applicable federal or state
law relating to bankruptcy, seeking the Depositor's
liquidation or reorganization or any other relief for the
Corporation as debtor, or consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian or
sequestrator (or other similar official) of the Corporation
or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing
its inability to pay its debts generally as they become due,
or take any corporate action in furtherance of such action.
The Owner Trustee shall notify the Certificateholders in
writing of any appointment of a successor Note Registrar or
Certificate Registrar within five Business Days thereof.
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<PAGE> 17
Section 4.2. Action by Certificateholders with Respect to
Certain Matters
. The Owner Trustee shall not have the power (a) to remove
the Master Servicer under the Master Sale and Servicing
Agreement or (b) except as expressly provided in the
Indenture and the related Series Supplement and at the
written direction of the Certificateholders, sell the
Receivables after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by
the Certificateholders and the furnishing of indemnification
satisfactory to the Owner Trustee by the Certificateholders.
Section 4.3. Action by Certificateholders with Respect to
Bankruptcy
. Until one year and one day following the date of payment
in full of the Notes of each Series have been paid in full,
the Owner Trustee shall not have the power to, and shall
not, commence any proceeding or other actions contemplated
by 2.13(d) hereof relating to the Trust without the prior
written consent of all the Certificateholders and the
delivery to the Owner Trustee by each such Certificateholder
of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
Section 4.4. Restrictions on Certificateholders' Power
(a) . (a) The Certificateholders shall not direct
the Owner Trustee to take or refrain from taking any action
if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this
Agreement, any of the Basic Documents or any Series Related
Documents or would be contrary to 2.3 or otherwise
contrary to law nor shall the Owner Trustee be obligated to
follow any such direction, if given.
(b) No Certificateholder shall have any right by
virtue or by availing itself of any provisions of this
Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless there are no
outstanding notes of any Series and unless the Certificate
Majority previously shall have given to the Owner Trustee a
written notice of default and of the continuance thereof, as
provided in this Agreement, and also unless the Certificate
Majority shall have made written request upon the Owner
Trustee to institute such action, suit or proceeding in its
own name as Owner Trustee under this Agreement and shall
have offered to the Owner Trustee such reasonable indemnity
as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding,
and during such 30-day period no request or waiver
inconsistent with such written request has been given to the
Owner Trustee pursuant to and in compliance with this
section or 6.3; it being understood and intended, and
being expressly covenanted by each Certificateholder with
every other Certificateholder and the Owner Trustee, that no
one or more Holders of Certificates shall have any right in
any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce
any right under this Agreement, except in the manner
provided in this Agreement and for the equal, ratable, and
common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this 4.4,
each and every Certificateholder and the Owner Trustee shall
be entitled to such relief as can be given either at law or
in equity.
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<PAGE> 18
Section 4.5. Majority Control
. No Certificateholder shall have any right to vote or in
any manner otherwise control the operation and management of
the Trust except as expressly provided in this Agreement.
Except as expressly provided herein, any action that may be
taken by the Certificateholders under this Agreement may be
taken by the Certificate Majority. Except as expressly
provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement
shall be effective if signed by the Certificate Majority at
the time of the delivery of such notice.
ARTICLE V
Certain Duties
Section 5.1. Accounting and Records to the Noteholders,
Certificate-holders, the Internal Revenue Service and Others
. Subject to Sections 12.1(b)(iii) and 12.1(c) of the
Master Sale and Servicing Agreement, the Master Servicer
shall (a) maintain (or cause to be maintained) the books of
the Trust on a calendar year basis on the accrual method of
accounting, including, without limitation, the allocations
of net income under 2.11, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by
the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1, if
applicable) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) file or cause to
be filed, if necessary, such tax returns relating to the
Trust (including a partnership information return, Form
1065), and direct the Owner Trustee or the Master Servicer,
as the case may be, to make such elections as may from time
to time be required or appropriate under any applicable
state or Federal statute or rule or regulation thereunder so
as to maintain the Trust's characterization as a branch, or
if applicable, as a partnership, for Federal income tax
purposes and (d) collect or cause to be collected any
withholding tax as described in and in accordance with the
Master Sale and Serving Agreement or any Series Supplement
with respect to income or distributions to
Certificateholders and the appropriate forms relating
thereto. The Owner Trustee or the Master Servicer, as the
case may be, shall make all elections pursuant to this 5.1
as directed in writing by the Depositor. The Owner Trustee
shall sign all tax information returns, if any, filed
pursuant to this 5.1 and any other returns as may be
required by law, and in doing so shall rely entirely upon,
and shall have no liability for information provided by, or
calculations provided by, the Depositor or the Master
Servicer. The Owner Trustee shall elect under 1278 of the
Code to include in income currently any market discount that
accrues with respect to the Receivables. The Owner Trustee
shall not make the election provided under 754 of the
Code.
Section 5.2. Signature on Returns; Tax Matters Partner
(a) . (a) Notwithstanding the provisions of 5.1
and in the event that the Trust is characterized as a
partnership, the Owner Trustee shall sign on behalf of the
Trust the tax returns of the Trust, unless applicable law
requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the Depositor.
(b) In the event that the Trust is characterized as a
partnership, the Depositor shall be the "tax matters
partner" of the Trust pursuant to the Code.
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ARTICLE VI
Authority and Duties of Owner Trustee
Section 6.1. General Authority
. The Owner Trustee is authorized and directed to execute
and deliver on behalf of the Trust the Basic Documents and
each Series Supplement and the related Series Related
Documents to which the Trust is named as a party and each
certificate or other document attached as an exhibit to or
contemplated by the Basic Documents and each Series
Supplement and the related Series Related Documents to which
the Trust is named as a party and any amendment thereto, in
each case, in such form as the Depositor shall approve as
evidenced conclusively by the Owner Trustee's execution
thereof, and on behalf of the Trust, to direct the Trustee
to authenticate and deliver each Series of Notes (or Class
of such Series). In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the Basic
Documents and each Series Supplement and the related Series
Related Documents. The Owner Trustee is further authorized
from time to time to take such action as the Certificate
Majority recommends with respect to the Basic Documents and
each Series Supplement and the related Series Related
Documents so long as such activities are consistent with the
terms of the Basic Documents and each Series Supplement and
the related Series Related Documents.
Section 6.2. General Duties
. It shall be the duty of the Owner Trustee to discharge
(or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and to administer
the Trust in accordance with the provisions of this
Agreement and in the interest of the Holders, subject to the
Basic Documents and, with respect to Certificates, each
Series Supplement and the related Series Related Documents.
Notwithstanding the foregoing, the Owner Trustee shall be
deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents and, with respect to
Certificates, each Series Supplement and the related Series
Related Documents to the extent the Master Servicer has
agreed in the Master Sale and Servicing Agreement to perform
any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Basic Document and, with
respect to Certificates, each Series Supplement and the
related Series Related Documents, and the Owner Trustee
shall not be liable for the default or failure of the Master
Servicer to carry out its obligations under the Master Sale
and Servicing Agreement.
Section 6.3. Action upon Instruction
(a) . (a) Subject to Article IV, the Certificate
Majority shall have the exclusive right to direct the
actions of the Owner Trustee in the management of the Trust,
so long as such instructions are not inconsistent with the
express terms set forth herein, in any Basic Document or,
with respect to Certificates, in any Series Supplement or in
any Series Related Document. The Certificate Majority shall
not instruct the Owner Trustee in a manner inconsistent with
this Agreement or the Basic Documents or, with respect to
Certificates, any Series Supplement or any Series Related
Document.
(b) The Owner Trustee shall not be required to take
any action hereunder or under any Basic Document or, with
respect to Certificates, any Series Supplement or any Series
Related Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of any
Basic Document or, with respect to Certificates, any Series
Supplement or any Series Related Document or is otherwise
contrary to law.
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<PAGE> 20
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required
by the terms of this Agreement or any Basic Document or,
with respect to Certificates, any Series Supplement or any
Series Related Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the
circumstances) to the Certificate Majority requesting
instruction as to the course of action to be adopted, and to
the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Certificate
Majority, the Owner Trustee shall not be liable on account
of such action to any Person. If the Owner Trustee shall
not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action,
not inconsistent with this Agreement or the Basic Documents
or, with respect to Certificates, any Series Supplement or
any Series Related Document, as it shall deem to be in the
best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as
to the application of any provision of this Agreement or any
Basic Document or, with respect to Certificates, any Series
Supplement or any Series Related Document or any such
provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable
provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee
is required to take with respect to a particular set of
facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the
Certificate Majority requesting instruction and, to the
extent that the Owner Trustee acts or refrains from acting
in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner
Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period
of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action,
not inconsistent with this Agreement, the Basic Documents or
any Series Related Document, as it shall deem to be in the
best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
Section 6.4. No Duties Except as Specified in this
Agreement or in Instructions
. The Owner Trustee shall not have any duty or obligation
to manage, make any payment with respect to, register,
record, sell, dispose of, or otherwise deal with the Owner
Trust Estate, or to otherwise take or refrain from taking
any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party,
except as expressly provided by the terms of this Agreement
or in any document or written instruction received by the
Owner Trustee pursuant to 6.3; and no implied duties or
obligations shall be read into this Agreement or any Basic
Document or, with respect to Certificates, any Series
Supplement or any Series Related Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for
filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it
hereunder or to prepare or file any Commission filing for
the Trust or to record this Agreement or any Basic Document
or, with respect to Certificates, any Series Supplement or
any Series Related Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any Liens
on any part of the Owner Trust Estate that result from
actions by, or claims against, the Owner Trustee (solely in
its individual capacity) and that are not related to the
ownership or the administration of the Owner Trust Estate.
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<PAGE> 21
Section 6.5. No Action Except under Specified Documents or
Instructions
. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner
Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with
the Basic Documents or any Series Related Document and (iii)
in accordance with any document or instruction delivered to
the Owner Trustee pursuant to 6.3.
Section 6.6. Restrictions
. The Owner Trustee shall not take any action (a) that is
inconsistent with the purposes of the Trust set forth in
2.3 or (b) that, to the actual knowledge of the Owner
Trustee, would result in the Trust's becoming taxable as a
corporation or a publicly traded partnership for Federal
income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate
the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
Section 7.1. Acceptance of Trusts and Duties
. The Owner Trustee accepts the trusts hereby created and
agrees to perform its duties hereunder with respect to such
trusts but only upon the terms of this Agreement. The Owner
Trustee and the Certificate Paying Agent also agree to
disburse all monies actually received by it constituting
part of the Owner Trust Estate upon the terms of this
Agreement or the Basic Documents or, with respect to
Certificates, any Series Supplement or any Series Related
Document. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document or, with
respect to Certificates, any Series Supplement or any Series
Related Document under any circumstances, except (i) for its
own willful misconduct, bad faith or negligence, (ii) in the
case of the inaccuracy of any representation or warranty
contained in 7.3 expressly made by the Owner Trustee in
its individual capacity, (iii) for liabilities arising from
the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of 6.4
hereof, (iv) for any investments issued by the Owner Trustee
or any branch or affiliate thereof in its commercial
capacity or (v) for taxes, fees or other charges on, based
on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth
in the preceding sentence):
(a) the Owner Trustee shall not be liable for any
error of judgment made by a Responsible Officer of the Owner
Trustee;
(b) the Owner Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in
accordance with the instructions of the Certificate
Majority, the Depositor, the Master Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic
Document or, with respect to Certificates, any Series
Supplement or any Series Related Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights
or powers hereunder or under any Basic Document or, with
respect to Certificates, any Series Supplement or any Series
Related Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of
the Basic Documents or, with respect to Certificates, any
Series Supplement or any Series Related Document, including
the principal of and interest on the Notes;
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<PAGE> 22
(e) the Owner Trustee shall not be responsible for or
in respect of the validity or sufficiency of this Agreement
or for the due execution hereof by the Depositor or for the
form, character, genuineness, sufficiency, value or validity
of any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents or, with
respect to Certificates, any Series Supplement or any Series
Related Document, other than the certificate of
authentication on the Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty or
obligation to the Depositor, any Series Support Provider,
Trustee, the Certificate Paying Agent, any Noteholder or to
any Certificateholder, other than as expressly provided for
herein, in the Basic Documents or, with respect to
Certificates, any Series Supplement or any Series Related
Document;
(f) the Owner Trustee shall not be liable for the
default or misconduct of the Depositor, any Series Support
Provider, the Trustee or the Master Servicer under any of
the Basic Documents or otherwise and the Owner Trustee shall
have no obligation or liability to perform the obligations
under this Agreement, the Basic Documents or, with respect
to Certificates, any Series Supplement or any Series Related
Document that are required to be performed by the Depositor
or the Certificate Paying Agent under this Agreement, by the
Trustee under the Indenture, any Series Supplement or any
Series Related Document or the Master Servicer under the
Master Sale and Servicing Agreement or any Series Supplement
or any Series Related Document; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
under this Agreement or otherwise or in relation to this
Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related
Document, at the request, order or direction of the
Certificate Majority or any of the Certificateholders,
unless such Certificate Majority or Certificateholders have
offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee to
perform any discretionary act enumerated in this Agreement
or in any Basic Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than
its negligence, bad faith or willful misconduct in the
performance of any such act.
Section 7.2. Furnishing of Documents
. The Owner Trustee shall furnish to the Certificateholders
promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other
instruments furnished to the Owner Trustee under the Basic
Documents or, with respect to Certificates, any Series
Supplement or any Series Related Document.
Section 7.3. Representations and Warranties
. The Owner Trustee hereby represents and warrants, in its
individual capacity, to the Depositor, the Holders and any
Series Support Provider (which shall have relied on such
representations and warranties in issuing any policy
relating to Series Support), that:
(a) It is a Delaware banking corporation, duly
organized and validly existing in good standing under the
laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and
perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this
Agreement, and this Agreement will be executed and delivered
by one of its officers who is duly authorized to execute and
deliver this Agreement on its behalf.
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<PAGE> 23
(c) Neither the execution nor the delivery by it of
this Agreement, nor the consummation by it of the
transactions contemplated hereby nor compliance by it with
any of the terms or provisions hereof will contravene any
Federal or Delaware state law, governmental rule or
regulation governing the banking or trust powers of the
Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-
laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its
properties may be bound.
Section 7.4. Reliance; Advice of Counsel
(a) . (a) The Owner Trustee shall incur no liability
to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper
party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and
that the same is in full force and effect. As to any fact
or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for
all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant
party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and
obligations under this Agreement or the Basic Documents, the
Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of
them, and the Owner Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such
agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with
counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other
such persons and according to such opinion not contrary to
this Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related
Document.
Section 7.5. Not Acting in Individual Capacity
. Except as provided in this Article VII, in accepting the
trusts hereby created Wilmington Trust Company acts solely
as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this
Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related
Document shall look only to the Owner Trust Estate for
payment or satisfaction thereof.
Section 7.6. Owner Trustee Not Liable for Certificates or
Receivables
. The recitals contained herein and in certificated
Certificates (other than the signature and countersignature
of the Owner Trustee on such Certificates) shall be taken as
the statements of the Depositor and the Owner Trustee
assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement, of any Basic Document or of
the Certificates (other than the signature and
countersignature of the Owner Trustee on certificated
Certificates) or the Notes, or of any Receivable or related
documents. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable, or
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<PAGE> 24
the perfection and priority of any security interest created
by any Receivable in any Financed Vehicle or the maintenance
of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle;
the existence and enforceability of any insurance thereon;
the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of
any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance
by the Depositor, the Master Servicer or any other Person
with any warranty or representation made under any Basic
Document or in any related document or the accuracy of any
such warranty or representation or any action of the Trustee
or the Master Servicer or any subservicer taken in the name
of the Owner Trustee.
Section 7.7. Owner Trustee May Own Certificates and Notes
. The Owner Trustee in its individual or any other capacity
may become the owner or pledgee of Certificates or Notes and
may deal with the Depositor, the Trustee and the Master
Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
Section 7.8. Payments from Owner Trust Estate
All payments to be made by the Owner Trustee or any
Certificate Paying Agent under this Agreement or any of the
Basic Documents or, with respect to Certificates, any Series
Supplement or any Series Related Document to which the Trust
or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to
the extent that the Owner Trust shall have received income
or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington
Trust Company, or any successor thereto, in its individual
capacity, shall not be liable for any amounts payable under
this Agreement or any of the Basic Documents or, with
respect to Certificates, any Series Supplement or any Series
Related Document to which the Trust or the Owner Trustee is
a party.
Section 7.9. Doing Business in Other Jurisdictions
. Notwithstanding anything contained to the contrary,
neither Wilmington Trust Company or any successor thereto,
nor the Owner Trustee shall be required to take any action
in any jurisdiction other than in the State of Delaware if
the taking of such action will, even after the appointment
of a co-trustee or separate trustee in accordance with
10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the
registration with or the taking of any other action in
respect of, any state or other governmental authority or
agency of any jurisdiction other than the State of Delaware;
(ii) result in any fee, tax or other governmental charge
under the laws of the State of Delaware becoming payable by
Wilmington Trust Company (or any successor thereto); or
(iii) subject Wilmington Trust Company (or any successor
thereto) to personal jurisdiction in any jurisdiction other
than the State of Delaware for causes of action arising from
acts unrelated to the consummation of the transactions by
Wilmington Trust Company (or any successor thereto) or the
Owner Trustee, as the case may be, contemplated hereby.
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ARTICLE VIII
Compensation of Owner Trustee
Section 8.1. Owner Trustee's Fees and Expenses
. The Owner Trustee shall receive as compensation for its
services hereunder such fees as have been separately agreed
upon before the date hereof between Household and the Owner
Trustee, and the Owner Trustee shall be entitled to be
reimbursed by the Depositor for its other reasonable
expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights
and its duties hereunder or under the Basic Documents or,
with respect to Certificates, under any Series Supplement or
under any Series Related Documents.
Section 8.2. Indemnification
. The Depositor shall be liable as primary obligor for, and
shall indemnify the Owner Trustee (in its individual and
trust capacities) and its officers, directors, successors,
assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities,
obligations, losses, damages, taxes, claims, actions and
suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses")
which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee (in its trust or
individual capacities) or any Indemnified Party in any way
relating to or arising out of this Agreement or the Basic
Documents or, with respect to Certificates, any Series
Supplement, any series Related Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the
action or inaction of the Owner Trustee hereunder, except
only that the Depositor shall not be liable for or required
to indemnify the Owner Trustee from and against Expenses
arising or resulting from any of the matters described in
the third sentence of 7.1. The indemnities contained in
this 8.2 and the rights under 8.1 shall survive the
resignation or termination of the Owner Trustee or the
termination of this Agreement. In any event of any claim,
action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of
legal counsel shall be subject to the approval of the
Depositor which approval shall not be unreasonably withheld.
Section 8.3. Payments to the Owner Trustee
. Any amounts paid to the Owner Trustee in its Trust
Capacity pursuant to this Article VIII shall be deemed not
to be a part of the Owner Trust Estate immediately after
such payment and any amounts so paid to the Owner Trustee,
in its individual capacity shall not be so paid out of the
Owner Trust Estate but shall be the property of the Owner
Trustee in its individual capacity.
Section 8.4. Non-recourse Obligations
. Notwithstanding anything in this Agreement or any Basic
Document or, with respect to Certificates, any Series
Supplement or any Series Related Document, the Owner Trustee
agrees in its individual capacity and in its capacity as
Owner Trustee for the Trust that all obligations of the
Trust to the Owner Trustee individually or as Owner Trustee
for the Trust shall be recourse to the Owner Trust Estate
only and specifically shall not be recourse to the assets of
any Certificateholder.
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ARTICLE IX
Termination of Agreement
Section 9.1. Termination of Agreement
(a) . (a) This Agreement shall terminate and the
Trust shall wind up, dissolve and be of no further force or
effect upon the latest to occur of (i) the maturity or other
liquidation of the last Receivable (including the optional
purchase by the Depositor or the Master Servicer of the
corpus of the Trust as described in 11.1 of the Master
Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as
provided in the Basic Documents and, with respect to amounts
released from the Lien of the Indenture, distribution
thereof to the Certificateholders, or (ii) the payment to
Noteholders and Certificateholders of each Series of all
amounts required to be paid to them pursuant to the
Indenture and this Agreement, including, with respect to
amounts released from the Lien of the Indenture,
distribution thereof to the Certificateholders, and the
payment to any Series Support Provider of all amounts
payable or reimbursable to it pursuant to the related Series
Supplement; provided, however, that the rights to
indemnification under 8.2 and the rights under 8.1 shall
survive the termination of the Trust. The Master Servicer
shall promptly notify the Owner Trustee of any prospective
termination pursuant to this 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this
Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim
an accounting or to take any action or proceeding in any
court for a partition or winding up of all or any part of
the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the
Depositor nor any other Certificateholder shall be entitled
to revoke or terminate the Trust.
(c) If any Certificates are in certificated form,
notice of any termination of a Series Trust Estate,
specifying the Distribution Date upon which the
Certificateholders of such Series shall surrender their
Certificates to the Certificate Paying Agent for payment of
the final distribution and cancellation, shall be given by
the Owner Trustee by letter to Certificateholders of such
Series mailed within five Business Days of receipt of notice
of such termination given pursuant to Section 9.1(a) hereof,
stating (i) the Distribution Date upon or with respect to
which final payment of the Certificates of such Series shall
be made upon presentation and surrender of the Certificates
of such Series at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final
payment, (iii) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the
Certificates of such Series at the office of the Certificate
Paying Agent therein specified and (iv) interest will cease
to accrue on the Certificates of such Series. The Owner
Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying
Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the
Certificates of such Series, the Certificate Paying Agent
shall cause to be distributed to Certificateholders of such
Series amounts distributable pursuant to the related Series
Supplement.
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<PAGE> 27
(d) If any Certificates are in certificated form, in
the event that all of the Certificateholders holding
certificated Certificates of such Series shall not surrender
their Certificates for cancellation within six months after
the date specified in the above-mentioned written notice,
the Certificate Paying Agent shall give a second written
notice to the remaining Certificateholders holding
certificated Certificates of such Series to surrender their
Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after
the second notice all the certificated Certificates of such
Series shall not have been surrendered for cancellation, the
Certificate Paying Agent may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the
remaining Certificateholders holding certificated
Certificates concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other
Series Trust Estate assets that shall remain subject to this
Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to
applicable escheat laws, by the Certificate Paying Agent to
the Depositor and Holders shall look solely to the Depositor
for payment.
(e) Any funds remaining in the Trust after funds for
final distribution have been distributed or set aside for
distribution shall be distributed by the Certificate Paying
Agent to the Depositor.
(f) Upon the winding up of the Trust and its
dissolution, the Owner Trustee shall cause the Certificate
of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with
the provisions of 3810 of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
Section 10.1. Eligibility Requirements for Owner Trustee
. The Owner Trustee shall at all times be a corporation (i)
satisfying the provisions of 3807(a) of the Business Trust
Statute; (ii) authorized to exercise corporate trust powers;
(iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by
Federal or State authorities; (iv) having (or having a
parent which has) a rating of at least Baa3 by Moody's or A-
1 by Standard & Poors; and (v) acceptable to the
Certificateholders. If such corporation shall publish
reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section,
the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section,
the Owner Trustee shall resign immediately in the manner and
with the effect specified in 10.2.
Section 10.2. Resignation or Removal of Owner Trustee
. The Owner Trustee may at any time resign and be
discharged from the trusts hereby created by giving written
notice thereof to the Depositor (or in the event that the
Depositor is not the sole Certificateholder, the Certificate
Majority), any Series Support Provider and the Master
Servicer. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Owner Trustee,
meeting the qualifications set forth in 10.1 herein, by
written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee, provided that
the Depositor shall have received written confirmation from
each of the Rating Agencies that the proposed appointment
will not result in an increased capital charge to any Series
Support Provider by either of the Rating Agencies. If no
successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee or
any Series Support Provider may petition any court of
competent jurisdiction for the appointment of a successor
Owner Trustee.
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If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of 10.1 and
shall fail to resign after written request therefor by the
Depositor, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its
property shall be appointed, or any public officer shall
take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove
the Owner Trustee. If the Depositor shall remove the Owner
Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor
Owner Trustee, meeting the qualifications set forth in
10.1 herein, by written instrument, in duplicate, one copy
of which instrument shall be delivered to the outgoing Owner
Trustee so removed, one copy to any Series Support Provider
and one copy to the successor Owner Trustee and payment of
all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee
and appointment of a successor Owner Trustee pursuant to any
of the provisions of this section shall not become effective
until acceptance of appointment by the successor Owner
Trustee pursuant to 10.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Depositor
shall provide notice of such resignation or removal of the
Owner Trustee to each of the Rating Agencies.
Section 10.3. Successor Owner Trustee
. Any successor Owner Trustee appointed pursuant to 10.2
shall execute, acknowledge and deliver to the Depositor, the
Master Servicer, each Series Support Provider and to its
predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee
shall become effective and such successor Owner Trustee,
without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with
like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this
Agreement; and the Depositor and the predecessor Owner
Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Owner
Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept
appointment as provided in this section unless at the time
of such acceptance such successor Owner Trustee shall be
eligible pursuant to 10.1.
Upon acceptance of appointment by a successor
Owner Trustee pursuant to this Section, the Master Servicer
shall mail notice of the successor of such Owner Trustee to
all Certificateholders, the Trustee, the Noteholders and the
Rating Agencies. If the Master Servicer shall fail to mail
such notice within 10 days after acceptance of appointment
by the successor Owner Trustee, the successor Owner Trustee
shall cause such notice to be mailed at the expense of the
Master Servicer.
Any successor Owner Trustee appointed pursuant to
this Section 10.3 shall promptly file an amendment to the
Certificate of Trust with the Secretary of State identifying
the name and principal place of business of such successor
Owner Trustee in the State of Delaware.
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<PAGE> 29
Section 10.4. Merger or Consolidation of Owner Trustee
. Any corporation into which the Owner Trustee may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party,
or any corporation succeeding to all or substantially all of
the corporate trust business of the Owner Trustee, shall be
the successor of the Owner Trustee hereunder, provided such
corporation shall be eligible pursuant to 10.1, without
the execution or filing of any instrument or any further act
on the part of any of the parties hereto, anything herein to
the contrary notwithstanding; provided further (i) that the
Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies, the Depositor and the
Master Servicer and (ii) any successor Owner Trustee shall
file an amendment to the Certificate of Trust as required by
Section 10.3.
Section 10.5. Appointment of Co-Trustee or Separate Trustee
. Notwithstanding any other provisions of this Agreement,
at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the
Owner Trust Estate or any Financed Vehicle may at the time
be located, the Master Servicer and the Owner Trustee acting
jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by
the Owner Trustee and any Series Support Provider to act as
co-trustee, jointly with the Owner Trustee, or separate
trustee or separate trustees, of all or any part of the
Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Master
Servicer and the Owner Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee, subject to the approval
of the Certificate Majority (which approval shall not be
unreasonably withheld), shall have the power to make such
appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility
as a successor trustee pursuant to 10.1 and no notice of
the appointment of any co-trustee or separate trustee shall
be required pursuant to 10.3.
Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such
separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee
under this Agreement; and
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<PAGE> 30
(iii) the Master Servicer and the Owner Trustee acting
jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the
Owner Trustee shall be deemed to have been given to each of
the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article. Each separate
trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly
with the Owner Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee and a copy
thereof given to the Master Servicer.
Any separate trustee or co-trustee may at any time
appoint the Owner Trustee, its agent or attorney-in-fact
with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting,
resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
ARTICLE XI
Miscellaneous
Section 11.1. Supplements and Amendments
(a) . (a) This Agreement may be amended from time to
time by the parties hereto, by a written instrument signed
by each of them, without the consent of any of the
Securityholders; provided that an Opinion of Counsel for the
Depositor (which Opinion of Counsel may, as to factual
matters, rely upon Officer's Certificates of the Depositor)
is addressed and delivered to the Owner Trustee, dated the
date of any such amendment, to the effect that the
conditions precedent to any such amendment have been
satisfied and the Depositor shall have delivered to the
Owner Trustee an Officer's Certificate dated the date of any
such Amendment, stating that the Depositor reasonably
believes that such Amendment will not have a material
adverse effect on the Securityholders.
(b) This Agreement may also be amended from time to
time with the consent of the Holders of the Certificates and
Notes evidencing not less than 50% of the aggregate unpaid
principal amount of the Security Balance of all affected
Securityholders for which the Seller has not delivered an
Officer's Certificate stating that there is no material
adverse effect, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner
the rights of the Securityholders; provided, however, that
no such amendment shall (i) reduce in any manner the amount
of, or delay the timing of, payments received that are
required to be distributed on any Security without the
consent of the related Securityholder, or (ii) reduce the
aforesaid percentage of Securities the Holder of which are
required to consent to any such amendment, without the
consent of the Holders of all such Certificates then
outstanding or cause any material adverse tax consequences
to any Certificateholders or Noteholders.
Promptly after the execution of any such amendment
or consent, the Owner Trustee shall furnish written
notification of the substance of such amendment or consent
to each Certificateholder, the Trustee and each of the
Rating Agencies.
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It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Trustee pursuant
to this section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if
such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any
other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject
to such reasonable requirements as the Owner Trustee may
prescribe. Promptly after the execution of any amendment to
the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.
(c) The Owner Trustee shall not be required to enter
into any amendment to this Agreement which adversely affects
its own rights, duties or immunities under this Agreement.
Section 11.2. No Legal Title to Owner Trust Estate in
Certificateholders
. The Certificateholders shall not have legal title to any
part of the related Series Trust Estate. The
Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership
interest therein only in accordance with Articles V and IX.
No transfer, by operation of law or otherwise, of any right,
title or interest of the Certificateholders to and in their
ownership interest in the related Series Trust Estate shall
operate to terminate this Agreement or the trusts hereunder
or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the related
Series Trust Estate.
Section 11.3. Limitations on Rights of Others
. The provisions of this Agreement are solely for the
benefit of the Owner Trustee, the Depositor, the
Certificateholders, the Master Servicer and, to the extent
expressly provided herein, any Series Support Provider, the
Trustee and the Noteholders, and nothing in this Agreement,
whether express or implied, shall be construed to give to
any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions
contained herein.
Section 11.4. Notices
(a) . (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in
writing and shall be deemed given upon receipt personally
delivered, delivered by overnight courier or mailed first
class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon
receipt, if to the Owner Trustee, addressed to the Corporate
Trust Office; if to the Depositor, addressed to Household
Auto Receivables Corporation, 1111 Town Center Drive, Las
Vegas, Nevada 89134, with a copy to Household Finance
Corporation, 2700 Sanders Road, Prospect Heights, Illinois
60070, Attn: Treasurer; if to any Series Support Provider,
at the address of such Series Support Provider as set forth
in the related Series Supplement; or, as to each party, at
such other address as shall be designated by such party in a
written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail,
postage prepaid, at the address of such Holder as shown in
the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the
Certificateholder receives such notice.
<PAGE>
<PAGE> 32
Section 11.5. Severability
. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
Section 11.6. Separate Counterparts
. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.7. Assignments; Series Support Provider
. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective
successors and permitted assigns. This Agreement shall also
inure to the benefit of any Series Support Provider for so
long as a Support Default shall not have occurred and be
continuing. Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement
which confer rights upon any Series Support Provider shall
be for the benefit of and run directly to any Series Support
Provider, and any Series Support Provider shall be entitled
to rely on and enforce such covenants, subject, however, to
the limitations on such rights provided in this Agreement
and the Basic Documents. The Series Support Provider, if
any, may disclaim any of its rights and powers under this
Agreement (but not its duties and obligations under any
Series Support Provider) upon delivery of a written notice
to the Owner Trustee.
Section 11.8. Covenants of the Depositor
. The Depositor will not at any time institute against the
Trust any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificates, the
Notes, this Agreement or any of the Basic Documents.
Section 11.9. No Petition
. The Owner Trustee (not in its individual capacity but
solely as Owner Trustee), by entering into this Agreement,
each Certificateholder, by accepting a Certificate, and the
Trustee and each Noteholder by accepting the benefits of
this Agreement, hereby covenants and agrees that they will
not at any time institute against the Depositor, or join in
any institution against the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States
Federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificates, the
Notes, this Agreement, any of the Basic Documents, any
Series Supplement or any Series Related Documents.
Section 11.10. No Recourse
. Each Certificateholder by accepting a Certificate
acknowledges that such Certificateholder's Certificates
represent beneficial interests in the related Series Trust
Estate only and do not represent interests in or obligations
of the Master Servicer, the Depositor, the Owner Trustee,
the Trustee, any Series Support Provider or any Affiliate
thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or
contemplated in this Agreement, the Certificates, the Basic
Documents, any Series Supplement or any Series Related
Documents.
<PAGE>
<PAGE> 33
Section 11.11. Headings
. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 11.12. GOVERNING LAW
. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, 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 11.13. Master Servicer
. The Master Servicer is authorized to prepare, or cause to
be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of the Trust or Owner
Trustee to prepare, file or deliver pursuant to the Basic
Documents, any Series Supplement or any Series Related
Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Master Servicer a limited power
of attorney appointing the Master Servicer the Trust's agent
and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings,
instruments, certificates and opinions.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
officers hereunto duly authorized as of the day and year
first above written.
WILMINGTON TRUST COMPANY
Owner Trustee
By:___________________________
______
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
Depositor
By:___________________________
______
Name:
Title:
Acknowledged and Agreed:
HOUSEHOLD FINANCE CORPORATION
Master Servicer
By:____________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIAITON,
not in its individual capacity
but solely as Certificate Paying Agent
By:____________________________
Name:
Title:
<PAGE>
<PAGE> 34
EXHIBIT A
[FORM OF SERIES 2000-1 TRUST CERTIFICATE]
NUMBER
HOUSEHOLD AUTOMOTIVE TRUST IV
SERIES 2000-1 CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS SERIES 2000-1 CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND
SUCH STATE SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF
THIS CERTIFICATE MAY BE MADE UNLESS SUCH RESALE OR TRANSFER
(A) IS MADE IN ACCORDANCE WITH 3.4 OF THE AGREEMENT
PERTAINING TO THE HOUSEHOLD AUTOMOTIVE TRUST III (THE
"AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, (iii)
TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION
OF CERTAIN OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT.
NEITHER THE DEPOSITOR, THE MASTER SERVICER, THE TRUST NOR
THE OWNER TRUSTEE IS OBLIGATED TO REGISTER THE SERIES 2000-1
CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE
STATE SECURITIES LAWS.
_________________________________
SERIES 2000-1 CERTIFICATE
evidencing a beneficial ownership interest in the assets of
the Trust relating to the Series 2000-1 Trust Estate, which
includes a pool of motor vehicle retail installment sale
contracts sold to the Trust by Household Auto Receivables
Corporation.
(This Series 2000-1 Certificate does not represent an
interest in or obligation of Household Auto Receivables
Corporation or any of its Affiliates, except to the extent
described below.)
THIS CERTIFIES THAT Household Auto Receivables
Corporation is the registered owner of a nonassessable,
fully-paid, beneficial ownership interest representing a
% Percentage Interest in the assets of
Household Automotive Trust IV (the "Trust") formed by
Household Auto Receivables Corporation, a Nevada corporation
(the "Depositor") and the Series 2000-1 Trust Estate.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-
mentioned Agreement.
WILMINGTON TRUST COMPANY
not in its individual
capacity but solely as
Owner Trustee
by Authenticating Agent
by
Household Automotive Trust IV (the "Trust"), was
created pursuant to a Trust Agreement, dated as of February
1, 2000 (the "Agreement"), between the Depositor and
Wilmington Trust Company, as owner trustee (the "Owner
Trustee") as amended and restated as of February 1, 2000 and
as supplemented by a Series 2000-1 Supplement dated as of
February 1, 2000 (the "Series 2000-1 Supplement"). A
summary of certain of the pertinent provisions of the
Agreement and Series 2000-1 Supplement is set forth below.
To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the
Agreement and the Series 2000-1 Supplement.
<PAGE>
<PAGE> 35
This certificate is one of the duly authorized
certificates of Trust of Household Automotive Trust IV
designated as Series 2000-1 Certificates.
This Series 2000-1 Certificate is issued under and
is subject to the terms, provisions and conditions of the
Agreement and the Series 2000-1 Supplement, to which
Agreement the holder of this Series 2000-1 Certificate by
virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust consists of the
Series 2000-1 Trust Estate which includes a pool of motor
vehicle retail installment sale contracts (the
"Receivables"), all monies due thereunder on or after
specified Cutoff Dates, security interests in the vehicles
financed thereby, certain bank accounts and the proceeds
thereof, proceeds from claims on certain insurance policies
and certain other rights under the Agreement and the Master
Sale and Servicing Agreement and each related Transfer
Agreement, all right, to and interest of, the Depositor in
and to the Master Receivables Purchase Agreement dated as of
February 1, 2000 between Household Automotive Finance
Corporation and the Depositor and each Receivables Purchase
Agreement Supplement and all proceeds of the foregoing.
Series 2000-1 Notes have been issued pursuant to
an Indenture dated as of February 1, 2000 (the "Indenture"),
among the Trust, Household Finance Corporation, as Master
Servicer and Norwest Bank Minnesota, National Association,
as Trustee and the Series 2000-1 Supplement.
Under the Series 2000-1 Supplement, there will be
distributed on the 17th day of each month or, if such 17th
day is not a Business Day, the next Business Day (the
"Distribution Date"), commencing on March 17, 2000, to the
Person in whose name this Series 2000-1 Certificate is
registered at the close of business on the Business Day
preceding such Distribution Date (the "Record Date") such
Series 2000-1 Certificateholder's fractional undivided
interest in any amount to be distributed to Series 2000-1
Certificateholders on such Distribution Date.
The holder of this Series 2000-1 Certificate
acknowledges and agrees that its rights to receive
distributions in respect of this Series 2000-1 Certificate
are subordinated to the rights of the Series 2000-1
Noteholders as described in the Master Sale and Servicing
Agreement, the Indenture, the Agreement and the Series 2000-
1 Supplement, as applicable.
Distributions on this Series 2000-1 Certificate
will be made as provided in the Agreement by the Owner
Trustee by wire transfer or check mailed to the Series 2000-
1 Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or
the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the above, the
final distribution on this Series 2000-1 Certificate will be
made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and
surrender of this Series 2000-1 Certificate at the office or
agency maintained for the purpose by the Owner Trustee in
the Corporate Trust Office.
Reference is hereby made to the further provisions
of this Series 2000-1 Certificate set forth on the reverse
hereof, which further provisions shall for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon
shall have been executed by an authorized officer of the
Owner Trustee, by manual signature, this Series 2000-1
Certificate shall not entitle the holder hereof to any
benefit under the Agreement or the Master Sale and Servicing
Agreement or be valid for any purpose.
<PAGE>
<PAGE> 36
THIS SERIES 2000-1 CERTIFICATE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf
of the Trust and not in its individual capacity, has caused
this Series 2000-1 Certificate to be duly executed.
HOUSEHOLD AUTOMOTIVE TRUST IV
By: WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Owner Trustee
Dated: By:_____________________________
_
By: ____________________________
Name:
Title:
<PAGE>
<PAGE> 37
(Reverse of Certificate)
The Series 2000-1 Certificates do not represent an
obligation of, or an interest in, the Depositor, the Master
Servicer, the Owner Trustee or any Affiliates of any of them
and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated
herein or in the Agreement, the Indenture, the Basic
Documents or any Series Related Documents. In addition,
this Series 2000-1 Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in
right of payment to certain collections with respect to the
Receivables, as more specifically set forth herein and in
the Master Sale and Servicing Agreement. A copy of each of
the Master Sale and Servicing Agreement, the Agreement and
the Series 2000-1 Supplement may be examined during normal
business hours at the principal office of the Depositor, and
at such other places, if any, designated by the Depositor,
by any Series 2000-1 Certificateholder upon written request.
As provided in the Agreement and subject to
certain limitations therein set forth, the transfer of this
Series 2000-1 Certificate is registrable in the Certificate
Register upon surrender of this Series 2000-1 Certificate
for registration of transfer at the offices or agencies of
the Certificate Registrar maintained by the Owner Trustee in
the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner
Trustee and the Certificate Registrar duly executed by the
holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Series 2000-1
Certificates in authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar
appointed under the Agreement is Wilmington Trust Company.
The Certificates are issuable as registered
Certificates in any Percentage Interest not to exceed 100%.
As provided in the Agreement and subject to certain
limitations therein set forth, Series 2000-1 Certificates
are exchangeable for new Series 2000-1 Certificates in
authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the holder surrendering
the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee
or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable
in connection therewith.
The Owner Trustee, the Certificate Registrar and
any agent of the Owner Trustee or the Certificate Registrar
may treat the person in whose name this Series 2000-1
Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate
Registrar nor any such agent shall be affected by any notice
to the contrary.
The Series 2000-1 Certificates may not be acquired
by or for the account of (a) an employee benefit plan (as
defined in 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (b) a plan (as defined in
4975(e) (1) of the Code) that is subject to 4975 of the
Code or (c) any entity whose underlying assets include plan
assets by reason of such plan's investment in the entity
(each, a "Benefit Plan"). The Certificate Registrar shall
not register the transfer of a Series 2000-1 Certificate
unless the transferee has delivered to the Owner Trustee a
representation letter in form and substance satisfactory to
the Trustee to the effect that the transferee is not, and is
not acquiring the Series 2000-1 Certificate for the account
of, a Benefit Plan.
The recitals contained herein shall be taken as
the statements of the Depositor or the Master Servicer, as
the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or
sufficiency of this Series 2000-1 Certificate or of any
Receivable or related document.
<PAGE>
<PAGE> 38
Unless the certificate of authentication hereon
shall have been executed by an authorized officer of the
Owner Trustee, by manual or facsimile signature, this Series
2000-1 Certificate shall not entitle the holder hereof to
any benefit under the Agreement or the Master Sale and
Servicing Agreement or be valid for any purpose.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip
code, of assignee)
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
____________________ Attorney to transfer said Certificate
on the books of the Certificate Registrar, with full power
of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must
correspond with the name of the registered owner as it
appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee
program" as may be determined by the Certificate Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended.
<PAGE>
<PAGE> 39
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST
OF
HOUSEHOLD AUTOMOTIVE TRUST IV
THIS Certificate of Trust of Household Automotive Trust
IV (the "Trust") is being duly executed and filed on behalf
of the Trust by the undersigned, as trustee, to form a
business trust under the Delaware Business Trust Act (12
Del. C. 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by
this Certificate of Trust is Household Automotive Trust IV.
2. Delaware Trustee. The name and business address
of the trustee of the Trust in the State of Delaware are
Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attn:
Corporate Trust Administration.
3. Series Trust. The Trust may issue series of
beneficial interests, having separate rights, powers or
duties with respect to property or obligations of the Trust,
as provided in 12 Del. C. 3804 and 3806(b)(2), such that
the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets of
such series only, and not against the assets of the Trust
generally.
4. Effective Date. This Certificate of Trust shall
be effective upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed
this Certificate of Trust in accordance with Section
3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as Trustee
By:
_________________________
Name:
Title:
<PAGE> 1
HOUSEHOLD AUTOMOTIVE TRUST IV
Issuer
INDENTURE
Dated as of February 1, 2000
Norwest Bank Minnesota, National Association
Indenture Trustee
____________________________________________________________
____________
TABLE OF CONTENTS
Page
ARTICLE I. Definitions and Incorporation by Reference 1
SECTION 1.1 Definitions 1
SECTION 1.2 Incorporation by Reference of the
Trust Indenture Act 6
SECTION 1.3 Rules of Construction 7
SECTION 1.4 Action by or Consent of Noteholders
and Certificateholders 7
SECTION 1.5 Conflict with TIA 7
ARTICLE II. The Notes 7
SECTION 2.1 Form; Amount Limited; Issuable in
Series 7
SECTION 2.2 Execution, Authentication and Delivery 8
SECTION 2.3 Temporary Notes 9
SECTION 2.4 Registration; Registration of Transfer
and Exchange 9
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen
Notes 12
SECTION 2.6 Persons Deemed Owner 12
SECTION 2.7 Payment of Principal and Interest;
Defaulted Interest 13
SECTION 2.8 Cancellation 14
SECTION 2.9 Release of Collateral 14
SECTION 2.10 Book-Entry Notes 14
SECTION 2.11 Notices to Clearing Agency 15
SECTION 2.12 Definitive Notes 15
SECTION 2.13 Final Distribution 16
ARTICLE III. Covenants 17
SECTION 3.1 Payment of Principal and Interest 17
SECTION 3.2 Maintenance of Office or Agency 17
SECTION 3.3 Money for Payments to be Held in Trust 17
SECTION 3.4 Existence 19
SECTION 3.5 Protection of Trust Property 19
SECTION 3.6 Opinions as to Trust Property 20
SECTION 3.7 Performance of Obligations; Servicing
of Receivables 20
<PAGE>
<PAGE> 2
SECTION 3.8 Negative Covenants 21
SECTION 3.9 Annual Statement as to Compliance 22
SECTION 3.10 Issuer May Consolidate, Etc. Only on
Certain Terms 22
SECTION 3.11 Successor or Transferee 24
SECTION 3.12 No Other Business 24
SECTION 3.13 No Borrowing 24
SECTION 3.14 Master Servicer's Obligations 25
SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities 25
SECTION 3.16 Capital Expenditures 25
SECTION 3.17 Compliance with Laws 25
SECTION 3.18 Restricted Payments 25
SECTION 3.19 Notice of Events of Default 25
SECTION 3.20 Further Instruments and Acts 26
SECTION 3.21 Amendments of Master Sale and
Servicing Agreement and Trust
Agreement 26
SECTION 3.22 Income Tax Characterization 26
ARTICLE IV. Satisfaction and Discharge 26
SECTION 4.1 Satisfaction and Discharge of
Indenture 26
SECTION 4.2 Application of Trust Money 27
SECTION 4.3 Repayment of Monies Held by Note
Paying Agent 27
ARTICLE V. Remedies 28
SECTION 5.1 Events of Default 28
SECTION 5.2 Collection of Indebtedness and Suits
for Enforcement by Indenture Trustee 28
SECTION 5.3 Limitation of Suits 30
SECTION 5.4 Unconditional Rights of Noteholders To
Receive Principal and Interest 30
SECTION 5.5 Restoration of Rights and Remedies 31
SECTION 5.6 Rights and Remedies Cumulative 31
SECTION 5.7 Delay or Omission Not a Waiver 31
SECTION 5.8 Control by Noteholders 31
SECTION 5.9 Waiver of Past Defaults 32
SECTION 5.10 Undertaking for Costs 32
SECTION 5.11 Waiver of Stay or Extension Laws 32
SECTION 5.12 Action on Notes 32
SECTION 5.13 Performance and Enforcement of Certain
Obligations 33
ARTICLE VI. The Indenture Trustee 33
SECTION 6.1 Duties of Indenture Trustee 33
SECTION 6.2 Rights of Indenture Trustee 35
SECTION 6.3 Individual Rights of Indenture Trustee 37
SECTION 6.4 Indenture Trustee's Disclaimer 37
SECTION 6.5 Notice of Defaults 37
SECTION 6.6 Reports by Indenture Trustee to
Holders 37
SECTION 6.7 Compensation and Indemnity 38
SECTION 6.8 Replacement of Indenture Trustee 38
SECTION 6.9 Successor Indenture Trustee by Merger 40
SECTION 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee 40
SECTION 6.11 Eligibility: Disqualification 42
SECTION 6.12 Preferential Collection of Claims
Against Issuer 42
SECTION 6.13 Representations and Warranties of the
Indenture Trustee 42
SECTION 6.14 Waiver of Setoffs 43
SECTION 6.15 No Consent to Certain Acts of Seller 43
ARTICLE VII. Noteholders' Lists and Reports 43
SECTION 7.1 Issuer To Furnish To Indenture Trustee
Names and Addresses of Noteholders 43
SECTION 7.2 Preservation of Information;
Communications to Noteholders 43
SECTION 7.3 Reports by Issuer 44
SECTION 7.4 Reports by Indenture Trustee 44
ARTICLE VIII. Accounts, Disbursements and Releases 44
SECTION 8.1 Collection of Money 44
SECTION 8.2 Release of Trust Property 45
SECTION 8.3 Opinion of Counsel 45
ARTICLE IX. Amendments; Series Supplements 46
SECTION 9.1 Amendments Without Consent of
Noteholders 46
SECTION 9.2 Amendments With Consent of Noteholders 47
SECTION 9.3 Supplements Authorizing a Series of
Notes 48
<PAGE>
<PAGE> 3
SECTION 9.4 Execution of Series Supplements 49
SECTION 9.5 Effect of Series Supplement 49
SECTION 9.6 Conformity With Trust Indenture Act 49
SECTION 9.7 Reference in Notes to Series
Supplements 49
ARTICLE X. Reserved 49
ARTICLE XI. Miscellaneous 50
SECTION 11.1 Compliance Certificates and Opinions,
etc. 50
SECTION 11.2 Form of Documents Delivered to
Indenture Trustee 51
SECTION 11.3 Acts of Noteholders 52
SECTION 11.4 Notices, etc., to Indenture Trustee,
Issuer and Rating Agencies 53
SECTION 11.5 Notices to Noteholders; Waiver 53
SECTION 11.6 Alternate Payment and Notice
Provisions 54
SECTION 11.7 Conflict with Trust Indenture Act 54
SECTION 11.8 Effect of Headings and Table of
Contents 54
SECTION 11.9 Successors and Assigns 55
SECTION 11.10 Separability 55
SECTION 11.11 Benefits of Indenture 55
SECTION 11.12 Legal Holidays 55
SECTION 11.13 GOVERNING LAW 55
SECTION 11.14 Counterparts 55
SECTION 11.15 Recording of Indenture 55
SECTION 11.16 Trust Obligation 55
SECTION 11.17 No Petition 56
SECTION 11.18 Limited Recourse. 56
SECTION 11.19 Inspection 57
SECTION 11.20 Limitation of Liability 57
EXHIBIT A -- Form of Transferee Certificate
INDENTURE dated as of February 1, 2000, between
HOUSEHOLD AUTOMOTIVE TRUST IV, a Delaware business trust
(the "Issuer") and Norwest Bank Minnesota, National
Association, a national banking association, as trustee (the
"Indenture Trustee").
In consideration of the mutual agreements
contained herein, and of other good and valuable
consideration the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
GRANTING CLAUSE
In order to secure the due and punctual payment of
the principal of and interest on the Notes of the related
Series when and as the same shall become due and payable,
whether as scheduled, by declaration of acceleration,
prepayment or otherwise, according to the terms of this
Indenture, the related Series Supplement and the related
Notes, the Issuer, pursuant to the related Series
Supplement, shall pledge the related Series Trust Estate to
the Indenture Trustee, all for the benefit of the Indenture
Trustee for the benefit of the Holders of the related
Series.
<PAGE>
<PAGE> 4
ARTICLE I.
Definitions and Incorporation by Reference
SECTION 1.1 Definitions
. Except as otherwise specified herein, the
following terms have the respective meanings set forth below
for all purposes of this Indenture.
"Act" has the meaning specified in Section
11.3(a).
"Authorized Officer" means, with respect to the
Issuer and the Master Servicer, any officer or agent acting
pursuant to a power of attorney of the Owner Trustee or the
Master Servicer, as applicable, who is authorized to act for
the Owner Trustee or the Master Servicer, as applicable, in
matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by each of the Owner
Trustee and the Master Servicer to the Indenture Trustee on
the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"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.
"Class" means, with respect to any Series, all the
Notes of such Series having the same specified payment terms
and priority of payment.
"Class SV Preferred Stock" means the preferred
stock of the Seller.
"Clearing Agency" means an organization registered
as a "clearing agency" pursuant to Section 17A of the
Exchange Act.
"Clearing Agency Participant" means a broker,
dealer, bank, other financial institution or other Person
for whom from time to time a Clearing Agency effects book-
entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and Treasury Regulations
promulgated thereunder.
"Corporate Trust Office" means the principal
office of the Indenture Trustee at which at any particular
time its corporate trust business shall be administered
which office at date of the execution of this Agreement is
located at Sixth Street and Marquette Avenue, MAC N9311-161,
Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services/Asset-Backed Administration or at such other
address as the Indenture Trustee may designate from time to
time by notice to the Noteholders, the Master Servicer and
the Issuer, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders and
the Issuer).
"Default" means any occurrence that is, or with
notice or the lapse of time or both would become, an Event
of Default.
"Definitive Notes" has the meaning specified in
Section 2.10.
"Event of Default" has the meaning specified in
Section 5.1.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
<PAGE>
<PAGE> 5
"Executive Officer" means, with respect to any
corporation, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, Executive Vice
President, any Vice President, the Secretary, the Treasurer,
or any Assistant Treasurer of such corporation.
"Grant" means mortgage, pledge, bargain, sell,
warrant, alienate, remise, release, convey, assign,
transfer, create, grant a lien upon and a security interest
in and right of set-off against, deposit, set over and
confirm pursuant to this Indenture. A Grant of a Series
Trust Estate or of any other agreement or instrument shall
include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect,
receive and give receipt for principal and interest payments
in respect of a Series Trust Estate and all other monies
payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to
exercise all rights and options, to bring proceedings in the
name of the granting party or otherwise and generally to do
and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect
thereto.
"Holder" or "Noteholder" means the Person in whose
name a Note is registered on the Note Register.
"Indebtedness" means, with respect to any Person
at any time, (a) indebtedness or liability of such Person
for borrowed money whether or not evidenced by bonds,
debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade
obligations); (b) obligations of such Person as lessee under
leases which should have been or should be, in accordance
with generally accepted accounting principles, recorded as
capital leases; (c) current liabilities of such Person in
respect of unfunded vested benefits under plans covered by
Title IV of ERISA; (d) obligations issued for or liabilities
incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance
facilities; (f) obligations of such Person under any
guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or
otherwise to assure a creditor against loss; (g) obligations
of such Person secured by any lien on property or assets of
such Person, whether or not the obligations have been
assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"Indenture Trustee" means, initially, Norwest Bank
Minnesota, National Association, not in its individual
capacity but as trustee under this Indenture, or any
successor trustee under this Indenture.
"Indenture Trustee Fee" means the fees due to the
Indenture Trustee, as may be set forth in that certain fee
letter, dated as of the date hereof between the Master
Servicer and Norwest Bank Minnesota, National Association.
"Independent" means, when used with respect to any
specified Person, that the person (a) is in fact independent
of the Issuer, any other obligor upon the Notes, the Seller
and any Affiliate of any of the foregoing persons, (b) does
not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other
obligor, the Seller or any Affiliate of any of the foregoing
Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing
similar functions.
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<PAGE> 6
"Independent Certificate" means a certificate or
opinion to be delivered to the Indenture Trustee under the
circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.1, prepared by an
Independent appraiser or other expert appointed pursuant to
an Issuer Order and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate
shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Issuer Order" and "Issuer Request" means a
written order or request signed in the name of the Issuer by
any one of its Authorized Officers and delivered to the
Indenture Trustee.
"Master Sale and Servicing Agreement" means the
Master Sale and Servicing Agreement dated as of February 1,
2000, among the Issuer, the Seller, the Master Servicer and
the Indenture Trustee, as the same may be amended or
supplemented from time to time.
"Note" means any Note authenticated and delivered
under this Indenture.
"Note Owner" means, with respect to a Book-Entry
Note, the person who is the owner of such Book-Entry Note,
as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Note Paying Agent" means the Indenture Trustee or
any other Person that meets the eligibility standards for
the Indenture Trustee specified in Section 6.11 and is
authorized by the Issuer to make payments to and
distributions from the Master Collection Account and the
Series 2000-1 Collection Account, including payment of
principal of or interest on the Notes on behalf of the
Issuer.
"Note Register" and "Note Registrar" have the
respective meanings specified in Section 2.4.
"Officer's Certificate" means a certificate signed
by any Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with,
the applicable requirements of Section 11.1 and TIA 314,
and delivered to the Indenture Trustee. Unless otherwise
specified, any reference in this Indenture to an Officer's
Certificate shall be to an Officer's Certificate of any
Authorized Officer of the Issuer. Each certificate with
respect to compliance with a condition or covenant provided
for in this Agreement shall include (1) a statement that the
Authorized Officer signing the certificate has read such
covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon
which the statements contained in such certificate are
based; (3) a statement that in the opinion of such person,
he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and (4) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been
complied with.
"Outstanding" means, as of the date of
determination, all Notes theretofore authenticated and
delivered under this Indenture except:
(i) Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for
cancellation;
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<PAGE> 7
(ii) Notes or portions thereof the payment for
which money in the necessary amount has been
theretofore deposited with the Indenture Trustee or any
Note Paying Agent in trust for the Holders of such
Notes (provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given
pursuant to a Series Supplement or provision therefor,
satisfactory to the Indenture Trustee, has been made);
and
(iii) Notes in exchange for or in lieu of
other Notes which have been authenticated and delivered
pursuant to this Indenture unless proof satisfactory to
the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;
provided, however, that in determining whether the Holders
of the requisite Outstanding Amount of the Notes have given
any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes,
the Seller or any Affiliate of any of the foregoing Persons
shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Indenture Trustee
either actually knows to be so owned or has received written
notice thereof shall be so disregarded. Notes so owned that
have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction
of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal
amount of all Notes, or Class of Notes, as applicable,
outstanding at the date of determination.
"Predecessor Note" means, with respect to any
particular Note, every previous Note evidencing all or a
portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition,
any Note authenticated and delivered under Section 2.5 in
lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Proceeding" means any suit in equity, action at
law or other judicial or administrative proceeding.
"Record Date" means, with respect to a
Distribution Date, the close of business on the Business Day
immediately preceding such Distribution Date. However, if
Definitive Notes are issued, the Record Date shall be the
last Business Day of the month preceding a Distribution
Date.
"Registration Statement" has the meaning specified
therefor in the Securities Act.
"Responsible Officer" means, with respect to the
Indenture Trustee or the Owner Trustee (as defined in the
Trust Agreement), any officer within the Corporate Trust
Office of the Indenture Trustee or the Owner Trustee, as the
case may be, including any Vice President, Assistant Vice
President, Assistant Treasurer, Assistant Secretary,
Financial Services Officer or any other officer of the
Indenture Trustee or the Owner Trustee, as the case may be,
customarily performing functions similar to those performed
by any of the above designated officers and having direct
responsibility for the administration of this Indenture.
"Securities Act" means the Securities Act of 1933,
as amended.
"State" means any one of the 50 states of the
United States of America or the District of Columbia.
<PAGE>
<PAGE> 8
"Tranche" means all of the Notes of a Series (or a
Class within a Series) having the same date of
authentication.
"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, as
the same may be amended and supplemented from time to time.
"Trust Property" means all money, instruments,
rights and other property that are subject or intended to be
subject to the lien and security interest of this Indenture
for the benefit of the Noteholders (including all property
and interests Granted to the Indenture Trustee), including
all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust
Indenture Act of 1939, as amended and as in force on the
date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise
requires, the Uniform Commercial Code, as in effect in the
relevant jurisdiction, as amended from time to time.
"Unregistered Note" means a Note which is not
being offered for sale hereunder pursuant to a Registration
Statement.
Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in
the Master Sale and Servicing Agreement or the Trust
Agreement.
SECTION 1.2 Incorporation by Reference of the Trust
Indenture Act
. Whenever this Indenture refers to a provision
of the TIA, the provision is incorporated by reference in
and made a part of this Indenture. The following TIA terms
used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange
Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee"
means the Indenture Trustee.
"obligor" on the indenture securities means the
Issuer.
All other TIA terms used in this Indenture that
are defined by the TIA, or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3 Rules of Construction
. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
and
(v) words in the singular include the plural and words
in the plural include the singular.
SECTION 1.4 Action by or Consent of Noteholders and
Certificateholders
<PAGE>
<PAGE> 9
. Whenever any provision of this Agreement refers
to action to be taken, or consented to, by Noteholders or
Certificateholders, such provision shall be deemed to refer
to the Certificateholder or Noteholder, as the case may be,
of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given,
by Noteholders or Certificateholders. Solely for the
purposes of any action to be taken, or consented to, by
Noteholders or Certificateholders, any Note or Certificate
registered in the name of Seller or any Affiliate thereof
shall be deemed not to be outstanding (except in the event
that the Seller and/or an Affiliate thereof then owns all
outstanding Notes and Certificates); provided, however,
that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action
or consent, only Notes or Certificates which the Owner
Trustee or the Indenture Trustee, respectively, knows to be
so owned shall be so disregarded.
SECTION 1.5 Conflict with TIA
. If this Indenture is qualified under the TIA,
and if any provision hereof limits, qualifies or conflicts
with a provision of the TIA that is required under the TIA
to be part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so
modified or excluded, the latter provisions shall be deemed
to apply to this Indenture as so modified or to be excluded,
as the case may be.
ARTICLE II.
The Notes
SECTION 2.1 Form; Amount Limited; Issuable in Series
.
(a) Notes of each Series, together with the Indenture
Trustee's certificate of authentication, shall be in
substantially the form set forth in the related Series
Supplement, with such appropriate insertions, omissions,
substitutions and other variations as are required or
permitted by this Indenture or the related Series Supplement
and may have such letters, numbers or other marks of
identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.
The Definitive Notes shall be typewritten,
printed, lithographed or engraved or produced by any
combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the
related Series Supplement are part of the terms of this
Indenture.
(b) The aggregate principal amount of Notes which may
be authenticated and delivered and Outstanding at any time
under this Indenture is not limited; provided that any
Series Supplement may so limit the aggregate principal
amount of Notes of the related Series. The Notes shall be
issued in one or more Series, and may be issued in Classes
and/or Tranches within a Series (and Tranches within a
Class).
No Series of Notes shall be issued under this
Indenture unless such Notes have been authorized pursuant to
a Series Supplement, and all conditions precedent to the
issuance thereof, as specified in the related Series
Supplement, shall have been satisfied.
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<PAGE> 10
All Notes of each Series issued under this
Indenture shall be in all respects equally and ratably
entitled to the benefits hereof and secured by the related
Series Trust Estate without preference, priority or
distinction on account of the actual time or times of
authentication and delivery, all in accordance with the
terms and provisions hereof and the related Series
Supplement.
SECTION 2.2 Execution, Authentication and Delivery
. The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of
any such Authorized Officer on the Notes may be original or
facsimile.
Notes bearing the original or facsimile signature
of individuals who were at any time Authorized Officers of
the Issuer shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.
At any time and from time to time after the
execution and delivery of this Indenture and the related
Series Supplement, and upon satisfaction of all the
conditions set forth in the related Series Supplement, the
Indenture Trustee shall, upon receipt of an Issuer Order and
an Officer's Certificate prepared and delivered by the
Seller that all conditions precedent for such issuance have
been satisfied, deliver Notes of the related Series
(including Notes of any Class or Tranche within such
Series.)
The Notes of a Series shall be issuable in the
denominations specified in the related Series Supplement.
No Note shall be entitled to any benefit under
this Indenture or any Series Supplement or be valid or
obligatory for any purpose, unless there appears attached to
such Note a certificate of authentication substantially in
the form provided for herein executed by the Indenture
Trustee by the manual signature of one of its authorized
signatories, and such certificate attached to any Note shall
be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder.
SECTION 2.3 Temporary Notes
. Pending the preparation of Definitive Notes of
any Series (or of any Class or Tranche within a Series), the
Issuer may execute, and upon receipt of an Issuer Order
prepared and delivered by the Master Servicer, the Indenture
Trustee shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten, mimeographed
or otherwise produced, of the tenor of the Definitive Notes
in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by
their execution of such Notes.
If temporary Notes of any Series (or of any Class
or Tranche within a Series) are issued, the Issuer will
cause Definitive Notes of such Series (or Class or Tranche)
to be prepared without unreasonable delay. After the
preparation of Definitive Notes of such Series (or Class or
Tranche), the temporary Notes shall be exchangeable for
Definitive Notes of such Series (or Class or Tranche) upon
surrender of the temporary Notes at the office or agency of
the Issuer to be maintained as provided in Section 3.2,
without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer
shall execute and the Indenture Trustee shall authenticate
and deliver in exchange therefor a like principal amount of
Definitive Notes of such Series (or Class or Tranche) of
authorized denominations. Until so exchanged, the temporary
Notes of any Series (or Class or Tranche) shall in all
respects be entitled to the same benefits under this
Indenture and the related Series Supplement as Definitive
Notes of such Series (or Class or Tranche).
<PAGE>
<PAGE> 11
SECTION 2.4 Registration; Registration of Transfer and
Exchange
. The Issuer shall cause to be kept a register
(the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide
for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee shall be "Note
Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation
of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is
appointed by the Issuer as Note Registrar, the Issuer will
give the Indenture Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and
any change in the location, of the Note Register, and the
Indenture Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies
thereof. The Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar
by an Authorized Officer thereof as to the names and
addresses of the Holders of the Notes and the principal
amounts and number of such Notes.
Upon surrender for registration or transfer of any
Note at the office or agency of the Issuer to be maintained
as provided in Section 3.2, and if the requirements of
Section 8-401(1) of the UCC are met, the Issuer shall
execute and cause the Indenture Trustee to authenticate one
or more new Notes, in any authorized denominations, of the
same class and a like aggregate principal amount. A
Noteholder may also obtain from the Indenture Trustee, in
the name of the designated transferee or transferees one or
more new Notes, in any authorized denominations, of the same
Class and Tranche, as applicable, and a like aggregate
principal amount. Such requirements shall not be deemed to
create a duty in the Indenture Trustee to monitor the
compliance by the Issuer with Section 8-401 of the UCC.
At the option of the Holder, Notes of a Series (or
Class or Tranche) may be exchanged for other Notes of such
Series (or Class or Tranche) in any authorized
denominations, of the same Class (and Tranche, if
applicable) and a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange,
and if the requirements of Section 8-401(1) of the UCC are
met, the Issuer shall execute and upon its written request
the Indenture Trustee shall authenticate the Notes which the
Noteholder making the exchange is entitled to receive. Such
requirements shall not be deemed to create a duty in the
Indenture Trustee to monitor the compliance by the Issuer
with Section 8-401 of the UCC.
All Notes issued upon any registration of transfer
or exchange of Notes shall be the valid obligations of the
Issuer, evidencing the same debt, and entitled to the same
benefits under this Indenture and the related Series
Supplement, as the Notes surrendered upon such registration
of transfer or exchange.
Unless specified in a Series Supplement, every
Note presented or surrendered for registration of transfer
or exchange shall, unless specified in a Series Supplement,
be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in the form attached as an exhibit to
the Note duly executed by the Holder thereof or such
Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which
requirements include membership or participation in
Securities Transfer Agents Medallion Program ("Stamp") or
such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in
substitution for, Stamp, all in accordance with the Exchange
Act, and (ii) accompanied by such other documents as the
Note Registrar may require.
<PAGE>
<PAGE> 12
No service charge shall be made to a Holder for
any registration of transfer or exchange of Notes, but the
Note Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or
exchange of Notes.
Notwithstanding, the preceding provisions of this
section, the Issuer shall not be required to make, and the
Note Registrar shall not register, transfers or exchanges of
Notes selected for redemption for a period of 15 days
preceding the Distribution Date.
The Note Registrar shall not register the transfer
of a Definitive Note unless the transferee has executed and
delivered to the Indenture Trustee a certification, in the
form of Exhibit A hereto, to the effect that either (i) the
transferee is not (A) an employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) that is subject
to Title I of ERISA or (B) a plan (within the meaning of
Section 4975(e)(1) of the Code) that is subject to Section
4975 of the Code (each of the foregoing, a "Plan"), and is
not acting on behalf of or investing the assets of a Plan or
(ii) that the transferee's acquisition and continued holding
of the Definitive Note will be covered by a prohibited
transaction class exemption issued by the U.S. Department of
Labor. Each Note Owner that purchases a Book-Entry Note, or
to whom a Book-Entry Note is transferred, shall be deemed to
represent that either (i) it is not a Plan and is not acting
on behalf of or investing the assets of a Plan or (ii) its
acquisition and continued holding of the Book-Entry Note
will be covered by a prohibited transaction class exemption
issued by the U.S. Department of Labor.
No Holder of an Unregistered Note shall transfer
its Note, unless (i) such transfer is made in accordance
with Rule 144A under the Securities Act or (ii) pursuant to
an exemption from registration provided by Rule 144 under
the Securities Act (if available) and the registration and
qualification requirements under applicable state securities
laws.
Each Unregistered Note issued hereunder will
contain the following legend limiting sales to "Qualified
Institutional Buyers" within the meaning of Rule 144A under
the Securities Act:
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND HAS NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR REGULATORY AUTHORITY OF ANY STATE. THIS
NOTE HAS BEEN OFFERED AND SOLD PRIVATELY. THE HOLDER
HEREOF ACKNOWLEDGES THAT THESE SECURITIES ARE
"RESTRICTED SECURITIES" THAT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT AND AGREES FOR THE BENEFIT OF
THE OBLIGORS AND ITS AFFILIATES THAT THESE SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION.
<PAGE>
<PAGE> 13
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes
. If (i) any mutilated Note is surrendered to the
Indenture Trustee, or the Indenture Trustee receives
evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to each of
the Issuer and the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and
the Indenture Trustee harmless, then, in the absence of
notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-
405 of the UCC are met, the Issuer shall execute and upon
its request the Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the
same Series (or Class or Tranche) (such requirement shall
not be deemed to create a duty in the Indenture Trustee to
monitor the compliance by the Issuer with Section 8-405);
provided, however, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have
been called for redemption pursuant to the terms of the
related Series Supplement, the Issuer may, instead of
issuing a replacement Note, direct the Indenture Trustee, in
writing, to pay such destroyed, lost or stolen Note when so
due or payable or upon the redemption date without surrender
thereof. If, after the delivery of such replacement Note or
payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of
the original Note in lieu of which such replacement Note was
issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom
it was delivered or any Person taking such replacement Note
from such Person to whom such replacement Note was delivered
or any assignee of such Person, except a bona fide
purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under
this Section, the Issuer may require the payment by the
Holder of such Note of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) connected
therewith.
Every replacement Note of any Series issued
pursuant to this Section in replacement of any mutilated,
destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or
not the mutilated, destroyed, lost or stolen Note shall be
at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture and the related Series
Supplement equally and proportionately with any and all
other Notes of the same Series duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner
. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee and
any agent of Issuer or the Indenture Trustee may treat the
Person in whose name any Note is registered (as of the
Record Date) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any on
such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Issuer, the
Indenture Trustee nor any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the
contrary.
<PAGE> 14
SECTION 2.7 Payment of Principal and Interest; Defaulted
Interest
.
(a) The Notes shall accrue interest as provided in the
form of Note set forth in the related Series Supplement and
such interest shall be due and payable on each Distribution
Date as specified therein. Any installment of interest or
principal, if any, payable on any Note which is punctually
or duly provided for by the Issuer on the applicable
Distribution Date shall be paid, as provided in the related
Series Supplement, or if not so provided to the Person in
whose name such Note (or one or more Predecessor Notes) is
registered on the Record Date, by check mailed first-class,
postage prepaid, to such Person's address as it appears on
the Note Register on such Record Date, except that, if the
Notes of a Series are Book Entry Notes, unless Definitive
Notes have been issued for such Series pursuant to Section
2.12, with respect to Notes of such Series registered on the
Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payment
will be made by wire transfer in immediately available funds
to the account designated by such nominee and except for the
final installment of principal payable with respect to such
Note on a Distribution Date or on the Final Scheduled
Distribution Date with respect to a Series as set forth in
the relevant Series Supplement which shall be payable as
provided below. The funds represented by any such checks
returned undelivered shall be held in accordance with
Section 3.3.
(b) The principal of each Note shall be payable in
installments on each Distribution Date as provided in the
form of Note set forth in the related Series Supplement.
Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not
previously paid, on the date on which an Event of Default
shall have occurred and be continuing, if the Notes are
declared to be immediately due and payable in the manner
provided in the related Series Supplement. Upon written
notice from the Master Servicer on behalf of the Issuer, the
Indenture Trustee shall notify the Person in whose name a
Note is registered at the close of business on the Record
Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and
interest on such Note will be paid. Such notice may be
mailed or transmitted by facsimile prior to such final
Distribution Date and may specify that such final
installment will be payable only upon presentation and
surrender of such Note and shall specify the place where
such Note may be presented and surrendered for payment of
such installment.
(c) If the Issuer defaults in a payment of interest on
the Notes, the Issuer shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) at
the applicable Note Rate to the extent lawful. Unless
otherwise provided in the related Series Supplements, the
Issuer may pay such defaulted interest to the Persons who
are Noteholders on a subsequent special record date, which
date shall be at least five Business Days prior to the
payment date. The Issuer shall fix or cause to be fixed any
such special record date and payment date, and, at least 15
days before any such special record date, the Issuer shall
mail to each Noteholder and the Indenture Trustee a notice
that states the special record date, the payment date and
the amount of defaulted interest to be paid.
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<PAGE> 15
SECTION 2.8 Cancellation
. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to
any Person other than the Indenture Trustee, be delivered to
the Indenture Trustee and shall be promptly canceled by the
Indenture Trustee in accordance with its customary
procedures. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may
have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Indenture
Trustee in accordance with its customary procedures. No
Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes
may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as
in effect at the time.
SECTION 2.9 Release of Collateral
. The Indenture Trustee shall, on or after a
Series Termination Date, release any remaining portion of
the related Series Trust Estate from the lien created by
this Indenture and deposit in the applicable Series
Collection Account any funds then on deposit in any other
Trust Account. The Indenture Trustee shall release property
from the lien created by this Indenture pursuant to this
Section 2.9 only upon receipt of an Issuer Request by it and
the Indenture Trustee accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the
TIA) Independent Certificates in accordance with TIA
314(c) and 314(d)(1) meeting the applicable requirements
of Section 11.1.
SECTION 2.10 Book-Entry Notes
. The Notes, upon original issuance, may be
issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of,
the Issuer. Such Notes may initially be registered on the
Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a
Definitive Note representing such Note Owner's interest in
such Note, except as provided in Section 2.12. Unless and
until definitive, fully registered Notes (the "Definitive
Notes") have been issued to Note Owners pursuant to Section
2.12:
(i) the provisions of this Section shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall
be entitled to deal with the Clearing Agency for all
purposes of this Indenture (including the payment of
principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of
the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the
provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners
and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Notes are issued
pursuant to Section 2.12, the initial Clearing Agency will
make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments of principal
of and interest on the Notes to such Clearing Agency
Participants;
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<PAGE> 16
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of
Holders of Notes evidencing a specified percentage of the
Outstanding Amount of the Notes, the Clearing Agency shall
be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the
beneficial interest in the Notes or in the Notes of a Class,
as the case maybe, and has delivered such instructions to
the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent
to Noteholders pursuant to this Indenture, upon written
request, together with a certification that they are Note
Owners and payment of reproduction and postage expenses
associated with the distribution of such reports, from the
Indenture Trustee at the Corporate Trust Office.
SECTION 2.11 Notices to Clearing Agency
. With respect to each Series of Notes which are
Book Entry Notes, whenever a notice or other communication
to the Noteholders of such Series is required under this
Indenture, unless and until Definitive Notes shall have been
issued to Note Owners pursuant to Section 2.12, the
Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of
the Notes to the Clearing Agency, and shall have no
obligation to the Note Owners.
SECTION 2.12 Definitive Notes
. If the Notes of a Series are Book-Entry Notes
and if (i) the Master Servicer advises the Indenture Trustee
in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect
to the Notes of such Series, and the Master Servicer is
unable to locate a qualified successor, (ii) the Master
Servicer at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of
an Event of Default with respect to such Series, Note Owners
representing beneficial interests aggregating at least a
majority of the Outstanding Amount of the Notes advise the
Indenture Trustee through the Clearing Agency in writing
that the continuation of a book entry system through the
Clearing Agency is no longer in the best interests of the
Note Owners, then the Clearing Agency shall notify all Note
Owners and the Indenture Trustee of the occurrence of any
such event and of the availability of Definitive Notes to
Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall
execute and upon the written direction of the Issuer the
Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the
issuance of Definitive Notes, the Indenture Trustee shall
recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.13 Final Distribution
.
(a) The Master Servicer on behalf of the Issuer shall
give the Indenture Trustee at least 15 days prior notice of
the Distribution Date on which the Noteholders of any Series
or Class may surrender their Notes for payment of the final
distribution on and cancellation of such Notes. Not later
than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable
to Noteholders, the Indenture Trustee shall provide notice
to the Noteholders of such Series or Class specifying
(i) the date upon which final payment of such Series or
Class will be made upon presentation and surrender of Notes
<PAGE>
<PAGE> 17
(if required) of such Series or Class at the office or
offices therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise
applicable to such payment date is not applicable, payments
being made only upon presentation and surrender of such
Notes at the office or offices therein specified. The
Indenture Trustee shall give such notice to the Registrar
and the Note Paying Agent at the time such notice is given
to Noteholders.
(b) Notwithstanding a final distribution to the
Noteholders of any Series or Class, except as otherwise
provided in this paragraph, all funds then on deposit in the
Master Collection Account and any Series Trust Account
allocated to such Noteholders shall continue to be held in
trust for the benefit of such Noteholders, and the Note
Paying Agent or the Indenture Trustee shall pay such funds
to such Noteholders upon surrender of their Notes. In the
event that all such Noteholders shall not surrender their
Notes for cancellation within six months after the date
specified in the notice from the Indenture Trustee described
in paragraph (a), the Indenture Trustee shall give a second
notice to the remaining such Noteholders to surrender their
Notes for cancellation and receive the final distribution
with respect thereto. If within one year after the second
notice all such Notes shall not have been surrendered for
cancellation, the Indenture Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to
contact the remaining such Noteholders concerning surrender
of their Notes, and the cost thereof shall be paid out of
the funds in the account held for the benefit of such
Noteholders. The Indenture Trustee and the Note Paying
Agent shall upon written request pay to the related Issuer
any moneys held by them for the payment of principal or
interest that remains unclaimed for two years. After
payment to the related Issuers, Noteholders entitled to the
money must look to the related Issuers for payment as
general unsecured creditors unless an applicable abandoned
property law designates another Person and all liability of
the Indenture Trustee or such Note Paying Agent with respect
to such trust money shall thereupon cease.
(c) Any notice required or permitted to be given to a
Holder of Registered Notes shall be given by first-class
mail, postage prepaid, at the address of such Holder as
shown in the Note Register.
ARTICLE III.
Covenants
SECTION 3.1 Payment of Principal and Interest
. The Issuer will duly and punctually pay or
cause to be paid the principal of and interest on the Notes
in accordance with the terms of the Notes, this Indenture
and the related Series Supplement. Amounts properly
withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered
as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.2 Maintenance of Office or Agency
. The Issuer will maintain in Minnesota an office
or agency where Notes may be surrendered for registration,
transfer or exchange of the Notes, and where notices and
demands to or upon the Issuer in respect of the Notes and
this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written
notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office
or agency or shall fail to furnish the Indenture Trustee
with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office,
and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.
<PAGE>
<PAGE> 18
SECTION 3.3 Money for Payments to be Held in Trust
. One Business Day prior to each Distribution
Date, the Issuer shall deposit or cause to be deposited to
the related Series Collection Account Available Funds (which
shall be immediately available) with respect to the related
Collection Period. Such sum shall be held in trust for the
benefit of the Persons entitled thereto and (unless the Note
Paying Agent is the Indenture Trustee), the Issuer shall
promptly notify the Indenture Trustee of its action or
failure so to act.
The Issuer will cause each Note Paying Agent other
than the Indenture Trustee to execute and deliver to the
Indenture Trustee an instrument in which such Note Paying
Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Note Paying Agent with respect to
clauses (i) and (v), it hereby so agrees), subject to the
provisions of this Section, that such Note Paying Agent
will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee written notice of any
default by the Issuer of which a Responsible Officer of the
Note Paying Agent has actual knowledge (or any other obligor
upon the Notes) in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in
trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it
in trust for the payment of Notes if at any time it ceases
to meet the standards required to be met by a Note Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture
and any Series Supplement or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the
Indenture Trustee all sums held in trust by such Note Paying
Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by
such Note Paying Agent; and upon such a payment by any Note
Paying Agent to the Indenture Trustee, such Note Paying
Agent shall be released from all further liability with
respect to such money.
The Trust hereby appoints Norwest Bank Minnesota,
National Association, as Certificate Paying Agent to make
payments to Certificateholders on behalf of the Issuer in
accordance with the provisions of the Certificates, this
Agreement and the Trust Agreement, and Norwest Bank
Minnesota, National Association, hereby accepts such
appointment (subject to removal in the event it not longer
serves as Indenture Trustee pursuant to Section 6.8) and
further agrees that it will be bound by the provisions of
the Trust Agreement relating to the Certificate Paying Agent
and will:
(i) hold all sums held by it for the payment of
amounts due with respect to the Certificates in trust for
the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided and as provided in the Trust Agreement and
pay such sums to such Persons as herein and therein
provided;
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<PAGE> 19
(ii) give the Owner Trustee notice of any default by
the Issuer of which a Responsible Officer of the Indenture
Trustee has actual knowledge in the making of any payment
required to be made with respect to the Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee
forthwith pay to the Owner Trustee on behalf of the Issuer
all sums so held in Trust by such Certificate Paying Agent;
(iv) immediately resign as a Certificate Paying Agent
and forthwith pay to the Owner Trustee on behalf of the
Issuer all sums held by it in trust for the payment of
Certificates if at any time it ceases to meet the standards
required to be met by a Note Paying Agent at the time of its
appointment; and
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on
any Certificates of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting
requirements in connection therewith.
SECTION 3.4 Existence
. Except as otherwise permitted by the provisions
of Section 3.10, the Issuer will keep in full effect its
existence, rights and franchises as a business trust under
the laws of the State of Delaware (unless it becomes, or any
successor Issuer hereunder is or becomes, organized under
the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect
its existence, rights and franchises under the laws of such
other jurisdiction) and will obtain and preserve its
qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, each Series
Supplement, the Notes and each other instrument or agreement
included in the related Series Trust Estate.
SECTION 3.5 Protection of Trust Property
. The Issuer intends the security interest
Granted pursuant to this Indenture and the related Series
Supplement in favor of the Holders to be prior to all other
liens in respect of the related Series Trust Estate, and the
Issuer shall take all actions necessary to obtain and
maintain, in favor of the Indenture Trustee for the benefit
of the Holders a first lien on and a first priority,
perfected security interest in the related Series Trust
Estate. The Issuer will from time to time prepare (or shall
cause to be prepared), execute and deliver all such
supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further
assurance and other instruments, and will take such other
action necessary or advisable to:
(i) Grant more effectively all or any portion of the
related Series Trust Estate;
(ii) maintain or preserve the lien and security
interest (and the priority thereof) in favor of the
Indenture Trustee for the benefit of the Holders created by
this Indenture and the related Series Supplement or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture and the
related Series Supplement ;
(iv) enforce any of the related Series Trust Estate;
(v) preserve and defend title to the related Series
Trust Estate and the rights of the Indenture Trustee in such
Trust Property against the claims of all persons and
parties; and
(vi) pay all taxes or assessments levied or assessed
upon the related Series Trust Estate when due.
SECTION 3.6 Opinions as to Trust Property
.
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<PAGE> 20
(a) On the Closing Date, the Issuer shall furnish to
the Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been
taken with respect to the recording and filing of this
Indenture, Series Supplement, and any other requisite
documents, and with respect to the execution and filing of
any financing statements and continuation statements, as are
necessary to perfect and make effective the first priority
lien and security interest in favor of the Indenture Trustee
for the benefit of the Holders, created by this Indenture
and the related Series Supplement and reciting the details
of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 90 days after the beginning of each
calendar year, beginning with 2001 the Master Servicer on
behalf of the Issuer shall furnish to the Indenture Trustee
an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this
Indenture, any Series Supplement and any other requisite
documents and with respect to the execution and filing of
any financing statements and continuation statements as are
necessary to maintain the lien and security interest created
by this Indenture and the related Series Supplement and
reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-
recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and
the execution and filing of any financing statements and
continuation statements that will, in the opinion of such
counsel, be required to maintain the lien and security
interest of this Indenture and the related Series Supplement
until December 31 of the following calendar year.
SECTION 3.7 Performance of Obligations; Servicing of
Receivables
.
(a) The Issuer will not take any action and will use
its best efforts not to permit any action to be taken by
others that would release any Person from any of such
Person's material covenants or obligations under any
instrument or agreement included in the related Series Trust
Estate or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or
agreement, except as ordered by any bankruptcy or other
court or as expressly provided in this Indenture, the Basic
Documents and the related Series Related Documents or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to
assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Master
Servicer to assist the Issuer in performing its duties under
this Indenture and each Series Supplement.
(c) The Issuer will punctually perform and observe all
of its obligations and agreements contained in this
Indenture, the Basic Documents, all Series Related Documents
and in the instruments and agreements included in the
related Series Trust Estate, including, but not limited, to
preparing (or causing to be prepared) and filing (or causing
to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this
Indenture, the related Series Supplement and the Master Sale
and Servicing Agreement in accordance with and within the
time periods provided for herein and therein. Except as
otherwise expressly provided therein, the Issuer shall not
waive, amend, modify, supplement or terminate any Basic
Document or any provision thereof without the consent of the
Indenture Trustee.
<PAGE>
<PAGE> 21
(d) If a Responsible Officer of the Owner Trustee
shall have actual knowledge of the occurrence of a Master
Servicer Termination Event under the Master Sale and
Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Rating Agencies thereof in
accordance with Section 11.4, and shall specify in such
notice the action, if any, the Issuer is taking in respect
of such default. If a Master Servicer Termination Event
shall arise from the failure of the Master Servicer to
perform any of its duties or obligations under the Master
Sale and Servicing Agreement with respect to the
Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.
SECTION 3.8 Negative Covenants
. So long as any Notes are Outstanding, the Issuer shall
not:
(i) except as expressly permitted by this Indenture or
the Basic Documents or the related Series Related Documents,
sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included
in the related Series Trust Estate;
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Notes
of a Series (other than amounts properly withheld from such
payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the
taxes levied or assessed upon any part of the related Series
Trust Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture or any Series Supplement to be impaired, or permit
the lien in favor of the Indenture Trustee created by this
Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to
the Notes under this Indenture or any Series Supplement
except as may be expressly permitted hereby, (B) permit any
lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture and
the related Series Supplement) to be created on or extend to
or otherwise arise upon or burden the related Series Trust
Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on
a Financed Vehicle and arising solely as a result of an
action or omission of the related Obligor), (C) permit the
lien of this Indenture and the related Series Supplement not
to constitute a valid first priority (other than with
respect to any such tax, mechanics' or other lien) security
interest in the related Series Trust Estate, (D) except as
expressly permitted therein, amend, modify or fail to comply
with the provisions of the Basic Documents or (E) except as
expressly permitted therein, amend, modify or fail to comply
with the provisions of the Series Related Documents.
SECTION 3.9 Annual Statement as to Compliance
. The Master Servicer on behalf of the Issuer
will deliver to the Indenture Trustee, within 90 days after
the end of each fiscal year of the Issuer (commencing with
the fiscal year ended December 31, 2000), and otherwise in
compliance with the requirements of TIA Section 314(a)(4) an
Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during
such year and of performance under this Indenture has been
made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied
with all conditions and covenants under this Indenture and
each Series Supplement throughout such year, or, if there
has been a default in the compliance of any such condition
or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
<PAGE>
<PAGE> 22
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain
Terms
.
(a) The Issuer shall not consolidate or merge with or
into any other Person, unless
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States
of America or any State and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture and each
Series Supplement on the part of the Issuer to be performed
or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing under any Series Supplement;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee and the Owner Trustee) to the effect that
such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture and each
Series Supplement shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger comply with
this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied
with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including
those included in each Series Trust Estate, to any Person,
unless
(i) the Person that acquires by conveyance or transfer
the properties and assets of the Issuer the conveyance or
transfer of which is hereby restricted shall (A) be a United
States citizen or a Person organized and existing under the
laws of the United States of America or any state, (B)
expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and
the performance or observance of every agreement and
covenant of this Indenture, each Supplement, each of the
Basic Documents and each of the Series Related Documents on
the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agree by means of such
Indenture Supplement that all right, title and interest so
conveyed or transferred shall be subject and subordinate to
the rights of Holders of the Notes, (D) unless otherwise
provided in such Series Supplement, expressly agree to
indemnify, defend and hold harmless the Issuer against and
from any loss, liability or expense arising under or related
to this Indenture, each Series Supplement and the Notes and
(E) expressly agree by means of such Series Supplement that
such Person (or if a group of persons, then one specified
Person) shall prepare (or cause to be prepared) and make all
filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the
Notes;
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<PAGE> 23
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing under any Series Supplement;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Trust,
any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien
and security interest created by this Indenture and each
Series Supplement shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such
Indenture Supplement complies with this Article III and that
all conditions precedent herein provided for relating to
such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.11 Successor or Transferee
.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this
Indenture and each Series Supplement with the same effect as
if such Person had been named as each Issuer herein.
(b) Upon a conveyance or transfer of all the assets
and properties of the Issuer pursuant to Section 3.10 (b),
Household Automotive Trust IV will be released from every
covenant and agreement of this Indenture and each Series
Supplement to be observed or performed on the part of the
Issuer with respect to the Notes immediately upon the
delivery of written notice to the Indenture Trustee stating
that Household Automotive Trust IV is to be so released.
SECTION 3.12 No Other Business
. The Issuer shall not engage in any business
other than financing, purchasing, owning, selling and
managing the Receivables, entering and maintaining any
ancillary agreement related to issuance of the Notes and
owning the Class SV Preferred Stock of the Seller in the
manner contemplated by this Indenture, the Basic Documents
and each Series Supplement and all Series Related Documents
and activities incidental thereto.
SECTION 3.13 No Borrowing
. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or
indirectly, for any Indebtedness except for (i) the Notes,
(ii) obligations owing from time to time to a related Series
Support Provider under the related agreement regarding
Series Support, if any and (iii) any other Indebtedness
permitted by or arising under the Basic Documents and each
Series Supplement. The proceeds of the Notes and the
Certificates of a Series shall be used exclusively to fund
the Issuer's purchase of the Receivables of such Series, or
to obtain release of the lien relating to the pledge of the
Receivables for a prior series of notes issued by the
Issuer, the purchase of related property of the Series Trust
Estate, to fund any trust account and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.14 Master Servicer's Obligations
. The Issuer shall enforce the provisions of
Sections 4.9, 4.10 and 4.11 of the Master Sale and Servicing
Agreement with respect to the duties of Master Servicer
thereunder.
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SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities
. Except as contemplated by the Master Sale and
Servicing Agreement or this Indenture or any Series
Supplement, the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing
or otherwise), endorse or otherwise become continently
liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree continently to do so) any
stock, obligations, assets or securities of, or any other
interest in, or make any capital contribution to, any other
Person.
SECTION 3.16 Capital Expenditures
. The Issuer shall not make any expenditure (by
long-term or operating lease or otherwise) for capital
assets (either realty or personally).
SECTION 3.17 Compliance with Laws
. The Issuer shall comply with the requirements
of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely
affect the ability of the Issuer to perform its obligations
under the Notes, this Indenture, or any Basic Document, any
Series Supplement or any Series Related Document.
SECTION 3.18 Restricted Payments
. The Issuer shall not, directly or indirectly,
(i) pay any dividend or make any distribution (by reduction
of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or
any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest
or security in or of the Issuer or to the Seller, (ii)
redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Seller, Master
Servicer, the Owner Trustee, the Indenture Trustee and the
Certificateholders as permitted by, and to the extent funds
are available for such purpose under, the Master Sale and
Servicing Agreement or Trust Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions
from the Master Collection Account except in accordance with
this Indenture, the Basic Documents, any Series Supplement
or any Series Related Document.
SECTION 3.19 Notice of Events of Default
. Upon a Responsible Officer of the Owner Trustee
having actual knowledge thereof, the Issuer agrees to give
the Indenture Trustee and the Rating Agencies prompt written
notice of each Event of Default under any Series Supplement
and each default on the part of the Master Servicer or the
Seller of its obligations under the Master Sale and
Servicing Agreement.
SECTION 3.20 Further Instruments and Acts
. Upon request of the Indenture Trustee, the
Issuer will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this
Indenture.
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<PAGE> 25
SECTION 3.21 Amendments of Master Sale and Servicing
Agreement and Trust Agreement
. The Issuer shall not agree to any amendment to
Section 13.1 of the Master Sale and Servicing Agreement or
Section 13.1 of the Trust Agreement to eliminate the
requirements thereunder that the Indenture Trustee or the
Holders of the Notes consent to amendments thereto as
provided therein.
SECTION 3.22 Income Tax Characterization
. For purposes of federal income, state and local
income and franchise and any other income taxes, the Issuer,
the Noteholders, the Certificateholders and the Indenture
Trustee will treat the Notes as indebtedness and hereby
instructs the Indenture Trustee to treat the Notes as
indebtedness for federal and state tax reporting purposes.
ARTICLE IV.
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture
. This Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of
registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and
interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10,
3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights and
immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.7 and the
obligations of the Indenture Trustee under Section 4.2) and
(vi) the rights of Noteholders as beneficiaries hereof with
respect to the related Series Trust Estate so deposited with
the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to
the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in
Section 2.5 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust, as provided in Section 3.3)
have been delivered to the Indenture Trustee for
cancellation and the related Series Support, if any, has
been returned to the related Series Support Provider; or
(2) all Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at
their respective Final Scheduled Distribution
Dates within one year, or
(iii) are to be called for
redemption within one year under arrangements
satisfactory to the Indenture Trustee for the
giving of notice of redemption by the
Indenture Trustee in the name, and at the
expense, of the Issuer,
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<PAGE> 26
and the Issuer, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee
cash or direct obligations of or obligations
guaranteed by the United States of America (which
will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount
sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for
cancellation when due on the Final Scheduled
Distribution Date or tender date (if Notes shall
have been called for redemption or tender pursuant
to the related Series Supplement, as the case may
be; and
(B) the Issuer has paid or caused to be paid all other
amounts owing hereunder by the Issuer.
SECTION 4.2 Application of Trust Money
. All monies deposited with the Indenture Trustee
pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the
Notes, this Indenture and the related Series Supplement, to
the payment, either directly or through any Note Paying
Agent, as the Indenture Trustee may determine, to the
Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon
for principal and interest; but such monies need not be
segregated from other funds except to the extent required
herein or in the Master Sale and Servicing Agreement or
required by law.
SECTION 4.3 Repayment of Monies Held by Note Paying Agent
. In connection with the satisfaction and
discharge of this Indenture with respect to the Notes, all
monies then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture
with respect to such Notes shall, upon demand of the Issuer,
be paid to the Indenture Trustee to be held and applied
according to Section 3.3 and thereupon such Note Paying
Agent shall be released from all further liability with
respect to such monies.
ARTICLE V.
Remedies
SECTION 5.1 Events of Default
. The definition of "Event of Default" with
respect to a Series, together with certain rights and
remedies consequent thereto, shall be set forth in the
related Series Supplement.
SECTION 5.2 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee
(a) Subject to the terms of the related Series
Supplement, the Issuer covenants that if (i) default is made
in the payment of any interest on any Note when the same
becomes due and payable, and such default continues for a
period of five days, or (ii) default is made 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 continues for a period of five days, the Issuer
will, upon demand of the Indenture Trustee, pay to it, for
the benefit of the Holders of the Notes, the whole amount
then due and payable on such Notes for principal and
interest, with interest upon the overdue principal, and, to
the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest, at the
applicable Note Rate and in addition thereto such further
amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and outside counsel.
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<PAGE> 27
(b) If an Event of Default occurs and is continuing
with respect to a Series, the Indenture Trustee may in its
discretion proceed to protect and enforce the rights of the
Noteholders of each Series by such appropriate Proceedings
as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or the related Series Supplement or in aid of the
exercise of any power granted herein, or to enforce any
other proper remedy or legal or equitable right vested in
the Indenture Trustee by this Indenture, the related Series
Supplement or by law.
(c) In case there shall be pending, relative to the
Issuer or any other obligor upon the Notes or any Person
having or claiming an ownership interest in the related
Series Trust Estate, proceedings under Title 11 of the
United States Code or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the
Issuer or its property or such other obligor or Person, or
in case of any other comparable judicial proceedings
relative to the Issuer or other obligor upon the Notes of
such Series, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective
of whether the principal of any Notes of such Series shall
then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the
Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered,
by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect
of such Notes and to file such other papers or documents as
may be necessary or advisable in order to have the claims of
the Indenture Trustee against the related Series Trust
Estate (including any claim for reasonable compensation to
the Indenture Trustee and each predecessor Indenture
Trustee, and their respective agents, attorneys and outside
counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence, bad faith or willful
misconduct) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes of
such Series in any election of a trustee, a standby trustee
or person performing similar functions in any such
proceedings;
(iii) to collect and receive any monies or other
property payable or deliverable on any such claims and
received with respect to the related Series Trust Estate and
to distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee or the Holders of Notes
of such Series, in each case against the related Series
Trust Estate allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other
similar official in any such proceeding is hereby authorized
by each of such Noteholders to make payments to the
Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to
such Noteholders, to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of
negligence or bad faith.
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(d) Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to
or vote for or accept or adopt on behalf of any Noteholder
any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder
thereof or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of
a trustee in bankruptcy or similar person.
(e) All rights of action and of asserting claims under
this Indenture, the related Series Supplement or under any
of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production
thereof in any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the
Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the
Notes.
(f) In any proceedings brought by the Indenture
Trustee (and also any proceedings involving the
interpretation of any provision of this Indenture or the
related Series Supplement), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall
not be necessary to make any Noteholder a party to any such
proceedings.
SECTION 5.3 Limitation of Suits
. No Holder of any Note shall have any right to
institute any proceeding, judicial or otherwise, with
respect to this Indenture or the related Series Supplement,
or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Indenture Trustee of a continuing Event of Default with
respect to the Notes of the related Series;
(ii) the Holders of not less than 25% of the
Outstanding Amount of the Notes of the related Series have
made written request to the Indenture Trustee to institute
such proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee indemnity reasonably satisfactory to it
against the costs, expenses and liabilities to be incurred
in complying with such request;
(iv) the Indenture Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has
failed to institute such Proceedings; and
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such
60-day period by the Holders of a majority of the
Outstanding Amount of the Notes of such Series.
it being understood and intended that no Holders of Notes
shall have any right in any manner whatsoever by virtue of,
or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided.
SECTION 5.4 Unconditional Rights of Noteholders To
Receive Principal and Interest
. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right,
which is absolute and unconditional, to receive payment of
the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such
Note or in this Indenture or the related Series Supplement
(or, in the case of redemption or tender pursuant to any
Series Supplement, on or after the related redemption or
tender date) and to institute suit for the enforcement of
any such payment, and such right shall not be impaired
without the consent of such Holder.
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<PAGE> 29
SECTION 5.5 Restoration of Rights and Remedies
. If the Indenture Trustee or any Noteholder has
instituted any Proceeding to enforce any right or remedy
under this Indenture or the related Series Supplement and
such Proceeding has been discontinued or abandoned for any
reason, then and in every such case the Issuer, the
Indenture Trustee, and the related Noteholders shall,
subject to any determination in such Proceeding, be restored
severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the
Indenture Trustee, and the related Noteholders shall
continue as though no such proceeding had been instituted.
SECTION 5.6 Rights and Remedies Cumulative
. No right or remedy herein conferred upon or
reserved to the related Noteholders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity
or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.7 Delay or Omission Not a Waiver
. No delay or omission of the Indenture Trustee
or any Holder of any related Note to exercise any right or
remedy accruing upon any Default or Event of Default shall
impair any such right or remedy or constitute a waiver of
any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or
by law to the Indenture Trustee, the Indenture Trustee or to
the related Noteholders may be exercised from time to time,
and as often as may be deemed expedient, by the Indenture
Trustee or by the related Noteholders, as the case may be.
SECTION 5.8 Control by Noteholders
. The Holders of a majority of the Outstanding
Amount of the Notes with respect to such Series shall have
the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture
Trustee with respect to the Notes of such Series or
exercising any trust or power conferred on the Indenture
Trustee; provided that
(i) such direction shall not be in conflict with any
rule of law or with this Indenture or with the related
Series Supplement; and
(ii) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not
inconsistent with such direction;
provided, however, that, subject to Section 6.1, the
Indenture Trustee need not take any action that it
determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not
consenting to such action.
SECTION 5.9 Waiver of Past Defaults
. Unless otherwise provided in the related Series
Related Documents, a majority of the Noteholders of a Series
may waive any past Default or Event of Default relating to
such Series and its consequences except a Default relating
to such Series (a) in payment of principal of or interest on
any of the Notes of the related Series or (b) in respect of
a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note of
the related Series. In the case of any such waiver, the
Issuer, the Indenture Trustee and the Holders of the Notes
of the related Series shall be restored to their former
positions and rights hereunder, respectively; but no such
waiver shall extend to any subsequent or other Default or
impair any right consequent thereto.
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<PAGE> 30
Upon any such waiver, such Default shall cease to
exist and be deemed to have been cured and not to have
occurred, and any Event of Default arising therefrom shall
be deemed to have been cured and not to have occurred, for
every purpose of this Indenture and the related Series
Supplement; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 5.10 Undertaking for Costs
. All parties to this Indenture and the related
Series Supplement agree, and each Holder of any Note by such
Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this
Indenture and the related Series Supplement, or in any suit
against the Indenture Trustee for any action taken, suffered
or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions
of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Outstanding Amount of the
Notes of the related Series or (c) any suit instituted by
any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the
respective due dates expressed in such Note and in this
Indenture and the related Series Supplement.
SECTION 5.11 Waiver of Stay or Extension Laws
. The Issuer covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit
of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants
or the performance of this Indenture and the related Series
Supplement; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit of any
such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.
SECTION 5.12 Action on Notes
. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture or any
Series Supplement shall not be affected by the seeking,
obtaining or application of any other relief under or with
respect to this Indenture or the related Series Supplement.
Neither the lien of this Indenture or the related Series
Supplement nor any rights or remedies of the Indenture
Trustee or the Noteholders shall be impaired by the recovery
of any judgment by the Indenture Trustee against the Issuer
or by the levy of any execution under such judgment upon any
portion of the related Series Trust Estate or upon any of
the assets of the Issuer.
SECTION 5.13 Performance and Enforcement of Certain
Obligations
.
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<PAGE> 31
(a) Promptly following a request from the Indenture
Trustee to do so and at the Master Servicer's expense, the
Issuer agrees to take all such lawful action as the
Indenture Trustee may request to compel or secure the
performance and observance by the Seller and the Master
Servicer, as applicable, of each of their obligations to the
Issuer under or in connection with the Master Sale and
Servicing Agreement in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in
connection with the Master Sale and Servicing Agreement to
the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on
the part of the Seller or the Master Servicer thereunder and
the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller or
the Master Servicer of each of their obligations under the
Master Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is
continuing with respect to a Series, the Indenture Trustee
may, and, at the written direction of the Holders of 66-2/3%
of the Outstanding Amount of the Notes of such Series shall,
exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Master Servicer
under or in connection with the Master Sale and Servicing
Agreement, including the right or power to take any action
to compel or secure performance or observance by the Seller
or the Master Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Master
Sale and Servicing Agreement, and any right of the Issuer to
take such action shall be suspended.
ARTICLE VI.
The Indenture Trustee
SECTION 6.1 Duties of Indenture Trustee
.
(a) If an Event of Default has occurred and is
continuing of which Responsible Officer of the Indenture
Trustee has actual knowledge, the Indenture Trustee shall
exercise the rights and powers vested in it by this
Indenture and the Basic Documents and use the same degree of
care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of
Default with respect to a Series of which a Responsible
Officer of the Indenture Trustee has actual knowledge:
(i) the Indenture Trustee undertakes to perform with
respect to such Series such duties and only such duties as
are specifically set forth in this Indenture and the related
Series Supplement and no implied covenants or obligations
shall be read into this Indenture or the related Series
Supplement against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Indenture Trustee as the case may be and conforming to the
requirements of this Indenture and the related Series
Supplement; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture
or the related Series Supplement provided, further, that the
Indenture Trustee shall not be responsible for the accuracy
or content of any resolution, certificate, statement,
opinion, report, document, order or other instrument
furnished to it, including, without limitation, any
statistical, numerical or financial data contained therein.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
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<PAGE> 32
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer unless it is proved that the Indenture Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant
to Section 5.8.
(d) The Indenture Trustee shall not be liable for
interest on any money received by it except as such Person
may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need
not be segregated from other funds except to the extent
required by law or the terms of this Indenture, the related
Series Supplement or the Master Sale and Servicing
Agreement.
(f) No provision of this Indenture or the related
Series Supplement shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayment of
such funds or indemnity reasonably satisfactory to it
against such risk or liability is not reasonably assured to
it.
(g) Every provision of this Indenture and the related
Series Supplement relating to the conduct or affecting the
liability of or affording protection to the Indenture
Trustee shall be subject to the provisions of this Section
and to the provisions of the TIA.
(h) The Indenture Trustee shall, and hereby agrees
that it will, perform all of the obligations and duties
required of it under the Master Sale and Servicing
Agreement.
(i) Without limiting the generality of this Section
6.1, the Indenture Trustee shall have no duty (i) to see to
any recording, filing or depositing of this Indenture, any
Series Supplement or any agreement referred to herein or any
financing statement evidencing a security interest in the
Financed Vehicles, or to see to the maintenance of any such
recording or filing or depositing or to any recording,
refiling or redepositing of any thereof, (ii) to see to any
insurance of the Financed Vehicles or Obligors or to effect
or maintain any such insurance, (iii) to see to the payment
or discharge of any tax, assessment or other governmental
charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the
Trust, (iv) to confirm or verify the contents of any reports
or certificates delivered to the Indenture Trustee pursuant
to this Indenture, any Series Supplement or the Master Sale
and Servicing Agreement believed by the Indenture Trustee to
be genuine and to have been signed or presented by the
proper party or parties, or (v) to inspect the Financed
Vehicles at any time or ascertain or inquire as to the
performance of observance of any of the Issuer's, the
Seller's or the Master Servicer's representations,
warranties or covenants or the Master Servicer's duties and
obligations as Master Servicer and as custodian of the
Receivable Files under the Master Sale and Servicing
Agreement.
(j) In no event shall Norwest Bank Minnesota, National
Association, in any of its capacities hereunder, be deemed
to have assumed any duties of the Owner Trustee under the
Delaware Business Trust Statute, common law, or the Trust
Agreement.
SECTION 6.2 Rights of Indenture Trustee
.
(a) The Indenture Trustee may rely on any document
believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document.
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(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate or an
Opinion of Counsel. The Indenture Trustee shall not be
liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of
Counsel.
(c) The Indenture Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys or a
custodian or nominee, and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of,
or for the supervision of the Master Servicer or any other
agent, attorney, custodian or nominee appointed with due
care by it hereunder.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers;
provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel,
and the advice or opinion of counsel with respect to legal
matters relating to this Indenture, the Basic Documents, any
Series Supplement, any Series Related Documents and the
Notes and such advice or opinion of counsel shall be full
and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation
to institute, conduct or defend any litigation under this
Indenture or any Series Supplement or in relation to this
Indenture or any Series Supplement, at the request, order or
direction of any of the Holders of Notes, pursuant to the
provisions of this Indenture or any Series Supplement,
unless such Holders of Notes shall have offered to the
Indenture Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred
therein or thereby; provided, however, that the Indenture
Trustee shall, upon the occurrence of an Event of Default
(that has not been cured), exercise the rights and powers
vested in it by this Indenture and any Series Supplement
with reasonable care and skill customary for the care and
skill exercised by Indenture Trustees under similar
circumstances.
(g) The Indenture Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, provided, however, that if the
payment within a reasonable time to the Indenture Trustee of
the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of
the Indenture Trustee not reasonably assured to the
Indenture Trustee by the security afforded to it by the
terms of this Indenture, any Series Supplement or the Master
Sale and Servicing Agreement, the Indenture Trustee may
require indemnity reasonably satisfactory to it against such
cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be
paid by the Person making such request, or, if paid by the
Indenture Trustee shall be reimbursed by the Person making
such request upon demand.
(h) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Indenture Trustee shall not be
answerable for other than its negligence or willful
misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to
give any bond or surety in respect of the execution of the
Trust Estate created hereby or the powers granted hereunder.
(j) Anything in this Indenture or any Supplement
hereto to the contrary notwithstanding, in no event shall
the Indenture Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the
Indenture Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action.
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(k) The Indenture Trustee shall not be required to
take notice or be deemed to have notice or knowledge of any
default, Event of Default, Master Servicer Termination Event
unless a Responsible Officer of the Indenture Trustee shall
have actual notice thereof.
(l) The Indenture Trustee shall not in any way be held
liable by reason of any insufficiency in any Trust Account
(including, without limitation, the Master Collection
Account, the Series 2000-1 Reserve Account and the Series
2000-1 Collection Account or any subaccount thereof) held by
or on behalf of the Indenture Trustee resulting from any
investment loss on any Eligible Investment included therein.
SECTION 6.3 Individual Rights of Indenture Trustee
. The Indenture Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture
Trustee. Any Note Paying Agent, Note Registrar, co-
registrar or co-paying agent may do the same with like
rights. However, the Indenture Trustee must comply with
Sections 6.11 and 6.12.
SECTION 6.4 Indenture Trustee's Disclaimer
. The Indenture Trustee shall not be responsible
for and makes no representation as to the validity or
adequacy of this Indenture, any Series Supplement, the
related Series Trust Estate or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the
Notes, and it shall not be responsible for any statement of
the Issuer in the Indenture, in any Series Supplement or in
any document issued in connection with the sale of the Notes
or in the Notes other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults
. If an Event of Default occurs and is continuing
and if it is either actually 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
90 days after such knowledge or notice occurs. Except in
the case of a Default in payment of principal of or interest
on any Note, the Indenture Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the
interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders
. Upon written request, the Note Paying Agent or
the Master Servicer shall on behalf of the Issuer deliver to
each Noteholder such information as may be reasonably
required to enable such Holder to prepare its Federal and
state income tax returns required by law.
SECTION 6.7 Compensation and Indemnity
.
(a) As payable in each Series Supplement, the Issuer
shall, or shall cause the Master Servicer to, pay to the
Indenture Trustee from time to time the Indenture Trustee
Fee as compensation for its services. The Indenture
Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer
shall or shall cause the Master Servicer to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such
expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's
agents, outside counsel, accountants and experts. The
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<PAGE> 35
Issuer shall or shall cause the Master Servicer to indemnify
the Indenture Trustee, and its respective officers,
directors, employees and agents against any and all loss,
liability or expense (including attorneys' fees and
expenses) incurred by each of them in connection with the
acceptance or the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer and the Master Servicer promptly of
any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Master
Servicer shall not relieve the Issuer of its obligations
hereunder or the Master Servicer of its obligations under
Article XII of the Master Sale and Servicing Agreement. The
Issuer shall defend or shall cause the Master Servicer to
defend any claim for indemnity that may arise against the
Indenture Trustee, or the Indenture Trustee may have
separate counsel and the Issuer shall or shall cause the
Master Servicer to pay the fees and expenses of such
counsel. Neither the Issuer nor the Master Servicer need
reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee
through such Person's own willful misconduct, negligence or
bad faith.
(b) The Issuer's payment obligations to the Indenture
Trustee pursuant to this Section shall survive the
resignation or removal of the Indenture Trustee and the
discharge of this Indenture. When the Indenture Trustee
incurs expenses after the occurrence of an Insolvency Event
with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the
United States Code or any other applicable Federal or state
bankruptcy, insolvency or similar law. Notwithstanding
anything else set forth in this Indenture, the Basic
Documents, any Series Supplement or any Series Related
Documents, the Indenture Trustee agrees that the obligations
of the Issuer (but not the Master Servicer) to the Indenture
Trustee hereunder and under any Series Supplement or any
Series Related Documents, shall be recourse to the related
Series Trust Estate only and specifically shall not be
recourse to the assets of the Issuer or any Securityholder.
In addition, the Indenture Trustee agrees that its recourse
to the Issuer, the related Series Trust Estate, the Seller
and amounts held pursuant to the related Series Support
shall be limited to the right to receive the distributions
as provided for in the payment priority provisions of the
related Series Supplement.
SECTION 6.8 Replacement of Indenture Trustee
. The Indenture Trustee may, and in the
circumstances specified in subparagraph (i) shall, resign at
any time upon 60 days' prior written notice by so notifying
the Issuer. Holders of a majority of Outstanding Amount of
the Notes and the Master Servicer. In addition, the Master
Servicer may remove the Indenture Trustee by so notifying
the Indenture Trustee upon 60 days' written notice. The
Issuer may and, at the request of the Noteholders shall,
remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) a court having jurisdiction in the premises in
respect of the Indenture Trustee in an involuntary case or
proceeding under Federal or state banking or bankruptcy
laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting
relief or appointing a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator (or similar
official) for the Indenture Trustee or for any substantial
part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's
affairs;
(iii) an involuntary case under the Federal bankruptcy
laws, as now or hereafter in effect, or another present or
future Federal or state bankruptcy, insolvency or similar
law is commenced with respect to the Indenture Trustee and
such case is not dismissed within 60 days;
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(iv) the Indenture Trustee commences a voluntary case
under any Federal or state banking or bankruptcy laws, as
now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar
law, or consents to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for
the Indenture Trustee or for any substantial part of the
Indenture Trustee's property, or makes any assignment for
the benefit of creditors or fails generally to pay its debts
as such debts become due or takes any corporate action in
furtherance of any of the foregoing;
(v) the Indenture Trustee otherwise becomes incapable
of acting; or
(vi) the rating assigned to the long-term unsecured
debt obligations of the Indenture Trustee by the Rating
Agencies shall be lowered below the rating of "BBB", "Baa2"
or equivalent rating or be withdrawn by either of the Rating
Agencies.
If the Indenture Trustee resigns or is removed or
if a vacancy exists in the office of Indenture Trustee for
any reason (the Indenture Trustee in such event being
referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly deliver a notice of such removal,
resignation or vacancy to the Master Servicer and the Master
Servicer may appoint a successor Indenture Trustee. If the
Master Servicer fails to appoint such a successor Indenture
Trustee, the Issuer or a resigning Indenture Trustee may
petition any court of competent jurisdiction to appoint a
successor Indenture Trustee. If the Indenture Trustee
resigns or is removed, the Indenture Trustee shall also
resign or be removed, as the case may be, as Certificate
Paying Agent.
A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring
Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring
Indenture Trustee under this Indenture and the Series
Supplement. The successor Indenture Trustee shall mail a
notice of its succession to Noteholders. The retiring
Indenture Trustee shall promptly transfer all property held
by it as Indenture Trustee to the successor Indenture
Trustee.
If the Indenture Trustee fails to comply with
Section 6.11, any Noteholder may petition any court of
competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Master
Servicer's obligations under Section 6.7 shall continue for
the benefit of the retiring Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger
. If the Indenture Trustee consolidates with,
merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving
or transferee entity without any further act shall be the
successor Indenture Trustee; provided that such corporation
or banking association shall otherwise be eligible under
Section 6.11 hereof. The Indenture Trustee shall provide
the Rating Agencies with written notice of any such
transaction as soon as practical thereafter.
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In case at the time such successor or successors
by merger, conversion or consolidation to the Indenture
Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but
not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or
Separate Indenture Trustee
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the
Trust may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a co-
trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the related Series Trust
Estate, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title
to the related Series Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee
under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be
required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to
the following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any
particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or
any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture
Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee
hereunder, including acts or omissions of predecessor or
successor trustees; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each
of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each
separate trustee and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the
liability of, or affording protection to, the Indenture
Trustee. Every such instrument shall be filed with the
Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-
fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, dissolve, become
insolvent, become incapable of acting, resign or be removed,
all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Indenture Trustee, to
the extent permitted by law, without the appointment of a
new or successor trustee.
SECTION 6.11 Eligibility: Disqualification
. The Indenture Trustee shall at all times:
satisfy TIA 310(a), have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent
published annual report of condition, and have a long-term
debt rating of at least "BBB", "Baa2" or equivalent rating
from each of the Rating Agencies. The Indenture Trustee
shall comply with TIA 310(b), including the optional
provision permitted by the second sentence of TIA
310(b)(9); provided, however, that there shall be excluded
from the operation of TIA 310(b)(1) any indenture or
indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth
in TIA 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against
Issuer
. The Indenture Trustee shall comply with TIA
311(a), excluding any creditor relationship listed in TIA
311(b). An Indenture Trustee who has resigned or been
removed shall be subject to TIA 311(a) to the extent
indicated.
SECTION 6.13 Representations and Warranties of the
Indenture Trustee
. The Indenture Trustee represents and warrants
to the Issuer as follows:
(a) Due Organization. The Indenture Trustee is a
national banking association, duly organized, validly
existing and in good standing under the laws of the State of
the United States and is duly authorized and licensed under
applicable law to conduct its business as presently
conducted.
(b) Corporate Power. The Indenture Trustee has all
requisite right, power and authority to execute and deliver
this Indenture and each Series Supplement and to perform all
of its duties as the Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by
the Indenture Trustee of this Indenture, each Series
Supplement and the other Series Related Transaction
Documents to which it is a party, and the performance by the
Indenture Trustee of its duties hereunder and thereunder,
have been duly authorized by all necessary corporate
proceedings which are required for the valid execution and
delivery by the Indenture Trustee, or the performance by the
Indenture Trustee, of this Indenture, each Series Supplement
and such other Series Related Documents.
(d) Valid and Binding Indenture. The Indenture
Trustee has duly executed and delivered this Indenture, each
Series Supplement, each other Basic Document and each Series
Related Document to which it is a party, and each of this
Indenture, any Series Supplement, each other Basic Document
and each other Series Related Document constitutes the
legal, valid and binding obligation of the Indenture Trustee
enforceable against the Indenture Trustee in accordance with
its terms, except as (i) such enforceability may be limited
by bankruptcy, insolvency, reorganization and similar laws
relating to or affecting the enforcement of creditors'
rights generally and (ii) the availability of equitable
remedies may be limited by equitable principles of general
applicability.
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SECTION 6.14 Waiver of Setoffs
. The Indenture Trustee hereby expressly waives
any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect
to any Trust Account and Series Trust Account and agrees
that amounts in the Trust Accounts and Series Trust Accounts
shall at all times be held and applied solely in accordance
with the provisions hereof.
SECTION 6.15 No Consent to Certain Acts of Seller
. The Seller shall not request that the Indenture
Trustee consent to, nor shall the Indenture Trustee consent
to any action proposed to be taken by the Seller pursuant to
Article FIFTEENTH of the Seller's Articles of Incorporation.
ARTICLE VII.
Noteholders' Lists and Reports
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names
and Addresses of Noteholders
. The Issuer will furnish or cause to be
furnished to the Indenture Trustee with respect to each
Series of Notes (a) not more than five days after the
earlier of (i) each Record Date with respect to such Series
and (ii) three months after the last Record Date, a list, in
such form as the Indenture Trustee may reasonably require,
of the names and addresses of the Holders with respect to
such Series as of such Record Date, (b) at such other times
as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list
of similar form and content as of a date not more than 10
days prior to the time such list is furnished; provided,
however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
SECTION 7.2 Preservation of Information; Communications
to Noteholders
. The Indenture Trustee shall preserve, in as
current a form as is reasonably practicable, the names and
addresses of the Holders contained in the most recent list
furnished to the Indenture Trustee as provided in Section
7.1 and the names and addresses of Holders received by the
Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so
furnished.
(a) Noteholders may communicate pursuant to TIA
312(b) with other Noteholders with respect to their rights
under this Indenture or under the Notes.
(b) The Issuer, the Indenture Trustee and the Note
Registrar shall have the protection of TIA 312(c).
SECTION 7.3 Reports by Issuer
.
If this Indenture is qualified under the TIA, the
Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and copies of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the
Issuer may be required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission
in accordance with rules and regulations prescribed from
time to time by the Commission such additional information,
documents and reports with respect to compliance by the
Issuer with the conditions and covenants of this Indenture
as may be required from time to time by such rules and
regulations; and
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(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described
in TIA 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.3(a) as
may be required by rules and regulations prescribed from
time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal
year of the Issuer shall end on December 31 of each year.
(c) The Indenture Trustee shall not have any duty or
obligation with respect to any reports or other information
delivered to it pursuant to this Section 7.3.
SECTION 7.4 Reports by Indenture Trustee
. If required by TIA 313(a), within 60 days
after each March 31 beginning with March 31, 2000 the
Indenture Trustee shall mail to each Noteholder as required
by TIA 313(c) a brief report dated as of such date that
complies with TIA 313(a). The Indenture Trustee also
shall comply with TIA 313(b).
A copy of each report at the time of its mailing
to Noteholders shall be filed by the Indenture Trustee with
the Commission and each stock exchange, if any, on which the
Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock
exchange.
ARTICLE VIII.
Accounts, Disbursements and Releases
SECTION 8.1 Collection of Money
. Except as otherwise expressly provided herein,
the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention
or assistance of any fiscal agent or other intermediary, all
money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture and the Master
Sale and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this
Indenture and the Series Supplement. Except as otherwise
expressly provided in this Indenture or in the Master Sale
and Servicing Agreement, if any default occurs in the making
of any payment or performance under any agreement or
instrument that is part of the Series Trust Estate, the
Indenture Trustee may take such action as may be appropriate
to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. Any
such action shall be without prejudice to any right to claim
a Default or Event of Default under this Indenture and any
right to proceed thereafter as provided in Article V.
SECTION 8.2 Release of Trust Property
.
(a) Subject to the payment of its fees and expenses
pursuant to Section 6.7, the Indenture Trustee may, and when
required by the Issuer and the provisions of this Indenture
shall, execute instruments to release property from the lien
of this Indenture, in a manner and under circumstances that
are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article VIII shall be
bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or
see to the application of any monies.
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(b) The Indenture Trustee shall, at such time as there
are no Notes outstanding and all sums due the Indenture
Trustee pursuant to Section 6.7 have been paid, release any
remaining portion of the related Series Trust Estate that
secured the Notes from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Trust Accounts. The
Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.2(b) only upon
receipt of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the
TIA) Independent Certificates in accordance with TIA
314(c) and 314(d)(1) meeting the applicable requirements
of Section 11.1.
SECTION 8.3 Opinion of Counsel
. The Indenture Trustee shall receive at least
seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.2(a), accompanied by copies of
any instruments involved, and the Indenture Trustee shall
also require as a condition to such action, an Opinion of
Counsel, stating the legal effect of any such action,
outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of
such action have been complied with and such action will not
materially and adversely impair the security for the Notes
or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an
opinion as to the fair value of the related Series Trust
Estate. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to
the Indenture Trustee in connection with any such action.
ARTICLE IX.
Amendments; Series Supplements
SECTION 9.1 Amendments Without Consent of Noteholders
.
(a) Except as otherwise provided in the Series
Supplement, without the consent of the Holders of any Notes
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, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture,
or better to assure, convey and confirm unto the Indenture
Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of
this Indenture 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 Holders of the Notes, 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;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any Series Supplement which may
be inconsistent with any other provision herein or in any
Series Supplement or to make any other provisions with
respect to matters or questions arising under this Indenture
or in any Series Supplement; provided that such action shall
not adversely affect the interests of the Holders of the
Notes;
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(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to
the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to
effect the qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to
add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture 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.
(b) Except as otherwise provided in the Series
Supplement, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, may, also without the consent
of any of the Holders of the Notes 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, this
Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided,
however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.2 Amendments With Consent of Noteholders
. Except as otherwise provided in the Series
Supplement, 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
Notes affected thereby, 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 Indenture or of modifying in any manner
the rights of the Holders of the Notes under this Indenture;
provided, however, that no such amendment shall, without the
consent of the Holder of each Outstanding Note affected
thereby:
(i) change the date of payment of any installment
of principal of or interest on any Note, or reduce
the principal amount thereof, the interest rate
thereon, change the provision of this Indenture
relating to the application of collections on, or
the proceeds of the sale of, any Series Trust
Estate to payment of principal of or interest on
the Notes, or change any place of payment where,
or the coin or currency in which, any Note or the
interest thereon is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture
requiring the application of funds available
therefor, as provided in Article V, to the payment
of any such amount due on the Notes on or after
the respective due dates thereof;
(iii) reduce the percentage of the Outstanding
Amount of the Notes, the consent of the Holders of
which is required for any such Series Supplement,
or the consent of the Holders of which is required
for any waiver of compliance with certain
provisions of this Indenture or certain defaults
hereunder and their consequences provided for in
this Indenture;
(iv) modify or alter the provisions of the proviso
to the definition of the term "Outstanding";
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(v) reduce the percentage of the Outstanding
Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or
liquidate the Series Trust Estate pursuant to
Section 5.4;
(vi) modify any provision of this Section except
to increase any percentage specified herein or to
provide that certain additional provisions of this
Indenture or the Basic Documents cannot be
modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(vii) modify any of the provisions of this
Indenture in such manner as to affect the
calculation of the amount of any payment of
interest or principal due on any 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 Notes to the benefit of any provisions
for the mandatory redemption of the Notes
contained in the Series Supplement; or
(viii) permit the creation of any lien ranking
prior to or on a parity with the lien of this
Indenture with respect to any part of the Series
Trust Estate or, except as otherwise permitted or
contemplated herein or in the Series Supplement or
the Series Related Documents, terminate the lien
of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note
of the security provided by the lien of this
Indenture.
It shall not be necessary for any Act of
Noteholders under this Section to approve the particular
form of any proposed amendment, 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 any amendment pursuant to this Section,
the Indenture Trustee shall mail to the Holders of the Notes
to which such amendment relates a notice setting forth in
general terms the substance of such amendment. 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 such amendment.
Prior to the execution of any amendment to this
Indenture, the Indenture 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 Indenture. The Indenture Indenture Trustee may, but
shall not be obligated to, enter into any such amendment
which affects the Indenture Indenture Trustee's own rights,
duties or immunities under this Indenture.
SECTION 9.3 Supplements Authorizing a Series of Notes
.
(a) Each Series of Notes issued hereunder shall be
issued pursuant to a Series Supplement, which shall set
forth the terms and provisions of such Series.
(b) Amendments to Series Supplements shall be governed
by the provisions of the relevant Series Supplement. The
Indenture Trustee may conclusively rely on an Opinion of
Counsel as to which Series Supplements relate to which
Series, or to this Indenture (and thus all Series) as a
whole.
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SECTION 9.4 Execution of Series Supplements
. In executing, or permitting the additional
trusts created by, any Series Supplement permitted by this
Article IX or the modifications thereby of the trusts
created by this Indenture, the Indenture Trustee shall be
entitled to receive, and subject to Sections 6.1 and 6.2,
shall be fully protected in relying upon, an Opinion of
Counsel (and, if requested, an Officer's Certificate)
stating that the execution of such Series Supplement is
authorized or permitted by this Indenture. The Indenture
Trustee may, but shall not be obligated to, enter into any
such Series Supplement that affects the Indenture Trustee's
own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.5 Effect of Series Supplement
. Upon the execution of any Series Supplement or
amendment pursuant to the provisions of such Series
Supplement or hereof, this Indenture shall be and be deemed
to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such
Series Supplement or amendment shall be and be deemed to be
part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 9.6 Conformity With Trust Indenture Act
. Every amendment of this Indenture and every
Series Supplement executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be
qualified under the Trust Indenture Act.
SECTION 9.7 Reference in Notes to Series Supplements
. Notes authenticated and delivered after the
execution of any Series Supplement pursuant to this Article
IX may, and if required by the Issuer shall, bear a notation
as to any matter provided for in such Series Supplement. If
the Issuer shall so determine, new Notes so modified as to
conform, in the opinion of the Issuer, to any such Series
Supplement may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in
exchange for Outstanding Notes.
ARTICLE X.
Reserved
ARTICLE XI.
Miscellaneous
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to
the Indenture Trustee to take any action under any provision
of this Indenture or any Series Supplement, the Issuer shall
furnish to the Indenture Trustee (i) an Officer's
Certificate stating that all conditions precedent, if any,
provided for in this Indenture or any Series Supplement
relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have
been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public
accountants meeting the applicable requirements of this
Section, except that, in the case of any such application or
request as to which the furnishing of such documents is
specifically required by any provision of this Indenture or
any Series Supplement, no additional certificate or opinion
need be furnished.
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Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture or any Series Supplement shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read
such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory such condition or covenant has been complied
with.
(b)
(i) (i) Prior to the deposit of any property or
securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject
to the lien of this Indenture and the related Series
Supplement, the Issuer shall, in addition to any obligation
imposed in Section 11.1(a) or elsewhere in this Indenture or
the related Series Supplement, furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the
fair value (within 90 days of such deposit) to the Issuer of
the property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to
the same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of
the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is 10% or
more of the Outstanding Amount of the Notes; provided, that
such a certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is
less than $25,000 or less than 1% percent of the Outstanding
Amount of the Notes.
(iii) Other than with respect to the release of any
Repurchased Receivables or Liquidated Receivables (as such
terms are defined in the Master Sale and Servicing
Agreement), whenever any property or securities are to be
released from the lien of this Indenture and the related
Series Supplement, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating
that in the opinion of such person the proposed release will
not impair the security under this Indenture and the related
Series Supplement in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also furnish
to the Indenture Trustee an Independent Certificate as to
the same matters if the fair value of the property or
securities and of all other property other than Repurchased
Receivables and Defaulted Receivables (as such terms are
defined in the Master Sale and Servicing Agreement), or
securities released from the lien of this Indenture since
the commencement of the then current calendar year, as set
forth in the certificates required by clause (ii) above and
this clause (iii), equals 10% or more of the Outstanding
Amount of the Notes; provided, that such certificate need
not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less
than 1 percent of the then Outstanding Amount of the Notes.
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(v) Notwithstanding Section 2.9 or any other provision
of this Section, the Issuer may (A) collect, liquidate, sell
or otherwise dispose of Receivables as and to the extent
permitted or required by the Basic Documents and (B) make
cash payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents.
SECTION 11.2 Form of Documents Delivered to Indenture
Trustee
. In any case where several matters are required
to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Authorized
Officer of the Issuer may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the
Master Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the
possession of the Master Servicer, the Seller or the Issuer,
unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be
consolidated and form one instrument.
Whenever in this Indenture or any Series
Supplement, in connection with any application or
certificate or report to the Indenture Trustee, it is
provided that the Issuer shall deliver any document as a
condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of
such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such
case be conditions precedent to the right of the Issuer to
have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to
conclusively rely upon the truth and accuracy of any
statement or opinion contained in any such document as
provided in Article VI.
SECTION 11.3 Acts of Noteholder
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered
to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner
provided in this Section.
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(b) The fact and date of the execution by any person
of any such instrument or writing may be proved in any
customary manner of the Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any
Notes shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon
such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer
and Rating Agencies
. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture or any
Series Supplement to be made upon, given or furnished to or
filed with:
(a) The Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if
personally delivered, delivered by overnight courier or
mailed first-class and shall be deemed to have been duly
given upon receipt to the Indenture Trustee at its Corporate
Trust Office, or
(b) The Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder
if personally delivered, delivered by facsimile or overnight
courier or mailed first class, and shall deemed to have been
duly given upon receipt to the Issuer addressed to:
Household Automotive Trust IV, in care of Wilmington Trust
Company, Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890-0001 Attention: Corporate Trust
Administration, or at any other address previously furnished
in writing to the Indenture Trustee by Issuer. The Issuer
shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.
Notices required to be given to the Rating
Agencies by the Issuer, the Indenture Trustee or the Owner
Trustee shall be in writing, personally delivered, delivered
by overnight courier or first class or via facsimile to (i)
in the case of Moody's, at the following address: Moody's
Investors Service, Inc., 99 Church Street, New York, New
York 10004, Fax No: (212) 553-0355 and (ii) in the case of
S&P, at the following address: Standard & Poor's Ratings
Group, 55 Water Street, New York, New York 10041, Attention:
Asset Backed Surveillance Department, Fax No: (212) 438-
2649; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other
parties.
SECTION 11.5 Notices to Noteholders; Waiver
. Where this Indenture or any Series Supplement
provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such event,
at his address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so
mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been
duly given.
Where this Indenture or any Series Supplement
provides for notice in any manner, such notice may be waived
in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by
Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
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In case, by reason of the suspension of regular
mail service as a result of a strike, work stoppage or
similar activity, it shall be impractical to mail notice of
any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the
Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where this Indenture or any Series Supplement
provides for notice to the Rating Agencies, failure to give
such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.
SECTION 11.6 Alternate Payment and Notice Provisions
. Notwithstanding any provision of this
Indenture, any Series Supplement or any of the Notes to the
contrary, the Issuer may enter into any agreement with any
Holder of a Note providing for a method of payment, or
notice by the Indenture Trustee or any Note Paying Agent to
such Holder, that is different from the methods provided for
in this Indenture or the related Series Supplement for such
payments or notices, provided that such methods are
reasonable and consented to by the Indenture Trustee (which
consent shall not be unreasonably withheld). The Issuer will
furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act
. If this Indenture is qualified under the Trust
Indenture Act and if any provision hereof limits, qualifies
or conflicts with another provision hereof that is required
to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall
control.
The provisions of TIA 310 through 317 that
impose duties on any person (including the provisions
automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents
. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 11.9 Successors and Assigns
. All covenants and agreements in this Indenture
and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture, any Series Supplement
shall bind its successors. All agreements of the Master
Servicer in this Indenture or any Series Supplement shall
bind its successors and assigns.
SECTION 11.10 Separability
. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
SECTION 11.11 Benefits of Indenture
. Nothing in this Indenture or any Series
Supplement or in the Notes, express or implied, shall give
to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other
party secured hereunder, and any other person with an
ownership interest in any part of the related Series Trust
Estate, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
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SECTION 11.12 Legal Holidays
. In any case where the date on which any payment
is due shall not be a Business Day, then (notwithstanding
any other provision of the Notes, this Indenture or any
Series Supplement) payment need not be made on such date,
but may be made on the next succeeding Business Day with the
same force and effect as if made on the date an which
nominally due, and no interest shall accrue for the period
from and after any such nominal date.
SECTION 11.13 GOVERNING LAW
. THIS INDENTURE 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 11.14 Counterparts
. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to
be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.15 Recording of Indenture
. If this Indenture or any Series Supplement is
subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and
at its expense accompanied by an Opinion of Counsel (which
may be counsel to the Trust or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the
Noteholders or any other person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture
Trustee under this Indenture or any Series Supplement.
SECTION 11.16 Trust Obligation
. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer,
the Seller, the Master Servicer, the Owner Trustee or the
Indenture Trustee on the Notes or under this Indenture or
any Series Supplement or any certificate or other writing
delivered in connection herewith or therewith, against (i)
the Seller, the Master Servicer, the Indenture Trustee or
the Owner Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director, employee or
agent of the Seller, the Master Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller,
the Master Servicer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Seller, the
Master Servicer, the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the
Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that
any such owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII, and VIII
of the Trust Agreement.
<PAGE>
<PAGE> 50
SECTION 11.17 No Petition
. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby
covenant and agree that they will not at any time institute
against the Seller, or the Issuer, or join in, cooperate
with or encourage others in connection with the institution
against the Seller, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States
Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, this Indenture
or any of the Basic Documents or any of the Series Related
Documents.
SECTION 11.18 Limited Recourse.
(a) Notwithstanding anything in the Series 2000-1
Related Documents to the contrary, the Series 2000-1 Notes
constitute limited recourse obligations of the Issuer and
are limited in recourse to the Series 2000-1 Trust Estate.
The Indenture Trustee, by entering into this Indenture and
the related Series 2000-1 Supplement, and each Series 2000-1
Noteholder agree that recourse for the Series 2000-1 Notes
is limited to the Series 2000-1 Trust Estate and, if the
Series 2000-1 Trust Estate shall prove to be insufficient to
pay amounts due under the Series 2000-1, shall have no claim
against the assets of the Issuer or the Seller other than
the Series 2000-1 Trust Estate.
(b) If, notwithstanding paragraph (a) above, the
Series 2000-1 Noteholders are deemed to have any interest in
any asset of the Seller other than the Seller's interest in
the Series 2000-1 Trust Estate, including any interest in
assets of the Seller pledged to secure debt obligations of
the Seller other than the Series 2000-1 Notes, the Indenture
Trustee, by entering into this Indenture and the related
Series 2000-1 Supplement, and each Series 2000-1 Noteholder
agree that any such interest is subordinate to the claims of
the holders of any such debt obligations, and the Series
2000-1 Noteholders shall have no rights in such assets until
such other debt obligations are indefeasibly paid in full.
The agreement of the Indenture Trustee and the Series 2000-1
Noteholders pursuant to this Section 11.18(b) is intended to
constitute a subordination agreement for the purposes of
Section 510(a) of the Bankruptcy Code.
SECTION 11.19 Inspection
. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to
examine all the books of account, records, reports, and
other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by independent
certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers,
employees, and independent certified public accountants, all
at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture
Trustee may reasonably determine that such disclosure is
consistent with its Obligations hereunder.
<PAGE>
<PAGE> 51
SECTION 11.20 Limitation of Liability
. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or
personally but solely as Owner Trustee of the Issuer under
the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on
the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by Wilmington
Trust Company but is made and intended for the purpose for
binding only the Issuer, (c) nothing herein contained shall
be construed as creating any liability on Wilmington Trust
Company individually or personally, to perform any covenant
either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties to
this Agreement and by any person claiming by, through or
under them and (d) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation,
warranty or covenant made or undertaking by the Issuer under
this Agreement or any related documents.
[Signature Page Follows]
IN WITNESS WHEREOF, the Issuer and the Indenture
Trustee have caused this Indenture to be duly executed by
their respective officers, hereunto duly authorized, all as
of the day and year first above written.
HOUSEHOLD AUTOMOTIVE TRUST IV
By: WILMINGTON TRUST COMPANY, not
in its individual capacity but
solely as Owner Trustee
By:_______________________________
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture
Trustee
By:_______________________________
Name:
Title:
[Signature Page for the Indenture]
<PAGE>
<PAGE> 52
Exhibit A
FORM OF TRANSFEREE CERTIFICATE
Pursuant to Section 2.4 of the Indenture dated as
of February 1, 2000 between the Household Automotive Trust
IV and Norwest Bank Minnesota, National Association,
___________ (the "Transferee") hereby certifies on the date
hereof that either (check appropriate certification):
_____ (i) the Transferee is not (A) an employee
benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA or (B) a plan
(within the meaning of Section 4975(e)(1) of the Internal
Revenue Code of 1986, as amended (the "Code")) that is
subject to Section 4975 of the Code (each of the foregoing,
a "Plan"), and is not acting on behalf of or investing the
assets of a Plan; or
_____ (ii) that the Transferee's acquisition and
continued holding of the Definitive Note will be covered by
a prohibited transaction class exemption issued by the U.S.
Department of Labor.
By: ___________________
[Name of Transferee]
<PAGE> 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
<PAGE>
<PAGE> 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 A-
4 Notes" and together with Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes, the "Class A Notes").
<PAGE>
<PAGE> 3
(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").
<PAGE>
<PAGE> 4
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.
<PAGE>
<PAGE> 5
"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.
<PAGE>
<PAGE> 6
"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).
<PAGE>
<PAGE> 7
"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.
<PAGE>
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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 Moody's.
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. 1038377 for further credit, account no. 13633701, reference
Household Automotive Trust IV Reserve Account at the Indenture
Trustee, ABA No. 091000019.
"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. 1038377, for further credit,
account no. 13633700, reference Household Automotive Trust IV
Collection Account at the Indenture Trustee, ABA No. 091000019.
"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 Moody's (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).
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(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.
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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.
<PAGE>
<PAGE> 17
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.
<PAGE>
<PAGE> 18
(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
<PAGE>
<PAGE> 19
(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.
<PAGE>
<PAGE> 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: B.B. Moss, Jr.
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: Steven H. Smith
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:
<PAGE>
<PAGE> 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 Magnuson-Moss 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;
<PAGE>
<PAGE> 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;
<PAGE>
<PAGE> 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;
<PAGE>
<PAGE> 24
(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 Dewey Ballantine
Exhibit A
Form of Master Servicer's Certificate
<PAGE> 1
[CAPTION]
MASTER SALE AND SERVICING AGREEMENT
among
HOUSEHOLD AUTOMOTIVE TRUST IV,
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
HOUSEHOLD FINANCE CORPORATION,
Master Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Indenture Trustee
Dated as of February 1, 2000
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.1. Definitions 1
SECTION 1.2. Other Interpretive Provisions 19
SECTION 1.3. Usage of Terms 19
SECTION 1.4. Certain References 20
SECTION 1.5. No Recourse 20
SECTION 1.6. Action by or Consent of Noteholders 20
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables 20
SECTION 2.2. Further Encumbrance of Series Trust
Estate 24
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller 25
SECTION 3.2. Repurchase upon Breach 25
SECTION 3.3. Custody of Receivables Files 26
<PAGE>
<PAGE> 2
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of the Master Servicer 26
SECTION 4.2. Collection of Receivable Payments;
Modifications of Receivables 28
SECTION 4.3. Realization Upon Receivables 29
SECTION 4.4. Insurance 31
SECTION 4.5. Maintenance of Security Interests in
Vehicles 31
SECTION 4.6. Covenants, Representations, and
Warranties of Master Servicer 32
SECTION 4.7. Repurchase of Receivables Upon Breach of
Covenant 33
SECTION 4.8. Total Servicing Fee; Payment of Certain
Expenses by Master Servicer 33
SECTION 4.9. Master Servicer's Certificate 34
SECTION 4.10. Annual Statement as to Compliance,
Notice of Master Servicer Termination
Event 34
SECTION 4.11. Annual Independent Accountants' Report 34
SECTION 4.12. Access to Certain Documentation and
Information Regarding Receivables 35
SECTION 4.13. Fidelity Bond and Errors and Omissions
Policy 35
ARTICLE V
Trust Accounts; Distributions;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts 36
SECTION 5.2. Certain Reimbursements to the Master
Servicer 38
SECTION 5.3. Application of Collections 38
SECTION 5.4. Additional Deposits 38
SECTION 5.5. Distributions 38
ARTICLE VI
RESERVED
ARTICLE VII
RESERVED
ARTICLE VIII
The Seller
SECTION 8.1. Representations of Seller 39
SECTION 8.2. Corporate Existence 41
SECTION 8.3. Liability of Seller; Indemnities 42
SECTION 8.4. Merger or Consolidation of, or Assumption
of the Obligations of, Seller 43
SECTION 8.5. Limitation on Liability of Seller and
Others 43
SECTION 8.6. Seller May Own Certificates or Notes 44
ARTICLE IX
The Master Servicer
SECTION 9.1. Representations of Master Servicer 44
SECTION 9.2. Liability of Master Servicer; Indemnities 46
SECTION 9.3. Merger or Consolidation of, or Assumption
of the Obligations of the Master Servicer 48
SECTION 9.4. Limitation on Liability of Master
Servicer and Others 48
SECTION 9.5. Delegation of Duties 49
SECTION 9.6. Master Servicer Not to Resign 49
SECTION 9.7. Sub-Servicing Agreements Between Master
Servicer and Sub-Servicers 50
SECTION 9.8. Successor Sub-Servicers 50
ARTICLE X
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Default
SECTION 10.1. Master Servicer Termination Event 51
SECTION 10.2. Consequences of a Master Servicer
Termination Event 52
SECTION 10.3. Appointment of Successor 53
SECTION 10.4. Notification to Noteholders and
Certificateholders 54
SECTION 10.5. Waiver of Past Defaults 54
SECTION 10.6. Successor to Master Servicer 54
ARTICLE XI
Termination
SECTION 11.1. Optional Purchase of All Receivables 55
ARTICLE XII
Administrative Duties of the Master Servicer
SECTION 12.1. Administrative Duties. 56
SECTION 12.2. Records 58
SECTION 12.3. Additional Information to be Furnished
to the Issuer 58
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.1. Amendments 58
SECTION 13.2. Protection of Title to Trust 60
SECTION 13.3. Notices 62
SECTION 13.4. Assignment 62
SECTION 13.5. Limitations on Rights of Others 62
SECTION 13.6. Severability 63
SECTION 13.7. Separate Counterparts 63
SECTION 13.8. Headings 63
SECTION 13.9. Governing Law 63
SECTION 13.10. Assignment to Indenture Trustee 63
SECTION 13.11. Nonpetition Covenants 63
SECTION 13.12. Limitation of Liability of Owner
Trustee 64
SECTION 13.13. Independence of the Master Servicer 64
SECTION 13.14. No Joint Venture 64
EXHIBITS
Exhibit A - Form of Master Servicer's Certificate
Exhibit B - Form of Transfer Agreement
Exhibit C - Form of Request for Release and Receipt of
Documents
Exhibit D - Form of Indenture Trustee's Acknowledgement
MASTER SALE AND SERVICING AGREEMENT dated as of
February 1, 2000, among HOUSEHOLD AUTOMOTIVE TRUST IV, a
Delaware business trust (the "Issuer"), HOUSEHOLD AUTO
RECEIVABLES CORPORATION, a Nevada corporation (the
"Seller"), HOUSEHOLD FINANCE CORPORATION, a Delaware
corporation (the "Master Servicer") and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, in its capacity as Indenture Trustee.
WHEREAS the Issuer desires to purchase from time
to time Receivables arising in connection with motor vehicle
retail installment sale contracts acquired by Household
Automotive Finance Corporation or any of its subsidiaries;
WHEREAS the Seller will purchase from time to time
Receivables from Household Automotive Finance Corporation
and is willing to sell Receivables to the Issuer;
WHEREAS the Master Servicer is willing to service
all such receivables;
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NOW, THEREFORE, in consideration of the promises
and the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions
. Whenever used in this Agreement, the following words and
phrases shall have the following meanings:
"Accountants' Report" means the report of a firm
of nationally recognized independent accountants described
in Section 4.11.
"Accounting Date" means, with respect to a
Distribution Date, the last day of the Collection Period
immediately preceding such Distribution Date.
"Actuarial Method" means the method of allocating
a fixed level monthly payment on an obligation between
principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the
product of (a) 1/12, (b) the fixed annual rate of interest
on such obligation and (c) the outstanding principal balance
of such obligation.
"Actuarial Receivable" means a Receivable under
which the portion of the payment allocated to interest and
the portion allocable to principal is determined in
accordance with the Actuarial Method.
"Addition Notice" means, with respect to any
transfer of Receivables to the Trust pursuant to Section 2.1
of this Agreement, notice of the Seller's election to
transfer Receivables to the Trust, such notice to designate
the related Transfer Date, the related Series Trust Estate,
if any, and the approximate principal amount of Receivables
to be transferred on such Transfer Date.
"Affiliate" means, with respect to any specified
Person, any other Person controlling or controlled by or
under common control with such specified Person. For the
purposes of this definition, "control" when used with
respect to any Person means the power to direct the
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
"Aggregate Principal Balance" means, with respect
to any date of determination, the sum of the Principal
Balances for all Receivables (other than (i) any Receivable
that has become a Liquidated Receivable and (ii) any
Receivable that has become a Repurchased Receivable as of
the date of determination).
"Agreement" means this Master Sale and Servicing
Agreement, as the same may be amended and supplemented from
time to time.
"Amount Financed" means, with respect to a
Receivable, the aggregate amount advanced under such
Receivable toward the purchase price of the Financed Vehicle
and any related costs, including amounts advanced in respect
of accessories, insurance premiums, service and warranty
contracts, other items customarily financed as part of
retail automobile installment sale contracts or promissory
notes, and related costs.
"Annual Percentage Rate" or "APR" of a Receivable
means the annual percentage rate of finance charges or
service charges, as stated in the related Contract.
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"Base Servicing Fee" means, with respect to each
Series Trust Estate and with respect to any Collection
Period, the fee payable to the Master Servicer for services
rendered during such Collection Period, which, unless
otherwise specified in the related Series Supplement, shall
be equal to one-twelfth of the Servicing Fee Rate multiplied
by the Pool Balance for such Series Trust Estate determined
as of the first day of such Collection Period.
"Basic Documents" means this Agreement, the
Certificate of Trust, the Trust Agreement, the Indenture,
the Master Receivables Purchase Agreements and other
documents and certificates delivered in connection
therewith.
"Business Day" means a day other than a Saturday,
a Sunday or other day on which commercial banks located in
the states of Illinois and Minnesota are authorized or
obligated to be closed.
"Certificate" has the meaning assigned to such
term in the Trust Agreement and, with respect to a Series,
the meaning specified in the relevant Series Supplement.
"Certificateholder" has the meaning assigned to
such term in the Trust Agreement.
"Class" means a class of Notes or Certificates, as
the context requires.
"Collected Funds" means, with respect to any
Distribution Date, the amount of funds in the Master
Collection Account representing collections on Receivables
during the related Collection Period, including all Net
Liquidation Proceeds collected during the related Collection
Period (but excluding any Repurchase Amounts).
"Collection Period" means, for each Series, with
respect to the first Distribution Date in such Series, the
period beginning on the opening of business on the related
Cutoff Date and ending on the close of business on the last
day of the calendar month preceding such Distribution Date.
With respect to each subsequent Distribution Date, the
preceding calendar month. Any amount stated "as of the
close of business of the last day of a Collection Period"
shall give effect to all applications of collections on such
day.
"Collection Records" means all manually prepared
or computer generated records relating to collection efforts
or payment histories with respect to the Receivables.
"Computer Tape" means the computer tapes or other
electronic media furnished by the Seller to the Issuer and
its assigns describing certain characteristics of the
Receivables.
"Contract" means a motor vehicle retail
installment sale contract.
"Corporate Trust Office" means (i) with respect to
the Owner Trustee, the principal corporate trust office of
the Owner Trustee, which at the time of execution of this
agreement is Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration, and (ii) with respect to the Indenture
Trustee, the principal corporate trust office of Norwest
Bank Minnesota, National Association, which at the time of
execution of this agreement is Norwest Bank Minnesota,
National Association, MAC N9311-161, 6th & Marquette,
Minneapolis, MN 55479, Attn: Corporate Trust
Services/Asset-Backed Administration.
"Covenant Receivable" means, with respect to any
Collection Period, a Receivable which the Master Servicer is
required to purchase pursuant to Section 4.7.
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"Cram Down Loss" means, with respect to a
Receivable, if a court of appropriate jurisdiction in an
insolvency proceeding shall have issued a final order
reducing the amount owed on a Receivable or otherwise
modifying or restructuring the scheduled payments to be made
on a Receivable, an amount equal to (i) the excess of the
Principal Balance of such Receivable immediately prior to
such order over the Principal Balance of such Receivable as
so reduced and/or (ii) if such court shall have issued an
order reducing the effective rate of interest on such
Receivable, the excess of the Principal Balance of such
Receivable immediately prior to such order over the net
present value (using as the discount rate the higher of the
APR on such Receivable or the rate of interest, if any,
specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss"
shall be deemed to have occurred on the date of issuance of
such order.
"Cutoff Date" means, with respect to a Receivable
and (i) the Transfer Date as of which such Receivable is
transferred to the Trust, (a) the Accounting Date
immediately preceding such Transfer Date or (b) if such
Receivable is originated in the month of the related
Transfer Date, the date of origination or (ii) the date
designated in the related Series Supplement as the Cutoff
Date for such Series.
"Dealer" means a dealer who sold a Financed
Vehicle and who originated and assigned the respective
Receivable, directly or indirectly, to HAFC or one of its
subsidiaries under a Dealer Agreement or pursuant to a
Dealer Assignment.
"Dealer Agreement" means any agreement between
HAFC and a Dealer relating to the acquisition of Receivables
from a Dealer by HAFC.
"Dealer Assignment" means, with respect to a
Receivable, the executed assignment executed by a Dealer
conveying such Receivable to HAFC.
"Dealer Underwriting Guide" means either, (i) the
underwriting guidelines used by or on behalf of HAFC or one
of its subsidiaries in the origination and purchase of
Receivables as amended from time to time or (ii) the
underwriting guidelines used in the origination of
Receivables as reviewed by HAFC or one of its subsidiaries
prior to the purchase of Receivables by HAFC.
"Delivery" means with respect to the Trust Account
Property:
(1) the perfection and priority of a security interest
in which is governed by the law of a jurisdiction which has
adopted the 1978 Revision to Article Eight of the UCC:
(a) with respect to bankers' acceptances,
commercial paper, negotiable certificates of deposit
and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC
(other than certificated securities) and are
susceptible of physical delivery, transfer thereof to
the Indenture Trustee by physical delivery to the
Indenture Trustee, endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or
endorsed in blank and such additional or alternative
procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such
Collateral to the Indenture Trustee free and clear of
any adverse claims, consistent with changes in
applicable law or regulations or the interpretation
thereof;
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<PAGE> 7
(b) with respect to a "certificated security" (as
defined in Section 8-102(1)(a) of the UCC), transfer
thereof:
(i) by physical delivery of such
certificated security to the Indenture Trustee,
provided that if the certificated security is in
registered form, it shall be endorsed to, or
registered in the name of, the Indenture Trustee
or endorsed in blank;
(ii) by physical delivery of such
certificated security to a "financial
intermediary" (as defined in Section 8-313(4) of
the UCC) of the Indenture Trustee specially
endorsed to or issued in the name of the Indenture
Trustee;
(iii) by the sending by a financial
intermediary, not a "clearing corporation" (as
defined in Section 8-102(3) of the UCC), of a
confirmation of the purchase and the making by
such financial intermediary of entries on its
books and records identifying as belonging to the
Indenture Trustee of (A) a specific certificated
security in the financial intermediary's
possession, (B) a quantity of securities that
constitute or are part of a fungible bulk of
certificated securities in the financial
intermediary's possession, or (C) a quantity of
securities that constitute or are part of a
fungible bulk of securities shown on the account
of the financial intermediary on the books of
another financial intermediary; or
(iv) by the making by a clearing corporation
of appropriate entries on its books reducing the
appropriate securities account of the transferor
and increasing the appropriate securities account
of the Indenture Trustee or a Person designated by
the Indenture Trustee by the amount of such
certificated security, provided that in each case:
(A) the clearing corporation identifies such
certificated security for the sole and exclusive
account of the Indenture Trustee or the Person
designated by the Indenture Trustee, (B) such
certificated security shall be subject to the
clearing corporation's exclusive control, (C) such
certificated security is in bearer form or
endorsed in blank or registered in the name of the
clearing corporation or custodian bank or a
nominee of either of them, (D) custody of such
certificated security shall be maintained by such
clearing corporation or a "custodian bank" (as
defined in Section 8-102(4) of the UCC) or the
nominee of either subject to the control of the
clearing corporation and (E) such certificated
security is shown on the account of the transferor
thereof on the books of the clearing corporation
prior to the making of such entries; and such
additional or alternative procedures as may
hereafter become appropriate to effect the
complete transfer of ownership of any such
Collateral to the Indenture Trustee free and clear
of any adverse claims, consistent with changes in
applicable law or regulations or the
interpretation thereof;
(c) with respect to any security issued by the
U.S. Treasury, the Federal Home Loan Mortgage
Corporation or by the Federal National Mortgage
Association that is a book-entry security held through
the Federal Reserve System pursuant to Federal book
entry regulations, the following procedures, all in
accordance with applicable law, including applicable
Federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such property to an
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<PAGE> 8
appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which
is also a "depositary" pursuant to applicable Federal
regulations and issuance by such financial intermediary
of a deposit advice or other written confirmation of
such book-entry registration to the Indenture Trustee
of the purchase by the financial intermediary on behalf
of the Indenture Trustee of such book-entry security;
the making by such financial intermediary of entries in
its books and records identifying such book-entry
security held through the Federal Reserve System
pursuant to Federal book-entry regulations as belonging
to the Indenture Trustee and indicating that such
financial intermediary holds such book-entry security
solely an agent for the Indenture Trustee; and such
additional or alternative procedures as may hereafter
become appropriate to effect complete transfer of
ownership of any such Collateral to the Indenture
Trustee free of any adverse claims, consistent with
changes in applicable law or regulations or the
interpretation thereof;
(d) with respect to any Trust Account Property
that is an "uncertificated security" (as defined in
Section 8-102(1)(b) of the UCC) and that is not
governed by clause (c) above, transfer thereof:
(i) by registration of the transfer thereof
to the Indenture Trustee, on the books and records
of the issuer thereof;
(ii) by the sending of a confirmation by a
financial intermediary of the purchase, and the
making by such financial intermediary of entries
on its books and records identifying as belonging
to the Indenture Trustee (A) a quantity of
securities which constitute or are part of a
fungible bulk of uncertificated securities
registered in the name of the financial
intermediary or (B) a quantity of securities which
constitute or are part of a fungible bulk of
securities shown on the account of the financial
intermediary on the books of another financial
intermediary; or
(iii) by the making by a clearing
corporation of appropriate entries on its books
reducing the appropriate account of the transferor
and increasing the account of the Indenture
Trustee or a person designated by the Indenture
Trustee by the amount of such uncertificated
security, provided that in each case: (A) the
clearing corporation identifies such
uncertificated security for the sole and exclusive
use of the Indenture Trustee or the Person
designated by the Indenture Trustee, (B) such
uncertificated security is registered in the name
of the clearing corporation or a custodian bank or
a nominee of either, and (C) such uncertificated
security is shown on the account of the transferor
on the books of the clearing corporation prior to
the making of such entries; and
(e) in each case of delivery contemplated herein,
the Indenture Trustee shall make appropriate notations
on its records, and shall cause same to be made of the
records of its nominees, indicating that such
securities are held in trust pursuant to and as
provided in this Agreement.
(2) the perfection and priority of a security interest
in which is governed by the law of a jurisdiction which has
adopted the 1994 Revision to Article 8 of the UCC:
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<PAGE> 9
(a) with respect to bankers' acceptances,
commercial paper, negotiable certificates of deposit
and other obligations that constitute "instruments"
within the meaning of Section 9-105(1)(i) of the UCC
(other than certificated securities) and are
susceptible of physical delivery, transfer thereof to
the Indenture Trustee by physical delivery to the
Indenture Trustee, endorsed to, or registered in the
name of, the Indenture Trustee or its nominee or
endorsed in blank and such additional or alternative
procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such
Collateral to the Indenture Trustee free and clear of
any adverse claims, consistent with changes in
applicable law or regulations or the interpretation
thereof;
(b) with respect to a "certificated security" (as
defined in Section 8-102(a)(4) of the UCC), transfer
thereof:
(i) by physical delivery of such
certificated security to the Indenture Trustee,
provided that if the certificated security is in
registered form, it shall be endorsed to, or
registered in the name of, the Indenture Trustee
or endorsed in blank;
(ii) by physical delivery of such
certificated security in registered form to a
"securities intermediary" (as defined in
Section 8-102(a)(14) of the UCC) acting on
behalf of the Indenture Trustee if the
certificated security has been specially
endorsed to the Indenture Trustee by an
effective endorsement.
(c) with respect to any security issued by the
U.S. Treasury, the Federal Home Loan Mortgage
Corporation or by the Federal National Mortgage
Association that is a book-entry security held through
the Federal Reserve System pursuant to Federal book
entry regulations, the following procedures, all in
accordance with applicable law, including applicable
federal regulations and Articles 8 and 9 of the UCC:
book-entry registration of such property to an
appropriate book-entry account maintained with a
Federal Reserve Bank by a securities intermediary which
is also a "depositary" pursuant to applicable federal
regulations and issuance by such securities
intermediary of a deposit advice or other written
confirmation of such book-entry registration to the
Indenture Trustee of the purchase by the securities
intermediary on behalf of the Indenture Trustee of such
book-entry security; the making by such securities
intermediary of entries in its books and records
identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry
regulations as belonging to the Indenture Trustee and
indicating that such securities intermediary holds such
book-entry security solely as agent for the Indenture
Trustee; and such additional or alternative procedures
as may hereafter become appropriate to effect complete
transfer of ownership of any such Collateral to the
Indenture Trustee free of any adverse claims,
consistent with changes in applicable law or
regulations or the interpretation thereof;
(d) with respect to any Trust Account Property
that is an "uncertificated security" (as defined in
Section 8-102(a)(18) of the UCC) and that is not
governed by clause (c) above, transfer thereof:
(i) (A) by registration to the Indenture
Trustee as the registered owner thereof, on the
books and records of the issuer thereof.
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<PAGE> 10
(B) by another Person (not a securities
intermediary) either becomes the registered owner
of the uncertificated security on behalf of the
Indenture Trustee, or having become the registered
owner acknowledges that it holds for the Indenture
Trustee.
(ii) the issuer thereof has agreed that it
will comply with instructions originated by the
Indenture Trustee without further consent of the
registered owner thereof.
(e) in each case of delivery contemplated herein,
the Indenture Trustee shall make appropriate notations
on its records, and shall cause same to be made of the
records of its nominees, indicating that securities are
held in trust pursuant to and as provided in this
Agreement.
(f) with respect to a "security entitlement" (as
defined in Section 8-102(a)(17) of the UCC)
(i) if a securities intermediary (A)
indicates by book entry that a "financial asset" (as defined
in Section 8-102(a)(9) of the UCC) has been credited to be
the Indenture Trustee's "securities account" (as defined in
Section 8-501(a) of the UCC), (B) receives a financial asset
(as so defined) from the Indenture Trustee or acquires a
financial asset for the Indenture Trustee, and in either
case, accepts it for credit to the Indenture Trustee's
securities account (as so defined), (C) becomes obligated
under other law, regulation or rule to credit a financial
asset to the Indenture Trustee's securities account, or (D)
has agreed that it will comply with "entitlement orders" (as
defined in Section 8-102(a)(8) of the UCC) originated by the
Indenture Trustee without further consent by the
"entitlement holder" (as defined in Section 8-102(a)(7) of
the UCC), of a confirmation of the purchase and the making
by such securities intermediary of entries on its books and
records identifying as belonging to the Indenture Trustee or
(I) specific certificated security in the securities
intermediary's possession, (II) a quantity of securities
that constitute or are part of a fungible bulk of
certificated securities in the securities intermediary's
possession, or (III) a quantity of securities that
constitute or are part of a fungible bulk of securities
shown on the account of the securities intermediary on the
books of another securities intermediary.
"Depositor" shall mean the Seller in its capacity
as Depositor under the Trust Agreement.
"Determination Date" means, unless otherwise
provided in a Series Supplement, the earlier of the fifth
calendar day (or if such day is not a Business Day, the next
preceding Business Day) or the third Business Day preceding
each Distribution Date.
"Distribution Date" means, unless otherwise
provided in a Series Supplement, with respect to each
Collection Period, the seventeenth day of the following
calendar month, or if such day is not a Business Day, the
immediately following Business Day.
"Electronic Ledger" means the electronic master
record of the retail installment sales contracts or
installment loans serviced by the Master Servicer.
"Eligibility Criteria" means with respect to a
Series, the criteria set forth in the related Schedule of
Eligibility Criteria.
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<PAGE> 11
"Eligible Bank" means, except as otherwise
provided in a Series Supplement, any depository institution
(which shall initially be the Indenture Trustee) organized
under the laws of the United States of America or any one of
the states thereof or the District of Columbia (or any
United States branch or agency of a foreign bank), which is
subject to supervision and examination by federal or state
banking authorities and which at all times (a) has a net
worth in excess of $50,000,000 and (b) has either (i) a
rating of P-1 from Moody's and A-1 from Standard & Poor's
with respect to short-term deposit obligations, or such
other lower ratings acceptable to the Rating Agency, or (ii)
if such institution has issued long-term unsecured debt
obligations, a rating acceptable to the Rating Agency with
respect to long-term unsecured debt obligations.
"Eligible Deposit Account" means, except as
otherwise provided in a Series Supplement, either (a) a
segregated account with an Eligible Bank or (b) a segregated
trust account with the corporate trust department of a
depository institution with corporate trust powers organized
under the laws of the United States of America or any state
thereof or the District of Columbia (or any United States
branch or agency of a foreign bank), provided that such
institution also must have a rating of Baa3 or higher from
Moody's and a rating of BBB- or higher from Standard &
Poor's with respect to long-term deposit obligations, or
such other lower ratings acceptable to the Rating Agency.
"Eligible Investments" shall mean, except as
otherwise provided in a Series Supplement, negotiable
instruments or securities represented by instruments in
bearer or registered form, or, in the case of deposits
described below, deposit accounts held in the name of the
Indenture Trustee in trust for the benefit of the Holders of
the Securities of the relevant Series, subject to the
exclusive custody and control of the Indenture Trustee and
for which the Indenture Trustee has sole signature
authority, which evidence:
(a) direct obligations of, or obligations fully
guaranteed as to timely payment by, the United States of
America;
(b) demand deposits, time deposits or
certificates of deposit (having original maturities of no
more than 365 days) of depositary institutions or trust
companies incorporated under the laws of the United States
of America or any state thereof (or domestic branches of
foreign banks) and subject to supervision and examination by
federal or state banking or depositary institution
authorities; provided, that at the time of the Trust's
investment or contractual commitment to invest therein, the
short-term debt rating of such depository institution or
trust company shall be satisfactory to the Rating Agency;
(c) commercial paper (having original or
remaining maturities of not more than 30 days) having, at
the time of the Trust's investment or contractual commitment
to invest therein, a rating satisfactory to the Rating
Agency;
(d) investments in money market funds having, at
the time of the Trust's investment therein, a rating
acceptable to the Rating Agency;
(e) demand deposits, time deposits and
certificates of deposit which are fully insured by the FDIC
having, at the time of the Trust's investment therein, a
rating satisfactory to the Rating Agency;
(f) bankers' acceptances (having original
maturities of no more than 365 days) issued by a depository
institution or trust company referred to in (b) above;
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<PAGE> 12
(g) (x) time deposits (having maturities not
later than the succeeding Distribution Date) other than as
referred to in clause (e) above, with a Person the
commercial paper of which has a credit rating satisfactory
to the Rating Agency or (y) notes which are payable on
demand issued by Household; provided such notes will
constitute Eligible Investments only if the commercial paper
of Household has, at the time of the Trust's investment in
such notes, a rating satisfactory to the Rating Agency; or
(h) any other investment of a type or rating that
is acceptable to the Rating Agency.
Any of the foregoing Eligible Investments may be
purchased on or through the Indenture Trustee or through any
of its Affiliates.
"Eligible Servicer" means Household Finance
Corporation or any Person which at the time of its
appointment as Master Servicer, (i) is servicing a portfolio
of motor vehicle retail installment sales contracts and/or
motor vehicle installment loans, (ii) is legally qualified
and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to
service a portfolio of motor vehicle retail installment
sales contracts and/or motor vehicle installment loans
similar to the Receivables with reasonable skill and care,
(iv) is qualified and entitled to use, pursuant to a license
or other written agreement, and agrees to maintain the
confidentiality of, the software which the Master Servicer
uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties
and responsibilities under this Agreement and (v) has a net
worth of at least $50,000,000.
"Eligible Sub-Servicer" means Household Automotive
Finance Corporation or any wholly owned subsidiary of
Household or any Person which at the time of its appointment
as Sub-Servicer, (i) is servicing a portfolio of motor
vehicle retail installment sales contracts and/or motor
vehicle installment loans, (ii) is legally qualified and has
the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to
service a portfolio of motor vehicle retail installment
sales contracts and/or motor vehicle installment loans
similar to the Receivables with reasonable skill and care,
and (iv) is qualified and entitled to use, pursuant to a
license or other written agreement, and agrees to maintain
the confidentiality of, the software which the Master
Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties
and responsibilities under this Agreement.
"Financed Vehicle" means a new or used automobile,
light-duty truck or van securing an Obligor's indebtedness
under the respective Receivable.
"HAFC" means Household Automotive Finance
Corporation.
"Indenture Trustee" means the Person acting as
trustee under the Indenture, its successors in interest and
any successor trustee under the Indenture.
"Indenture Trustee Fee" means the fees due to the
Indenture Trustee as may be set forth in that certain fee
agreement dated as of the date hereof between the Master
Servicer and Norwest Bank Minnesota, National Association.
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"Insolvency Event" means, with respect to a
specified Person, (a) the filing of a petition against such
Person or the entry of a decree or order for relief by a
court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an
involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator, or similar official for
such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's
affairs, and such petition, decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or (b) the commencement by such Person of a voluntary case
under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief
in an involuntary case under any such law, or the consent by
such Person to the appointment of or taking possession by, a
receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such
Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay
its debts as such debts become due, or the taking of action
by such Person in furtherance of any of the foregoing.
"Insurance Policy" means, with respect to a
Receivable, any insurance policy (including the insurance
policies described in Section 4.4 hereof) benefiting the
holder of the Receivable providing loss or physical damage,
credit life, credit disability, theft, mechanical breakdown
or similar coverage with respect to the Financed Vehicle or
the Obligor.
"Interest Period" for any Class or Series of Notes
or Certificates, the meaning set forth in the related Series
Supplement.
"Investment Earnings" means, with respect to any
Distribution Date and Trust Account, the investment earnings
(net of investment losses and expenses) on amounts on
deposit in such Trust Account on such Distribution Date.
"Issuer" means Household Automotive Trust IV,
together with each other Trust designated as an Issuer
hereunder pursuant to a Series Supplement, in each case so
long as such Trust has not been terminated in accordance
with the terms of the related Trust Agreements.
"Lien" means a security interest, lien, charge,
pledge, equity, or encumbrance of any kind, other than tax
liens, mechanics' liens and any liens that attach to the
respective Receivable by operation of law as a result of any
act or omission by the related Obligor, provided that, any
assignment permitted by Section 2.1 hereof and the lien
created by this Agreement or the Indenture shall not be
deemed to constitute a Lien.
"Lien Certificate" means, with respect to a
Financed Vehicle, an original certificate of title,
certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured
party which indicates that the lien of the secured party on
the Financed Vehicle is recorded on the original certificate
of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor,
the term "Lien Certificate" shall mean only a certificate or
notification issued to a secured party.
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<PAGE> 14
"Liquidated Receivable" means, with respect to any
Collection Period, upon the earliest of each of the
following to occur, a Receivable as to which (i) such
Receivable has been liquidated by the Master Servicer
through the sale of the Financed Vehicle, (ii) 90 days have
elapsed since the Master Servicer repossessed the Financed
Vehicle, (iii) proceeds have been received in respect of
such Receivable which, in the Master Servicer's reasonable
judgment, constitute the final amounts recoverable in
respect of such Receivable or (iv) 10% or more of a
Scheduled Payment shall have become 150 or more days
delinquent (or, in the case where the Obligor of such
Receivable is subject to an Insolvency Event, 10% or more of
a Scheduled Payment shall have become 210 or more days
delinquent). Any Receivable that becomes a Repurchased
Receivable on or before the related Accounting Date shall
not be a Liquidated Receivable.
"Master Collection Account" means the account
designated as such, established and maintained pursuant to
Section 5.1.
"Master Receivables Purchase Agreements" means (i)
the Master Receivables Purchase Agreement between the Seller
and HAFC, dated as of December 1, 1998, as such agreement
was amended and supplemented by the Master Succession and
Assumption Agreement and (ii) the Master Receivables
Purchase Agreement between the Seller and HAFC, dated as of
November 18, 1999, as such agreement may be amended or
supplemented from time to time.
"Master Servicer" means Household Finance
Corporation, as the servicer of the Receivables, and each
successor Master Servicer pursuant to Section 10.3.
"Master Servicer Credit Facility" means the credit
facility maintained by the Master Servicer with a Master
Servicer Credit Facility Issuer pursuant to Section 4.2(d).
"Master Servicer Credit Facility Issuer" means a
depository institution or insurance company that qualifies
pursuant to Section 4.2(d).
"Master Servicer Termination Event" means an event
specified in Section 10.1.
"Master Servicer's Certificate" means an Officers'
Certificate of the Master Servicer delivered pursuant to
Section 4.9, substantially in the form of Exhibit A hereto.
"Master Succession and Assumption Agreement" means
the Master Succession and Assumption Agreement dated as of
September 1, 1999 among the Master Servicer, 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.
"Monthly Records" means all records and data
maintained by the Master Servicer with respect to the
Receivables, including the following with respect to each
Receivable: the account number; the originating Dealer;
Obligor name; Obligor address; Obligor home phone number;
Obligor business phone number; original Principal Balance;
original term; Annual Percentage Rate; current Principal
Balance; current remaining term; origination date; first
payment date; final scheduled payment date; next payment due
date; date of most recent payment; new/used classification;
collateral description; days currently delinquent; number of
contract extensions (months) to date; amount of Scheduled
Payment; current Insurance Policy expiration date; and past
due late charges.
"Moody's" means Moody's Investors Service, Inc.,
or its successor.
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<PAGE> 15
"Net Liquidation Proceeds" means, with respect to
a Liquidated Receivable, all amounts realized with respect
to such Receivable (other than amounts withdrawn or received
from any Series Support) net of (i) reasonable expenses,
which expenses shall not include any deficiency balances or
post-disposition recoveries collected, incurred by the
Master Servicer in connection with the collection of such
Receivable and the repossession and disposition of the
Financed Vehicle and (ii) amounts that are required to be
refunded to the Obligor on such Receivable; provided,
however, that the Liquidation Proceeds with respect to any
Receivable shall in no event be less than zero; provided,
further, that, so long as amounts cannot be traced to
specific Receivables the Master Servicer shall reasonably
estimate, on or prior to each Accounting Date, the amount of
Net Liquidation Proceeds attributable to each Series Trust
Estate.
"Noteholder" means the Person in whose name a Note
is registered on the Note Register.
"Notes" has the meaning assigned to such term in
the Indenture.
"Obligor" on a Receivable means the purchaser or
co-purchasers of the Financed Vehicle and any other Person
who owes payments under the Receivable.
"Officers' Certificate" means a certificate signed
by the chairman of the board, the president, any executive
vice president or any vice president, any treasurer,
assistant treasurer, secretary or assistant secretary of the
Seller or the Master Servicer, as appropriate.
"Opinion of Counsel" means an opinion of counsel
who may be counsel to the Master Servicer or the Seller,
acceptable to the Indenture Trustee.
"Other Conveyed Property" means all property
conveyed by the Seller to the Trust pursuant to Section
2.1(a)(ii) through (xii) of this Agreement.
"Outstanding" has the meaning assigned to such
term in the Indenture.
"Outstanding Amount" means, with respect to any
Series, the aggregate principal amount of all Notes of such
Series which are Outstanding at the date of determination
after giving effect to all distributions of principal on
such date of determination.
"Owner Trust Estate" has the meaning assigned to
such term in the Trust Agreement.
"Owner Trustee" means Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee
under the Trust Agreement, its successors-in-interest or any
successor Owner Trustee under the Trust Agreement.
"Payment Record" means the record maintained by
the Master Servicer for the Trust as provided in Section
4.2(d) hereof.
"Person" means any individual, corporation,
estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to
such term in the definition of "Delivery" above.
"Principal Balance" means, with respect to any
Receivable, as of any date, the Amount Financed minus (i)
that portion of all amounts received on or prior to such
date and allocable to principal in accordance with the
Actuarial Method, or the Simple Interest Method, as
appropriate, and (ii) any Cram Down Loss in respect of such
Receivable. The "Principal Balance" of a Repurchased
Receivable or Liquidated Receivable shall be deemed to be
zero.
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<PAGE> 16
"Rating Agency" means, with respect to any
outstanding Series or Class, each Rating Agency specified in
the Series Supplement.
"Rating Agency Condition" means, with respect to
any action with respect to a Series, that each Rating Agency
shall have received prior notice thereof and that each
Rating Agency shall have notified the Master Servicer in
writing (who shall then immediately notify the Seller, the
Owner Trustee and the Indenture Trustee in writing) that
such action will not result in a reduction or withdrawal of
the then current rating of any Class of Notes.
"Realized Losses" means, with respect to any
Receivable that becomes a Liquidated Receivable, the excess
of the Principal Balance of such Liquidated Receivable over
Net Liquidation Proceeds to the extent allocable to
principal.
"Receivable" means any Contract listed on Schedule
II to the Series Supplement or Schedule A to a Transfer
Agreement (which Schedule may be in an acceptable electronic
format), except Liquidated Receivables and Receivables
released from the Owner Trust Estate.
"Receivable Files" means the documents specified
in Section 3.3.
"Receivables Purchase Agreement Supplement" means
any Receivables Purchase Agreement Supplement to either
Master Receivables Purchase Agreement.
"Record Date" with respect to each Distribution
Date means the Business Day immediately preceding such
Distribution Date, unless otherwise specified in the
applicable Series Supplement.
"Registrar of Titles" means, with respect to any
state, the governmental agency or body responsible for the
registration of, and the issuance of certificates of title
relating to, motor vehicles and liens thereon.
"Repurchase Amount" means, with respect to a
Receivable, the Principal Balance and all accrued and unpaid
interest on the Receivable, after giving effect to the
receipt of any moneys collected (from whatever source) on
such Receivable, if any, as of the date of purchase,
provided that, reductions in the Principal Balance resulting
from such Receivable becoming a Liquidated Receivable shall
be disregarded.
"Repurchased Receivable" means a Receivable
purchased by the Master Servicer pursuant to Section 4.7 or
repurchased by the Seller pursuant to Section 3.2 or the
Seller or HAFC pursuant to Section 11.1(a).
"Schedule of Eligibility Criteria" means the
Schedule of Eligibility Criteria attached as Schedule I to a
Series Supplement.
"Schedule of Receivables" means, with respect to
each Series Trust Estate, the schedule of all retail
installment sales contracts and promissory notes originally
held as part of the Trust which is attached as Schedule II
to the Series Supplement or Schedule A to the Transfer
Agreements relating to such Series Trust Estate.
"Scheduled Payment" means, with respect to any
Collection Period for any Receivable, the amount set forth
in such Receivable as required to be paid by the Obligor in
such Collection Period. If after the Series Closing Date,
the Obligor's obligation under a Receivable with respect to
a Collection Period has been modified so as to differ from
the amount specified in such Receivable as a result of (i)
the order of a court in an insolvency proceeding involving
the Obligor, (ii) pursuant to the Soldiers' and Sailors'
Civil Relief Act of 1940, as amended, or (iii) modifications
or extensions of the Receivable permitted by Sections 4.2(b)
and (c), the Scheduled Payment with respect to such
Collection Period shall refer to the Obligor's payment
obligation with respect to such Collection Period as so
modified.
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<PAGE> 17
"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders and the
Certificateholders.
"Seller" means Household Auto Receivables
Corporation, a Nevada corporation, and its successors in
interest to the extent permitted hereunder.
"Series" means, with respect to any Notes, Notes
issued pursuant to the same Series Supplement and with
respect to any Certificates, Certificates issued pursuant to
the same Series Supplement, or the Notes and Certificates
issued pursuant to the same Series Supplement, as the
context may require.
"Series Closing Date" means, with respect to any
Series, the date designated in the related Series Supplement
as the closing date for such Series.
"Series Collection Account" means, with respect to
any Series, the collection account designated in the related
Series Supplement.
"Series of Certificates" means the Certificates
issued in connection with a Series of Notes.
"Series Related Documents" with respect to a
Series, has the meaning specified therefor in the related
Series Supplement.
"Series Supplement" means, with respect to any
Series, a Series Supplement to the Indenture and the Trust
Agreement, executed and delivered in connection with the
original issuance of the Notes and Certificates of such
Series, and all amendments thereof and supplements thereto.
"Series Support" means the rights and benefits
provided to the Indenture Trustee or the Noteholders of any
Series or Class pursuant to any letter of credit, surety
bond, cash collateral account, spread account, guaranteed
rate agreement, maturity liquidity facility, interest rate
swap agreement, tax protection agreement or other similar
arrangement. The subordination of any Series or Class to
another Series or Class shall be deemed to be a Series
Support. Notwithstanding that such Series Support may be
held by or in favor of the Indenture Trustee for the benefit
of any Series or Class, only those Series or Classes to
which such Series Support relates shall have any rights with
respect thereto and all payments thereunder received by the
Indenture Trustee shall be distributed exclusively as
prescribed in the Series Supplement relating to such Series
or Class.
"Series Support Provider" means the Person, if
any, designated in the related Series Supplement, as
providing any Series Support, other than Household or any of
its Affiliates or the Noteholders of any Series or Class
which is subordinated to another Class or Series.
"Series Trust Accounts" has the meaning with
respect to each Series specified in the related Series
Supplement.
"Series Termination Date" has the meaning with
respect to each Series specified in the related Series
Supplement.
"Series Trust Estate" has the meaning with respect
to each Series specified in the related Series Supplement.
"Service Contract" means, with respect to a
Financed Vehicle, the agreement, if any, financed under the
related Receivable that provides for the repair of such
Financed Vehicle.
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<PAGE> 18
"Servicing Fee Rate" means 3% per annum unless
otherwise specified in a Series Supplement with respect to
the related Series Trust Estate.
"Simple Interest Method" means the method of
allocating a fixed level payment on an obligation between
principal and interest, pursuant to which the portion of
such payment that is allocated to interest is equal to the
product of the fixed rate of interest on such obligation
multiplied by the period of time (expressed as a fraction of
a year, based on the actual number of days in the calendar
month and 365 days in the calendar year) elapsed since the
preceding payment under the obligation was made.
"Simple Interest Receivable" means a Receivable
under which the portion of the payment allocable to interest
and the portion allocable to principal is determined in
accordance with the Simple Interest Method.
"Standard & Poor's" means Standard & Poor's, a
division of the McGraw Hill Companies, Inc., or its
successor.
"Sub-Servicer" means any Eligible Sub-Servicer
with whom the Master Servicer has entered into an agreement
relating to subservicing the Receivables. Initially, the
Sub-Servicer will be HAFC.
"Supplemental Servicing Fee" means, with respect
to any Collection Period, (i) all administrative fees,
expenses and charges paid by or on behalf of Obligors,
including late fees, prepayment fees and liquidation fees
collected on the Receivables during such Collection Period,
and (ii) the net realized Investment Earnings of funds on
deposit in the Master Collection Account and Series
Collection Account.
"Support Default" shall mean a default relating to
the Insolvency or performance of a Series Support Provider.
"Transfer Agreement" means the agreement among the
Issuer, the Seller and the Master Servicer, substantially in
the form of Exhibit B.
"Transfer Date" means, with respect to
Receivables, any date on which Receivables are to be
transferred to a Trust pursuant to this Agreement and a
related Transfer Agreement.
"Trust" means the respective Issuers,
individually.
"Trust Account Property" means the Trust Accounts
and each Series Trust Account, all amounts and investments
held from time to time in any Trust Account and each Series
Trust Account (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto
in Section 5.1.
"Trust Agreement" means the Trust Agreement, dated
as of 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, and as the
same may be amended and further supplemented from time to
time.
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<PAGE> 19
"Trust Officer" means, (i) in the case of the
Indenture Trustee, the chairman or vice-chairman of the
board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the
president, any vice president, assistant vice-president or
managing director, the secretary, any assistant secretary or
any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of
the above designated officers and also means, with respect
to a particular corporate trust matter and having direct
responsibility for the Administration of this Agreement, and
(ii) in the case of the Owner Trustee, any officer in the
corporate trust office of the Owner Trustee or any agent of
the Owner Trustee under a power of attorney with direct
responsibility for the administration of this Agreement or
any of the Basic Documents or Series Related Documents on
behalf of the Owner Trustee.
"UCC" means the Uniform Commercial Code as in
effect in the relevant jurisdiction on the date of the
Agreement.
"Warranty Receivable" With respect to any
Collection Period, a Receivable which the Seller has become
obligated to repurchase pursuant to Section 3.2.
SECTION 1.2. Other Interpretive Provisions
(a) . (a) Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them
in the Indenture, or, if not defined therein, in the Trust
Agreement. Cross referenced definitions may include a
Series designation.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any instrument governed hereby
and in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement, in any instrument
governed hereby and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting
terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting
terms partly defined in this Agreement or in any such
instrument, certificate or other document to the extent not
defined, shall have the respective meanings given to them
under generally accepted accounting principles as in effect
on the date of this Agreement or any such instrument,
certificate or other document, as applicable. To the extent
that the definitions of accounting terms in this Agreement
or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in
this Agreement or in any such instrument, certificate or
other document shall control.
(d) Any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate
delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and
instruments incorporated therein.
(e) Any term defined herein, which is otherwise
defined in a Series Supplement, shall have the meaning with
respect to such Series specified therefor in such Series
Supplement, whether or not the definition in this Agreement
includes a phrase to the effect that such term may be
otherwise defined in a Series Supplement.
(f) In the event that with respect to a Series there
is no Series Support Provider, any references herein or in
any other of the Basic Documents to the consent of, or
acceptability to, the Series Support Provider shall be
deemed to be deleted.
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<PAGE> 20
SECTION 1.3. Usage of Terms
. With respect to all terms used in this Agreement, the
singular includes the plural and the plural includes the
singular; words importing any gender include the other
gender; references to "writing" include printing, typing,
lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual
instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their
respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and
assigns; the terms "include" or "including" mean "include
without limitation" or "including without limitation;" the
words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision, and
Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of
Schedules and Exhibits to this Agreement.
SECTION 1.4. Certain References
. All references to the Principal Balance of a Receivable
as of any date of determination shall refer to the close of
business on such day, or as of the first day of an Interest
Period shall refer to the opening of business on such day.
All references to the last day of an Interest Period shall
refer to the close of business on such day.
SECTION 1.5. No Recourse
. Without limiting the obligations of the Master Servicer
or Seller hereunder, no recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other
writing delivered in connection herewith or therewith,
against any stockholder, officer or director, as such, of
the Master Servicer or Seller, or of any of their respective
Affiliates, predecessors or successors.
SECTION 1.6. Action by or Consent of Noteholders
. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders, such provision
shall be deemed to refer to the Noteholders of record as of
the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders.
Solely for the purposes of any action to be taken, or
consented to, by Noteholders, any Note registered in the
name of HAFC or any Affiliate thereof shall be deemed not to
be outstanding; provided, however, that, solely for the
purpose of determining whether the Indenture Trustee is
entitled to rely upon any such action or consent, only Notes
which the Trust Officer of the Indenture Trustee actually
knows to be so owned shall be so disregarded.
ARTICLE II
Conveyance of Receivables
SECTION 2.1. Conveyance of Receivables
(a) . (a) Subject to the conditions set forth in
paragraph (b) below, in consideration of the Issuer's
delivery to or upon the order of the Seller on the Series
Closing Date or a Transfer Date of the net proceeds from the
sale of a Series of Notes thereunder and the other amounts
to be distributed from time to time to the Seller in
accordance with the terms of this Agreement and the related
Series Supplement, the Seller shall, from time to time,
sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse (subject to the obligations set
forth herein), all right, title and interest of the Seller
in and to:
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<PAGE> 21
(i) each and every Receivables listed on Schedule II
to the Series Supplement and Schedule A to the related
Transfer Agreement, if any, and all monies paid or payable
thereon or in respect thereof after the Series Closing Date
or the related Transfer Date (including amounts due on or
before the Cutoff Date but received by HAFC, the Seller or
the Issuer on or after the Cutoff Date);
(ii) the security interests in the related Financed
Vehicles granted by Obligors pursuant to the related
Receivables and any other interest of the Seller in such
Financed Vehicles;
(iii) all rights of the Seller against the Dealers
pursuant to Dealer Agreements;
(iv) any proceeds and the right to receive proceeds
with respect to such 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;
(v) all rights under any Service Contracts on the
related Financed Vehicles:
(vi) any proceeds and the right to receive proceeds
with respect to such Receivables from claims on any physical
damage, credit life or disability insurance policies
covering the related Financed Vehicles or Obligors,
including rebates of insurance premiums relating to the
Receivables;
(vii) all items contained in the related Receivables
Files with respect to the Receivables; and any and all other
documents that HAFC keeps on file in accordance with its
customary procedures relating to the related Receivables,
the Obligors or the Financed Vehicles;
(viii) all funds on deposit from time to time in the
Trust Accounts (including all investments and proceeds
thereof);
(ix) property (including the right to receive future
Net Liquidation Proceeds) that secures a Receivable and that
has been acquired by or on behalf of the Trust pursuant to
liquidation of such Receivable;
(x) all of the Seller's right, title and interest in
its rights and benefits, but none of its obligations or
burdens, under each of the Master Receivables Purchase
Agreements and the Receivables Purchase Agreement
Supplements, including the delivery requirements,
representations and warranties and the cure and repurchase
obligations of HAFC under each of the Master Receivables
Purchase Agreements and the Receivables Purchase Agreement
Supplements, on or after the related Cutoff Date;
(xi) one share of Class SV Preferred Stock of the
Seller; and
(xii) all present and future claims, demands, causes and
chooses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind
and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any
time constitute all or part of or are included in the
proceeds of any of the foregoing.
(b) The Seller shall transfer to the Issuer the
Receivables and the other property and rights related
thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior
to the Series Closing Date or the related Transfer Date:
(i) if the transfer is not on the Closing Date, the
Seller shall have provided the Indenture Trustee and the
Owner Trustee with an Addition Notice not later than five
days prior to such Transfer Date (which Addition Notice will
designate the Series Trust Estate which the Receivables will
be a part of, if any) and shall have provided any
information reasonably requested by any of the foregoing
with respect to the related Receivables;
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<PAGE> 22
(ii) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee a duly executed Transfer
Agreement or Series Supplement which shall include a
schedule (which may be in electronic format), listing the
Receivables to be transferred;
(iii) the Seller shall, to the extent required by
Section 4.2, have deposited in the Master Collection Account
all collections received after the related Cutoff Date in
respect of the Receivables to be transferred;
(iv) as of the Series Closing Date and each Transfer
Date, (A) the Seller shall not be insolvent and shall not
become insolvent as a result of the transfer of Receivables
on such date, (B) the Seller shall not intend to incur or
believe that it shall incur debts that would be beyond its
ability to pay as such debts mature, (C) such transfer shall
not have been made with actual intent to hinder, delay or
defraud any Person and (D) the assets of the Seller shall
not constitute unreasonably small capital to carry out its
business as conducted;
(v) each of the representations and warranties made by
the Seller pursuant to Section 3.1 with respect to the
Receivables to be transferred on the Series Closing Date or
the related Transfer Date shall be true and correct as of
the Series Closing Date or the related Transfer Date, and
the Seller shall have performed all obligations to be
performed by it hereunder on or prior to such Transfer Date;
(vi) the Seller shall, at its own expense, on or prior
to the Series Closing Date or the related Transfer Date
indicate in its computer files that the Receivables
identified in the Schedule to the Series Supplement or to
the related Transfer Agreement have been sold to the Trust
pursuant to this Agreement;
(vii) the Seller shall have taken any action necessary
or, if required by the Indenture Trustee, advisable to
maintain the first priority perfected ownership interest of
the Trust in the Owner Trust Estate and the first perfected
security interest of the Indenture Trustee in the Series
Trust Estate;
(viii) no selection procedures adverse to the interests
of the related Series shall have been utilized in selecting
the related Receivables;
(ix) the addition of any such Receivables shall not
result in a material adverse tax consequence to the Trust or
the Noteholders;
(x) if required by any of the related Series Related
Documents, the Seller shall simultaneously transfer to the
Indenture Trustee any amounts required to be deposited in
the related Trust Accounts with respect to the Receivables
transferred on such Series Closing Date or Transfer Date;
and
(xi) the Seller shall have delivered to the Indenture
Trustee an Officers' Certificate confirming the satisfaction
of each condition precedent specified in this paragraph (b).
The Seller covenants that in the event any of the
foregoing conditions precedent are not satisfied with
respect to any Receivable on the date required as specified
above, the Seller will immediately repurchase such
Receivable from the Trust, at a price equal to the
Repurchase Amount thereof, in the manner specified in
Section 3.2.
It is the intention of the Seller that the
transfer and assignment contemplated by this Agreement and
each related Transfer Agreement shall constitute a sale of
the related Series Trust Estate from the Seller to the
Issuer and the beneficial interest in and title to the
related Series Trust Estate shall not be part of the
Seller's estate in the event of the filing of a bankruptcy
petition by or against the Seller under any bankruptcy law.
In the event that, notwithstanding the intent of the Seller,
the transfer and assignment contemplated hereby and thereby
is held not to be a sale, this Agreement and the related
Transfer Agreement shall constitute a grant of a security
interest in the property referred to in this Section 2.1 for
the benefit of the Noteholders.
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SECTION 2.2. Further Encumbrance of Series Trust Estate
(a) . (a) Immediately upon the conveyance to the
Trust by the Seller of any item of the related Series Trust
Estate pursuant to Section 2.1, all right, title and
interest of the Seller in and to such Series Trust Estate
shall terminate, and all such right, title and interest
shall vest in the Issuer, in accordance with the Trust
Agreement and Sections 3802 and 3805 of the Business Trust
Statute (as defined in the Trust Agreement).
(b) Immediately upon the vesting of the related Series
Trust Estate in the Trust, the Trust shall have the sole
right to pledge or otherwise encumber, such related Series
Trust Estate. Pursuant to the Indenture and a Series
Supplement, the Trust will grant a security interest in the
Series Trust Estate to secure the repayment of a related
Series of Notes. The related Series of Certificates shall
represent the beneficial ownership interest in the related
Series Trust Estate, and the related Series of
Certificateholders shall be entitled to receive
distributions with respect thereto as set forth in the
related Series Supplement.
(c) The Indenture Trustee shall hold the related
Series Trust Estate for the benefit of the related Series
Securityholders. Following the payment in full of the
related Series of Notes and the release and discharge of the
Indenture and the related Series Supplement, all covenants
of the Issuer under Article III of the Indenture and the
related Series Supplement shall, until payment in full of
the Certificates, remain as covenants of the Issuer for the
benefit of the related Series of Certificateholders,
enforceable by the related Series of Certificateholders to
the same extent as such covenants were enforceable by the
related Series of Noteholders prior to the discharge of the
Indenture. Any rights of the Indenture Trustee under
Article III of the Indenture and the related Series
Supplement, following the discharge of the Indenture and the
related Series Supplement, shall vest in related Series of
Certificateholders.
(d) The Indenture Trustee shall, at such time as there
are no Securities of a Series outstanding and all sums due
to the Indenture Trustee or any agent or counsel thereof
pursuant to the Indenture as supplemented by the related
Series Supplement, have been paid, pursuant to Section 4.1
of the Indenture, and subject to satisfaction of the
conditions set forth therein, release the Lien of the
related Series Supplement and the Indenture with respect to
the related Series Trust Estate.
ARTICLE III
The Receivables
SECTION 3.1. Representations and Warranties of Seller
. The Seller represents and warrants as to the related
Receivables that the representations and warranties set
forth on the Schedule of Eligibility Criteria with respect
to a Series are, or will be, true and correct as of the
respective dates specified in such Schedule. The Issuer is
deemed to have relied on such representations and warranties
in acquiring the related Receivables and the related
Securityholders shall be deemed to rely on such
representations and warranties in purchasing the Notes.
Such representations and warranties shall survive the sale,
transfer and assignment of the related Series Trust Estate
to the Issuer and any pledge thereof to the Indenture
Trustee pursuant to the Indenture and the related Series
Supplement.
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<PAGE> 24
SECTION 3.2. Repurchase upon Breach
(a) . (a) The Seller, the Master Servicer, any Trust
Officer of the Indenture Trustee or the Owner Trustee, as
the case may be, shall inform each of the other parties to
this Agreement promptly, in writing, upon the discovery of
any breach of the Seller's representations and warranties
made pursuant to Section 3.1; provided, however, that the
failure to give any such notice shall not derogate from any
obligations of the Seller under this Section 3.2. As of the
last day of the second (or, if the Seller so elects, the
first, or with respect to any exceptions appearing on any
exception report delivered by the Indenture Trustee, the
first) month following the discovery by the Seller or
receipt by the Seller of notice of such breach (or such
longer period not in excess of 120 days, as may be agreed
upon by the Indenture Trustee and the Master Servicer),
unless such breach is cured by such date, the Seller shall
have an obligation to repurchase or cause HAFC to repurchase
any Receivable in which the interests of the related Series
Securityholders are materially and adversely affected by any
such breach. In consideration of and simultaneously with
the repurchase of the Receivables, the Seller shall remit,
or cause HAFC to remit, to the related Series Collection
Account, the Repurchase Amount in the manner specified in
Section 5.4 and the Issuer shall execute such assignments
and other documents reasonably requested by such person in
order to effect such repurchase. The sole remedy of the
Issuer, the Owner Trustee, the Indenture Trustee and the
related Series Securityholders with respect to a breach of
representations and warranties pursuant to Section 3.1 and
the agreement contained in this Section shall be the
repurchase of the Receivables pursuant to this Section,
subject to the conditions contained herein or to enforce the
obligation of HAFC to the Seller to repurchase such
Receivables pursuant to the Master Receivables Purchase
Agreements. Neither the Owner Trustee nor the Indenture
Trustee shall have a duty to conduct any affirmative
investigation as to the occurrence of any conditions
requiring the repurchase of any Receivable pursuant to this
Section.
(b) Pursuant to Section 2.1 of this Agreement and
pursuant to the related Transfer Agreement, the Seller
conveyed to the Trust all of the Seller's right, title and
interest in its rights and benefits, but none of its
obligations or burdens, under the Master Receivables
Purchase Agreements and the related Receivables Purchase
Agreement Supplements, including the Seller's rights under
the Master Receivables Purchase Agreements and the delivery
requirements, representations and warranties and the cure or
repurchase obligations of HAFC thereunder. The Seller
hereby represents and warrants to the Trust that such
assignment is valid, enforceable and effective to permit the
Trust to enforce such obligations of HAFC under the Master
Receivables Purchase Agreements.
SECTION 3.3. Custody of Receivables Files
. In connection with the sale, transfer and assignment of
the Receivables, if any, to the Trust pursuant to this
Agreement and pursuant to the related Transfer Agreement,
the Master Servicer shall act as custodian for the benefit
of the Indenture Trustee of the following documents or
instruments with respect to each Receivable:
(i) The fully executed original of the Receivable
(together with any agreements modifying the Receivable,
including, without limitation, any extension agreements);
(ii) The original credit application, or a copy
thereof, of each Obligor, fully executed by each such
Obligor on HAFC's or the Dealer's customary form, or on a
form approved by HAFC, for such application; and
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<PAGE> 25
(iii) The original certificate of title (when received)
and otherwise such documents, if any, that HAFC keeps on
file in accordance with its customary procedures indicating
that the Financed Vehicle is owned by the Obligor and
subject to the interest of (x) HAFC (or any predecessor
corporation to HAFC, or any Affiliate of HAFC or such
predecessor corporation) as first lienholder or secured
party (including any Lien Certificate received by HAFC), or,
(y) a Dealer as first lienholder or secured party or, if
such original certificate of title has not yet been
received, a copy of the application therefor, showing either
HAFC (or any predecessor corporation to HAFC, or any
Affiliate of HAFC or such predecessor corporation), or a
Dealer as secured party; and
(iv) Documents evidencing or relating to any Insurance
Policy, to the extent such documents are maintained by or on
behalf of the Seller or HAFC.
Notwithstanding the foregoing, the Master Servicer may
appoint a Sub-Servicer as subcustodian, which subcustodian
may hold physical possession of some or all of the
Receivable Files. The Indenture Trustee shall have no
liability for the acts or omissions of any such custodian or
subcustodian.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.1. Duties of the Master Servicer
. The Master Servicer is hereby authorized to act as agent
for the Trust (and also on behalf of the Indenture Trustee
and the Noteholders) and in such capacity shall manage,
service, administer and make collections on the Receivables,
and perform the other actions required by the Master
Servicer under this Agreement. The Master Servicer agrees
that its servicing of the Receivables shall be carried out
in accordance with customary and usual procedures of
institutions which service motor vehicles retail installment
sales contracts and, to the extent more exacting, the degree
of skill and attention that the Master Servicer exercises
with respect to all comparable motor vehicle receivables
that it services for itself or others. In performing such
duties, so long as Household is the Master Servicer, it
shall comply with the standard and customary procedures for
servicing all of its comparable motor vehicle receivables.
The Master Servicer's duties shall include, without
limitation, collection and posting of all payments,
responding to inquiries of Obligors on the Receivables,
investigating delinquencies, sending payment statements to
Obligors, reporting any required tax information to
Obligors, accounting for collections and furnishing monthly
and annual statements to the Indenture Trustee with respect
to distributions, monitoring the status of Insurance
Policies with respect to the Financed Vehicles and
performing the other duties specified herein. The Master
Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided
for in the Dealer Agreements (and Household shall make
efforts to obtain possession of the Dealer Agreements, to
the extent it is necessary to do so), the Dealer Assignments
and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments and Insurance Policies relate
to the Receivables, the Financed Vehicles or the Obligors.
To the extent consistent with the standards, policies and
procedures otherwise required hereby, the Master Servicer
shall follow its customary standards, policies, and
procedures and shall have full power and authority, acting
alone, to do any and all things in connection with such
managing, servicing, administration and collection that it
may deem necessary or desirable. Without limiting the
generality of the foregoing, the Master Servicer is hereby
authorized and empowered by the Trust to execute and
deliver, on behalf of the Trust, any and all instruments of
satisfaction or cancellation, or of partial or full release
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<PAGE> 26
or discharge, and all other comparable instruments, with
respect to the Receivables and with respect to the Financed
Vehicles; provided, however, that notwithstanding the
foregoing and subject to Section 4.3 hereof, the Master
Servicer shall not, except pursuant to an order from a court
of competent jurisdiction, release an Obligor from payment
of any unpaid amount under any Receivable or waive the right
to collect the unpaid balance of any Receivable from the
Obligor. The Master Servicer is hereby authorized to
commence, in it's own name or in the name of the Trust, a
legal proceeding to enforce a Receivable pursuant to Section
4.3 or to commence or participate in any other legal
proceeding (including, without limitation, a bankruptcy
proceeding) relating to or involving a Receivable, an
Obligor or a Financed Vehicle. If the Master Servicer
commences or participates in such a legal proceeding in its
own name, the Trust shall thereupon be deemed to have
automatically assigned such Receivable to the Master
Servicer solely for purposes of commencing or participating
in any such proceeding as a party or claimant, and the
Master Servicer is authorized and empowered by the Trust to
execute and deliver in the Master Servicer's name any
notices, demands, claims, complaints, responses, affidavits
or other documents or instruments in connection with any
such proceeding. The Indenture Trustee and the Owner
Trustee shall furnish the Master Servicer with any powers of
attorney and other documents which the Master Servicer may
reasonably request and which the Master Servicer deems
necessary or appropriate and take any other steps which the
Master Servicer may deem reasonably necessary or appropriate
to enable the Master Servicer to carry out its servicing and
administrative duties under this Agreement.
SECTION 4.2. Collection of Receivable Payments;
Modifications of Receivables
(a) . (a) Consistent with the standards, policies
and procedures required by this Agreement, the Master
Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the
Receivables as and when the same shall become due, and shall
follow such collection procedures as it follows with respect
to all comparable automobile receivables that it services
for itself or others and otherwise act with respect to the
Receivables, the Dealer Agreements, the Dealer Assignments,
the Insurance Policies and the Other Conveyed Property in
such manner as will, in the reasonable judgment of the
Master Servicer, maximize the amount to be received by the
Trust with respect thereto. The Master Servicer is
authorized in its discretion to waive any prepayment charge,
late payment charge or any other similar fees that may be
collected in the ordinary course of servicing any
Receivable.
(b) The Master Servicer may at any time agree to a
modification or amendment of a Receivable in order to (i)
change the Obligor's regular due date to a date within 30
days of when such due date occurs or (ii) re-amortize the
scheduled payments on the Receivable following a partial
prepayment of principal; provided, however, that no such
change shall extend the maturity date of any Receivable.
(c) The Master Servicer may grant payment extensions
on, or other modifications or amendments to, a Receivable
(including those modifications permitted by Section 4.2(b))
in accordance with its customary procedures if the Master
Servicer believes in good faith that such extension,
modification or amendment is necessary to avoid a default on
such Receivable, will maximize the amount to be received
with respect to such Receivable, and is otherwise in the
best interests of the Trust; provided, however, that unless
otherwise specified in any Series Supplement:
(i) The aggregate period of all extensions on a
Receivable shall not exceed six months; provided, however,
that not more than two months can be in any consecutive
twelve month period;
(ii) In no event may a Receivable be extended by the
Master Servicer beyond the Collection Period immediately
preceding the Final Scheduled Distribution Date of the Notes
with respect to the related Series; and
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<PAGE> 27
(iii) As of any Determination Date the number of
Receivables included in a Series Trust Estate the term of
which have been extended during the preceding 12-month
period shall not exceed 8% of the number of Receivables in
such Series Trust Estate at the beginning of the preceding
12-month period.
(d) Except as otherwise provided below, the Master
Servicer shall deposit collections on or with respect to
Receivables into the Master Collection Account as promptly
as possible after the date of processing of such
collections, but in no event later than the second Business
Day following the date of processing. Subject to the
express terms of any Series Supplement, but notwithstanding
anything else in this Agreement to the contrary, for so long
as (i) Household remains the Master Servicer and maintains a
commercial paper rating of not less than A-1 by Standard &
Poor's and P-1 by Moody's (or such other rating below A-1 or
P-1, as the case may be, which is satisfactory to the Rating
Agency) and for five Business Days following any reduction
of any such rating or (ii) a Master Servicer Credit Facility
is maintained in effect by the Master Servicer acceptable in
form and substance to the Rating Agency (such acceptability
to be evidenced in writing by the Rating Agency to the
effect that failure to make the aforementioned deposit on
the basis of the maintenance of the Master Servicer Credit
Facility will not adversely affect the then current rating
of the Notes), issued by a depository institution or
insurance having a rating on its (A) short-term obligations
of at least P-1 by Moody's and A-1 by Standard & Poor's and
(B) long term obligations of at least A2 by Moody's and A by
Standard & Poor's or other ratings approved by the Rating
Agency, the Master Servicer shall not be required to make
deposits of collections on or with respect to Receivables as
provided in the preceding sentence, but may make one or more
deposits of such collections with respect to a Collection
Period into the Master Collection Account in immediately
available funds not later than 1:00 P.M., Central time, on
the Business Day immediately preceding the related
Distribution Date. In the event that a Master Servicer
Credit Facility is maintained, the Master Servicer shall
within two Business Days of the date of processing of
collections on or with respect to Receivables notify the
Indenture Trustee and the Master Servicer Credit Facility
Issuer in writing of the amounts that would otherwise be
deposited in the Collection Account. The Master Servicer
shall establish and maintain for the Trust a Payment Record
in which the payments on or with respect to the Receivables
shall be credited and the Master Servicer shall notify the
Indenture Trustee and the Master Servicer Credit Facility
Issuer in writing as promptly as practicable (but in any
event prior to the Determination Date for the following
Distribution Date) of the amounts so credited on or with
respect to the Receivables that are to be included in
Collected Funds for the related Distribution Date and of the
amounts so credited which will constitute a part of
Collected Funds for the second following Distribution Date.
The Payment Record shall be made available for inspection
during normal business hours of the Master Servicer upon
request of the Indenture Trustee, or any Master Servicer
Credit Facility Issuer. The Master Servicer shall give
written notice to the Indenture Trustee if it is required to
deposit funds in accordance with the first sentence of this
paragraph.
SECTION 4.3. Realization Upon Receivables
(a) . (a) Consistent with the standards, policies
and procedures required by this Agreement, the Master
Servicer shall use its best efforts to repossess (or
otherwise comparably convert the ownership of) and liquidate
any Financed Vehicle securing a Receivable with respect to
which the Master Servicer has determined that payments
thereunder are not likely to be resumed, as soon as is
practicable after default on such Receivable but in no event
later than the date on which 10% or more of a Scheduled
Payment has become 150 days delinquent (other than in the
case of Financed Vehicles where neither the Financed Vehicle
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<PAGE> 28
nor the Obligor can be physically located by the Master
Servicer (using procedures consistent with the standards,
policies and procedures of the Master Servicer required by
this Agreement) and other than in the case of an Obligor who
is subject to a bankruptcy proceeding); provided, however,
that the Master Servicer may elect not to repossess a
Financed Vehicle within such time period if in its good
faith judgment it determines that the proceeds ultimately
recoverable with respect to such Receivable would be
increased by forbearance. The Master Servicer is authorized
to follow such customary practices and procedures as it
shall deem necessary or advisable, consistent with the
standard of care required by Section 4.1, which practices
and procedures may include reasonable efforts to realize
upon any recourse to Dealers, the sale of the related
Financed Vehicle at public or private sale, the submission
of claims under an Insurance Policy and other actions,
including, without limitation, entering into settlements
with Obligors, by the Master Servicer in order to realize
upon such a Receivable. The foregoing is subject to the
provision that, in any case in which the Financed Vehicle
shall have suffered damage, the Master Servicer shall not
expend funds in connection with any repair or towards the
repossession of such Financed Vehicle unless it shall
determine in its discretion that such repair and/or
repossession shall increase the proceeds of liquidation of
the related Receivable by an amount greater than the amount
of such expenses. The Master Servicer shall be entitled to
recover all reasonable expenses incurred by it in the course
of repossessing and liquidating a Financed Vehicle but only
from the liquidation proceeds of the vehicle or under the
related Dealer Agreement. The Master Servicer shall recover
such reasonable expenses based on the information contained
in the Master Servicer's Certificate delivered on the
related Determination Date. The Master Servicer shall pay
on behalf of the Trust any personal property taxes assessed
on repossessed Financed Vehicles. The Master Servicer shall
be entitled to reimbursement of any such tax from Net
Liquidation Proceeds with respect to such Receivable.
(b) If the Master Servicer elects to commence a legal
proceeding to enforce a Dealer Agreement or Dealer
Assignment, the act of commencement shall be deemed to be an
automatic assignment from the Trust to the Master Servicer
of the rights under such Dealer Agreement and Dealer
Assignment for purposes of collection only. If, however, in
any enforcement suit or legal proceeding it is held that the
Master Servicer may not enforce a Dealer Agreement or Dealer
Assignment on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer
Agreement or Dealer Assignment, the Owner Trustee, at the
Master Servicer's written direction and expense, or the
Seller, at the Seller's expense, shall take such steps as
the Master Servicer deems reasonably necessary to enforce
the Dealer Agreement or Dealer Assignment, including
bringing suit in its name or the name of the Seller or of
the Trust and the Owner Trustee for the benefit of the
Securityholders. All amounts recovered shall be remitted
directly by the Master Servicer as provided in Section
4.2(d).
(c) The Master Servicer agrees that prior to
delivering any repossessed Finance Vehicle for sale to any
dealer, it shall make such filings and effect such notices
as are necessary under Section 9-114(1) of the UCC to
preserve the Trust's ownership interest (or security
interest, as the case may be) in such repossessed Financed
Vehicle.
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<PAGE> 29
SECTION 4.4. Insurance
(a) . (a) The Master Servicer shall require, in
accordance with its customary servicing policies and
procedures, that each Financed Vehicle be insured by the
related Obligor under an insurance policy covering physical
loss and damage to the related Financed Vehicle and shall
monitor the status of such physical loss and damage
insurance coverage thereafter, in accordance with its
customary servicing procedures. Each Receivable requires
the Obligor to obtain such physical loss and damage
insurance, naming HAFC and its successors and assigns as
loss payee, and with respect to liability coverage,
additional insureds, and permits the holder of such
Receivable to obtain physical loss and damage insurance at
the expense of the Obligor if the Obligor fails to maintain
such insurance. If the Master Servicer shall determine that
an Obligor has failed to obtain or maintain a physical loss
and damage Insurance Policy covering the related Financed
Vehicle which satisfies the conditions set forth in the
related Eligibility Criteria (including, without limitation,
during the repossession of such Financed Vehicle) the Master
Servicer shall be diligent in carrying out its customary
servicing procedures to enforce the rights of the holder of
the Receivable under the Receivable to require the Obligor
to obtain such physical loss and damage insurance in
accordance with its customary servicing policies and
procedures.
(b) The Master Servicer may sue to enforce or collect
upon the Insurance Policies, in its own name, if possible,
or as agent of the Trust. If the Master Servicer elects to
commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic
assignment of the rights of the Trust under such Insurance
Policy to the Master Servicer for purposes of collection
only. If, however, in any enforcement suit or legal
proceeding it is held that the Master Servicer may not
enforce an Insurance Policy on the grounds that it is not a
real party in interest or a holder entitled to enforce the
Insurance Policy, the Owner Trustee, at the Master
Servicer's written direction and expense, or the Seller, at
the Seller's expense, shall take such steps as the Master
Servicer deems reasonably necessary to enforce such
Insurance Policy, including bringing suit in its name or the
name of the Trust and the Owner Trustee for the benefit of
the Noteholders.
SECTION 4.5. Maintenance of Security Interests in Vehicles
. Consistent with the policies and procedures required by
this Agreement, the Master Servicer shall take such steps on
behalf of the Trust as are necessary to maintain perfection
of the security interest created by each Receivable in the
related Financed Vehicle on behalf of the Trust as the
Indenture Trustee shall reasonably request, including, but
not limited to, obtaining the execution by the Obligors and
the recording, registering, filing, re-recording, re-filing,
and re-registering of all security agreements, financing
statements and continuation statements as are necessary to
maintain the security interest granted by the Obligors under
the respective Receivables. The Owner Trustee, on behalf of
the Trust, hereby authorizes the Master Servicer, and the
Master Servicer agrees, to take any and all steps necessary
to re-perfect such security interest on behalf of the Trust
as necessary because of the relocation of a Financed Vehicle
or for any other reason. In the event that the assignment
of a Receivable to the Trust is insufficient, without a
notation on the related Financed Vehicle's certificate of
title, or without fulfilling any additional administrative
requirements under the laws of the state in which the
Financed Vehicle is located, to perfect a security interest
in the related Financed Vehicle in favor of the Trust, HAFC
hereby agrees that the designation of any predecessor
company to HAFC, or any Affiliate of any of the foregoing as
the secured party on the certificate of title is in its
capacity as agent of the Trust for such limited purpose.
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<PAGE> 30
SECTION 4.6. Covenants, Representations, and
Warranties of Master Servicer
. By its execution and delivery of this Agreement, the
Master Servicer makes the following representations,
warranties and covenants on which the Indenture Trustee
relies in accepting the related Receivables, on which the
Indenture Trustee relies in authenticating each Series of
Notes, on which the Noteholders rely on in purchasing a
Series of Notes and on which the Owner Trustee relies in
executing each Series of Certificates.
The Master Servicer covenants as follows:
(i) Liens in Force. The Financed Vehicle securing
each Receivable shall not be released in whole or in part
from the security interest granted by the Receivable, except
upon payment in full of the Receivable or as otherwise
contemplated herein;
(ii) No Impairment. The Master Servicer shall do
nothing to impair the rights of the Trust or the related
Series of Noteholders in the Receivables, the Dealer
Agreements, the Dealer Assignments, the Insurance Policies
or the Other Conveyed Property;
(iii) No Amendments. The Master Servicer shall not
extend or otherwise amend the terms of any Receivable,
except in accordance with Section 4.2;
(iv) Restrictions on Liens. The Master Servicer shall
not (i) create, incur or suffer to exist, or agree to
create, incur or suffer to exist, or consent to cause or
permit in the future (upon the happening of a contingency or
otherwise) the creation, incurrence or existence of any Lien
or restriction on transferability of the Receivables except
for the Lien in favor of the Indenture Trustee for the
benefit of the related Series Securityholders, and the
restrictions on transferability imposed by this Agreement or
(ii) sign or file under the Uniform Commercial Code of any
jurisdiction any financing statement which names HAFC, the
Master Servicer or any Affiliate thereof as a debtor, or
sign any security agreement authorizing any secured party
thereunder to file such financing statement, with respect to
the Receivables, except in each case any such instrument
solely securing the rights and preserving the Lien of the
Indenture Trustee;
(v) Servicing of Receivables. The Master Servicer
shall service the Receivables as required by the terms of
this Agreement and in material compliance with its standard
and customary procedures for servicing all its other
comparable motor vehicle receivables and in compliance with
applicable law; and
(vi) Relocation of Office. The Master Servicer shall
notify the Indenture Trustee of any relocation of the Master
Servicer's principal office set forth in Section 13.3 hereof
and all Receivables Files shall be maintained by the Master
Servicer in the United States.
SECTION 4.7. Repurchase of Receivables Upon Breach of Covenant
. Upon discovery by any of the Master Servicer, the Seller,
a Trust Officer of the Owner Trustee or of the Indenture
Trustee of a breach of any of the covenants set forth in
Sections 4.5 or 4.6, the party discovering such breach shall
give prompt written notice to the others; provided, however,
that the failure to give any such notice shall not affect
any obligation of the Master Servicer under this Section
4.7. As of the second Accounting Date following its
discovery or receipt of notice of any breach of any covenant
set forth in Sections 4.5 or 4.6 which materially and
adversely affects the interests of the related Series
Securityholders in any Receivable (including any Liquidated
Receivable) (or, at the Master Servicer's election, the
first Accounting Date so following) or the related Financed
Vehicle, the Master Servicer shall, unless such breach shall
have been cured in all material respects, repurchase from
the Trust the Receivable affected by such breach and, on the
date specified in Section 5.4, the Master Servicer shall pay
the related Repurchase Amount and deposit such Repurchase
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Amounts into the Master Collection Account in accordance
with Section 5.3 hereof. It is understood and agreed that
the obligation of the Master Servicer to repurchase any
Receivable (including any Liquidated Receivable) with
respect to which such a breach has occurred and is
continuing shall, if such obligation is fulfilled,
constitute the sole remedy against the Master Servicer for
such breach;
SECTION 4.8. Total Servicing Fee; Payment of Certain
Expenses by Master Servicer
. As compensation for its activities, the Master Servicer
shall be entitled to retain out of amounts otherwise to be
deposited in the Master Collection Account with respect to a
Collection Period, the Base Servicing Fee and any
Supplemental Servicing Fee for each Series for such
Collection Period. The Master Servicer shall be required to
pay all expenses incurred by it in connection with its
activities under this Agreement (including taxes imposed on
the Master Servicer, expenses incurred in connection with
distributions and reports made by the Master Servicer to
Securityholders and all fees and expenses of the Owner
Trustee or the Indenture Trustee), except taxes levied or
assessed against the Trust, and claims against the Trust in
respect of indemnification, which taxes and claims in
respect of indemnification against the Trust are expressly
stated to be for the account of Household. The Master
Servicer shall be liable for the fees, charges and expenses
of the Owner Trustee, the Indenture Trustee, any Sub-
Servicer and their respective agents.
SECTION 4.9. Master Servicer's Certificate
. No later than 10:00 a.m. Central time on each
Determination Date, the Master Servicer shall deliver, or
cause to be delivered, to the Indenture Trustee and the
Owner Trustee, a Master Servicer's Certificate executed by a
responsible officer or agent of the Master Servicer
containing among other things, all information necessary to
enable the Indenture Trustee to make the allocations
required by Section 5.5 and the distributions with respect
to such Distribution Date pursuant to each Series
Supplement. Upon request, the Master Servicer will also
provide a listing of all Warranty Receivables and Covenant
Receivables repurchased as of the related Determination
Date, identifying the Receivables so purchased. Such list
will identify Receivables repurchased by the Master Servicer
or by the Seller on the related Determination Date and each
Receivable which became a Liquidated Receivable or which was
paid in full during the related Collection Period by account
number. In addition to the information set forth in the
preceding sentence, the Master Servicer's Certificate shall
also contain the information required by any Series
Supplement.
SECTION 4.10. Annual Statement as to Compliance,
Notice of Master Servicer Termination Event
(a) . (a) The Master Servicer shall deliver or cause
to be delivered to the Indenture Trustee and the Owner
Trustee on or before April 30 (or 120 days after the end of
the Master Servicer's fiscal year, if other than December
31) of each year, beginning on April 30, 2001, an Officer's
Certificate signed by any responsible officer of the Master
Servicer, or such Eligible Sub-Servicer who is performing
the servicing duties of the Master Servicer, dated as of
December 31 (or other applicable date) of the immediately
preceding year, stating that (i) a review of the activities
of the Master Servicer, or such Eligible Sub-Servicer who is
performing the servicing duties of the Master Servicer,
during the preceding 12-month period and of its performance
under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on
such review, the Master Servicer, or such Eligible Sub-
Servicer who is performing the servicing duties of the
Master Servicer, has in all material respects fulfilled all
its obligations under this Agreement throughout such period,
or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such
officer and the nature and status thereof.
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(b) The Master Servicer, or such Eligible Sub-Servicer
who is performing the servicing duties of the Master
Servicer, shall deliver to the Indenture Trustee and the
Owner Trustee and, in the event that such notice is
delivered by the Sub-Servicer, to the Master Servicer,
promptly after having obtained knowledge thereof, but in no
event later than two (2) Business Days thereafter, written
notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become
a Master Servicer Termination Event under Section 10.1(a).
The Seller or the Master Servicer shall deliver to the
Indenture Trustee, the Owner Trustee, the Master Servicer or
the Seller (as applicable) promptly after having obtained
knowledge thereof, but in no event later than two (2)
Business Days thereafter, written notice in an Officer's
Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Master Servicer
Termination Event under any other clause of Section 10.1.
SECTION 4.11. Annual Independent Accountants' Report
(a) . (a) The Master Servicer shall cause a firm of
nationally recognized independent certified public
accountants (the "Independent Accountants"), who may also
render other services to the Master Servicer or to the
Seller, to deliver to the Indenture Trustee and the Owner
Trustee on or before April 30 (or 120 days after the end of
the Master Servicer's fiscal year, if other than December
31) of each year, beginning on April 30, 2001, with respect
to the twelve months ended the immediately preceding
December 31 (or other applicable date), a report to the
effect that they have examined certain documents and records
relating to the servicing of Receivables under this
Agreement and each Series Supplement, compared the
information contained in the Master Servicer's Certificates
delivered pursuant to Section 4.9 during the period covered
by such report with such documents and records and that, on
the basis of such examination, such accountants are of the
opinion that the servicing has been conducted in compliance
with the terms and conditions as set forth in Articles IV
and V of this Agreement and the applicable provisions of
each Series Supplement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall
be set forth in such statement. Such report shall
acknowledge that the Indenture Trustee shall be a "non-
participating party" with respect to such report, or words
to similar effect. The Indenture Trustee shall have no duty
to make any independent inquiry or investigation as to, and
shall have no obligation or liability in respect of, the
sufficiency of such procedures.
(b) On or before April 30 of each calendar year,
beginning with April 30, 2001, the Master Servicer shall
cause a firm of nationally recognized independent public
accountants (who may also render other services to the
Master Servicer or Seller) to furnish a report to the
Indenture Trustee, the Master Servicer and each Rating
Agency to the effect that they have compared the
mathematical calculations of each amount set forth in the
Master Servicer's Certificates delivered pursuant to Section
4.9 during the period covered by such report with the Master
Servicer's computer reports which were the source of such
amounts and that on the basis of such comparison, such
accountants are of the opinion that such amounts are in
agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth
in such statement. Such report shall acknowledge that the
Indenture Trustee shall be a "non-participating party" with
respect to such report, or words to similar effect. The
Indenture Trustee shall have no duty to make any independent
inquiry or investigation as to, and shall have no obligation
or liability in respect of, the sufficiency of such
procedures.
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SECTION 4.12. Access to Certain Documentation and
Information Regarding Receivables
. The Master Servicer shall provide to representatives of
the Indenture Trustee and the Owner Trustee reasonable
access to the documentation regarding the Receivables. In
each case, such access shall be afforded without charge but
only upon reasonable request and during normal business
hours. Nothing in this Section shall derogate from the
obligation of the Master Servicer to observe any applicable
law prohibiting disclosure of information regarding the
Obligors, and the failure of the Master Servicer to provide
access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
SECTION 4.13. Fidelity Bond and Errors and Omissions Policy
. The Master Servicer or such Eligible Sub-Servicer that is
performing the servicing duties of the Master Servicer, has
obtained, and shall continue to maintain in full force and
effect, a Fidelity Bond and Errors and Omissions Policy of a
type and in such amount as is customary for servicers
engaged in the business of servicing automobile receivables.
ARTICLE V
Trust Accounts; Distributions;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts
(a) . (a) (i) Except as otherwise provided with
respect to a Series in the related Series Supplement, the
Master Servicer, on behalf of the Noteholders with respect
to each Series, the holders of the Series Trust Certificates
of each Series and the holders of the Owner Trust
Certificates, shall establish and maintain in the name of
the Indenture Trustee, a trust account which is an Eligible
Deposit Account (the "Master Collection Account"), bearing a
designation clearly indicating that the funds deposited
therein are held for the benefit of the Series Noteholders
with respect to the Household Automotive Trusts, holders of
the Series Trust Certificates of each Series and the holders
of the Owner Trust Certificates. The Master Collection
Account shall initially be established with the Indenture
Trustee. The Indenture Trustee shall possess all right,
title and interest in all funds on deposit from time to time
in, and shall have sole dominion and control with respect
to, the Master Collection Account and in all proceeds
thereof for the benefit of the Series Noteholders, the
holders of the Series Trust Certificates of each Series and
the holders of the Owner Trust Certificates. Except as
expressly provided in this Agreement, the Master Servicer
agrees that it shall have no right of setoff or banker's
lien against, and no right to otherwise deduct from, any
funds held in the Master Collection Account for any amount
owed to it by the Trust.
(ii) With respect to each Series, the Indenture
Trustee shall establish and maintain the Series Trust
Accounts required to be established and maintained pursuant
to the related Series Supplement.
(b) Funds on deposit in the Master Collection Account
and any Series Trust Accounts (collectively, the "Trust
Accounts") shall be invested by the Indenture Trustee (or
any custodian with respect to funds on deposit in any such
account) in Eligible Investments selected in writing by the
Master Servicer (pursuant to standing instructions or
otherwise) which absent any instruction shall be the
investments specified in clause (d) of the definition of
Eligible Investments set forth herein. Funds on deposit in
any Trust Account shall be invested in Eligible Investments
that will mature so that such funds will be available at the
close of business on the Business Day immediately preceding
the Distribution Date. Funds deposited in a Trust Account
on the day immediately preceding a Distribution Date and
representing the proceeds of Eligible Investments are not
required to be invested overnight. All Eligible Investments
will be held to maturity.
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(c) All investment earnings of monies deposited in the
Trust Accounts shall be deposited (or caused to be
deposited) by the Indenture Trustee in the Master Collection
Account or the related Series Collection Account no later
than the close of business on the Business Day immediately
preceding the related Distribution Date, and any loss
resulting from such investments shall be charged to the
Master Collection Account. The Master Servicer will not
direct the Indenture Trustee to make any investment of any
funds held in any of the Trust Accounts unless the security
interest granted and perfected in such account will continue
to be perfected in such investment, in either case without
any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such
investment, if necessary, the Master Servicer shall deliver
to the Indenture Trustee an Opinion of Counsel to such
effect.
(d) The Indenture Trustee shall not in any way be held
liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment
included therein except for losses attributable to the
Indenture Trustee's negligence or bad faith or its failure
to make payments on such Eligible Investments issued by the
Indenture Trustee in its commercial capacity as principal
obligor and not as Indenture Trustee in accordance with
their terms.
(e) If (i) the Master Servicer shall have failed to
give investment directions for any funds on deposit in the
Trust Accounts to the Indenture Trustee by 2:00 p.m. Eastern
Time (or such other time as may be agreed by the Issuer and
the Indenture Trustee) on any Business Day; or (ii) an Event
of Default shall have occurred and be continuing with
respect to a Series of Notes, the Indenture Trustee shall,
to the fullest extent practicable, invest and reinvest funds
in the Trust Accounts in one or more Eligible Investments in
accordance with paragraph (b) above; provided that, if
following an Event of Default amounts are to be distributed
to Securityholders other than on a Distribution Date,
investments shall mature on the Business Day preceding any
such proposed date of distribution.
(f) The Indenture Trustee, in its respective
capacities with respect to the various Series shall possess
all right, title and interest in all funds on deposit from
time to time in the Trust Accounts and in all proceeds
thereof (excluding all Investment Earnings on the Master
Collection Account and the Series Collection Accounts) and
all such funds, investments, proceeds and income shall be
part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole
dominion and control of the Indenture Trustee for the
benefit of the related Noteholders. If, at any time, any of
the Trust Accounts ceases to be an Eligible Deposit Account,
the Indenture Trustee (or the Master Servicer on its behalf)
shall within five Business Days (or such longer period as to
which each Rating Agency may consent) establish a new Trust
Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Trust Account.
In connection with the foregoing, the Master Servicer agrees
that, in the event that any of the Trust Accounts are not
accounts with the Indenture Trustee, the Master Servicer
shall notify the Indenture Trustee in writing promptly upon
any of such Trust Accounts ceasing to be an Eligible Deposit
Account. Pursuant to the authority granted to the Master
Servicer under this Agreement, the Master Servicer shall
have the revocable power, granted by the Indenture Trustee
to make withdrawals and payments from the Master Collection
Account and to instruct the Indenture Trustee to make
withdrawals and payments from the Master Collection Account
for the purposes of carrying out the Master Servicer's
duties hereunder. The Master Servicer may net against any
deposits required to be made to the Master Collection
Account on the Business Day before any Determination Date
amounts that the Seller, as Certificateholder or otherwise,
is entitled to receive as distributions directly or
indirectly from the Master Collection Account on such
Determination Date.
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SECTION 5.2. Certain Reimbursements to the Master Servicer
. The Master Servicer shall be entitled to withhold from
amounts otherwise required to be remitted to the Master
Collection Account with respect to a Collection Period an
amount in respect of funds deposited with respect to prior
Collection Periods in the Master Collection Account but
later determined by the Master Servicer to have resulted
from mistaken deposits or postings or checks returned for
insufficient funds; provided, that, such withholding may be
made only following certification by the Master Servicer of
such amounts and the provision of such information to the
Indenture Trustee, as may be necessary in the opinion of the
Indenture Trustee to verify the accuracy of such
certification.
SECTION 5.3. Application of Collections
. All collections for the Collection Period shall be
applied by the Master Servicer as follows:
With respect to each Simple Interest Receivable
(other than a Repurchased Receivable), payments by or on
behalf of the Obligor, (other than Supplemental Servicing
Fees with respect to such Receivable, to the extent
collected) shall be applied to interest and principal in
accordance with the Simple Interest Method. With respect to
each Actuarial Receivable, (other than a Repurchased
Receivable), payments by or on behalf of the Obligor, (other
than Supplemental Servicing Fees with respect to such
Receivable, to the extent collected) shall be applied to
interest and principal in accordance with the Actuarial
Method.
SECTION 5.4. Additional Deposits
. HAFC and the Seller, as applicable, shall deposit or
cause to be deposited in the Master Collection Account for
distribution to the appropriate Series Collection Account on
the Business Day preceding the Determination Date following
the date on which such obligations are due the aggregate
Repurchase Amount with respect to Repurchased Receivables.
SECTION 5.5. Distributions
(a) . (a) If, with respect to a Series, Collected
Funds are deposited in the Master Collection Account, on
each Distribution Date, the Indenture Trustee shall transfer
Collected Funds with respect to such Series Trust Estate in
the respective amounts set forth in the Master Servicer's
Certificates with respect to such Series from the Master
Collection Account to the related Series Collection Account
for further application and distribution as set forth in the
related Series Supplement.
(b) In the event that the Master Collection Account is
maintained with an institution other than the Indenture
Trustee, the Master Servicer shall instruct and cause such
institution to make all deposits and distributions pursuant
to Section 5.5(a) on the related Distribution Date.
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ARTICLE VI
RESERVED
ARTICLE VII
RESERVED
ARTICLE VIII
The Seller
SECTION 8.1. Representations of Seller
. The Seller makes the following representations on which
each Series Support Provider shall be deemed to have relied
in providing the Series Support and on which the Issuer is
deemed to have relied in acquiring the Receivables and on
which the Noteholders are deemed to have relied on in the
purchasing of Notes. The representations speak as of the
execution and delivery of this Agreement and each Transfer
Agreement and as of each Transfer Date and each Series
Closing Date and shall survive each sale of the Receivables
to the Issuer and each pledge thereof to the Indenture
Trustee pursuant to the Indenture and each Series
Supplement.
(a) Schedule of Representations. The representations
and warranties set forth on the Schedule of Eligibility
Criteria attached as Schedule I to the Series Supplement are
true and correct.
(b) Organization and Good Standing. The Seller has
been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Nevada, with
power and authority to own its properties and to conduct its
business as such properties are currently owned and such
business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to
acquire, own and sell each Series Trust Estate transferred
to the Trust.
(c) Due Qualification. The Seller is duly qualified
to do business as a foreign corporation in good standing and
has obtained all necessary licenses and approvals in all
jurisdictions where the failure to do so would materially
and adversely affect Seller's ability to transfer the
Receivables and the Other Conveyed Property to the Trust
pursuant to this Agreement, or the validity or
enforceability of the Series Trust Estate or to perform
Seller's obligations hereunder and under the Basic Documents
to which the Seller is a party.
(d) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and its
Basic Documents and to carry out its terms and their terms,
respectively; the Seller has full power and authority to
sell and assign each Series Trust Estate to be sold and
assigned to and deposited with the Trust by it and has duly
authorized such sale and assignment to the Trust by all
necessary corporate action; and the execution, delivery and
performance of this Agreement and the Basic Documents to
which the Seller is a party have been duly authorized by the
Seller by all necessary corporate action.
(e) Valid Sale, Binding Obligations. This Agreement
and each related Transfer Agreement effects a valid sale,
transfer and assignment of the related Series Trust Estate,
enforceable against the Seller and creditors of and
purchasers from the Seller; and this Agreement and the Basic
Documents to which the Seller is a party, when duly executed
and delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance with
their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability
of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at
law.
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<PAGE> 37
(f) No Violation. The consummation of the
transactions contemplated by this Agreement and the Basic
Documents and the fulfillment of the terms of this Agreement
and the Basic Documents shall not conflict with, result in
any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a
material default under the certificate of incorporation or
by-laws of the Seller, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the
Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument,
other than this Agreement, or violate any law, order, rule
or regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction
over the Seller or any of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge,
threatened against the Seller, before any court, regulatory
body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the
Seller or its properties (A) asserting the invalidity of
this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of any Securities or the consummation
of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (C) seeking any determination or
ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement or any of the
Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax
attributes of the Securities.
(h) Approvals. All approvals, authorizations,
consents, orders or other actions of any person, corporation
or other organization, or of any court, governmental agency
or body or official, required in connection with the
execution and delivery by the Seller of this Agreement and
the consummation of the transactions contemplated hereby
have been or will be taken or obtained on or prior to each
Series Closing Date and each Transfer Date.
(i) No Consents. The Seller is not required to obtain
the consent of any other party or any consent, license,
approval or authorization, or registration or declaration
with, any governmental authority, bureau or agency in
connection with the execution, delivery, performance,
validity or enforceability of this Agreement which has not
already been obtained.
(j) Chief Executive Office. The chief executive
office of the Seller is at 1111 Town Center Drive, Las
Vegas, Nevada 89134.
SECTION 8.2. Corporate Existence
(a) . (a) During the term of this Agreement, the
Seller will keep in full force and effect its existence,
rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation and will obtain and
preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this
Agreement, the Basic Documents and each other instrument or
agreement necessary or appropriate to the proper
administration of this Agreement and the transactions
contemplated hereby.
(b) During the term of this Agreement, the Seller
shall observe the applicable legal requirements for the
recognition of the Seller as a legal entity separate and
apart from its Affiliates, including as follows:
(i) the Seller shall not engage in any other business
other than as provided in Article THIRD of Seller's Articles
of Incorporation;
(ii) the Seller shall maintain corporate records and
books of account separate from those of its Affiliates;
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<PAGE> 38
(iii) except as otherwise provided in this Agreement,
the Seller shall not commingle its assets and funds with
those of its Affiliates;
(iv) the Seller shall hold such appropriate meetings of
its Board of Directors as are necessary to authorize all the
Seller's corporate actions required by law to be authorized
by the Board of Directors, shall keep minutes of such
meetings and of meetings of its stockholder(s) and observe
all other customary corporate formalities (and any successor
Seller not a corporation shall observe similar procedures in
accordance with its governing documents and applicable law);
(v) the Seller shall at all times hold itself out to
the public under the Seller's own name as a legal entity
separate and distinct from its Affiliates;
(vi) the Seller shall not become involved in the day-to-
day management of any other Person;
(vii) the Seller shall not guarantee any other Person's
obligations or advance funds to any other Person for the
payment of expenses or otherwise;
(viii) the Seller shall not act as an agent of any other
Person in any capacity;
(ix) the Seller shall not dissolve or liquidate, in
whole or in part; and
(x) all transactions and dealings between the Seller
and its Affiliates will be conducted on an arm's-length
basis.
(c) During the term of this Agreement, the Seller will
comply with the limitations on its business and activities,
as set forth in its Certificate of Incorporation, and will
not incur indebtedness other than pursuant to or as
expressly permitted by the Basic Documents or the Series
Related Documents with respect to each Series.
SECTION 8.3. Liability of Seller; Indemnities
. The Seller shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken under
this Agreement by the Seller and the representations made by
the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold
harmless the Issuer, the Owner Trustee, the Trust and the
Indenture Trustee from and against any taxes that may at any
time be asserted against any such Person with respect to the
transactions contemplated in this Agreement and any of the
Basic Documents (except any income taxes arising out of fees
paid to the Owner Trustee, the Indenture Trustee and each
Series Support Provider and except any taxes to which the
Owner Trustee or the Indenture Trustee may otherwise be
subject to), including any sales, gross receipts, general
corporation, tangible personal property, privilege or
license taxes (but, in the case of the Issuer, not including
any taxes asserted with respect to, federal or other income
taxes arising out of distributions on the Certificates and
the Notes) and costs and expenses in defending against the
same.
(b) The Seller shall indemnify, defend and hold
harmless the Issuer, the Owner Trustee and the Indenture
Trustee against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith or
negligence in the performance of its duties under this
Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the
Seller's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of
the Notes.
(c) The Seller shall indemnify, defend and hold
harmless the Owner Trustee and the Indenture Trustee and
their respective officers, directors, employees and agents
from and against any and all costs, expenses, losses,
claims, damages and liabilities arising out of, or incurred
in connection with, the acceptance or performance of the
trusts and duties set forth herein and in the Basic
Documents, except to the extent that such cost, expense,
loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in
judgment) of the Person seeking indemnification.
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<PAGE> 39
Indemnification under this Section shall survive
the resignation or removal of the Owner Trustee or the
Indenture Trustee and the termination of this Agreement or
the Indenture or the Trust Agreement, as applicable, and
shall include reasonable fees and expenses of counsel and
other expenses of litigation. If the Seller shall have made
any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Seller,
without interest.
SECTION 8.4. Merger or Consolidation of, or
Assumption of the Obligations of, Seller
. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or
consolidation to which the Seller shall be a party or (c)
which may succeed to the properties and assets of the Seller
substantially as a whole, which Person in any of the
foregoing cases (x) has a certificate of incorporation
containing provisions relating to limitations on business
and other matters substantially identical to those contained
in the Seller's certificate of incorporation and (y)
executes an agreement of assumption to perform every
obligation of the Seller under this Agreement, the other
Basic Documents and the applicable Series Related Documents
shall be the successor to the Seller hereunder without the
execution or filing of any document or any further act by
any of the parties to this Agreement; provided, however,
that the Rating Agency Condition shall have been satisfied
with respect to such transaction.
SECTION 8.5. Limitation on Liability of Seller and Others
. (a) The Seller and any director or officer or employee
or agent of the Seller may rely in good faith on the written
advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person
respecting any matters arising under any Basic Document.
The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that
in its opinion may involve it in any expense or liability.
Except as provided in Section 8.3 hereof, neither the Seller
nor any of the directors, officers, employees or agents of
the Seller acting in such capacities shall be under any
liability to the Trust, the Securityholders, any Series
Support Provider or any other Person for any action taken or
for refraining from the taking of any action in good faith
in such capacities pursuant to this Agreement; provided,
however, that this provision shall not protect the Seller or
any such person against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder.
(b) All obligations of the Seller under this
Agreement (including, but not limited to, repurchase and
indemnification obligations) and under any of the Basic
Documents shall be limited in recourse to property, if any,
which the Seller may hold from time to time, not subject to
any Lien.
SECTION 8.6. Seller May Own Certificates or Notes
. The Seller and any Affiliate thereof may in its
individual or any other capacity become the owner or pledgee
of Certificates or Notes with the same rights as it would
have if it were not the Seller or an Affiliate thereof,
except as expressly provided herein or in any Basic
Document. Notes or Certificates so owned by the Seller or
such Affiliate shall have an equal and proportionate benefit
under the provisions of the Basic Documents, without
preference, priority, or distinction as among all of the
Notes or Certificates; provided, however, except in the
event that all outstanding Notes and Certificates are owned
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by the Seller and/or any Affiliate thereof, that any Notes
or Certificates owned by the Seller or any Affiliate
thereof, during the time such Notes or Certificates are
owned by them, shall be without voting rights for any
purpose set forth in the Basic Documents and any such Notes
will not be entitled to the benefits of any financial
guaranty insurance policy. The Seller shall notify the
Owner Trustee and the Indenture Trustee promptly after it or
any of its Affiliates become the owner or pledgee of a
Certificate or a Note.
ARTICLE IX
The Master Servicer
SECTION 9.1. Representations of Master Servicer
. The Master Servicer makes the following representations
on which each Series Support Provider shall be deemed to
have relied in executing and delivering the Series Support
and on which the Issuer is deemed to have relied in
acquiring the Receivables and on which the Noteholders are
deemed to have relied on in the purchasing of Notes. The
representations speak as of the execution and delivery of
this Agreement and each Series Supplement, each Series
Closing Date and as of each Transfer Date and shall survive
each sale of the Series Trust Estate to the Issuer and each
pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(i) Organization and Good Standing. The Master
Servicer has been duly organized and is validly existing and
in good standing under the laws of its jurisdiction of
organization, with power, authority and legal right to own
its properties and to conduct its business as such
properties are currently owned and such business is
currently conducted, and had at all relevant times, and now
has, power, authority and legal right to enter into and
perform its obligations under this Agreement and the other
Basic Documents to which it is a party;
(ii) Due Qualification. The Master Servicer is duly
qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including
the servicing of the Receivables as required by this
Agreement) requires or shall require such qualification;
except where the failure to qualify or obtain licenses or
approvals would not have a material adverse effect on its
ability to perform its obligations as Master Servicer under
this Agreement and the other Basic Documents to which it is
a party;
(iii) Power and Authority. The Master Servicer has the
power and authority to execute and deliver this Agreement
and its Basic Documents and to carry out its terms and their
terms, respectively, and the execution, delivery and
performance of this Agreement and the Basic Documents to
which the Master Servicer is a party have been duly
authorized by the Master Servicer by all necessary corporate
action;
(iv) Binding Obligation. This Agreement and the Basic
Documents to which the Master Servicer is a party shall
constitute legal, valid and binding obligations of the
Master Servicer enforceable in accordance with their
respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar
laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability
of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at
law;
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<PAGE> 41
(v) No Violation. The consummation of the
transactions contemplated by this Agreement and the Basic
Documents to which the Master Servicer is a party, and the
fulfillment of the terms of this Agreement and the Basic
Documents to which the Master Servicer is a party, shall not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or
lapse of time) a material default under, the articles of
incorporation or bylaws of the Master Servicer, or any
indenture, agreement, mortgage, deed of trust or other
instrument to which the Master Servicer is a party or by
which it is bound, or result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust or
other instrument, other than this Agreement, or violate any
law, order, rule or regulation applicable to the Master
Servicer of any court or of any federal or state regulatory
body, administrative agency or other governmental
instrumentality having jurisdiction over the Master Servicer
or any of its properties, or any way materially adversely
affect the interest of the Noteholders or the Trust in any
Receivable or affect the Master Servicer's ability to
perform its obligations under this Agreement;
(vi) No Proceedings. There are no proceedings or
investigations pending or, to the Master Servicer's
knowledge, threatened against the Master Servicer, before
any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction
over the Master Servicer or its properties (A) asserting the
invalidity of this Agreement or any of the Basic Documents,
(B) seeking to prevent the issuance of the Securities or the
consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, or (C) seeking any
determination or ruling that might materially and adversely
affect the performance by the Master Servicer of its
obligations under, or the validity or enforceability of,
this Agreement or any of the Basic Documents or (D) seeking
to adversely affect the federal income tax or other federal,
state or local tax attributes of the Securities;
(vii) Approvals. All approvals, authorizations,
consents, orders or other actions of any person, corporation
or other organization, or of any court, governmental agency
or body or official, required in connection with the
execution and delivery by the Master Servicer of this
Agreement and the consummation of the transactions
contemplated hereby have been or will be taken or obtained
on or prior to the Series Closing Date.
(viii) No Consents. The Master Servicer is not required
to obtain the consent of any other party or any consent,
license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement
which has not already been obtained.
(ix) Chief Executive Office. The chief executive
office of the Master Servicer is located at 2700 Sanders
Road, Prospect Heights, Illinois 60070.
SECTION 9.2. Liability of Master Servicer; Indemnities
(a) . (a) The Master Servicer (in its capacity as
such) shall be liable hereunder only to the extent of the
obligations in this Agreement specifically undertaken by the
Master Servicer and the representations made by the Master
Servicer.
(b) The Master Servicer shall defend, indemnify and
hold harmless the Trust, the Indenture Trustee, the Owner
Trustee and their respective officers, directors, agents and
employees, from and against any and all costs, expenses,
losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of
litigation arising out of or resulting from the use,
ownership or operation of, or lien on, any Financed Vehicle;
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<PAGE> 42
(c) The Master Servicer (when the Master Servicer is
Household or an Affiliate of Household) shall indemnify,
defend and hold harmless the Trust, the Indenture Trustee,
the Owner Trustee and their respective officers, directors,
agents and employees and from and against any taxes that may
at any time be asserted against any of such parties with
respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts,
tangible or intangible personal property, privilege or
license taxes (but not including any Federal or other income
taxes, including franchise taxes asserted with respect to,
and as of the date of, the sale of the Receivables and the
Other Conveyed Property to the Trust or the issuance and
original sale of any Series of the Notes) and costs and
expenses in defending against the same, except to the extent
that such costs, expenses, losses, damages, claims and
liabilities arise out of the negligence or willful
misconduct of such parties;
The Master Servicer (when the Master Servicer is
not Household) shall indemnify, defend and hold harmless the
Trust, the Indenture Trustee, the Owner Trustee and their
respective officers, directors, agents and employees from
and against any taxes with respect to the sale of
Receivables in connection with servicing hereunder that may
at any time be asserted against any of such parties with
respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts,
tangible or intangible personal property, privilege or
license taxes (but not including any Federal or other income
taxes, including franchise taxes asserted with respect to,
and as of the date of, the sale of the Series Trust Estate
to the Trust or the issuance and original sale of the
Securities) and costs and expenses in defending against the
same; and
(d) The Master Servicer shall indemnify, defend and
hold harmless the Trust, the Indenture Trustee, the Owner
Trustee, each Series Support Provider and their respective
officers, directors, agents and employees from and against
any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss,
claim, damage, or liability arose out of, or was imposed
upon the Trust or the Indenture Trustee by reason of the
breach of this Agreement by the Master Servicer, the
negligence, misfeasance, or bad faith of the Master Servicer
in the performance of its duties under this Agreement or any
Series Supplement or by reason of reckless disregard of its
obligations and duties under this Agreement or any Series
Supplement, except to the extent that such costs, expenses,
losses, damages, claims, and liabilities arise out of the
negligence or willful misconduct of the Person seeking
indemnification.
(e) The Master Servicer shall indemnify, defend and
hold harmless the Trust, the Indenture Trustee, the Owner
Trustee and their respective officers, directors, agents and
employees from and against any loss, liability or expense
incurred by reason of the violation by Master Servicer of
Federal or state securities laws in connection with the
registration or the sale of the Securities, except to the
extent that such costs, expenses, losses, damages, claims,
and liabilities arise out of the negligence or willful
misconduct of such parties.
(f) Indemnification under this Article shall survive
the termination of this Agreement and will survive the early
resignation or removal of any of the parties hereto and
shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the
Master Servicer has made any indemnity payments pursuant to
this Article and the recipient thereafter collects any of
such amounts from others, the recipient shall promptly repay
such amounts collected to the Master Servicer, without
interest. Notwithstanding any other provision of this
Agreement, the obligations of the Master Servicer shall not
terminate or be deemed released upon the resignation or
termination of Household as the Master Servicer and shall
survive any termination of this Agreement.
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SECTION 9.3. Merger or Consolidation of, or
Assumption of the Obligations of the Master Servicer
(a) . (a) Any Person (i) into which the Master
Servicer may be merged or consolidated, (ii) resulting from
any merger or consolidation to which the Master Servicer
shall be a party, (iii) which acquires by conveyance,
transfer, or lease substantially all of the assets of the
Master Servicer, or (iv) succeeding to the business of the
Master Servicer, in any of the foregoing cases shall execute
an agreement of assumption to perform every obligation of
the Master Servicer under this Agreement and each Basic
Document and Series Related Document and, whether or not
such assumption agreement is executed, shall be the
successor to the Master Servicer under this Agreement and
each Basic Document and Series Related Document without the
execution or filing of any paper or any further act on the
part of any of the parties to this Agreement and each Series
Supplement, anything in this Agreement and each Series
Supplement to the contrary notwithstanding. Notwithstanding
the foregoing, the initial Master Servicer shall not merge
or consolidate with any other Person or permit any other
Person to become a successor to the Master Servicer's
business, unless (x) the Master Servicer shall have
delivered to the Owner Trustee, the Rating Agencies and the
Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with this
Section 9.3(a) and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction
have been complied with, and (y) the Rating Agency Condition
shall have been satisfied with respect to such assignment or
succession.
SECTION 9.4. Limitation on Liability of Master
Servicer and Others
(a) . (a) Neither the Master Servicer, the Indenture
Trustee nor any of the directors or officers or employees or
agents of the Master Servicer or the Indenture Trustee shall
be under any liability to the Trust, except as provided in
this Agreement and each Basic Document or Series Related
Document, for any action taken or for refraining from the
taking of any action pursuant to this Agreement and each
Basic Document or Series Related Document; provided,
however, that this provision shall not protect the Master
Servicer, the Indenture Trustee or any such person against
any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (excluding
errors in judgment) in the performance of duties (including
negligence with respect to the Master Servicer's
indemnification obligations hereunder), by reason of
reckless disregard of obligations and duties under this
Agreement and each Basic Document or Series Related Document
or any violation of law by the Master Servicer, the
Indenture Trustee or such person, as the case may be;
provided, further, that this provision shall not affect any
liability to indemnify the Indenture Trustee and the Owner
Trustee for costs, taxes, expenses, claims, liabilities,
losses or damages paid by the Indenture Trustee and the
Owner Trustee, in their individual capacities. The Master
Servicer, the Indenture Trustee and any director, officer,
employee or agent of the Master Servicer may rely in good
faith on the written advice of counsel or on any document of
any kind prima facie properly executed and submitted by any
Person respecting any matters arising under this Agreement.
The Indenture Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if the repayment of
such funds or adequate written indemnity against such risk
or liability is not reasonably assured to it in writing
prior to the expenditure of risk of such funds or incurrence
of financial liability.
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(b) Notwithstanding anything herein to the contrary,
the Indenture Trustee shall not be liable for any obligation
of the Master Servicer contained in this Agreement and each
Basic Document and Series Related Document, and the Owner
Trustee, the Seller and the Noteholders shall look only to
the Master Servicer to perform such obligations.
(c) The parties expressly acknowledge and consent to
Norwest Bank Minnesota, National Association acting in the
potential dual capacity of successor Master Servicer and in
the capacity as Indenture Trustee. Norwest Bank Minnesota,
National Association may, in such dual or other capacity,
discharge its separate functions fully, without hindrance or
regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent
that any such conflict or breach arises from the performance
by Norwest Bank Minnesota, National Association of express
duties set forth in this Agreement in any of such
capacities, all of which defenses, claims or assertions are
hereby expressly waived by the other parties hereto and the
Noteholders except in the case of negligence and willful
misconduct by Norwest Bank Minnesota, National Association.
SECTION 9.5. Delegation of Duties
. In the ordinary course of business, the Master Servicer
at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to
conduct such duties in accordance with standards employed by
the Master Servicer in compliance with Section 4.1. Such
delegation shall not relieve the Master Servicer of its
liabilities and responsibilities with respect to such duties
and shall not constitute a resignation within the meaning of
Section 9.6. The Master Servicer shall provide each Rating
Agency and the Indenture Trustee with written notice prior
to the delegation of any of its duties to any Person other
than any of the Master Servicer's Affiliates or their
respective successors and assigns.
SECTION 9.6. Master Servicer Not to Resign
. Subject to the provisions of Section 9.3, the Master
Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the
performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material
conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or
Affiliates, the other activities of the Master Servicer so
causing such a conflict being of a type and nature carried
on by the Master Servicer or its subsidiaries or Affiliates
at the date of this Agreement or (ii) upon satisfaction of
the following conditions: (a) the Master Servicer has
proposed a successor servicer to the Indenture Trustee in
writing and such proposed successor servicer is reasonably
acceptable to the Indenture Trustee; (b) the Rating Agency
shall have delivered a letter to the Indenture Trustee
stating that the appointment of such proposed successor
servicer as Master Servicer hereunder will satisfy the
Rating Agency Condition; and (c) such proposed successor
servicer has agreed in writing to assume the obligations of
Master Servicer hereunder and under each relevant Basic
Document and Series Related Document and (d) the Master
Servicer has delivered to the Indenture Trustee an Opinion
of Counsel to the effect that all conditions precedent to
the resignation of the Master Servicer and the appointment
of and acceptance by the proposed successor servicer have
been satisfied; provided, however, that, in the case of
clause (i) above, no such resignation by the Master Servicer
shall become effective until the Indenture Trustee shall
have assumed the Master Servicer's responsibilities and
obligations hereunder or the Indenture Trustee shall have
designated a successor servicer in accordance with Section
10.3 which shall have assumed such responsibilities and
obligations. Any such resignation shall not relieve the
Master Servicer of responsibility for any of the obligations
specified in Sections 10.1 and 10.3 as obligations that
survive the resignation or termination of the Master
Servicer. Any such determination permitting the resignation
of the Master Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered
to the Indenture Trustee.
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SECTION 9.7. Sub-Servicing Agreements Between Master
Servicer and Sub-Servicers
. The Master Servicer may enter into agreements for any
subservicing and administration of Receivables with any
institution which is an Eligible Subservicer and is in
compliance with the laws of each state necessary to enable
it to perform the obligations of the Master Servicer
pursuant to this Agreement. The Master Servicer initially
appoints HAFC to subservice the Receivables. For purposes
of this Agreement and each Basic Document and Series Related
Document, the Master Servicer shall be deemed to have
received payments on Receivables when any Sub-Servicer has
received such payments. Any such agreement shall be
consistent with and not violate the provisions of this
Agreement. The Master Servicer shall not be relieved of its
obligations under this Agreement and each Basic Document and
Series Related Document notwithstanding any agreement
relating to subservicing and the Master Servicer shall be
obligated to the same extent and under the same terms and
conditions as if it alone were servicing and administering
the Receivables. The Issuer shall have no liability to the
Master Servicer except for payment of the Base Servicing Fee
and any Supplemental Servicing Fee and reimbursement of
repossession and liquidation expenses. The Issuer shall
have no obligation to indemnify the Master Servicer for
costs or expenses, except with respect to the preceding
sentence. The parties hereto acknowledge that with respect
to statements or certificates required to be delivered by
the Master Servicer in accordance with this Agreement and
each Series Supplement, including, but not limited to,
Sections 4.9, 4.10 and 4.11 hereof, that a statement or
certificate delivered by the Sub-Servicer shall be
sufficient to discharge the Master Servicer's obligation to
deliver such certificate or statement.
SECTION 9.8. Successor Sub-Servicers
. The Master Servicer may terminate any Sub-Servicer and
either directly service the related Receivables itself or
enter into an agreement with a successor Sub-Servicer that
is an Eligible Sub-Servicer. None of the Owner Trustee or
the Indenture Trustee shall have no duty or obligation to
monitor or supervise the performance of any Sub-Servicer.
ARTICLE X
Default
SECTION 10.1. Master Servicer Termination Event
. For purposes of this Agreement, each of the following
shall constitute a "Master Servicer Termination Event", but
shall only constitute a Master Servicer Termination Event
with respect to the Series and the related Series Trust
Estates with respect to which such event arose:
(a) Any failure by the Master Servicer to deliver, or
cause to be delivered, to the Indenture Trustee for
distribution pursuant to the terms of this Agreement any
proceeds or payment required to be so delivered under the
terms of this Agreement (including deposits of the
Repurchase Amount pursuant to Section 3.2 and Section 4.7)
that continues unremedied for a period of five Business Days
after written notice is received by the Master Servicer from
the Indenture Trustee or after discovery of such failure by
a responsible Officer of the Master Servicer (but in no
event later than five Business Days after the Master
Servicer is required to make such delivery or deposit);
(b) Failure on the part of the Master Servicer duly to
observe or perform any other covenants or agreements of the
Master Servicer set forth in this Agreement and each Basic
Document or Series Related Document, which failure (i)
materially and adversely affects the rights of Noteholders
of a Series (determined without regard to the availability
of funds under any Series Support) and (ii) continues
unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by
the Indenture Trustee;
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(c) The entry of a decree or order for relief by a
court or regulatory authority having jurisdiction in respect
of the Master Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or
another present or future, federal bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official
of the Master Servicer or of any substantial part of its
property or ordering the winding up or liquidation of the
affairs of the Master Servicer or the commencement of an
involuntary case under the federal bankruptcy laws, as now
or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law and
such case is not dismissed within 60 days; or
(d) The commencement by the Master Servicer of a
voluntary case under the Federal bankruptcy laws, as now or
hereafter in effect, or any other present or future, Federal
or state, bankruptcy, insolvency or similar law, or the
consent by the Master Servicer to the appointment of or
taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official
of the Master Servicer or of any substantial part of its
property or the making by the Master Servicer of an
assignment for the benefit of creditors or the failure by
the Master Servicer generally to pay its debts as such debts
become due or the taking of corporate action by the Master
Servicer in furtherance of any of the foregoing; or
(e) Any representation, warranty or certification of
the Master Servicer made in this Agreement or any Series
Supplement or any certificate, report or other writing
delivered pursuant hereto or thereto shall prove to be
incorrect in any material respect as of the time when the
same shall have been made, and the incorrectness of such
representation, warranty or statement has a material adverse
effect on the interests of the Trust in the related Series
Trust Estate and, within 60 days after written notice
thereof shall have been given to the Master Servicer by the
Indenture Trustee the circumstances or condition in respect
of which such representation, warranty or statement was
incorrect shall not have been eliminated or otherwise cured;
or
(f) Notwithstanding the foregoing, a delay in or
failure of performance under Section 10.1(a) for a period of
five Business Days or under Section 10.1(b) for a period of
60 days, shall not constitute a Master Servicer Termination
Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and
such delay or failure was caused by an act of God, acts of
declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Master Servicer
from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this
Agreement, and the Master Servicer shall provide the
Indenture Trustee and the Seller with an Officers'
Certificate giving prompt notice of such failure or delay by
it, together with a description of its efforts to so perform
its obligations.
SECTION 10.2. Consequences of a Master Servicer
Termination Event
. If a Master Servicer Termination Event shall occur and be
continuing, the Indenture Trustee (to the extent a Trust
Officer of the Indenture Trustee has actual knowledge
thereof), by notice given in writing to the Master Servicer
may terminate all of the rights and obligations of the
Master Servicer under this Agreement and the other Basic
Documents as they relate to a Series and a Series Trust
Estate out of which such Servicer Termination Event arose.
On or after the receipt by the Master Servicer of such
written notice, all authority, power, obligations and
responsibilities of the Master Servicer under this
Agreement, whether with respect to the Notes or the Other
Conveyed Property or otherwise, automatically shall pass to,
be vested in, and become obligations and responsibilities,
of the Indenture Trustee (or such other successor Master
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<PAGE> 47
Servicer appointed by Indenture Trustee pursuant to Section
10.3); provided, however, that the successor Master Servicer
shall (i) have no liability with respect to any obligation
which was required to be performed by the terminated Master
Servicer prior to the date that the successor Master
Servicer becomes the Master Servicer or any claim of a third
party based on any alleged action or inaction of the
terminated Master Servicer and (ii) no obligation to perform
any repurchase or advancing obligations, if any, of the
terminated Master Servicer.
The successor Master Servicer is authorized and
empowered by this Agreement to execute and deliver, on
behalf of the terminated Master Servicer, as attorney-in-
fact or otherwise, any and all documents and other
instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and
endorsement of the Series Trust Estate and related documents
to show the Trust as lienholder or secured party on the
related Lien Certificates, or otherwise. The terminated
Master Servicer agrees to cooperate with the successor
Master Servicer in effecting the termination of the
responsibilities and rights of the terminated Master
Servicer under this Agreement as they relate to the Series
Trust Estate with respect to which such termination has been
effected , including, without limitation, the transfer to
the successor Master Servicer for administration by it of
all cash amounts that shall at the time be held by the
terminated Master Servicer for deposit, or have been
deposited by the terminated Master Servicer, in the Master
Collection Account or thereafter received with respect to
the Receivables in the subject Series Trust Estate and the
delivery to the successor Master Servicer of all Receivable
Files, Monthly Records and Collection Records and a computer
tape in readable form as of the most recent Business Day
containing all information necessary to enable the successor
Master Servicer to service such Series Trust Estate. If
requested by the Indenture Trustee, the successor Master
Servicer shall direct the Obligors to make all payments
under the Receivables directly to the successor Master
Servicer (in which event the successor Master Servicer shall
process such payments in accordance with Section 4.2(d)).
The terminated Master Servicer shall grant the Indenture
Trustee and the successor Master Servicer reasonable access
to the terminated Master Servicer's premises at the
terminated Master Servicer's expense.
SECTION 10.3. Appointment of Successor
(a) . (a) On and after the time the Master Servicer
receives a notice of termination pursuant to Section 10.2 or
upon the resignation of the Master Servicer pursuant to
Section 9.6, the Master Servicer shall continue to perform
all servicing functions under this Agreement until the date
specified in such termination notice or until such
resignation becomes effective or until a date mutually
agreed upon by the Master Servicer and the Indenture
Trustee. The Indenture Trustee shall as promptly as
possible after such termination or resignation appoint an
Eligible Servicer as a successor servicer (the "Successor
Master Servicer"), and such Successor Master Servicer shall
accept its appointment by a written assumption in a form
acceptable to the Indenture Trustee. In the event that a
Successor Master Servicer has not been appointed or has not
accepted its appointment at the time when the Master
Servicer ceases to act as Master Servicer, the Indenture
Trustee without further action shall automatically be
appointed the Successor Master Servicer. The Indenture
Trustee may delegate any of its servicing obligations to an
Affiliate or agent in accordance with Section 9.5.
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Notwithstanding the foregoing, the Indenture Trustee shall,
if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established
institution qualifying as an Eligible Servicer as the
Successor Master Servicer hereunder. The Indenture Trustee
shall give prompt notice to each Rating Agency upon the
appointment of a Successor Master Servicer. The Indenture
Trustee or the Successor Master Servicer, as the case may
be, shall be the successor in all respects to the Master
Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for in this
Agreement, and shall be subject to all the rights,
responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Master
Servicer by the terms and provisions of this Agreement,
except as otherwise stated herein. The Indenture Trustee or
the Successor Master Servicer, as the case may be, shall
take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. The
Successor Master Servicer shall be subject to termination
under Section 10.2 upon the occurrence of any Master
Servicer Termination Event applicable to it as Master
Servicer.
(b) Subject to Section 9.6, no provision of this
Agreement shall be construed as relieving the Indenture
Trustee of its obligation to succeed as Successor Master
Servicer upon the termination of the Master Servicer
pursuant to Section 10.2 or the resignation of the Master
Servicer pursuant to Section 9.6.
(c) Any Successor Master Servicer shall be entitled to
such compensation (whether payable out of the Master
Collection Account or otherwise) equal to the greater of (a)
the compensation the Master Servicer would have been
entitled to under this Agreement if the Master Servicer had
not resigned or been terminated hereunder and (b)
compensation calculated with a Servicing Fee Rate equal to
the then-current "market rate" fee for servicing assets
comparable to the Receivables, which rate shall be
determined by averaging three fee bids obtained by the
Indenture Trustee from third party servicers selected by the
Indenture Trustee. In addition, any Successor Master
Servicer shall be entitled to reasonable transition expenses
incurred in acting as Successor Master Servicer payable by
the outgoing Master Servicer, and to the extent such
transition expenses have not been paid by the outgoing
Master Servicer, such Successor Master Servicer shall be
entitled to reimbursement for such reasonable expenses
pursuant to the related Series Supplement.
SECTION 10.4. Notification to Noteholders and
Certificateholders
. Upon any termination of, or appointment of a successor
to, the Master Servicer or the Indenture Trustee shall give
prompt written notice thereof to each Noteholder.
SECTION 10.5. Waiver of Past Defaults
. A majority of the Noteholders may, on behalf of all
Securityholders, waive any default by the Seller or the
Master Servicer in the performance of their obligations
hereunder and its consequences, except the failure to make
any distributions required to be made to Noteholders or to
make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
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<PAGE> 49
SECTION 10.6. Successor to Master Servicer
(a) . (a) The Indenture Trustee, in its capacity as
successor to the Master Servicer, shall perform such duties
and only such duties as are specifically set forth in this
Agreement and each Basic Document and Series Related
Document with respect to the assumption of any servicing
duties and no implied covenants or obligations shall be read
into this Agreement against the Indenture Trustee.
(b) In the absence of bad faith or negligence on its
part, the Indenture Trustee may conclusively rely as to the
truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished
to the Indenture Trustee and conforming to the requirements
of this Agreement and each Series Supplement; but in the
case of any such certificates or opinions, which by any
provision hereof are specifically required to be furnished
to the Indenture Trustee, the Indenture Trustee shall be
under a duty to examine the same and to determine whether or
not they conform to the requirements of this Agreement and
each Series Supplement.
(c) The Indenture Trustee shall have no liability for
any actions taken or omitted by the terminated Master
Servicer.
ARTICLE XI
Termination
SECTION 11.1. Optional Purchase of All Receivables
(a) . (a) To the extent and under the circumstances
provided in a Series Supplement, the Master Servicer and the
Seller each shall have the option to purchase the related
Series Trust Estate, other than the Trust Accounts;
provided, however, that the amount to be paid for such
purchase shall be sufficient to pay the full amount of
principal and interest then due and payable on the Notes of
such Series and all other amounts due to the Series
Securityholders, the Indenture Trustee and Owner Trustee
under the related Series Supplement. To exercise such
option, the Master Servicer or the Seller, as the case may
be, shall deposit pursuant to Section 5.3 in the Master
Collection Account an amount equal to the aggregate
Repurchase Amount for the related Receivables, plus the
appraised value of any other property constituting such
Series Trust Estate, such value to be determined by an
appraiser mutually agreed upon by the Master Servicer and
the Trust, and shall succeed to all interests in and to the
related Series Trust Estate.
(b) Upon any sale of the assets of the Trust pursuant
to Article IV of the Indenture , the Master Servicer shall
instruct the Indenture Trustee to deposit the proceeds from
such sale after all payments and reserves therefrom
(including the expenses of such sale) have been made (the
"Insolvency Proceeds") in the Master Collection Account.
(c) Notice of any termination of the Trust shall be
given by the Master Servicer to the Owner Trustee, the
Indenture Trustee and the Rating Agencies as soon as
practicable after the Master Servicer has received notice
thereof.
(d) Following the satisfaction and discharge of the
Indenture, the payment in full of the principal of and
interest on the Notes, the termination of any Series Support
(as provided therein) and the surrender of any Series
Support to the Series Support Provider, the
Certificateholders will succeed to the rights of the
Noteholders hereunder and the Owner Trustee will succeed to
the rights of, and assume the obligations of, the Indenture
Trustee pursuant to this Agreement.
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ARTICLE XII
Administrative Duties of the Master Servicer
SECTION 12.1. Administrative Duties.
(a) Duties with Respect to the Indenture. The Master
Servicer shall perform all its duties and the duties of the
Issuer under the Indenture. In addition, the Master
Servicer shall consult with the Owner Trustee as the Master
Servicer deems appropriate regarding the duties of the
Issuer under the Indenture. The Master Servicer shall
monitor the performance of the Issuer and shall advise the
Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture. The Master Servicer
shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare,
file or deliver pursuant to the Indenture. In furtherance
of the foregoing, the Master Servicer shall take all
necessary action that is the duty of the Issuer to take
pursuant to the Indenture, including, without limitation,
pursuant to Sections 2.7, 3.4, 3.5, 3.6, 3.7, 3.9, 3.10,
3.17, 5.1, 5.4, 7.3, 8.3, 9.2, 9.3, 11.1 and 11.15 of the
Indenture.
(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Master Servicer
set forth in this Agreement or any of the Basic Documents,
the Master Servicer shall perform such calculations and
shall prepare for execution by the Issuer or the Owner
Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the
duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to this Agreement or any of the Basic
Documents or under state and Federal tax and securities
laws, and at the request of the Owner Trustee shall take all
appropriate action that it is the duty of the Issuer to take
pursuant to this Agreement or any of the Basic Documents,
including, without limitation, pursuant to Sections 2.6 and
2.11 of the Trust Agreement. In accordance with the
directions of the Issuer or the Owner Trustee, the Master
Servicer shall administer, perform or supervise the
performance of such other activities in connection with the
Trust Property (including the Basic Documents) as are not
covered by any of the foregoing provisions and as are
expressly requested by the Issuer or the Owner Trustee and
are reasonably within the capability of the Master Servicer.
(ii) Notwithstanding anything in this Agreement or any
of the Basic Documents to the contrary, the Master Servicer
shall be responsible for promptly notifying the Owner
Trustee and the Indenture Trustee in the event that any
withholding tax is imposed on the Issuer's payments (or
allocations of income) to a Certificateholder (as defined in
the Trust Agreement) as contemplated by this Agreement. Any
such notice shall be in writing and specify the amount of
any withholding tax required to be withheld by the Owner
Trustee and the Indenture Trustee pursuant to such
provision.
(iii) Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, the Master Servicer shall
be responsible for performance of the duties of the Issuer
or the Seller set forth in Section 5.1(a), (b), (c) and (d)
of the Trust Agreement with respect to, among other things,
accounting and reports to Owners (as defined in the Trust
Agreement); provided, however, that once prepared by the
Master Servicer, the Depositor shall retain responsibility
under Section 5.1(b) of the Trust Agreement for the
distribution of the Schedule K-1s necessary to enable each
Certificateholder to prepare its Federal and state income
tax returns.
(iv) The Master Servicer shall perform the duties of
the Depositor specified in Section 10.2 of the Trust
Agreement required to be performed in connection with the
resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Master
Servicer under this Agreement or any of the Basic Documents.
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(v) The Master Servicer, on behalf of the Seller,
shall direct the Issuer to request the tender of all or a
portion of the Notes of any Series in accordance with the
Indenture or any Series Supplement.
(vi) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Master Servicer
may enter into transactions with or otherwise deal with any
of its Affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with
any directions received from the Issuer and shall be, in the
Master Servicer's opinion, no less favorable to the Issuer
in any material respect.
(c) Tax Matters. The Master Servicer shall prepare and
file, or cause to be prepared and filed, on behalf of the
Seller, all tax returns, tax elections, financial statements
and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in
Article V of the Trust Agreement, including without
limitation forms 1099 and 1066. All tax returns will be
signed by the Seller.
(d) Non-Ministerial Matters. With respect to matters
that in the reasonable judgment of the Master Servicer are
non-ministerial, the Master Servicer shall not take any
action pursuant to this Article XII unless within a
reasonable time before the taking of such action, the Master
Servicer shall have notified the Owner Trustee and the
Indenture Trustee of the proposed action and the Owner
Trustee and the Indenture Trustee shall not have withheld
consent or provided an alternative direction. For the
purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the initiation of any claim or lawsuit by the Issuer
and the compromise of any action, claim or lawsuit brought
by or against the Issuer (other than in connection with the
collection of the Receivables);
(B) the appointment of successor Note Registrars, successor
Note Paying Agents and successor Indenture Trustees pursuant
to the Indenture or the consent to the assignment by the
Note Registrar, Note Paying Agent or Indenture Trustee of
its obligations under the Indenture; and
(C) the removal of the Indenture Trustee.
(e) Exceptions. Notwithstanding anything to the
contrary in this Agreement, except as expressly provided
herein or in the other Basic Documents, the Master Servicer,
in its capacity hereunder, shall not be obligated to, and
shall not, (1) make any payments to the Noteholders or
Certificateholders under the Basic Documents, (2) sell any
Trust Property pursuant to Section 4.03 of the Series 2000-1
Supplement, (3) take any other action that the Issuer
directs the Master Servicer not to take on its behalf or (4)
in connection with its duties hereunder assume any
indemnification obligation of any other Person.
(f) The Indenture Trustee shall not be responsible for
any obligations or duties of the Master Servicer under
Section 12.1.
SECTION 12.2. Records
. The Master Servicer shall maintain appropriate books of
account and records relating to services performed under
this Agreement, which books of account and records shall be
accessible for inspection by the Issuer and the Indenture
Trustee at any time during normal business hours.
SECTION 12.3. Additional Information to be Furnished
to the Issuer
. The Master Servicer shall furnish to the Issuer and the
Indenture Trustee from time to time such additional
information regarding any Series Trust Estate as the Issuer
and the Indenture Trustee shall reasonably request.
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<PAGE> 52
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.1. Amendments
(a) . (a) This Agreement may be amended by the
parties hereto at any time when no Series of Securities or
commitment to purchase a Series of Securities is outstanding
without the requirement of any consents or the satisfaction
of any conditions set forth below.
(b) Except as otherwise provided with respect to a
Series in a Series Supplement, this Agreement may be amended
from time to time by the parties hereto, by a written
instrument signed by each of the parties hereto, without the
consent of any of the Securityholders, provided that (i) an
Opinion of Counsel for the Seller (which Opinion of Counsel
may, as to factual matters, rely upon officers' certificates
of the Seller or the Master Servicer) is addressed and
delivered to the Indenture Trustee, dated the date of any
such amendment, to the effect that the conditions precedent
to any such amendment have been satisfied and (ii) the
Seller shall have delivered to the Indenture Trustee and
each Rating Agency, an Officer's Certificate dated the date
of any such Amendment, stating that the Seller reasonably
believes that such amendment will not have a material
adverse effect on the rights of the Noteholders.
(c) Except as otherwise provided with respect to a
Series in a Series Supplement, this Agreement may also be
amended from time to time by the Servicer, the Seller and
the Indenture Trustee, with the consent of the Noteholders
evidencing in each case not less than a majority of the
outstanding principal amount of the Notes of each affected
Series for which the Seller has not delivered an Officer's
Certificate stating that there is no adverse effect on the
rights of Noteholders of each Series, for the purpose of
adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) reduce
in any manner the amount of or delay the timing of any
distributions to be made to Securityholders or deposits of
amounts to be so distributed or the amount available under
any Series Support without the consent of each affected
Securityholder, (ii) change the definition of or the manner
of calculating the interest of any Securityholder without
the consent of each affected Securityholder, (iii) reduce
the aforesaid percentage required to consent to any such
amendment without the consent of each Securityholder or (iv)
adversely affect any rating of a Series by each Rating
Agency without the consent of the Noteholders evidencing not
less than a majority of the outstanding principal amount of
the outstanding Notes of such Series.
Promptly after the execution of any such amendment
or supplement, the Indenture Trustee shall furnish written
notification of the substance of such amendment or
supplement to each Securityholder.
It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section
to approve the particular form of any amendment, but it
shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents
(and any other consents of Noteholders or Certificateholders
provided for in this Agreement) and of evidencing the
authorization of any action by Noteholders or
Certificateholders shall be subject to such reasonable
requirements as the Indenture Trustee or the Owner Trustee,
as applicable, may prescribe, including the establishment of
record dates.
The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any amendment
which affects the Issuer's, the Owner Trustee's or the
Indenture Trustee's, as applicable, own rights, duties or
immunities under this Agreement or otherwise.
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<PAGE> 53
Prior to the execution of any amendment to this
Agreement, 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 Agreement and that all conditions precedent to the
execution and delivery of such amendment have been
satisfied.
SECTION 13.2. Protection of Title to Trust
(a) . (a) The Seller shall execute and file such
financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain
and protect the interest of the Issuer and the interests of
the Indenture Trustee on behalf of the related Series
Securityholders in the related Series Trust Estate and in
the proceeds thereof.
(b) Neither the Seller nor the Master Servicer shall
change its name, identity or corporate structure in any
manner that would, could or might make any financing
statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning
of 9-402(7) of the UCC, unless it shall have given the
Owner Trustee and the Indenture Trustee at least thirty
days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed
financing statements or continuation statements.
(c) Each of the Seller and the Master Servicer shall
have an obligation to give the Owner Trustee and the
Indenture Trustee prompt notice of any relocation of its
principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
statement and shall promptly file any such amendment. The
Master Servicer shall at all times maintain each office from
which it shall service Receivables, and its principal
executive office, within the United States of America.
(d) The Master Servicer shall maintain accounts and
records as to each Receivable accurately and in sufficient
detail to permit (i) the reader thereof to know at any time
the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each)
and (ii) reconciliation between payments or recoveries on
(or with respect to) each Receivable and the amounts from
time to time deposited in the Master Collection Account in
respect of such Receivable.
(e) The Master Servicer shall maintain or cause to be
maintained, a computer system so that, from and after the
time of sale under this Agreement and each Transfer
Agreement of the Receivables to the Issuer, such master
computer records (including any backup archives) that refer
to a Receivable shall indicate clearly the interest of the
Trust in such Receivable and that such Receivable is owned
by the Trust and to which Series Trust Estate such
Receivable has been pledged pursuant to the Indenture.
Indication of the Trust's interest in a Receivable shall be
deleted from or modified on such computer systems when, and
only when, the related Receivable shall have been paid in
full or repurchased by HAFC or the Seller.
(f) If at any time the Seller or HAFC shall propose to
sell, grant a security interest in or otherwise transfer any
interest in automotive receivables to any prospective
purchaser, lender or other transferee, the Master Servicer
shall give to such prospective purchaser, lender or other
transferee computer tapes, records or printouts (including
any restored from backup archives) that, if they shall refer
in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by
the Trust unless such Receivable has been paid in full or
repurchased by HAFC or the Seller.
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<PAGE> 54
(g) With respect to any Series Trust Estate, upon
request, the Master Servicer shall furnish or cause to be
furnished to the related Series Support Provider (only in
the event that there is a Series Support Provider with
respect to such Series), the Owner Trustee or to the
Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number) then held as part of the
related Series Trust Estate, together with a reconciliation
of such list to the related Schedule of Receivables and to
each of the Master Servicer's Certificates furnished before
such request indicating removal of Receivables from the
related Series Trust Estate. The Indenture Trustee shall
hold any such list and Schedule of Receivables for
examination by interested parties during normal business
hours at the Corporate Trust Office upon reasonable notice
by such Persons of their desire to conduct an examination.
(h) The Master Servicer shall deliver to the Owner
Trustee and the Indenture Trustee:
(1) simultaneously with the execution and delivery of
the Agreement and, if required pursuant to Section 13.1, of
each amendment, an Opinion of Counsel stating that, in the
opinion of such Counsel, in form and substance reasonably
satisfactory to the addressees of such Opinion, either (A)
all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve
and protect the interest of the Trust and the Indenture
Trustee in the Receivables then held as part of the related
Series Trust Estate, or (B) no such action shall be
necessary to preserve and protect such interest or (C) any
action which is necessary to preserve and protect such
interest during the following 12-month period; and
(2) within 90 days after the beginning of each
calendar year beginning in 2001, dated as of a date during
such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and
continuation statements have been executed and filed that
are necessary fully to preserve and protect the interest of
the Trust and the Indenture Trustee in the Series Trust
Estate or (B) no such action shall be necessary to preserve
and protect such interest.
Each Opinion of Counsel referred to in clause (1)
or (2) above shall specify any action necessary (as of the
date of such opinion) to be taken in the following year to
preserve and protect such interest.
SECTION 13.3. Notices
. All demands, notices and communications upon or to the
Seller, the Master Servicer, the Owner Trustee, the
Indenture Trustee or the Rating Agencies under this
Agreement shall be in writing, personally delivered, or
mailed by certified mail, or sent by confirmed telecopier
transmission and shall be deemed to have been duly given
upon receipt (a) in the case of the Seller to Household Auto
Receivables Corporation, 1111 Town Center Drive, Las Vegas,
Nevada 89134, with a copy to Household International, Inc.,
2700 Sanders Road, Prospect Heights, Illinois, 60070, Attn:
Treasurer (Telecopier # (847) 205-7538), (b) in the case of
the Master Servicer to Household Finance Corporation, 2700
Sanders Road, Prospect Heights, Illinois 60070, Attention:
Treasurer, Telecopier # (847) 205-7538, (c) in the case of
the Issuer or the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee, Telecopier # (302) 651-8882,
(d) in the case of the Indenture Trustee at the Corporate
Trust Office, Telecopier # (612) 667-3539, (e) in the case
of the Series Support Provider to the address set forth in
the related Series Supplement, and (f) in the case of any
Rating Agency, to the address set forth in the related
Series Supplement. Any notice required or permitted to be
mailed to a Noteholder or Certificateholder shall be given
by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register or Note
Register, as applicable. Any notice so mailed within the
time prescribed in the Agreement shall be conclusively
presumed to have been duly given, whether or not the
Certificateholder or Noteholder shall receive such notice.
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<PAGE> 55
SECTION 13.4. Assignment
. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective
successors and permitted assigns. Notwithstanding anything
to the contrary contained herein, except as provided in
Sections 8.4 and 9.3 and as provided in the provisions of
this Agreement concerning the resignation of the Master
Servicer, this Agreement may not be assigned by the Seller
or the Master Servicer without the prior written consent of
the Owner Trustee and the Indenture Trustee. In the event
that a successor Issuer with respect to a Series is formed
as contemplated in the related Series Supplement, such
Issuer shall succeed to all of the rights and obligations of
the predecessor Issuer hereunder; and all references to the
Issuer hereunder shall thereafter be deemed to be references
to such successor Issuer.
SECTION 13.5. Limitations on Rights of Others
. The provisions of this Agreement are solely for the
benefit of the parties hereto and for the benefit of the
Certificateholders (including the Seller), the Owner Trustee
and the Indenture Trustee, as third-party beneficiaries.
Each Series Support Provider and its successors and assigns
shall be a third-party beneficiary to the provisions of this
Agreement and to each Series Supplement with respect to each
Series for which they are providing Series Support, and
shall be entitled to rely upon and directly enforce such
provisions of this Agreement and to each Series Supplement
with respect to each Series for which they are providing
Series Support, so long as no default with respect to such
Series Support Provider shall have occurred and be
continuing. Nothing in this Agreement or in any Series
Supplement, whether express or implied, shall be construed
to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 13.6. Severability
. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
SECTION 13.7. Separate Counterparts
. This Agreement and each Transfer Agreement may be
executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an
original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 13.8. Headings
. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 13.9. Governing Law
. THIS AGREEMENT AND EACH TRANSFER AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
<PAGE> 56
SECTION 13.10. Assignment to Indenture Trustee
. The Seller hereby acknowledges and consents to any
mortgage, pledge, assignment and grant of a security
interest by the Issuer to the Indenture Trustee pursuant to
the Indenture, as supplemented by a Series Supplement for
the benefit of the related Series Securityholders of all
right, title and interest of the Issuer in, to and under the
applicable Series Trust Estate.
SECTION 13.11. Nonpetition Covenants
(a) . (a) Notwithstanding any prior termination of
this Agreement or any Series Supplement, the Master Servicer
and the Seller shall not, prior to the date which is one
year and one day after the termination of this Agreement or
any Series Supplement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke
the process of any court or government authority for the
purpose of commencing or sustaining a case against the
Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this
Agreement or any Series Supplement, the Master Servicer
shall not, prior to the date that is one year and one day
after the termination of this Agreement or any Series
Supplement with respect to the Seller, acquiesce to,
petition or otherwise invoke or cause the Seller to invoke
the process of any court or government authority for the
purpose of commencing or sustaining a case against the
Seller under any federal or state bankruptcy, insolvency or
similar law, appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official
of the Seller or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the
Seller.
SECTION 13.12. Limitation of Liability of Owner Trustee
. Notwithstanding anything contained herein to the
contrary, this Agreement and each Series Supplement has been
countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall Wilmington Trust
Company in its individual capacity or, except as expressly
provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or
in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this
Agreement and each Series Supplement, in the performance of
its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of
the Trust Agreement.
SECTION 13.13. Independence of the Master Servicer
. For all purposes of this Agreement, the Master Servicer
shall be an independent contractor and shall not be subject
to the supervision of the Issuer, the Indenture Trustee or
the Owner Trustee with respect to the manner in which it
accomplishes the performance of its obligations hereunder.
Unless expressly authorized by this Agreement or any Series
Supplement, the Master Servicer shall have no authority to
act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer
or the Owner Trustee.
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<PAGE> 57
SECTION 13.14. No Joint Venture
. Nothing contained in this Agreement or any Series
Supplement (i) shall constitute the Master Servicer and
either of the Issuer or the Owner Trustee as members of any
partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall
be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any
express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
IN WITNESS WHEREOF, the parties hereto have caused
this Master Sale and Servicing Agreement to be duly executed
and delivered by their respective duly authorized officers
as of the day and the year first above written.
HOUSEHOLD AUTOMOTIVE TRUST IV
by Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
by
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
by
Name:
Steven H. Smith
Title:
Vice President
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer,
by
Name: B.B. Moss Jr.
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
not in its individual capacity but
solely as Indenture Trustee,
by
Name:
Title:
[Signature Page for Master Sale and Servicing Agreement]
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<PAGE> 58
EXHIBIT A
FORM OF MASTER SERVICER'S CERTIFICATE
EXHIBIT B
FORM OF TRANSFER AGREEMENT
TRANSFER No. of Receivables
pursuant to the Master Sale and Servicing Agreement dated as
of February 1, 2000 (the "Sale and Servicing Agreement"),
among HOUSEHOLD AUTOMOTIVE TRUST IV, a Delaware business
trust (the "Issuer"), HOUSEHOLD AUTO RECEIVABLES
CORPORATION, a Nevada corporation (the "Seller"), HOUSEHOLD
FINANCE CORPORATION, a Delaware corporation (the "Master
Servicer"), and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, a New York banking corporation, in its capacity
as Indenture Trustee (the "Indenture Trustee ").
W I T N E S S E T H:
WHEREAS pursuant to the Master Sale and Servicing
Agreement, the Seller wishes to convey the Receivables to
the Issuer; and
WHEREAS, the Issuer is willing to accept such
conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the Issuer, the Seller, the Master
Servicer and the Indenture Trustee hereby agree as follows:
1. Defined Terms. Capitalized terms used herein
shall have the meanings ascribed to them in the Sale and
Servicing Agreement unless otherwise defined herein.
"Cutoff Date" shall mean, with respect to the
Receivables conveyed hereby, ___________, 2000.
"Transfer Date" shall mean. with respect to the
Receivables conveyed hereby, ___________, 2000.
2. Schedule of Receivables. Annexed hereto is a
supplement to Schedule II to the Series 2000-1 Supplement
listing the Receivables that constitute the Receivables to
be conveyed pursuant to this Agreement on the Transfer Date.
The Receivables conveyed pursuant to this Agreement shall be
a component of the Series 2000-1 Trust Estate.
3. Conveyance of Receivables. The Seller does hereby
sell, transfer, assign, set over and otherwise convey to the
Issuer, without recourse (except as expressly provided in
the Master Sale and Servicing Agreement), all right, title
and interest of the Seller in and to:
(a) each and every Receivable listed on Schedule A to the
related Receivables Purchase Agreement Supplement and all
monies paid or payable thereon or in respect thereof on or
after the related Cutoff Date (including amounts due on or
before the related Cutoff Date but received by the Seller on
or after such date);
(b) the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Receivables and any
other interest of the Seller in such Financed Vehicles;
(c) all rights of the Seller against Dealers pursuant to
Dealer Agreements or Dealer Assignments related to such
Receivables;
(d) any proceeds and the right to receive proceeds with
respect to such 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 of Seller under any Service Contracts on the
related Financed Vehicles;
(f) any proceeds and the right to receive proceeds with
respect to the related Receivables from claims on any
physical damage, credit life or disability insurance
policies, if any, covering Financed Vehicles or Obligors,
including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such
Receivables;
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<PAGE> 59
(g) 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;
(h) 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;
(i) all present and future claims, demands, causes and
chooses in action in respect of any or all of the foregoing
and all payments on or under and all proceeds of every kind
and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind and other forms of obligations
and receivables, instruments and other property which at any
time constitute all or part of or are included in the
proceeds of any of the foregoing.
4. Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Issuer as of
the date of this Agreement and as of the Transfer Date that:
(a) Organization and Good Standing. The Seller
has been duly organized and is validly existing as a
corporation in good standing under the laws of the
State of Nevada, with power and authority to own its
properties and to conduct its business as such
properties are currently owned and such business is
currently conducted, and had at all relevant times, and
now has, power, authority and legal right to acquire,
own and sell the Receivables and the Other Conveyed
Property transferred to the Trust.
(b) Due Qualification. The Seller is duly
qualified to do business as a foreign corporation in
good standing and has obtained all necessary licenses
and approvals in all jurisdictions where the failure to
do so would materially and adversely affect Seller's
ability to transfer the Receivables and the Other
Conveyed Property to the Trust pursuant to this
Agreement, or the validity or enforceability of the
Receivables and the Other Conveyed Property or to
perform Seller's obligations hereunder and under the
Seller's Basic Documents.
(c) Power and Authority. The Seller has the
power and authority to execute and deliver this
Agreement and its Basic Documents and to carry out its
terms and their terms, respectively; the Seller has
full power and authority to sell and assign the
Receivables and the Other Conveyed Property to be sold
and assigned to and deposited with the Trust by it and
has duly authorized such sale and assignment to the
Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement
and the Seller's Basic Documents have been duly
authorized by the Seller by all necessary corporate
action.
(d) Valid Sale, Binding Obligations. This
Agreement effects a valid sale, transfer and assignment
of the Receivables and the Other Conveyed Property,
enforceable against the Seller and creditors of and
purchasers from the Seller; and this Agreement and the
Seller's Basic Documents, when duly executed and
delivered, shall constitute legal, valid and binding
obligations of the Seller enforceable in accordance
with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by
equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
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<PAGE> 60
(e) No Violation. The consummation of the
transactions contemplated by this Agreement and the
Basic Documents and the fulfillment of the terms of
this Agreement and the Basic Documents shall not
conflict with, result in any breach of any of the terms
and provisions of or constitute (with or without
notice, lapse of time or both) a default under the
certificate of incorporation or by-laws of the Seller,
or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by
which it is bound, or result in the creation or
imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than
this Agreement, or violate any law, order, rule or
regulation applicable to the Seller of any court or of
any federal or state regulatory body, administrative
agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge,
threatened against the Seller, before any court,
regulatory body, administrative agency or other
tribunal or governmental instrumentality having
jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of
the Basic Documents, (B) seeking to prevent the
issuance of the Securities or the consummation of any
of the transactions contemplated by this Agreement or
any of the Basic Documents, (C) seeking any
determination or ruling that might materially and
adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability
of, this Agreement or any of the Basic Documents, or
(D) seeking to adversely affect the federal income tax
or other federal, state or local tax attributes of the
Securities.
(g) Approvals. All approvals, authorizations,
consents, order or other actions of any person,
corporation or other organization, or of any court,
governmental agency or body or official, required in
connection with the execution and delivery by the
Seller of this Agreement and the consummation of the
transactions contemplated hereby have been or will be
taken or obtained on or prior to the Transfer Date.
(h) No Consents. The Seller is not required to
obtain the consent of any other party or any consent,
license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this
Agreement which has not already been obtained.
(i) Chief Executive Office. The chief executive
office of the Seller is at 1111 Town Center Drive, Las
Vegas, Nevada 89134.
(j) Principal Balance. The aggregate Principal
Balance of the Receivables listed on the supplement to
Schedule A annexed hereto and conveyed to the Issuer
pursuant to this Agreement as of the Cutoff Date is
$____________.
5. Conditions Precedent. The obligation of the
Issuer to acquire the Receivables hereunder is subject to
the satisfaction, on or prior to the Transfer Date, of the
following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Seller in
Section 4 of this Agreement and in Section 3.1 of the
Sale and Servicing Agreement shall be true and correct
as of the date of this Agreement and as of the Transfer
Date.
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<PAGE> 61
(b) Sale and Servicing Agreement Conditions.
Each of the conditions set forth in Section 2.1(b) to
the Sale and Servicing Agreement shall have been
satisfied.
(c) Additional Information. The Seller shall
have delivered to the Issuer such information as was
reasonably requested by the Issuer to satisfy itself as
to (i) the accuracy of the representations and
warranties set forth in Section 4 of this Agreement and
in Section 6.1 of the Sale and Servicing Agreement and
(ii) the satisfaction of the conditions set forth in
this Section 5.
6. Ratification of Agreement. As supplemented by
this Agreement, the Sale and Servicing Agreement is in all
respects ratified and confirmed and the Sale and Servicing
Agreement as so supplemented by this Agreement shall be
read, taken and construed as one and the same instrument.
7. Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties in
separate counterparts), each of which shall be an original
but all of which together shall constitute one and the same
instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
1.
IN WITNESS WHEREOF, the Issuer, the Seller and the
Master Servicer have caused this Agreement to be duly
executed and delivered by their respective duly authorized
officers as of day and the year first above written.
HOUSEHOLD AUTOMOTIVE TRUST IV
by Wilmington Trust Company, not in
its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
by
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
Seller,
by
Name:
Title:
HOUSEHOLD FINANCE CORPORATION, Master
Servicer,
by
Name:
Title:
Acknowledged and Accepted:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
not in its individual
capacity but solely as Indenture Trustee
by
Name:
Title:
<PAGE>
<PAGE> 62
EXHIBIT C
REQUEST FOR RELEASE AND RECEIPT OF DOCUMENTS
To: Norwest Bank Minnesota, National Association
Re: Sale and Servicing Agreement (the "Servicing
Agreement, dated as of February 1, 2000
between Household Auto Receivables
Corporation (the "Seller"), Household
Automotive Trust IV (the "Trust"), Household
Finance Corporation individually and in its
capacity as Master Servicer (the "Master
Servicer"), and Norwest Bank Minnesota,
National Association, as Indenture Trustee
(the "Indenture Trustee")
In connection with the administration of the
Receivables held by you as the Indenture Trustee, we request
the release, and acknowledged receipt, of the Receivable and
related Receivable File described below, for the reason
indicated.
Obligor's Name, Customer Account Number and Vehicle
Identification Number
1. Receivable Paid in Full. All
amounts received in connection with such
payments have been deposited as required
pursuant to Section 3.3(b) of the Master
Servicing Agreement
2. Receivable Purchased from Trust
pursuant to Section 3.2 or 4.7 of the
Servicing Agreement.
3. Receivable is being serviced or
subject to enforcement of rights and remedies
pursuant to Section 3.3(b) of the Servicing
Agreement.
4. Other (explain)
If item 1 or 2 above is checked, and if all or part of the
Receivable or Receivable File was previously released to us,
please release to us any additional documents in your
possession to the above specified Receivable.
If Item 3 or 4 above is checked, upon our return of all of
the above documents to you as the Indenture Trustee, please
acknowledge your receipt by signing in the space indicated
below and returning this form.
HOUSEHOLD FINANCE CORPORATION
as Master Servicer
By:
Name:
Title:
Date:
DOCUMENTS RETURNED TO THE TRUSTEE
Norwest Bank Minnesota, National Association
By:
Name:
Title:
Date:
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<PAGE> 63
EXHIBIT D
TRUSTEE'S ACKNOWLEDGEMENT
Norwest Bank Minnesota, National Association (the
"Indenture Trustee"), holds on behalf of the Securityholders
certain "Receivable Files," as described in the Sale and
Servicing Agreement, dated as of February 1, 2000 (the "Sale
and Servicing Agreement"), among Household Automotive Trust
IV, Household Auto Receivables Corporation, as Seller,
Household Finance Corporation, as Master Servicer, and the
Indenture Trustee, hereby acknowledges receipt of the
Receivable File for each Receivable listed in the Schedule
of Receivables attached as Schedule A to said Sale and
Servicing Agreement except as noted in the Exception List
attached as Schedule I hereto.
IN WITNESS WHEREOF, Norwest Bank Minnesota,
National Association has caused this acknowledgement to be
executed by its duly authorized officer as of this
___________________.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Indenture Trustee
by
Name:
Title:
