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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 3, 1998.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOUSEHOLD FINANCE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
36-1239445
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(847) 564-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
PATRICK D. SCHWARTZ, ESQ.
ASSOCIATE GENERAL COUNSEL AND ASSISTANT SECRETARY
HOUSEHOLD INTERNATIONAL, INC.
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(847) 564-6301
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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WITH A COPY TO:
(UNDERWRITER'S/AGENT'S COUNSEL)
SCOTT N. GIERKE, ESQ.
MCDERMOTT, WILL & EMERY
227 WEST MONROE STREET
CHICAGO, ILLINOIS 60606
(312) 984-7521
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Debt Securities and Warrants to Purchase Debt
Securities........................................ $3,000,000,000 100% $3,000,000,000 $885,000
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</TABLE>
(1) Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement also relates to $300,000,000 of
securities previously registered pursuant to Form S-3 (Registration No.
33-64175), as to which this Registration Statement constitutes a
Post-Effective Amendment.
(2) Estimated solely for the purpose of computing the registration fee. Any
offering of Debt Securities or Warrants denominated in any foreign currency
or foreign currency units will be treated as the equivalent in U.S. dollars
based on the exchange rate applicable to the purchase of such Debt
Securities or Warrants from the Registrant.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 3, 1998
HOUSEHOLD FINANCE CORPORATION
DEBT SECURITIES
AND
WARRANTS TO PURCHASE DEBT SECURITIES
------------------------
Household Finance Corporation ("HFC" or the "Company") from time to time
may offer one or more series of its debt securities ("Debt Securities") and
warrants ("Warrants") to purchase Debt Securities (the Debt Securities and
Warrants being hereinafter collectively called "Securities") having an aggregate
initial offering price of up to $3,300,000,000, or the equivalent thereof if any
of the Securities are denominated in a foreign currency or a foreign currency
unit. The Debt Securities will be offered as separate series in amounts, at
prices and on terms to be determined at the time of sale and to be set forth in
supplements to this Prospectus. The Debt Securities and Warrants may be sold for
U.S. dollars, foreign currencies or foreign currency units, and the principal of
and any interest on the Debt Securities may be payable in U.S. dollars, foreign
currencies or foreign currency units. The specific designation and
classification as senior or senior subordinated debt securities of HFC,
aggregate principal amount, the currency or currency unit for which the
Securities may be purchased, the currency or currency unit in which the
principal and any interest is payable, the rate (or method of calculation) and
time of payment of any interest, authorized denominations, maturity, offering
price, any redemption terms or other specific terms of the Securities in respect
of which this Prospectus is being delivered are set forth in one or more
supplements to this Prospectus ("Prospectus Supplement"). With regard to the
Warrants, if any, in respect of which this Prospectus is being delivered, the
Prospectus Supplement sets forth a description of the Debt Securities for which
each Warrant is exercisable and the offering price, if any, exercise price,
duration, detachability and other terms of the Warrants.
HFC may sell Securities through underwriting syndicates led by one or more
managing underwriters or through one or more underwriting firms acting alone, to
or through dealers, acting as principals for their own account or as agents, and
also may sell Securities directly to other purchasers. See "Plan of
Distribution". The names of any underwriters or agents involved in the sale of
the Securities in respect to which this Prospectus is being delivered and their
compensation are set forth in the Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS AUGUST , 1998.
<PAGE> 3
AVAILABLE INFORMATION
HFC is subject to the informational requirements of the Securities Exchange
Act of 1934 and in accordance therewith files reports and other information with
the Securities and Exchange Commission (the "Commission"). Such reports and
other information can be inspected and copied at the public reference facilities
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at the Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048, or through the Internet Web site
maintained by the Commission at (http://www.sec.gov). Copies of such material
can also be obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
certain debt securities of HFC are listed on the New York Stock Exchange, and
reports and other material concerning HFC can be inspected at the offices of
such Exchange at 20 Broad Street, New York, New York 10005. Although HFC is not
required to send an annual report to its security holders, HFC will, upon
request, send to any security holder a copy of its latest Annual Report on Form
10-K, as filed with the Commission, which contains financial information that
has been examined and reported upon, with an opinion expressed, by independent
certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No. 1-75)
pursuant to the Securities Exchange Act of 1934 and are incorporated herein by
reference and made a part of this Prospectus:
(a) HFC's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) HFC's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998; and
(c) HFC's Current Reports on Form 8-K dated February 12, April 7, June
2, June 11 and June 30, 1998.
All documents filed by HFC with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date
of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and made a
part of this Prospectus from the respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
HFC WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY BENEFICIAL
OWNER) TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO:
HOUSEHOLD FINANCE CORPORATION
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
ATTENTION: OFFICE OF THE SECRETARY
TELEPHONE: (847) 564-5000
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HOUSEHOLD FINANCE CORPORATION
HFC was incorporated in Delaware in 1925, as successor to an enterprise
which traces its origin through the same ownership to an office established in
1878. The address of its principal executive office is 2700 Sanders Road,
Prospect Heights, Illinois 60070 (telephone (847) 564-5000). HFC is a subsidiary
of Household International, Inc. ("Household International" or the "parent
company").
HFC and its subsidiaries offer a diversified range of financial services.
The principal product of HFC's consumer financial services business is the
making or purchasing of cash loans and sales finance contracts, including home
equity loans secured by first and second mortgages, automotive installment sales
finance contracts and unsecured credit advances (including revolving and
closed-end personal loans) to middle-income consumers in the United States.
Loans are made through branch lending offices and through direct marketing
efforts. HFC also seeks to acquire portfolios of open-end and closed-end,
secured and unsecured loans.
HFC, through banking subsidiaries, offers both MasterCard* and VISA* credit
cards to residents throughout the United States.
Through its subsidiaries, HFC also purchases and services revolving charge
card accounts originated by merchants. These accounts result from consumer
purchases of goods and services from the originating merchant. Closed-end sales
contracts are also directly originated by subsidiaries of HFC.
Where applicable laws permit, HFC offers credit life and credit accident,
health and disability insurance to its customers. Such insurance is generally
written directly by, or reinsured with, one of HFC's insurance affiliates.
RECENT DEVELOPMENTS
On June 30, 1998, Household International completed the merger of
Beneficial Corporation ("Beneficial") with a subsidiary of Household
International. In connection with the merger, Household International
contributed substantially all of the consolidated assets of Beneficial to HFC.
This transaction was accounted as a "pooling-of-interests" by HFC. Additional
information concerning the merger, including historical financial statements of
Beneficial, pro forma financial information and restated combined financial
information is included in the Company's Current Reports on Form 8-K dated June
2 and June 30, 1998, which are incorporated by reference herein. See
"Incorporation of Certain Documents By Reference".
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, HFC will apply the
net proceeds from the sale of the Securities to its general funds to be used in
its financial services business, including the funding of investments in, or
extensions of credit to, affiliates of HFC. Pending such applications, the net
proceeds will be used initially to reduce outstanding commercial paper of HFC.
The proceeds of such commercial paper are used in connection with HFC's
financial services business.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for HFC and subsidiaries for the
periods indicated below was as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
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1998 1997 1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C> <C> <C>
HFC and subsidiaries -- calculated on income
from continuing operations.................... 2.01 1.65 1.61 1.57 1.41 1.51 1.54
</TABLE>
For purposes of calculating the ratio, earnings consist of income from
continuing operations to which has been added income taxes and fixed charges.
Fixed charges consist of interest on all indebtedness and one-third of rental
expense (approximate portion representing interest). The ratio has been restated
as a result of the merger of Household International and Beneficial Corporation
on June 30, 1998.
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*MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and VISA USA,
Inc., respectively.
3
<PAGE> 5
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent to which
such general terms and provisions may apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
GENERAL
Offered Debt Securities will constitute either senior or senior
subordinated unsecured debt of HFC and will be issued under one of the
indentures specified elsewhere herein (the "Indentures"). The Indentures, or
forms thereof, and the Standard Provisions (as defined herein) have been filed
as exhibits to HFC's Registration Statement which registers the Securities with
the Commission. The following summaries do not purport to be complete and, where
particular provisions of an Indenture or the Standard Provisions are referred
to, such provisions, including definitions of certain terms, are incorporated by
reference as part of such summaries, which are qualified in their entirety by
such reference.
The Indentures provide that Debt Securities may be issued thereunder from
time to time in one or more series and do not limit the aggregate principal
amount of the Debt Securities except as may be otherwise provided with respect
to any particular series of Offered Debt Securities.
Unless otherwise indicated in the Prospectus Supplement with respect to any
particular series of Offered Debt Securities, the Debt Securities will be issued
in registered form without coupons, will be exchangeable for authorized
denominations, and will be transferable at any time or from time to time. No
charge will be made to the holder for any such exchange or registration of
transfer except for any tax or governmental charge incident thereto. The Debt
Securities of any series may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depositary. See "Book-Entry System" below.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms and other
information to the extent applicable with respect to the Offered Debt
Securities: (1) the title of the Offered Debt Securities and whether such
Offered Debt Securities will be senior or senior subordinated debt of HFC; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the price (expressed as a percentage of the aggregate principal amount thereof)
HFC will be paid for the Offered Debt Securities and the initial offering price,
if any, at which the Offered Debt Securities will be offered to the public; (4)
the currency, currencies or currency units for which the Offered Debt Securities
may be purchased and the currency, currencies or currency units in which the
principal of and any interest on such Offered Debt Securities may be payable;
(5) the date or dates on which the Offered Debt Securities will mature; (6) the
rate or rates (which may be fixed or variable) per annum at which the Offered
Debt Securities will bear interest, if any; (7) the date from which such
interest, if any, on the Offered Debt Securities will accrue, the dates on which
such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence, and the Regular Record Dates for such Interest
Payment Dates, if any; (8) the dates, if any, on which and the price or prices
at which the Offered Debt Securities will, pursuant to any mandatory sinking
fund provisions, or may, pursuant to any optional sinking fund or to any
purchase fund provisions, be redeemed by HFC, and the other detailed terms and
provisions of such sinking and/or purchase funds; (9) the date, if any, after
which and the price or prices at which the Offered Debt Securities may, pursuant
to any optional redemption provisions, be redeemed at the option of HFC or of
the holder thereof and the other detailed terms and provisions of such optional
redemption; (10) the denominations in which the Offered Debt Securities are
authorized to be issued; (11) the securities exchange, if any, on which the Debt
Securities will be listed; and (12) additional provisions, if any, with respect
to the Offered Debt Securities.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or any interest on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of
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Debt Securities and such currencies or currency units will be set forth in a
Prospectus Supplement relating thereto.
Debt Securities may be issued as Original Issue Discount Securities to be
offered and sold at a discount below their stated principal amount. "Original
Issue Discount Securities" means any Debt Securities that provide for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the maturity thereof upon the occurrence of an Event of
Default and the continuation thereof. As used in the following summary of
certain terms of the Debt Securities, the term "principal amount" means, in the
case of any Original Issue Discount Security, the amount that would then be due
and payable upon acceleration of the maturity thereof, as specified in such Debt
Security.
BOOK-ENTRY SYSTEM
If so indicated in the Prospectus Supplement with respect to any series of
Offered Debt Securities, such Offered Debt Securities will be represented by one
or more global securities (the "Global Security"). The Global Security will be
deposited with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in the name of a nominee of the Depositary. Except under
circumstances described below, such Offered Debt Securities will not be issuable
in definitive form.
The Depositary has advised the Company and any underwriters, dealers or
agents named in the applicable Prospectus Supplement as follows: the Depositary
is a limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. The Depositary was created to hold securities of its participants
and to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations, some of which (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Upon the issuance of the Global Security, the Depositary will credit on its
book-entry registration and transfer system the accounts of participants with
the respective principal amounts of the Offered Debt Securities represented by
the Global Security. Ownership of beneficial interests in the Global Security
will be limited to persons that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in the Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary or its nominee (with respect to interests of participants) and
on the records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depositary or its nominee is the registered owner of the
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Offered Debt Securities represented
by the Global Security for all purposes under the Indenture. Except as provided
below, owners of beneficial interests in the Global Security will not be
entitled to have Offered Debt Securities represented by the Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Offered Debt Securities in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Principal and interest payments on Offered Debt Securities registered in
the name of the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security.
None of the Company, the Trustee, any paying agent or the registrar for the
Offered Debt Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on
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account of beneficial interests in the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
The Company expects that the Depositary for the Offered Debt Securities or
its nominee, upon receipt of any payment of principal or interest, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the Global
Security as shown on the records of the Depositary or its nominee. The Company
also expects that payments by participants to owners of beneficial interests in
the Global Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Company within 90
days, the Company will issue Offered Debt Securities in definitive form in
exchange for the entire Global Security. In addition, the Company may at any
time and in its sole discretion determine not to have the Offered Debt
Securities represented by the Global Security and, in such event, will issue
Offered Debt Securities in definitive form in exchange for the entire Global
Security. In any such instance, an owner of a beneficial interest in the Global
Security will be entitled to physical delivery in definitive form of Offered
Debt Securities represented by the Global Security equal in principal amount to
such beneficial interest and to have such Offered Debt Securities registered in
its name. Offered Debt Securities so issued in definitive form will be issued as
registered Offered Debt Securities in denominations of $1,000 and integral
multiples thereof, unless otherwise specified by the Company.
SENIOR DEBT SECURITIES
The trustees for the indentures under which Offered Debt Securities
constituting senior debt of HFC (the "Senior Debt Securities") will be issued
shall be either U.S. Bank Trust National Association (formerly known as First
Trust of Illinois, National Association, successor in interest to Bank of
America Illinois, formerly known as Continental Bank, National Association), The
Bank of New York (successor in interest to NationsBank of Tennessee), The First
National Bank of Chicago, Harris Trust and Savings Bank, The First National Bank
of Maryland, or such other entity which may be specified in the Prospectus
Supplement (collectively, the "Senior Trustees"). Each particular series of
Senior Debt Securities will be issued under the Indenture specified in the
Prospectus Supplement between HFC and a Senior Trustee, which will incorporate
the terms and provisions of the Standard Multiple-Series Indenture Provisions
for Senior Debt Securities dated as of June 1, 1992 (the "Standard Provisions").
The above noted indentures are collectively called the "Indentures for Senior
Debt Securities" herein. Senior Debt Securities will rank on a parity with all
unsecured debt of HFC, and prior to all subordinated debt.
Principal of and interest, if any, on Senior Debt Securities will be
payable at the office or agency of HFC specified in the Prospectus Supplement,
depending on the Senior Trustee; provided, however, that payment of interest may
be made at the option of HFC by check or draft mailed to the person entitled
thereto.
Covenant Against Creation of Pledges or Liens
All Senior Debt Securities issued under the Indentures for Senior Debt
Securities will be unsecured. HFC covenants that, with the exceptions listed
below, it will not issue, assume or guarantee any indebtedness for borrowed
money secured by a mortgage, security interest, pledge or lien ("security
interest") of or upon any of its property, now owned or hereafter acquired,
unless the Senior Debt Securities then outstanding are, by supplemental
indenture, effectively secured by such security interest equally and ratably
with all other indebtedness secured thereby for so long as such other
indebtedness shall be so secured. The term "indebtedness for borrowed money"
does not include any guarantee, cash deposit or other recourse obligation in
connection with the sale, securitization or discount by HFC of finance or
accounts receivables, trade acceptances, or other paper arising in the ordinary
course of its business.
The foregoing covenant does not apply to (a) security interests to secure
the payment of the purchase price of property, shares of capital stock, or
indebtedness acquired by HFC or the cost of construction or improvement of such
property or the refinancing of all or any part of such secured indebtedness,
provided that
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such security interests do not apply to any other property, shares of capital
stock, or indebtedness of HFC; (b) security interests on property, shares of
capital stock, or indebtedness existing at the time of acquisition by HFC; (c)
security interests on property of a corporation which security interests exist
at the time such corporation merges or consolidates with or into HFC or which
security interests exist at the time of the sale or transfer of all or
substantially all of the assets of such corporation to HFC; (d) security
interests to secure any indebtedness of HFC to a subsidiary; (e) security
interests in property of HFC in favor of the United States of America or any
state or agency or instrumentality thereof, or in favor of any other country or
political subdivision, to secure partial, progress, advance, or other payments
pursuant to any contract or statute or to secure any indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such security interests; (f)
security interests on properties financed through tax-exempt municipal
obligations; provided that such security interests are limited to the property
so financed; (g) security interests existing on the date of execution of the
applicable Indenture; and (b) any extension, renewal, refunding, or replacement
(or successive extensions, renewals, refundings, or replacements), in whole or
in part, of any security interest referred to in the foregoing clauses (a)
through (g) inclusive; provided, however, that the principal amount of
indebtedness secured in such extension, renewal, refunding, or replacement does
not exceed the principal amount of indebtedness secured at the time by such
security interest; provided, further, that such extension, renewal, refunding,
or replacement of such security interest is limited to all or part of the
property subject to such security interest so extended, renewed, refunded, or
replaced.
Notwithstanding the foregoing, HFC may, without equally and ratably
securing the Senior Debt Securities, issue, assume, or guarantee indebtedness
secured by a security interest not excepted pursuant to clauses (a) through (b)
above if the aggregate amount of such indebtedness, together with all other
indebtedness of, or guaranteed by, HFC existing at such time and secured by
security interests not so excepted, does not at the time exceed 10% of HFC's
Consolidated Net Worth (as defined). In addition, an arrangement with any person
providing for the leasing by HFC of any property, which property has been or is
to be sold or transferred by HFC to such person with the intention that such
property be leased back to HFC, shall not be deemed to create any indebtedness
secured by a security interest if the obligation in respect to such lease would
not be included as a liability on a consolidated balance sheet of HFC. The
holders of not less than a majority in principal amount of the Debt Securities
at the time outstanding under an Indenture, on behalf of the holders of all of
the Debt Securities issued under such Indenture, may waive compliance with the
foregoing covenant. (Standard Provisions -- Section 3.08)
Concerning the Trustees
HFC maintains a banking relationship with each of the Senior Trustees or
affiliates thereof and certain of the Senior Trustees are also trustees under
other indentures of HFC under which outstanding senior or subordinated unsecured
debt securities of HFC have been issued. The Senior Trustees or affiliates
thereof may also have other financial relations with HFC and other corporations
affiliated with HFC.
SENIOR SUBORDINATED DEBT SECURITIES
Offered Debt Securities which will constitute senior subordinated unsecured
debt of HFC (the "Senior Subordinated Debt Securities") will be issued under an
Indenture dated as of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee (the "Indenture for Senior Subordinated Debt Securities").
Unless a different place is specified in the Prospectus Supplement,
principal and interest, if any, on Senior Subordinated Debt Securities will be
payable at the office or agency of HFC in Chicago, Illinois; provided, however,
that payment of interest may be made at the option of HFC by check or draft
mailed to the person entitled thereto.
Subordination
Senior Subordinated Debt Securities are subordinate and junior in right of
payment to all indebtedness for borrowed money of HFC, whenever outstanding,
which is not by its terms subordinate and junior to other
7
<PAGE> 9
indebtedness of HFC, such indebtedness of HFC to which the Senior Subordinated
Debt Securities are subordinate and junior being hereinafter called "senior
indebtedness." At March 31, 1998, the aggregate amount of the outstanding senior
indebtedness of HFC was approximately $22.1 billion, including the impact of the
Beneficial merger. HFC is not directly limited in its ability to issue
additional senior indebtedness.
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to HFC or to its creditors, as such, or to its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of HFC, whether or not involving insolvency or
bankruptcy, then the holders of senior indebtedness shall be entitled to receive
payment in full of all principal and interest on all senior indebtedness before
the holders of the Senior Subordinated Debt Securities are entitled to receive
any payment on account of principal or interest upon the Senior Subordinated
Debt Securities, and to that end (but subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the rights
conferred in the Indentures for Senior Subordinated Debt Securities upon the
senior indebtedness and the holders thereof with respect to the subordinated
indebtedness represented by the Senior Subordinated Debt Securities and the
holders thereof by a lawful plan of reorganization under applicable bankruptcy
law) the holders of senior indebtedness shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in any such proceedings in respect of the Senior Subordinated Debt
Securities, except securities which are subordinate and junior in right of
payment to the payment of all senior indebtedness then outstanding.
In the event that any Senior Subordinated Debt Security is declared or
becomes due and payable before its expressed maturity because of the occurrence
of a default under the Indenture for Senior Subordinated Debt Securities (under
circumstances when the provisions of the foregoing paragraph shall not be
applicable), the holders of the senior indebtedness outstanding at the time such
Senior Subordinated Debt Security so becomes due and payable because of such
occurrence of such default shall be entitled to receive payment in full of all
principal and interest on all senior indebtedness before the holders of the
Senior Subordinated Debt Securities are entitled to receive any payment on
account of the principal or interest upon the Senior Subordinated Debt
Securities.
Without limiting the foregoing, no payment of principal, premium or
interest shall be made upon the Senior Subordinated Debt Securities during the
continuance of any default in the making of any required payment under any
sinking fund or analogous fund created for the benefit of any senior
indebtedness or any other default in the payment of principal of, or interest
on, any senior indebtedness then outstanding, whether by lapse of time, by
declaration, by call or notice of prepayment or otherwise. (Indenture for Senior
Subordinated Debt Securities -- Section 12.01)
Liens
HFC will not create, assume, incur or suffer to exist any mortgage, pledge
or other lien on any of the property or assets of HFC whether now owned or
hereafter acquired for the purpose of securing any senior subordinated
indebtedness or junior subordinated indebtedness, as defined. (Indenture for
Senior Subordinated Debt Securities -- Section 3.08)
Concerning the Trustee
Harris Trust and Savings Bank is trustee under other indentures of HFC
under which certain of HFC's outstanding senior subordinated debt securities
have been issued and under which HFC senior debt securities may be issued. HFC
maintains banking relationships with Harris Trust and Savings Bank. Harris Trust
and Savings Bank, or affiliates thereof, also have other financial relations
with HFC and other corporations affiliated with HFC.
SATISFACTION, DISCHARGE, AND DEFEASANCE OF THE INDENTURES AND DEBT SECURITIES
If there is deposited irrevocably with the Trustee as trust funds for the
benefit of the holders of Debt Securities of a particular series an amount, in
money or the equivalent in securities of the United States or
8
<PAGE> 10
securities the principal of and interest on which is fully guaranteed by the
United States, sufficient to pay the principal, premium, if any, and interest,
if any, on such series of Debt Securities on the dates such payments are due in
accordance with the terms of such series of Debt Securities through their
maturity, and if HFC has paid or caused to be paid all other sums payable by it
under the applicable Indenture with respect to such series, then HFC will be
deemed to have satisfied and discharged the entire indebtedness represented by
such series of Debt Securities and all of the obligations of HFC under such
Indenture with respect to such series, except as otherwise provided in such
Indenture. In the event of any such defeasance, holders of such Debt Securities
would be able to look only to such trust funds for payment of principal,
premium, if any, and interest, if any, on their Debt Securities. (Standard
Provisions -- Section 6.03, Indenture for Senior Subordinated Debt Securities --
Section 6.03)
For federal income tax purposes, any such defeasance may be treated as a
taxable exchange of the related Debt Securities for an issue of obligations of
the trust or a direct interest in the cash and securities held in the trust. In
that case holders of such Debt Securities would recognize gain or loss as if the
trust obligations or the cash or securities deposited, as the case may be, had
actually been received by them in exchange for their Debt Securities. Such
holders thereafter would be required to include in income a share of the income,
gain or loss of the trust. The amount so required to be included in income could
be a different amount than would be includable in the absence of defeasance.
Prospective investors are urged to consult their own tax advisors as to the
specific consequences to them of defeasance.
MODIFICATION OF INDENTURES
Each Indenture provides that the holders of not less than a majority in
principal amount of each series of Debt Securities at the time outstanding under
such Indenture may enter into supplemental indentures for the purpose of
amending, in any manner, provisions of the Indenture or of any supplemental
indenture or modifying the rights of holders of such series of Debt Securities.
However, no such supplemental indenture, without the consent of the holder of
each outstanding Debt Security affected thereby, shall, among other things, (i)
change the maturity of the principal of, or any installment of interest on any
Debt Security, or reduce the principal amount thereof or the interest thereon or
any premium payable upon the redemption thereof, or (ii) reduce the aforesaid
percentage of the Debt Securities, the consent of the holders of which is
required for the execution of any such supplemental indenture or for any waiver
of compliance with any covenant or condition in such Indenture. (Standard
Provisions -- Section 11.02, Indenture for Senior Subordinated Debt Securities
- -- Section 11.02)
Each Indenture may be amended or supplemented without the consent of any
holder of Debt Securities under certain circumstances, including (i) to cure any
ambiguity, defect or inconsistency in the Indenture, any supplemental indenture,
or in the Debt Securities of any series; (ii) to evidence the succession of
another corporation to the Company and to provide for the assumption of all the
obligations of the Company under the Debt Securities and the Indenture by such
corporation; (iii) to provide for uncertificated Debt Securities in addition to
certificated Debt Securities; (iv) to make any change that does not adversely
affect the rights of holders of Debt Securities issued thereunder; (v) to
provide for a new series of Debt Securities; or (vi) to add to rights of holders
of Debt Securities or add additional Events of Default. (Standard Provisions --
Section 11.01, Indenture for Senior Subordinated Debt Securities -- Section
11.01)
SUCCESSOR ENTITY
The Company may not consolidate with or merge into, or transfer, sell or
lease its properties and assets as, or substantially as, an entirety to another
entity unless the successor entity is a corporation incorporated within the
United States and, after giving effect thereto, no default under the Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all obligations of the Company under the Indenture terminate. (Standard
Provision -- Section 10.02, Indenture for Senior Subordinated Debt Securities --
Sections 10.01 and 10.02)
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<PAGE> 11
EVENTS OF DEFAULT
Each Indenture defines the following as Events of Default with respect to
any series of Debt Securities: default for 30 days in the payment of any
interest upon any Debt Security of such series issued under such Indenture;
default in the payment of any principal of or premium on any such Debt Security;
default for 30 days in the deposit of any sinking fund or similar payment for
such series of Debt Securities; default for 60 days after notice in the
performance of any other covenant in the Indenture; certain defaults for 30 days
after notice in the payment of principal or interest, or in the performance of
other covenants, with respect to borrowed money under another indenture in which
the Trustee for such Debt Securities is trustee which results in the principal
amount of such indebtedness becoming due and payable prior to maturity, which
acceleration has not been rescinded or annulled; and certain events of
bankruptcy, insolvency or reorganization. HFC is required to file with each
Trustee annually a certificate as to the absence of certain defaults under the
Indenture. (Standard Provisions -- Sections 3.05 and 7.01, Indenture for Senior
Subordinated Debt Securities -- Sections 3.05 and 7.01)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, either the Trustee or the holders of
not less than 25% in principal amount of the outstanding Debt Securities of such
series by notice as provided in the Indenture may declare the principal amount
of all the Debt Securities of such series to be due and payable immediately. At
any time after a declaration of acceleration with respect to Debt Securities of
any series has been made, but before a judgment or decree for payment of money
has been obtained by the Trustee, the holders of not less than a majority in
principal amount of outstanding Debt Securities of such series may, under
certain circumstances, rescind or annul such declaration of acceleration.
(Standard Provisions -- Section 7.02, Indenture for Senior Subordinated Debt
Securities -- Section 7.02)
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of such series, waive any past default under the Indenture and its
consequences with respect to Debt Securities of such series, except a default
(a) in the payment of principal of (or premium, if any) or interest, if any, on
any Debt Securities of such series, or (b) in respect of a covenant or provision
of the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Debt Security of such series affected. (Standard
Provisions -- Section 7.13, Indenture for Senior Subordinated Debt Securities --
Section 7.13)
Each Indenture provides that the Trustee thereunder may withhold notice to
holders of Debt Securities of any default, except in payment of the principal of
(or premium, if any) or interest, if any, on any Debt Security issued under such
Indenture or in the payment of any sinking fund or similar payment, if it
considers it in the interest of holders of Debt Securities to do so. (Standard
Provisions -- Section 8.02, Indenture for Senior Subordinated Debt Securities --
Section 8.02)
Holders of Debt Securities may not enforce an Indenture except as provided
therein. (Standard Provisions -- Section 7.07, Indenture for Senior Subordinated
Debt Securities -- Section 7.07) Each Indenture provides that the holders of a
majority in principal amount of the outstanding debt securities issued under
such Indenture have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee. (Standard Provisions -- Section 7.12,
Indenture for Senior Subordinated Debt Securities -- Section 7.12) The Trustee
will not be required to comply with any request or direction of holders of Debt
Securities pursuant to the Indenture unless offered indemnity against costs and
liabilities which might be incurred by the Trustee as a result of such
compliance. (Standard Provisions -- Section 8.03(e), Indenture for Senior
Subordinated Debt Securities -- Section 8.03(e))
DESCRIPTION OF WARRANTS
HFC may issue, together with any Debt Securities offered by any Prospectus
Supplement or separately, Warrants for the purchase of other Debt Securities.
The Warrants are to be issued under warrant agreements (each a "Warrant
Agreement") to be entered into between HFC and a bank or trust company, as
warrant
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<PAGE> 12
agent ("Warrant Agent"), all as set forth in the Prospectus Supplement relating
to the particular issue of Warrants ("Offered Warrants"). A copy of the forms of
Warrant Agreement, including the form of warrant certificates representing the
Warrants ("Warrant Certificates"), reflecting the alternative provisions to be
included in the Warrant Agreements that will be entered into with respect to
particular offerings of Warrants, is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Warrant
Agreement and the Warrant Certificates do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreement and the Warrant certificates, respectively,
including the definitions therein of certain terms.
GENERAL
The Prospectus Supplement describes the terms of the Offered Warrants, the
Warrant Agreement relating to the Offered Warrants and the Warrant Certificates
representing the Offered Warrants, including the following: (1) the designation,
aggregate principal amount, and terms of the Debt Securities purchasable upon
exercise of the Offered Warrants; (2) the designation and terms of any related
Debt Securities with which the Offered Warrants are issued and the number of
Offered Warrants issued with each such Debt Security; (3) the date, if any, on
and after which the Offered Warrants and the related Offered Debt Securities
will be separately transferable; (4) the principal amount of Debt Securities
purchasable upon exercise of one Offered Warrant and the price at which such
principal amount of Debt Securities may be purchased upon such exercise; (5) the
date on which the right to exercise the Offered Warrants shall commence and the
date ("Expiration Date") on which such right shall expire; (6) whether the
Warrants represented by the Warrant Certificates will be issued in registered or
bearer form, and if registered, where they may be transferred and registered;
and (7) any other terms of the Offered Warrants.
Warrant Certificates will be exchangeable on the terms specified in the
Prospectus Supplement for new Warrant Certificates of different denominations,
and Warrants may be exercised at the corporate trust office of the Warrant Agent
or any other office indicated in the Prospectus Supplement. Prior to the
exercise of their Warrants, holders of Warrants will not have any of the rights
of Holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payments of principal of, premium, if any. or interest, if any, on
the Debt Securities purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Offered Warrant will entitle the holder to purchase such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement relating
to the Offered Warrants by payment of such exercise price in full in the manner
specified in the Prospectus Supplement. Offered Warrants may be exercised at any
time up to the close of business on the Expiration Date set forth in the
Prospectus Supplement relating to the Offered Warrants. After the close of
business on the Expiration Date, unexercised Warrants will become void.
Upon receipt of payment of the exercise price and the Warrant Certificate
properly completed and duly executed at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement, HFC
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
PLAN OF DISTRIBUTION
HFC may sell the Securities in any of three ways: (i) through underwriters
or dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement sets forth the
terms of the offering of the Offered Debt Securities and any Offered Warrants
(collectively, the "Offered Securities"), including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities
and the proceeds to HFC from such sale, any underwriting discounts and other
items constituting underwriters' compensation and any discounts and commissions
allowed or paid to dealers. Any
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<PAGE> 13
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
If the Offered Securities are sold through underwriters, the Prospectus
Supplement relating thereto describes the nature of the obligation of the
underwriters to take and pay for the Offered Securities. The Offered Securities
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more underwriting
firms acting alone. The underwriter or underwriters with respect to a particular
underwritten offering of Offered Securities are named in the Prospectus
Supplement relating to such offering, and, if an underwriting syndicate is used,
the managing underwriter or underwriters are set forth on the cover of such
Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement,
the obligations of the underwriters to purchase the Offered Securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all the Offered Securities if any are purchased.
The Offered Securities may be sold directly by HFC or through agents
designated by HFC from time to time. Any agent involved in the offer or sale of
the Offered Securities in respect of which this Prospectus is delivered is
named, and any commissions payable by HFC to such agent are set forth, in the
Prospectus Supplement relating thereto.
Underwriters and agents who participate in the distribution of the Offered
Securities may be entitled under agreements which may be entered into with HFC
to indemnification by HFC against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
which the underwriters or agents may be required to make in respect thereof.
If so indicated in the Prospectus Supplement, HFC will authorize
underwriters, dealers or other persons acting as HFC's agents to solicit offers
by certain institutions to purchase Offered Securities from HFC pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
HFC. The obligations of any purchaser under any such contract will not be
subject to any conditions except that (i) the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (ii) if the Offered
Securities are also being sold to underwriters, HFC shall have sold to such
underwriters the Offered Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
There can be no assurance that a secondary market will be created for the
Offered Securities or, if it is created, that it will continue.
ERISA MATTERS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain restrictions on employee benefit plans ("Plans") that are
subject to ERISA and on persons who are fiduciaries with respect to such Plans.
In accordance with the ERISA's general fiduciary requirements, a fiduciary with
respect to any such Plan who is considering the purchase of Offered Securities
on behalf of such Plan should determine whether such purchase is permitted under
the governing Plan documents and is prudent and appropriate for the Plan in view
of its overall investment policy and the composition and diversification of its
portfolio. Other provisions of ERISA and Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code") prohibit certain transactions between a
Plan and persons who have certain specified relationships to the Plan ("parties
in interest" within the meaning of ERISA or "disqualified persons" within the
meaning of Section 4975 of the Code). Thus, a Plan fiduciary considering the
purchase of Offered Securities should consider whether such a purchase might
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code.
The Company may be considered a "party in interest" or a "disqualified
person" with respect to many Plans that are subject to ERISA. The purchase of
Offered Securities by a Plan that is subject to the fiduciary
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<PAGE> 14
responsibility provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement accounts and other
plans described in Section 4975(c)(1) of the Code) and with respect to which the
Company is a party in interest or a disqualified person may constitute or result
in a prohibited transaction under ERISA or Section 4975 of the Code, unless such
Offered Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment finds) or PTCE 90-1 (an exemption for
certain transactions involving insurance company pooled separate accounts). ANY
PENSION OR OTHER EMPLOYEE BENEFIT PLAN PROPOSING TO ACQUIRE ANY OFFERED
SECURITIES SHOULD CONSULT WITH ITS COUNSEL.
LEGAL OPINIONS
The legality of the Offered Securities will be passed upon for HFC by John
W. Blenke, Vice President -- Corporate Law for Household International, Inc.,
the parent of HFC. Certain legal matters will be passed upon for underwriters
and agents by McDermott, Will & Emery, Chicago, Illinois. Mr. Blenke is a
full-time employee and an officer of Household International and owns, and holds
options to purchase, shares of Common Stock of Household International.
EXPERTS
The financial statements and schedules of HFC and its subsidiaries
incorporated by reference in this Prospectus, to the extent and for the periods
indicated in its reports, have been audited by Arthur Andersen LLP, independent
public accountants, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
The financial statements of Beneficial Corporation for the year ended
December 31, 1997 incorporated in this Prospectus by reference from HFC's
Current Reports on Form 8-K as filed on June 2, 1998 and June 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated Expenses:
<TABLE>
<S> <C>
Printing & Engraving Fees................................... $ 250,000
Fees of Transfer Agent and Registrar........................ 50,000
Accountants' Fees and Expenses.............................. 75,000
Blue Sky Qualification Fees and Expenses.................... 25,000
SEC Filing Fee.............................................. 885,000*
Rating Agency Fees.......................................... 1,500,000
Legal Fees and Expenses..................................... 10,000
Miscellaneous............................................... 25,000
----------
Total.................................................. $2,820,000
==========
</TABLE>
- -------------------------
*Actual
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The General Corporation Law of Delaware (Section 145) gives Delaware
corporations broad powers to indemnify their present and former directors and
officers and those of affiliated corporations against expenses incurred in the
defense of any lawsuit to which they are made parties by reason of being or
having been such directors or officers, subject to specified conditions and
exclusions; gives a director or officer who successfully defends an action the
right to be so indemnified; and authorizes Household Finance Corporation ("HFC")
to buy directors' and officers' liability insurance. Such indemnification is not
exclusive of any other right to which those indemnified may be entitled under
any bylaw, agreement, vote of stockholders or otherwise.
A bylaw of HFC states and makes mandatory the indemnification expressly
authorized under the General Corporation Law of Delaware, in the absence of
other indemnification by contract, vote of stockholders or otherwise, with these
exceptions: the bylaw makes no distinction between litigation brought by third
parties and litigation brought by or in the right of HFC as regards the required
standard of conduct imposed upon the individual in order to be entitled to
indemnification. The bylaw standard applicable in all cases (excepting
indemnification in connection with the successful defense of any proceeding or
matter therein which is mandatory under the General Corporation Law of Delaware
and the bylaw without reference to any such standard) is that the individual
shall have acted in good faith and in a manner he/she reasonably believed to be
in or not opposed to the best interests of HFC, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his/her
conduct was unlawful. Further, the bylaw would protect directors, officers,
employees and agents against any and all expenses and liability with respect to
actions brought against them by or in the right of HFC if the required standard
of conduct is met. The bylaw is qualified in its entirety in that no
indemnification will be made if prohibited by applicable law. The bylaw is
applicable only to claims, actions, suits or proceedings made or commenced after
its adoption, whether arising from prior or subsequent acts or omissions to act.
The bylaw is applicable to directors, officers, employees or agents of HFC and
also to persons who are serving at the request of HFC as directors, officers,
employees or agents of other corporations.
Article VII of the Restated Certificate of Incorporation of Household
International, Inc. ("Household International") provides for indemnification to
the fullest extent permitted by Section 145 of the General Corporation Law of
Delaware for directors, officers and employees of Household International and
also to persons who are serving at the request of Household International as
directors, officers or employees of other corporations. Household International
has purchased liability policies which indemnify HFC's officers and directors
against loss arising from claims by reason of their legal liability for acts as
officers and directors, subject to limitations and conditions as set forth in
the policies.
II-1
<PAGE> 16
Pursuant to agreements which HFC may enter into with underwriters or agents
(the form of which is included as an exhibit to this Registration Statement),
officers and directors of HFC may be entitled to indemnification by such
underwriters or agents against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, arising from information appearing in
the Registration Statement or any Prospectus which has been furnished to HFC by
such underwriters or agents.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1 Form of Underwriting Agreement for Debt Securities and
Warrants to Purchase Debt Securities.
4.1 Standard Multiple-Series Indenture Provisions for Senior
Debt Securities dated as of June 1, 1992. (Incorporated
herein by reference from Exhibit 4(b) to HFC's Registration
Statement on Form S-3 (No. 33-48854)).
4.2 Indenture for Senior Subordinated Debt Securities, dated as
of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee. (Incorporated herein by reference from
Exhibit 4(e) to HFC's Registration Statement on Form S-3
(No. 33-38955)).
4.3 Indenture for Senior Debt Securities between HFC and U.S.
Bank Trust National Association formerly known as First
Trust of Illinois, National Association, successor in
interest to Bank of America Illinois, formerly known as
Continental Bank, National Association, as Trustee, dated as
of October 1, 1992. (Incorporated herein by reference from
Exhibit 4(d) to HFC's Registration Statement on Form S-3
(No. 33-55043)). ).
4.4 Indenture for Senior Debt Securities, dated as of November
1, 1994, between HFC and The Bank of New York, successor in
interest to NationsBank of Tennessee, as Trustee.
(Incorporated by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-64175)).
4.5 Indenture for Senior Debt Securities, dated as of April 1,
1995, between HFC and The First National Bank of Chicago, as
Trustee. (Incorporated by reference from Exhibit 4(f) to
HFC's Registration Statement on Form S-3 (No. 33-64175)).
4.6 Form of Indenture for Senior Debt Securities, between HFC
and Harris Trust and Savings Bank, as Trustee.
4.7 Form of Indenture for Senior Debt Securities, between HFC
and The First National Bank of Maryland, as Trustee.
4.8 Form of Indenture with respect to Senior Debt Securities.
4.9 Forms of Warrant Agreement, including forms of Warrant
Certificate.
5 Opinion and Consent of Mr. J. W. Blenke, Vice President --
Corporate Law and Assistant Secretary of Household
International, Inc.
12 Statement on the Computation of Ratio of Earnings to Fixed
Charges.
23.1 Consent of Arthur Andersen LLP, Certified Public
Accountants.
23.2 Consent of Deloitte & Touche LLP, Certified Public
Accountants.
23.3 Consent of Mr. J. W. Blenke, Vice President-Corporate Law
and Assistant Secretary of Household International, Inc., is
contained in his opinion (Exhibit 5).
24 Power of Attorney (contained on page II-5 herein).
25.1 Statement of eligibility and qualification of The First
National Bank of Chicago.
25.2 Statement of eligibility and qualification of Harris Trust
and Savings Bank.
25.3 Statement of eligibility and qualification of U.S. Bank
Trust National Association.
25.4 Statement of eligibility and qualification of The Bank of
New York.
25.5 Statement of eligibility and qualification of The First
National Bank of Maryland.
</TABLE>
II-2
<PAGE> 17
ITEM 17. UNDERTAKING.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) That for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(6) That for purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions set forth or described in Item 15 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
II-3
<PAGE> 18
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person, in connection with the securities registered hereby, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Prospect Heights, and State of Illinois, on the
3rd day of August, 1998.
HOUSEHOLD FINANCE CORPORATION
By: /s/ G.D. GILMER
------------------------------------
G.D. Gilmer
President and Chief Executive
Officer
Each person whose signature appears below constitutes and appoints J. W.
Blenke, L. S. Mattenson and P. D. Schwartz and each or any of them (with full
power to act alone), as his/her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him/her in his/her name,
place and stead, in any and all capacities, to sign and file with the Securities
and Exchange Commission, any and all amendments (including post-effective
amendments) to the Registration Statement, granting unto each such
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all
interests and purposes as he/she might or could do in person, hereby ratifying
and confirming all that such attorney-in-fact and agent or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on the 3rd day of August, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ G.D. GILMER President and Chief Executive Officer, Director
- ---------------------------------------------------
(G.D. Gilmer)
/s/ D.A. SCHOENHOLZ Vice President-Chief Financial Officer, Chief
- --------------------------------------------------- Accounting Officer, Director
(D. A. Schoenholz)
/s/ W.F. ALDINGER Director
- ---------------------------------------------------
(W. F. Aldinger)
/s/ G.O. FICK Director
- ---------------------------------------------------
(G.O. Fick)
</TABLE>
The Registrant reasonably believes that the security rating to be assigned
to the Securities registered hereunder will make the Securities "investment
grade securities" pursuant to Transaction Requirement B.2 of Form S-3.
II-5
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT DESCRIPTION NUMBER
- ------- -------------------- ----------
<C> <S> <C>
1 Form of Underwriting Agreement for Debt Securities and
Warrants to Purchase Debt Securities........................
4.1 Standard Multiple-Series Indenture Provisions for Senior
Debt Securities dated as of June 1, 1992. (Incorporated
herein by reference from Exhibit 4(b) to HFC's Registration
Statement on Form S-3 (No. 33-48854)).......................
4.2 Indenture for Senior Subordinated Debt Securities, dated as
of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee. (Incorporated herein by reference from
Exhibit 4(e) to HFC's Registration Statement on Form S-3
(No. 33-38955)).............................................
4.3 Indenture for Senior Debt Securities between HFC and U.S.
Bank Trust national Association formerly known as First
Trust of Illinois, National Association, successor in
interest to Bank of America Illinois, formerly known as
Continental Bank, National Association, as Trustee, dated as
of October 1, 1992. (Incorporated herein by reference from
Exhibit 4(d) to HFC's Registration Statement on Form S-3
(No. 33-55043)).............................................
4.4 Indenture for Senior Debt Securities, dated as of November
1, 1994, between HFC and The Bank of New York, successor in
interest to NationsBank of Tennessee, as Trustee.
(Incorporated by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-64175))..........
4.5 Indenture for Senior Debt Securities, dated as of April 1,
1995, between HFC and The First National Bank of Chicago, as
Trustee. (Incorporated by reference from Exhibit 4(f) to
HFC's Registration Statement on Form S-3 (No. 33-64175))....
4.6 Form of Indenture for Senior Debt Securities, between HFC
and Harris Trust and Savings Bank, as Trustee.
4.7 Form of Indenture for Senior Debt Securities, between HFC
and The First National Bank of Maryland, as Trustee.
4.8 Form of Indenture with respect to Senior Debt Securities....
4.9 Forms of Warrant Agreement, including forms of Warrant
Certificate.................................................
5 Opinion and Consent of Mr. J. W. Blenke, Vice President --
Corporate Law and Assistant Secretary of Household
International, Inc..........................................
12 Statement on the Computation of Ratio of Earnings to Fixed
Charges.....................................................
23.1 Consent of Arthur Andersen LLP, Certified Public
Accountants.................................................
23.2 Consent of Deloitte & Touche LLP, Certified Public
Accountants.................................................
23.3 Consent of Mr. J. W. Blenke, Vice President-Corporate Law
and Assistant Secretary of Household International, Inc., is
contained in his opinion (Exhibit 5)........................
24 Power of Attorney (contained on page II-5 herein)...........
25.1 Statement of eligibility and qualification of The First
National Bank of Chicago....................................
25.2 Statement of eligibility and qualification of Harris Trust
and Savings Bank............................................
25.3 Statement of eligibility and qualification of U.S. Bank
Trust National Association..................................
25.4 Statement of eligibility and qualification of The Bank of
New York....................................................
25.5 Statement of eligibility and qualification of The First
National Bank of Maryland...................................
</TABLE>
II-6
<PAGE> 1
Exhibit 1
HOUSEHOLD FINANCE CORPORATION
UNDERWRITING AGREEMENT
[Names of Representatives]
[Address]
_______, ____
Dear Sirs:
From time to time Household Finance Corporation, a Delaware corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the underwriters
named in Schedule I to the applicable Pricing Agreement (with respect to each
such Pricing Agreement, the "Underwriters") certain of its debt securities (the
"Debt Securities") and, if applicable, warrants to purchase Debt Securities (the
"Warrants") specified in Schedule II to such Pricing Agreement (with respect to
each such Pricing Agreement, the "Designated Debt Securities" and the
"Designated Warrants").
The terms and rights of any particular issuance of Designated Debt
Securities shall be as specified in the applicable Pricing Agreement and in or
pursuant to the indenture, as it may be supplemented from time to time (the
"Indenture"), identified in such Pricing Agreement. The terms and rights of any
particular issuance of Designated Warrants shall be as specified in the
applicable Pricing Agreement and in the warrant agreement (the "Warrant
Agreement") identified in such Pricing Agreement. Each Pricing Agreement shall
constitute an agreement by the Company and the Underwriters to be bound by all
of the provisions of this Agreement.
1. Particular sales of Designated Debt Securities and Designated Warrants
may be made from time to time to the Underwriters of such Debt Securities and
Warrants for whom the firms designated as representatives of the Underwriters of
such Debt Securities and Warrants in the Pricing Agreement relating thereto will
act as representatives (the "Representatives"). The term "Representatives" also
refers to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
<PAGE> 2
This Agreement shall not be construed as an obligation of the Company to sell
any of the Debt Securities or Warrants or as an obligation of any of the
Underwriters to purchase the Debt Securities or Warrants. The obligation of the
Company to issue and sell any of the Debt Securities or Warrants and the
obligation of any of the Underwriters to purchase any of the Debt Securities or
Warrants shall be evidenced by the Pricing Agreement with respect to the
Designated Debt Securities and Designated Warrants specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of such
Designated Debt Securities and the number of Designated Warrants, the public
offering price of such Designated Debt Securities, the purchase price to the
Underwriters of such Designated Debt Securities, the names of the Underwriters
of such Designated Debt Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Debt Securities and
Designated Warrants to be purchased by each Underwriter, whether any of such
Designated Debt Securities and Designated Warrants are to be purchased from the
Company pursuant to delayed delivery contracts on terms to be specified in the
Pricing Agreement and such contracts ("Delayed Delivery Contracts") and shall
set forth the date, time and manner of delivery of such Designated Debt
Securities and Designated Warrants and payment for such Designated Debt
Securities and Designated Warrants. The Pricing Agreement shall also specify
(to the extent not set forth in the registration statement and prospectus with
respect thereto) the terms of such Designated Debt Securities and Designated
Warrants. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement (Registration No. 33-64175) in respect of
the Debt Securities and the Warrants has been filed with the Securities
and Exchange Commission (the "Commission") in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statement, but including all documents
incorporated by reference therein, to the Representatives for each of the
other Underwriters and such registration statement in such form has been
declared effective by the Commission and no stop order
2
<PAGE> 3
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in such
registration statement being hereinafter called a "Preliminary
Prospectus"; such registration statement, including all exhibits thereto
but excluding each Form T-1, as amended at the time such registration
statement or any part thereof became effective, being hereinafter called
the "Registration Statement"; the prospectus included in the Registration
Statement, in the form in which it has most recently been filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 of
Regulation C on or prior to the date of this Agreement being hereinafter
called the "Prospectus"); any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents, if any, incorporated by reference therein pursuant to the
applicable form under the Securities Act of 1933, as amended (the "Act"),
as of the date of such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and so incorporated by reference; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Debt Securities and Designated Warrants in the form
in which it is filed with the Commission pursuant to Rule 424 under the
Act in accordance with Section 5(a) hereof including any documents
incorporated by reference therein as of the date of such filing or
transmission;
(b) 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 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
3
<PAGE> 4
Prospectus and in the Prospectus as amended or supplemented, when they
become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the 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;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter of
Designated Debt Securities and Designated Warrants through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects
to the requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the rules and regulations of the
Commission thereunder; the Registration Statement and any amendment
thereof (including the filing of any annual report on Form 10-K), at the
time it became effective, did not contain an untrue statement of the
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
the Prospectus, at the time the Registration Statement became effective
did not, as of the date hereof does not and as of the Time of Delivery (as
hereinafter defined) will not, contain an 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, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Debt Securities and Designated
Warrants through the Representatives expressly for use in the Prospectus
as amended or supplemented relating to such Debt Securities and Warrants;
(d) The financial statements included in the Registration Statement
present fairly the financial
4
<PAGE> 5
position of the Company and subsidiaries as of the dates indicated and the
results of their respective operations for the periods specified; and said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a basis which is consistent in
all material respects during the periods involved;
(e) Since the date of the latest audited financial statements in the
Prospectus there has not been any material change in the capital stock or
long-term debt of the Company (except for changes resulting from the
purchase by the Company of its outstanding securities for sinking fund
purposes) or any material adverse change in the general affairs or
management or the consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
(f) The Company and its significant subsidiaries within the meaning of
Rule 1-02 of Regulation S-X under the Act (the "significant subsidiaries")
are validly organized and existing corporations under the laws of their
respective jurisdictions of incorporation; and the Company and its
significant subsidiaries are duly authorized under statutes which regulate
the business of insurance or the business of making loans or of financing
the sale of goods (commonly called "small loan laws," "consumer finance
laws," or "sales finance laws"), or are permitted under the general
interest statutes and related laws and court decisions, to conduct in the
various jurisdictions in which they do business the respective businesses
therein conducted by them as described in the Prospectus, except where
failure to be so authorized or permitted will not have a material adverse
effect on the business or consolidated financial condition of the Company
and its subsidiaries taken as a whole;
(g) There are no legal or governmental proceedings pending, other than
those referred to in the Prospectus, to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, other than proceedings which are not
reasonably expected, individually or in the aggregate, to have a material
adverse effect on the consolidated financial
5
<PAGE> 6
position, shareholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(h) The Debt Securities and the Warrants have been duly authorized,
and, when issued and delivered pursuant to this Agreement, the Pricing
Agreement and any Delayed Delivery Contracts will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by
the Indenture and the Warrant Agreement under which such Debt Securities
and Warrants are to be issued, the Indenture and the Warrant Agreement to
be substantially in the forms filed as exhibits to the Registration
Statement; the Indenture has been duly authorized and, when executed and
delivered by the Company and the Trustee thereunder, the Indenture and the
Warrant Agreement will constitute valid and legally binding instruments
enforceable in accordance with their respective terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
or by general principles of equity; and the Debt Securities, the Warrants,
the Indenture and the Warrant Agreement conform to the descriptions
thereof in the Prospectus as originally filed with the Commission, and
will conform to the descriptions thereof in the Prospectus as amended or
supplemented;
(i) The issue and sale of the Debt Securities and the Warrants and
compliance by the Company with all of the provisions of the Debt
Securities, the Warrants, the Indenture, the Warrant Agreement, this
Agreement, any Pricing Agreement and any Delayed Delivery Contracts will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the property or assets of
the Company or any of its subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries may be bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (except for conflicts, breaches
6
<PAGE> 7
and defaults which would not, individually or in the aggregate, be
materially adverse to the Company and its subsidiaries taken as a whole or
materially adverse to the transactions contemplated by this Agreement),
nor will such action result in any violation of the provisions of the
Certificate or Articles of Incorporation, as amended, or the By-Laws of
the Company or any of its subsidiaries or any statute or any order, rule
or regulation applicable to the Company or any of its subsidiaries of any
court or of any Federal, State or other regulatory authority or other
governmental body having jurisdiction over the Company or any of its
subsidiaries; and no consent, approval, authorization, order, registration
or qualification of or with any court or any such regulatory authority or
other governmental body is required for the issue and sale of the Debt
Securities and the Warrants or the consummation of the other transactions
contemplated in this Agreement, any Pricing Agreement, or any Delayed
Delivery Contracts except the registration under the Act of the Debt
Securities and the Warrants, the qualification of the Indenture under the
Trust Indenture Act and 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
Debt Securities and the Warrants by the Underwriters; and
(j) Arthur Andersen LLP, who have certified certain financial
statements included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Debt Securities and Designated Warrants and authorization by the
Representatives of the release of such Designated Debt Securities and Designated
Warrants, the several Underwriters propose to offer such Designated Debt
Securities and Designated Warrants for sale upon the terms and conditions set
forth in the Prospectus and any amendment or supplement thereto relating to such
Designated Debt Securities and Designated Warrants.
7
<PAGE> 8
4. Designated Debt Securities and Designated Warrants to be purchased
by each Underwriter pursuant to the Pricing Agreement relating thereto, in
book-entry form, and in such authorized denominations and registered in the name
of the nominee of The Depository Trust Company, shall be delivered by or on
behalf of the Company through the facilities of The Depository Trust Company to
the Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
same-day funds to the Company all at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery" for such Designated Debt Securities
and Designated Warrants.
5. The Company agrees with each of the Underwriters of any Designated
Debt Securities and Designated Warrants:
(a) To make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the
Pricing Agreement relating to such Debt Securities and Warrants and prior
to the Time of Delivery for such Debt Securities and Warrants which shall
be disapproved by the Representatives promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment or
supplement after such Time of Delivery and furnish the Representatives
with copies thereof and 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, 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with the
offering or sale of such Debt Securities and Warrants, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or become effective, or any supplement to the
Prospectus or any amended Prospectus has been filed or transmitted for
filing, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Prospectus, of the
suspension of the qualification of such Debt Securities and Warrants for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and in the
8
<PAGE> 9
event of the issuance of any such stop order or of any such order
preventing or suspending the use of any Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Debt Securities and
Warrants for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Debt Securities and Warrants, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of such Debt
Securities and Warrants and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include an 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 Act, the Exchange Act or the
Trust Indenture Act, to notify the Representatives and upon their request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than ninety days after the close
of the period
9
<PAGE> 10
covered thereby, an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
covering a period of at least twelve consecutive months beginning not
later than the first day of the fiscal quarter following the Time of
Delivery; and
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Debt Securities and Designated Warrants and continuing
to and including the later of (i) the termination of trading restrictions
on such Designated Debt Securities and Designated Warrants, as notified to
the Company by the Representatives and (ii) the Time of Delivery for such
Designated Debt Securities and Designated Warrants, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company (except for Debt Securities issued upon exercise of warrants)
which mature more than nine months after such Time of Delivery and which
are substantially similar to such Designated Debt Securities, without the
prior written consent of the Representatives, provided, however, that in
no event shall the foregoing period extend more than fifteen calendar days
from the date of the Pricing Agreement.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Debt Securities and the Warrants under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
reproducing this Agreement, any Pricing Agreement, any Delayed Delivery
Contract, any Indenture and supplements thereto, any Warrant Agreement and
amendments thereto, and any Blue Sky Survey and Legal Investment Memorandum;
(iii) all expenses in connection with the qualification of the Debt Securities
and the Warrants for offering and sale under state securities laws as provided
in Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky Survey and Legal Investment Memorandum; (iv) any fees charged by
securities rating services for rating the Debt Securities; (v) any filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the
10
<PAGE> 11
terms of the sale of the Debt Securities and the Warrants; (vi) the cost of
preparing the Debt Securities and the Warrants; (vii) the fees and expenses of
any Trustee and any agent of any Trustee, the fees and expenses of any warrant
agent, and the fees and disbursements of counsel for any Trustee or any warrant
agent in connection with any Indenture, Warrant Agreement, the Debt Securities
and the Warrants; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Debt Securities or Warrants by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Debt
Securities and any Designated Warrants hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery for such
Designated Debt Securities and Designated Warrants, true and correct, the
condition that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the Time of Delivery for
such Designated Debt Securities and Designated Warrants, with respect to
the incorporation of the Company, the validity of the Indenture, the
Designated Debt Securities, the Designated Warrants, the Warrant
Agreement, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
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<PAGE> 12
(c) Counsel for the Company shall have furnished to you his written
opinion, dated the Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware;
(ii) The significant subsidiaries of the Company are validly
organized and existing corporations under the laws of their
respective jurisdictions of incorporation;
(iii) The Company and its significant subsidiaries are duly
authorized under statutes which regulate the business of insurance
or the business of making loans or of financing the sale of goods
(commonly called "small loan laws," "consumer finance laws," or
"sales finance laws"), or are permitted under the general interest
statutes and related laws and court decisions, to conduct in the
various jurisdictions in which they do business the respective
businesses therein conducted by them as described in the Prospectus,
except where failure to be so permitted or failure to be so
authorized will not have a material adverse effect on the business
or consolidated financial condition of the Company and its
subsidiaries taken as a whole;
(iv) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented and all of the
outstanding shares of its common stock have been duly and validly
authorized and issued, are fully paid and nonassessable and are
owned of record and beneficially by the Company's parent, Household
International, Inc.;
(v) To the best of such counsel's knowledge, there are no
legal or governmental proceedings pending, other than those referred
to or incorporated in the Prospectus, to which the Company or any of
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<PAGE> 13
its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which individually or in
the aggregate is material, and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Debt Securities and the Designated Warrants have been
duly authorized, executed and delivered by the Company;
(vii) Each Delayed Delivery Contract has been duly
authorized, executed and delivered by the Company and is a valid and
legally binding agreement of the Company in accordance with its
terms;
(viii) The Indenture and the Warrant Agreement have been duly
authorized, executed and delivered by the Company, and constitute
valid and legally binding instruments of the Company enforceable in
accordance with their respective terms except as enforcement of the
provisions thereof may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general principles of equity;
the Indenture has been duly qualified under the Trust Indenture Act;
and all taxes and fees required to be paid with respect to the
execution of the Indenture and the Warrant Agreement and the
issuance of the Designated Debt Securities and the Designated
Warrants have been paid;
(ix) The Designated Debt Securities and the Designated
Warrants have been duly authorized and executed and, when the
Designated Debt Securities and the Designated Warrants have been
duly authenticated, issued and delivered against payment of the
agreed consideration therefor, the Designated Debt Securities and
the Designated Warrants will constitute valid and legally binding
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<PAGE> 14
obligations of the Company and, with like exception as noted in
subdivision (viii) above, will be entitled to the benefits provided
by the Indenture and the Warrant Agreement; and the Designated Debt
Securities, the Designated Warrants, the Indenture and the Warrant
Agreement conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(x) The issue and sale of the Designated Debt Securities and
the Designated Warrants, and the compliance of the Company with all
of the provisions of the Designated Debt Securities, the Designated
Warrants, the Indenture, the Warrant Agreement and this Agreement,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Company or any of its subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement, or other agreement or instrument, known to such
counsel to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries may be bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject (except for conflicts, breaches and defaults
which would not, individually or in the aggregate, be materially
adverse to the Company and its subsidiaries taken as a whole or
materially adverse to the transactions contemplated by this
Agreement), nor will such action result in any violation of the
provisions of the Certificate or Articles of Incorporation, as
amended, or the By-Laws of the Company or any of its subsidiaries
or, to the best of such counsel's knowledge, any statute or any
order, rule or regulation applicable to the Company or any of its
subsidiaries of any court or of any Federal, State or other
regulatory authority or other governmental body having jurisdiction
over the Company or any of its subsidiaries; and no consent,
approval, authorization, order, registration
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<PAGE> 15
or qualification of or with any court or any such regulatory
authority or other governmental body is required for the issue and
sale of the Designated Debt Securities or the consummation of the
other transactions contemplated in this Agreement and the Pricing
Agreement, except the registration under the Act of the Designated
Debt Securities and the Designated Warrants, the qualification of
the Indenture under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under State securities or Blue Sky laws in connection with
the public offering of the Designated Debt Securities and the
Designated Warrants by the Underwriters;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of
such documents, when they became effective or were so filed, as the
case may be, contained, in the case of documents which became
effective under the Act, 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, in the
case of documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading;
(xii) The Registration Statement has become and is now
effective under the Act
15
<PAGE> 16
and, to the best of such counsel's knowledge, no proceedings for a
stop order in respect of the Registration Statement are pending or
threatened under Section 8(d) or 8(e) of the Act; and
(xiii) The Registration Statement and the Prospectus as
amended or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Debt Securities and the Designated Warrants (other than
the financial statements and related schedules therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel
has no reason to believe that the Registration Statement or any
amendment thereof (including the filing of any annual report on Form
10-K) at the time it became effective 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 or that the Prospectus as amended or supplemented at the
time it was filed or transmitted for filing pursuant to Rule 424
under the Act contained or as amended or supplemented at the Time of
Delivery contains an untrue statement of a material fact or omitted
or omits 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; and such counsel does not know of
any contracts or exhibits required to be filed with the Registration
Statement which are not so filed;
(d) At the Time of Delivery for the Designated Debt Securities and the
Designated Warrants the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement shall
have furnished to the Representatives a letter, dated such Time of
Delivery, in form and substance satisfactory to the
16
<PAGE> 17
Representatives, to the effect set forth in the letter furnished to
counsel for the Underwriters by said independent accountants at the time
the Registration Statement was filed under the Act, and as to such other
matters as the Representatives may reasonably request;
(e) (i) The Company and its subsidiaries taken as a whole, shall not
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented there
shall not have been any material change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change in the
general affairs or management, or the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus as amended or supplemented, the effect of which in any
such case described in clause (i) or (ii) is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Debt Securities and the Designated Warrants on the terms and in
the manner contemplated in the Prospectus as amended or supplemented;
(f) Subsequent to the date of the Pricing Agreement relating to the
Designated Debt Securities and the Designated Warrants no downgrading
shall have occurred in the rating accorded the Company's senior debt
securities by any "nationally recognized statistical rating organization,"
as that term is defined by the Commission for purposes of Rule 436(g) of
the Act;
(g) Subsequent to the date of the Pricing Agreement relating to the
Designated Debt Securities and the Designated Warrants there shall not
have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a general moratorium on commercial banking activities in
New York
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<PAGE> 18
declared by either Federal or New York State authorities; or (iii) the
outbreak or material escalation of hostilities or the declaration by the
United States of a national emergency or war, if the effect of any such
event specified in this clause (iii) in the reasonable judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Debt Securities and the
Designated Warrants on the terms and in the manner contemplated in the
Prospectus as amended or supplemented; and
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Debt Securities
and the Designated Warrants certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery (provided that, each representation and warranty which
refers to the Prospectus in Section 2 hereof shall be in relation to the
Prospectus as amended or supplemented relating to the Designated Debt
Securities and the Designated Warrants), as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as the Representatives
may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, Preliminary Prospectus
Supplement, the Registration Statement, the Prospectus or the Prospectus as
amended or supplemented, or any amendment or supplement thereto, 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
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim, 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 or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
18
<PAGE> 19
omission or alleged omission made in any Preliminary Prospectus, Preliminary
Prospectus Supplement, the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter of Designated Debt Securities and Designated Warrants
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Preliminary Prospectus supplement,
the Registration Statement, the Prospectus or the Prospectus as amended or
supplemented, or any amendment or supplement thereto, 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 not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Preliminary Prospectus, any Preliminary Prospectus supplement, the
Registration Statement, the Prospectus or the Prospectus as amended or
supplemented, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim, as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel
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<PAGE> 20
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under subsection (a) or (b) above in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters of the Designated Debt Securities and the Designated
Warrants on the other from the offering of the Designated Debt Securities and
the Designated Warrants to which such loss, claim, damage or liability (or
action in respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters of the Designated Debt Securities and the Designated
Warrants on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from such offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statements of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if
20
<PAGE> 21
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or action in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Debt
Securities and the Designated Warrants underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Debt Securities and Designated Warrants in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Debt Securities and Warrants and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Debt Securities and the Designated Warrants which it has agreed
to purchase under the Pricing Agreement relating to such Designated Debt
Securities and Designated Warrants, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such
Designated Debt Securities and Designated Warrants on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Designated Debt
Securities and Designated Warrants, then the Company shall be entitled to a
21
<PAGE> 22
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Designated
Debt Securities and Designated Warrants on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Designated Debt Securities
and Designated Warrants, or the Company notifies the Representatives that it has
so arranged for the purchase of such Designated Debt Securities and Designated
Warrants, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Debt Securities and Designated Warrants
for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Debt Securities and Designated
Warrants.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Debt Securities and the Designated Warrants of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate principal amount of such Designated Debt
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of the Designated Debt Securities to be purchased at
the Time of Delivery for such Designated Debt Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Designated Debt Securities and the number of Designated
Warrants which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Debt Securities and Designated Warrants and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Designated Debt Securities and the
number of Designated Warrants which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Debt Securities and the Designated
Warrants of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Debt Securities and the Designated
22
<PAGE> 23
Warrants of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate principal amount
of Designated Debt Securities and the number of Designated Warrants which remain
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Debt Securities to be purchased at the Time of Delivery for such
Designated Debt Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require nondefaulting Underwriters to purchase Designated Debt Securities and
Designated Warrants of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Debt Securities and Designated
Warrants shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Designated Debt Securities and the
Designated Warrants.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Debt Securities and the Designated Warrants
covered by such Pricing Agreement except as provided in Section 6 and Section 8
hereof; but, if for any other reason Designated Debt Securities and Designated
Warrants are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated Debt
Securities and Designated Warrants, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Debt
Securities and Designated Warrants except as provided in Section 6 and Section 8
hereof.
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<PAGE> 24
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Debt Securities and Designated Warrants shall act on behalf of each
of such Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by such Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or sent by
registered mail to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be sufficient in all respects if
delivered or sent by registered mail to the address of the Company set forth in
the Registration Statement: Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by registered mail to such Underwriter.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Debt
Securities or Warrants from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement.
15. This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of Illinois.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
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<PAGE> 25
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof.
Very truly yours,
Household Finance Corporation
By____________________________
Title:
Accepted as of the date hereof:
[Names of Representatives]
By:_________________________________
Title:
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<PAGE> 26
ANNEX I
PRICING AGREEMENT
[Names of Representative(s)]
As Representatives of the several
Underwriters named in Schedule I hereto
[Address]
__________, 19
Dear Sirs:
Household Finance Corporation (the "Company") proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement dated
__________, (the "Underwriting Agreement"), between the Company on the one hand
and [names of co-representatives[s] named therein] on the other hand, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters")
the Designated Debt Securities and the Designated Warrants specified in
Schedule II hereto less the principal amount of Designated Debt Securities and
the number of Designated Warrants covered by delayed delivery contracts
("Delayed Delivery Contracts") as provided below (such Designated Debt
Securities and Designated Warrants covered by Delayed Delivery Contracts being
hereinafter referred to collectively as Contract Securities). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provision had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each of the
representations and warranties set forth in Section 2 of the Underwriting
Agreement with respect to the Prospectus or the information contained in the
Prospectus shall constitute a representation or warranty thereof (a) as of the
date of the Underwriting Agreement with respect to the Prospectus, and also (b)
as of the date of this Pricing Agreement with respect to the Prospectus as
amended or supplemented. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by reference shall
be deemed to refer to you. Unless otherwise defined herein, terms defined in
the Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the
<PAGE> 27
Designated Securities, in the form heretofore delivered to you is now proposed
to be filed with, or in the case of a supplement transmitted for filing to, the
Commission.
The Company hereby authorizes the Underwriters to solicit offers to
purchase Designated Debt Securities and Designated Warrants from the Company
pursuant to Delayed Delivery Contracts, substantially in the form of Schedule
III attached hereto but with such changes therein as you and the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements,
and as compensation therefor the Company will pay to you, for the accounts of
the Underwriters, at the Time of Delivery, a commission of % of the principal
amount of Designated Debt Securities for which Delayed Delivery Contracts have
been made. Delayed Delivery Contracts are to be with institutional investors of
the types mentioned in the penultimate paragraph under the caption "Plan of
Distribution" in the Prospectus and subject to other conditions therein set
forth. The Company will enter into a Delayed Delivery Contract in each case
arranged by the Underwriters where the Company has advised you of its approval
of the proposed sale of Contract Securities to the purchaser thereunder;
provided, however, that the minimum principal amount of Designated Debt
Securities covered by any Delayed Delivery Contract with any purchaser or any
Delayed Delivery Contract with affiliated purchasers shall be $________ and the
aggregate principal amount of Designated Debt Securities covered by Delayed
Delivery Contracts shall not exceed $________, unless the Company shall
otherwise agree in writing. However, if the aggregate principal amount of
Designated Debt Securities requested for delayed delivery is less than
$________, the Company will have the right to reject all requests. The
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts.
The amount of Contract Securities to be deducted from the principal amount
of Designated Debt Securities and the number of Designated Warrants to be
purchased by each Underwriter as set forth in Schedule I hereto shall be, in
each case, the amount of Contract Securities which the Company has been advised
by you have been attributed to such Underwriter, provided that if the Company
has not been so advised, the amount of Contract Securities to be so deducted
shall be, in each case, that proportion of Contract Securities which the
principal amount of Designated Debt Securities and the number of Designated
Warrants to be purchased by such Underwriter under this Agreement bears to the
total principal amount of the Designated Debt Securities (rounded as you may
determine to the nearest $1,000 principal amount) and the total number of
Designated Warrants. The total principal amount of Designated Debt Securities
to be purchased by
-2-
<PAGE> 28
all the Underwriters shall be $________ less the principal amount of the
Designated Debt Securities covered by Delayed Delivery Contracts and the total
number of Designated Warrants so purchased shall be less the number of
Designated Warrants covered by such Contracts. The Company will deliver to you
not later than 3:30 o'clock p.m., Chicago time, on the business day preceding
the Time of Delivery (or such other time and date as you and the Company may
agree upon in writing) a written notice setting forth the principal amount of
Designated Debt Securities and the number of Designated Warrants covered by
Delayed Delivery Contracts.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement, the Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a purchase price to the Underwriters set forth in
Schedule II hereto, the principal amount of Designated Debt Securities and
number of Designated Warrants set forth opposite the name of such Underwriter in
Schedule I hereto less such Underwriter's portion of Contract Securities
determined as provided in the preceding paragraph.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement Among Underwriters, the form of which shall be supplied to
the Company upon request.
Very truly yours,
Household Finance Corporation
By:___________________________
(Title)
Accepted as of the date hereof:
[Name(s) of Representative(s)]
By:___________________________
(Title)
-3-
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
DESIGNATED NUMBER OF
DEBT DESIGNATED
SECURITIES WARRANTS
TO BE TO BE
UNDERWRITER PURCHASED PURCHASED
<S> <C> <C>
[Name(s) of Representative(s)] ........ $
[Name of other Underwriters] .......... _________ _________
Total ............................... $_________ _________
_________ _________
</TABLE>
<PAGE> 30
SCHEDULE II
DESIGNATED DEBT SECURITIES
Title of Designated Debt Securities:
[___%] [Floating Rate] [Zero Coupon] Notes due
Aggregate principal amount:
$__________
Price to Public:
___% of the principal amount of the Designated Debt Securities, plus
accrued interest from __________ to the Time of Delivery [and accrued
amortization, if any, from __________ to the Time of Delivery]
Purchase Price by Underwriters:
___% of the principal amount of the Designated Debt Securities, plus
accrued interest from __________ to the Time of Delivery [and accrued
amortization, if any, from __________ to the Time of Delivery]
Indenture:
Indenture, dated __________, 199 , between the Company and __________, as
Trustee
Maturity:
Interest Rate:
[___%] [Zero Coupon]
Interest Payment Dates:
[months and dates]
Regular Record Dates:
[months and dates]
II-1
<PAGE> 31
Redemption Provisions:
[No provisions for redemption]
[The Designated Debt Securities may be redeemed in whole or in part at
the option of the Company, in the amount of $__________ or an integral
multiple thereof, [on or after __________, at the following redemption
prices (expressed in percentages of principal amount). If redeemed
during the 12-month period beginning
YEAR REDEMPTION PRICE
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling in or after __________, __________,
at the election of the Company, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of
redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Debt Securities are entitled to the benefit of a sinking
fund to retire $_______ principal amount of Designated Debt Securities on
__________ in each of the years through at 100% of their principal amount
plus accrued interest] [, together with [cumulative] [non- cumulative]
redemptions at the option of the Company to retire an additional
$________ principal amount of Designated Debt Securities in the years
through at 100% of their principal amount plus accrued interest].
DESIGNATED WARRANTS
Warrant Exercise Price:
Principal Amount of Designated Debt Securities Issuable on Exercise of One
Warrant:
II-2
<PAGE> 32
Date after which Warrants are Exercisable:
Expiration Date:
Detachable Date:
Bearer or Registered
MISCELLANEOUS
Time of Delivery:
Closing Location:
Type of Funds:
[Other Terms]*:
_______________
* A description of particular tax, accounting or other unusual features of
the Securities should be set forth, or referenced to an attached and
accompanying description, if necessary to the issuer's understanding of
the transaction contemplated. Such a description might appropriately be
in the form in which such features will be described in the Prospectus
Supplement for the offering.
II-3
<PAGE> 33
SCHEDULE III
DELAYED DELIVERY CONTRACT
Household Finance Corporation,
[Name and address of Representative(s)]
Attention:
__________, ____
Dear Sirs:
The undersigned hereby agrees to purchase from Household Finance
Corporation (hereinafter called the "Company"), and the Company agrees to sell
to the undersigned, $________ principal amount of the Company's [full title of
Debt Securities] and [full title of Warrants] (hereinafter collectively called
the "Securities"), offered by the Company's Prospectus dated __________, as
supplemented by a supplement dated __________, __________, receipt of a copy of
which is hereby acknowledged, at a purchase price of ___% of the principal
amount of the Debt Securities, plus accrued interest from the date from which
interest accrues as set forth below, and on the further terms and conditions set
forth in this contract.
The undersigned will purchase the Securities from the Company on _________,
(the "Delivery Date"), and interest on the Securities so purchased will accrue
from __________, __________.
Payment for the Securities which the undersigned has agreed to purchase on
the Delivery Date shall be made to the Company or its order by certified or
official bank check in Federal funds at the office of the Company, 2700 Sanders
Road, Prospect Heights, Illinois 60070, on the Delivery Date upon delivery to
the undersigned of the Securities then to be purchased by the undersigned in
definitive fully registered form and in such denominations and registered in
such names as the undersigned may designate by written or telegraphic
communication addressed to the Company not less than five full business days
prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date shall be subject to the conditions that (1) the
purchase of Securities to be made by the undersigned shall not on the Delivery
Date be prohibited under the laws of the jurisdiction to which the undersigned
is subject and (2) the Company, on or before __________, __________, shall have
sold to the several Underwriters, pursuant to the Underwriting Agreement and
Pricing
III-1
<PAGE> 34
Agreement each dated __________, __________, with the Company, an aggregate
principal amount of Debt Securities equal to $__________, and an aggregate
number of Warrants equal to __________, minus the aggregate principal amount of
Debt Securities and aggregate number of Warrants covered by this contract and
other contracts similar to this contract. The obligation of the undersigned to
take delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payment for Securities
pursuant to other contracts similar to this contract.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the Opinion of Counsel for the Company
delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Securities
hereby agreed to be purchased by it under the laws of the jurisdiction to which
the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract shall be construed in accordance with and governed by the
laws of the State of Illinois.
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this contract) is in the Company's sole discretion and that,
without limiting the foregoing, acceptances of such contracts need not be on a
first-come, first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This
III-2
<PAGE> 35
will become a binding contract between the Company and the undersigned when such
counterpart is so mailed or delivered.
Yours very truly,
By:___________________________
(Signature)
______________________________
(Name and Title)
______________________________
(Address)
Accepted, __________, __________.
Household Finance Corporation
By:___________________________
III-3
<PAGE> 1
EXHIBIT 4.6
INDENTURE
FOR
SENIOR DEBT SECURITIES
dated as of
This Indenture, dated as of the day of , between Household
Finance Corporation, a corporation duly organized and existing under the laws of
the state of Delaware (hereinafter called the "Company") and having its
principal office at 2700 Sanders Road, Prospect Heights, Illinois 60070, and
Harris Trust and Savings Bank (hereinafter called the "Trustee"), and having its
principal Corporate Trust Office at 111 West Monroe Street, Chicago, Illinois
60690.
WITNESSETH:
Whereas, the Company deems it necessary from time to time to borrow money for
its corporate purposes and to issue its debt securities therefor, and to that
end has duly authorized and directed the execution and delivery of this
Indenture to provide for one or more series of its unsecured debentures, notes,
or other evidence of indebtedness, issuable as provided herein; and
Whereas, all things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of Notes to be issued
hereunder by Holders thereof, it is mutually covenanted and agreed, for the
equal proportionate benefit of all Holders, as follows:
Article 1. Standard Provisions. All of the terms, conditions, covenants and
provisions contained in the Company's Standard Multiple-Series Indenture
Provisions for Senior Debt Securities dated as of June 1, 19992 (the
"Provisions"), a copy of which is attached hereto, are incorporated herein by
reference in their entirety and shall be deemed to be a part hereof to the same
extent as if such provisions had been set forth in full herein. All capitalized
terms which re used herein and not otherwise defined herein are defined in the
provisions and are used herein with the same meanings as in the Provisions. The
Provisions, together with this Indenture, are deemed to be the "Indenture".
<PAGE> 2
TESTIMONIUM
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.
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first written above.
Household Finance Corporation
By:
--------------------------
Title:
------------------------
Attest:
- -------------------------------
(Corporate Seal)
Harris Trust and Savings Bank
By:
---------------------------
Title:
------------------------
Attest:
- -------------------------------
(Corporate Seal)
<PAGE> 1
EXHIBIT 4.7
INDENTURE
FOR
SENIOR DEBT SECURITIES
dated as of
This Indenture, dated as of the day of , between Household
Finance Corporation, a corporation duly organized and existing under the laws of
the state of Delaware (hereinafter called the "Company"), and having its
principal office at 2700 Sanders Road, Prospect Heights, Illinois 60070, and The
First National Bank Of Maryland (hereinafter called the "Trustee"), and having
its principal Corporate Trust Office at 25 S. Charles Street, Baltimore,
Maryland 21201.
WITNESSETH:
Whereas, the Company deems it necessary from time to time to borrow money for
its corporate purposes and to issue its debt securities therefor, and to that
end has duly authorized and directed the execution and delivery of this
Indenture to provide for one or more series of its unsecured debentures, notes,
or other evidence of indebtedness, issuable as provided herein; and
Whereas, all things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of Notes to be issued
hereunder by Holders thereof, it is mutually covenanted and agreed, for the
equal proportionate benefit of all Holders, as follows:
Article 1. Standard Provisions. All of the terms, conditions, covenants and
provisions contained in the Company's Standard Multiple-Series Indenture
Provisions for Senior Debt Securities dated as of June 1, 19992 (the
"Provisions"), a copy of which is attached hereto, are incorporated herein by
reference in their entirety and shall be deemed to be a part hereof to the same
extent as if such provisions had been set forth in full herein. All capitalized
terms which re used herein and not otherwise defined herein are defined in the
provisions and are used herein with the same meanings as in the Provisions. The
Provisions, together with this Indenture, are deemed to be the "Indenture".
<PAGE> 2
TESTIMONIUM
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.
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first written above.
Household Finance Corporation
By:
-----------------------------
Title:
--------------------------
Attest:
- -------------------------------
(Corporate Seal)
The First National Bank
of Maryland
By:
-----------------------------
Title:
--------------------------
Attest:
- -------------------------------
(Corporate Seal)
<PAGE> 1
EXHIBIT 4.8
INDENTURE
FOR
SENIOR DEBT SECURITIES
dated as of __________, 19__
This Indenture, dated as of the ___ day of ___________, 19__, between Household
Finance Corporation, a corporation duly organized and existing under the laws of
the state of Delaware (hereinafter called the "Company") and having its
principal office at 2700 Sanders Road, Prospect Heights, Illinois 60070, and
______________________________________________________________ (hereinafter
called the "Trustee"), and having its principal Corporate Trust Office at
___________________________________.
WITNESSETH:
Whereas, the Company deems it necessary from time to time to borrow money for
its corporate purposes and to issue its debt securities therefor, and to that
end has duly authorized and directed the execution and delivery of this
Indenture to provide for one or more series of its unsecured debentures, notes,
or other evidence of indebtedness, issuable as provided herein; and
Whereas, all things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Now, Therefore, This Indenture Witnesseth:
For and in consideration of the premises and the purchase of Notes to be issued
hereunder by Holders thereof, it is mutually covenanted and agreed, for the
equal proportionate benefit of all Holders, as follows:
Article 1. Standard Provisions. All of the terms, conditions, covenants and
provisions contained in the Company's Standard Multiple-Series Indenture
Provisions for Senior Debt Securities dated as of June 1, 19992 (the
"Provisions"), a copy of which is attached hereto, are incorporated herein by
reference in their entirety and shall be deemed to be a part hereof to the same
extent as if such provisions had been set forth in full herein. All capitalized
terms which re used herein and not otherwise defined herein are defined in the
provisions and are used herein with the same meanings as in the Provisions. The
Provisions, together with this Indenture, are deemed to be the "Indenture".
<PAGE> 2
TESTIMONIUM
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.
In Witness Whereof, the parties hereto have caused this Indenture to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first written above.
Household Finance Corporation
By:
----------------------------
Title:
-------------------------
Attest:
- ------------------------------
(Corporate Seal)
-------------------------------
By:
----------------------------
Title:
-------------------------
Attest:
- -------------------------------
(Corporate Seal)
<PAGE> 1
EXHIBIT 4.9
HOUSEHOLD FINANCE CORPORATION
Form of Warrant Agreement
(for warrants sold alone)
THIS WARRANT AGREEMENT dated as of between
Household Finance Corporation, a corporation organized under the laws of the
State of Delaware (the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to) and
as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as
of (the "Indenture"), with , as Trustee (the
"Trustee"), providing for the issuance from time to time of its unsecured debt
securities (the "Debt Securities"), to be issued in one or more series as
provided in the Indenture; and
WHEREAS, the Company proposes to sell warrant certificates
evidencing one or more warrants (the "Warrants" or, individually a "Warrant")
representing the right to purchase [title of debt securities purchasable
through exercise of Warrants] (the "Warrant Debt Securities"), such warrant
certificates and other warrant certificates issued pursuant to this Agreement
hereinafter referred to as the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, exchanged, exercised
and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution
and Delivery of Warrant Certificates
Section 1.01. Issuance of Warrants. Each Warrant Certificate
shall evidence one or more Warrants. Each Warrant evidenced thereby shall
represent the right, subject to the provisions contained herein and therein, to
purchase a Warrant Debt Security in the principal amount of $ .
<PAGE> 2
Section 1.02. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in [bearer] [registered]
form substantially in the form set forth in Exhibit A hereto, shall be dated
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Warrant
Certificates may be listed, or to conform to usage. The Warrant Certificates
shall be signed on behalf of the Company by either its President, one of its
Vice Presidents or one of its Assistant Treasurers under its corporate seal and
attested by its Secretary or any of its Assistant Secretaries. Such signatures
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose,
<PAGE> 3
and no Warrant evidenced thereby shall be exercisable, until such Warrant
Certificate has been countersigned by the manual signature of the Warrant
Agent. Such signature by the Warrant Agent upon any Warrant Certificate
executed by the Company shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates has ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the date
of the execution of this Agreement any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean the bearer of such Warrant
Certificate.]
[If registered Warrants -- The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean any person in whose name at the
time any Warrant Certificate shall be registered
2
<PAGE> 4
upon the books to be maintained by the Warrant Agent for that purpose.]
Section 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate principal amount
not exceeding $ = aggregate principal amount of Warrant Debt Securities
(except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed by
the Company and delivered to the Warrant Agent upon the execution of this
Warrant Agreement or from time to time thereafter. The Warrant Agent shall,
upon receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right
to purchase up to $ aggregate principal amount of Warrant Debt
Securities and shall deliver such Warrant Certificates to or upon the order
of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only
if the Warrant Certificate is issued in exchange or substitution for one or
more previously countersigned Warrant Certificates, [If registered Warrants
- -- or in connection with their transfer], as hereinafter provided or as
provided in Section 2.03(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants
Section 2.01. Warrant Price*. [On , 19 the
exercise price of each Warrant is $ . During the period from
, 19 through and including , 19 the exercise price of
each Warrant will be $ plus [accrued amortization of the original issue
discount] [accrued interest] from , 19 . On , 19 the
exercise price of each Warrant will be $ . During the period from
, 19 , through and including , 19 , the exercise price
of each Warrant will be $ plus [accrued amortization of the original
issue discount] [accrued interest] from , 19 , [in each case, the
original issue discount will be amortized at a % annual rate, computed on
an annual basis using a 360-day year consisting of twelve 30-day months]. Such
purchase price of Warrant Debt Securities is referred to in this Agreement as
the "Warrant Price". [The original issue discount for each $1,000 principal
amount of Warrant Debt Securities is $ ].
Section 2.02. Duration of Warrants. Each Warrant evidenced
by a Warrant Certificate may be exercised in whole at any time, as
- ------------------
* Complete and modify the provisions of this Section as appropriate
to reflect the exact terms of the Offered Warrants and the Warrant
Debt Securities.
3
<PAGE> 5
specified herein, on or after [the date thereof] [ , 19 ] and at or
before 5 p.m. time on , 19 (the "Expiration Date").
Each Warrant not exercised at or before 5 p.m. time on the
Expiration Date shall become void, and all rights of the holder of the Warrant
Certificate evidencing such Warrant under this Agreement shall cease.
Section 2.03. Exercise of Warrants. (a) During the period specified
in Section 2.02 any whole number of Warrants may be exercised by providing
certain information set forth on the reverse side of the Warrant Certificate
and by paying in full, in lawful money of the United States of America, [in
cash or by certified check or official bank check or by bank wire transfer, in
each case] [by bank wire transfer] in immediately available funds, the Warrant
Price for each Warrant exercised, to the Warrant Agent at its corporate trust
office [or at ], provided that such exercise is subject to receipt
within five business days of such [payment] [wire transfer] by the Warrant
Agent of the Warrant Certificate with the form of election to purchase Warrant
Debt Securities set forth on the reverse side of the Warrant Certificate
properly completed and duly executed. The date on which payment in full of the
Warrant Price is received by the Warrant Agent shall, subject to receipt of the
Warrant Certificate as aforesaid, be deemed to be the date on which the Warrant
is exercised. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of the Company maintained with it
and shall advise the Company by telephone at the end of each day on which a
[payment] [wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly confirm
such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee under the Indenture of (i) the
number of Warrants exercised in accordance with the terms and conditions of
this Agreement and the Warrant Certificates; (ii) the instructions of each
holder of the Warrant Certificates evidencing such Warrants with respect to
delivery of the Warrant Debt Securities to which such holder is entitled upon
such exercise; (iii) delivery of Warrant Certificates evidencing the balance,
if any, of the Warrants remaining after such exercise; and (iv) such other
information as the Company or the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant,
the Company shall issue, pursuant to the Indenture, in authorized denominations
to or upon the order of the holder of the Warrant Certificate evidencing such
Warrant, the Warrant Debt Securities to which such holder is entitled [in fully
registered form, registered in such name or names] [in bearer form] as may be
4
<PAGE> 6
directed by such holder*; [provided, however, the Company shall not be required
to deliver any unregistered Warrant Debt Securities in the United States]. If
fewer than all of the Warrants evidenced by such Warrant Certificate were
exercised, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Debt Securities; and in the
event that any such transfer is involved, the Company shall not be required to
issue or deliver any Warrant Debt Securities until such tax or other charge
shall have been paid or it has been established to the Company's satisfaction
that no such tax or other charge is due.
[(e) Issuance of unregistered Warrant Debt Securities upon
exercise of Warrants shall be subject to such arrangements and procedures as
shall be provided pursuant to Section of the Indenture.]
ARTICLE III
Other Provisions Relating to Rights
of Holders of Warrant Certificates
Section 3.01. No Rights as Warrant Debt Security Holder
Conferred by Warrants or Warrant Certificates. No Warrant Certificate or
Warrant evidenced thereby shall entitle the holder thereof to any of the rights
of a holder of Warrant Debt Securities, including, without limitation, the
right to receive the payment of principal of, premium (if any) or interest on
Warrant Debt Securities or to enforce any of the covenants in the Indenture.
Section 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to them and, in the case of mutilation, upon surrender
thereof to the Warrant Agent for cancellation, then, in the absence of notice
to the Company or the Warrant Agent that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute, and an authorized
officer of the Warrant Agent shall manually countersign and deliver, in
exchange for or in lieu of the lost,
- -----------------
* Subject to change in accordance with changes in tax laws and
regulations.
5
<PAGE> 7
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate
of the same tenor and evidencing the same number of Warrants. Upon the
issuance of any new Warrant Certificate under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Warrant Agent) in connection therewith.
Every substitute Warrant Certificate executed and delivered pursuant to this
Section in lieu of any lost, stolen or destroyed Warrant Certificate shall
represent an additional contractual obligation of the Company, whether or not
the lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly
executed and delivered 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 of mutilated, lost, stolen or destroyed Warrant
Certificates.
Section 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder of
a Warrant Certificate, without the consent of the Warrant Agent, the Trustee,
the holder of any Warrant Debt Securities or the holder of any other Warrant
Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce or otherwise in respect of, his right to exercise the
Warrants evidenced by his Warrant Certificate in the manner provided in his
Warrant Certificate and in this Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates
Section 4.01. Exchange and Transfer of Warrant Certificates.
Upon surrender at the corporate trust office of the Warrant Agent [or
], Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants [If registered
Warrants -- or may be transferred in whole or in part]; provided that such
other Warrant Certificates evidence the same aggregate number of Warrants as
the Warrant Certificates so surrendered. [If registered Warrants -- The
Warrant Agent shall keep, at its corporate trust office [and at ],
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [or ] for exchange [or transfer],
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer, all in form satisfactory to the Company
6
<PAGE> 8
and the Warrant Agent.] No service charge shall be made for any exchange [or
transfer] of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that
may be imposed in connection with any such exchange [or transfer]. Whenever
any Warrant Certificates are so surrendered for exchange [or transfer] an
authorized officer of the Warrant Agent shall manually countersign and deliver
to the person or persons entitled thereto a Warrant Certificate or Warrant
Certificates duly authorized and executed by the Company, as so requested. The
Warrant Agent shall not be required to effect any exchange [or transfer] which
will result in the issuance of a Warrant Certificate evidencing a fraction of a
Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant
Certificates issued upon any exchange [or transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to the same benefits under this Agreement, as the Warrant
Certificates surrendered for such exchange [or transfer].
Section 4.02. Treatment of Holders of Warrant Certificates.
[Bearer warrants -- Each Warrant Certificate shall be transferable by delivery
and shall be deemed negotiable and the bearer of each Warrant Certificate may
be treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.] [Registered Warrants -- The
Company and the Warrant Agent may treat the registered holder as the absolute
owner thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.]
Section 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange [transfer] or exercise of the
Warrants evidenced thereby shall, if surrendered to the Company, be delivered
to the Warrant Agent and all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall
not be reissued and, except as expressly permitted by this Agreement, no
Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
Concerning the Warrant Agent
Section 5.01. Warrant Agent. The Company hereby
appoints as Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates, upon the
7
<PAGE> 9
terms and subject to the conditions herein set forth; and
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and
hereby and such further powers and authority to act on behalf of the Company as
the Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in the Warrant
Certificates are subject to and governed by the terms and provisions hereof.
Section 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim of
such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advise of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice of such
counsel.
(d) Documents. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) Certain Transactions. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or
8
<PAGE> 10
acquire any interest in, Warrants, with the same rights that it or they would
have if it were not the Warrant Agent hereunder, and, to the extent permitted
by applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Debt Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the
Warrant Agent from acting as Trustee under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall have
no liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth, and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligations to take any action
hereunder which may tend to subject it to any expense or liability,
reimbursement for which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
responsible for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained herein or in the Warrant Certificates or in the case of
the receipt of any written demand from a holder of a Warrant Certificate with
respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 6.02 hereof,
to make any demand upon the Company.
Section 5.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be
9
<PAGE> 11
a Warrant Agent hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided that
such date shall be not less than three months after the date on which such
notice is given, unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall
take effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall continue to
the extent set forth therein, notwithstanding the resignation or removal of the
Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under Title II
of the United States Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy law or similar law or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered for relief
against it under the provisions of Title II of the United States Code, as now
constituted or hereafter amended, or under any other applicable Federal or
State bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as set forth in subsection (b) above, shall be appointed by
the Company by an instrument in writing, filed with the successor Warrant
Agent. Upon the appointment as aforesaid of a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the Warrant
Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such
10
<PAGE> 12
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies, securities
and other property on deposit with or held by such predecessor, as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent shall be the
successor Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided
that it shall be qualified as set forth above in subsection (b).
ARTICLE VI
Miscellaneous
Section 6.01 Amendment. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided
that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
Section 6.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
Section 6.03. Addresses. Any communications from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
, attention: , and any
communications from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Household Finance Corporation, 2700 Sanders
Road, Prospect Heights, Illinois 60070, attention: Treasurer (or such other
address as shall be specified in writing by the Warrant Agent or by the
Company).
11
<PAGE> 13
Section 6.04. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued hereunder
and of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of .
Section 6.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Debt Securities deliverable upon exercise of Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the delivery
of the Warrant Debt Securities issued upon such exercise, a Prospectus.
Section 6.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and State laws (including without limitation a registration statement
in respect of the Warrants and Warrant Debt Securities under the Securities Act
of 1933), which may be or become requisite in connection with the issuance,
sale, transfer, and delivery of the Warrant Certificates, the exercise of the
Warrants, the issuance, sale, transfer and delivery of the Warrant Debt
Securities issued upon exercise of the Warrants or upon the expiration of the
period during which the Warrants are exercisable.
Section 6.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement expressed or implied and nothing that may be inferred
from any of the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof; and all covenants, conditions,
stipulations, promises and agreements in this Agreement contained shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their
successors and of the holders of the Warrant Certificates.
Section 6.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
12
<PAGE> 14
Section 6.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF, Household Finance Corporation has caused
this Agreement to be signed by one of its duly authorized officers, and its
corporate seal to be affixed hereunto, and the same to be attested by its
Secretary or one of its Assistant Secretaries; and
has caused this Agreement to be signed by one of its duly authorized
officers, and its corporate seal to be affixed hereunto, and the same to be
attested by its Secretary or one of its Assistant Secretaries, all as of the
day and year first above written.
HOUSEHOLD FINANCE CORPORATION
By_________________________________
Attest:
____________________
By_________________________________
as Warrant Agent
Attest:
_____________________
13
<PAGE> 15
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
Warrant Certificates representing
Warrants to purchase
[Title of Warrant Debt Securities]
as described herein.
HOUSEHOLD FINANCE CORPORATION
WARRANTS TO PURCHASE
[Title of Warrant Debt Securities]
VOID AFTER 5 P.M. TIME ON , 19
[No.] Warrants
This certifies that [the bearer is the] [ or registered
assigns is the registered] owner of the above indicated number of Warrants,
each Warrant entitling such [bearer] [owner] to purchase, at any time [after 5
p.m. time on , 19 and] on or before 5 p.m.
time on , 19 , $ principal amount of [Title of Warrant
Debt Securities] (the "Warrant Debt Securities"), of HOUSEHOLD FINANCE
CORPORATION (the "Company"), issued and to be issued under the Indenture (as
hereinafter defined), on the following basis:* [on , 19 the
exercise price of each Warrant is $ ; during the period from ,
19 through and including , 19 , the exercise price of each Warrant
will be $ plus [accrued amortization of the original issue discount]
[accrued interest] from , 19 ; on , 19 the exercise
price of each Warrant will be $ ; during the period from , 19 ,
through and including , 19 , the exercise price of each
Warrant will be $ plus [accrued amortization of the original issue
discount] [accrued interest]
- ------------------
* Complete and modify the following provisions as appropriate to
reflect the exact terms of the Offered Warrants and the Warrant Debt
Securities.
<PAGE> 16
from , 19 ; [in each case, the original issue discount will be
amortized at a % annual rate, computed on an annual basis, using a 360-day
year consisting of twelve 30-day months] (the "Warrant Price"). [The original
issue discount for each $1,000 principal amount of Warrant Debt Securities is
$ .] The holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof and by paying in full in
lawful money of the United States of America, [in cash or by certified check
or official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in immediately available funds, the Warrant Price for each Warrant
exercised to the Warrant Agent [as hereinafter defined] and by surrendering
this Warrant Certificate, with the purchase form on the back hereof duly
executed at the corporate trust office of [name of Warrant Agent], or its
successor as warrant agent (the "Warrant Agent"), [or ] at the address
specified on the reverse hereof and upon compliance with and subject to the
conditions set forth herein and in the Warrant Agreement [as hereinafter
defined].
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Debt Securities in registered
form in denominations of $ and any integral multiples thereof. Upon
any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement, dated as of , 19 (the "Warrant
Agreement"), between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ].
The Warrant Debt Securities to be issued and delivered upon
the exercise of the Warrants evidenced by this Warrant Certificate will be
issued under and in accordance with an Indenture dated as of (the
"Indenture"), between the Company and , a
organized and existing under the laws of ,
as Trustee, ( and any successor to such Trustee
being hereinafter referred to as the "Trustee") and will be subject to the
terms and provisions contained in the Indenture. [In particular, issuance of
unregistered Warrant Debt Securities upon exercise of Warrants shall be subject
to such arrangements and procedures as shall be provided pursuant to
Section of the Indenture.] Copies of the Indenture and the form of
the Warrant Debt Securities are on file at the corporate trust office of the
Trustee [and at ].
2
<PAGE> 17
[If Bearer Warrants -- This Warrant Certificate, and all
rights hereunder, may be transferred by delivery and the Company and the
Warrant Agent may treat the bearer hereof as the owner for all purposes.]
[If Registered Warrants -- This Warrant Certificate may be
transferred when surrendered at the corporate trust office of the Warrant Agent
[or ] by the registered owner or his assigns, in person or by an
attorney duly authorized in writing, in the manner and subject to the
limitations provided in the Warrant Agreement.]
After countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent for Warrant
Certificates representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Debt Securities, including,
without limitation, the right to receive payments of principal of (premium, if
any) or interest, if any, on the Warrant Debt Securities or to enforce any of
the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory for
any purpose until countersigned by the Warrant Agent.
Dated as of , 19 .
HOUSEHOLD FINANCE CORPORATION
By_________________________________
Attest:
________________________
Countersigned:
________________________
As Warrant Agent
By______________________
Authorized Signature
3
<PAGE> 18
[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)
To exercise the Warrants evidenced hereby, the holder must pay
[in cash or by certified check or official bank check or by bank wire transfer]
[by bank wire transfer] in immediately available funds the Warrant Price in
full for Warrants exercised to [insert name of Warrant Agent] Corporate Trust
Department, [insert address of Warrant Agent], Attn: [or ],
which [payment] [wire transfer] must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate
in person or by mail (registered mail is recommended) to the Warrant Agent at
the addresses set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of
the [payment] [wire transfer].
[FORM OF ELECTION TO PURCHASE]
(To be executed upon exercise of Warrant.)
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase
$ principal amount of the [Title of Debt Securities] (the "Warrant
Debt Securities") of Household Finance Corporation and represents that he has
tendered payment for such Warrant Debt Securities [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer] in immediately available funds to the order of Household Finance
Corporation c/o [insert name and address of Warrant Agent], in the amount of
$ in accordance with the terms hereof. The undersigned requests that said
principal amount of Warrant Debt Securities be in [bearer form in the
authorized denominations] [fully registered form in the authorized
denominations, registered in such names and delivered] all as specified in
accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrants evidenced hereby be issued and
delivered to the undersigned unless otherwise specified in the instructions
below.
Dated:
___________________________
___________________________ Name_________________________________
(Insert Social Security (Please Print)
or Other Identifying Number
of Holder) Address______________________________
______________________________
Signature____________________________
<PAGE> 19
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at ______________________________________________
______________________________________________
______________________________________________
______________________________________________
$________________
By mail at ______________________________________________
______________________________________________
______________________________________________
______________________________________________
(Instructions as to form and delivery of Warrant Debt
Securities and, if applicable, Warrant Certificates evidencing unexercised
Warrants.)
2
<PAGE> 20
Reverse of Warrant Certificate
*[CERTIFICATE FOR DELIVERY OF BEARER BONDS]
HOUSEHOLD FINANCE CORPORATION
Warrant Debt Securities
TO: HOUSEHOLD FINANCE CORPORATION
[Name of Trustee],
as Trustee
This certificate is submitted in connection with our request
that you deliver to us $ principal amount of Warrant Debt Securities in
bearer form upon exercise of Warrants. We hereby certify that either (a) none
of such Warrant Debt Securities will be held by or on behalf of a United States
Person, or (b) if a United States Person will have a beneficial interest in
such Warrant Debt Securities, such person is described in Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1954, as amended, and
the regulations thereunder. As used herein, "United States Person" means a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof or an estate or trust whose income from sources
without the United States is includible in gross income for United States
Federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States.
We understand that this certificate is required in connection
with certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
_____________________________________
(Please print name)
- ------------------
* Subject to changes in accordance with changes in tax laws and
regulations.
<PAGE> 21
[If registered Warrant]
ASSIGNMENT
[FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES
TO TRANSFER WARRANTS EVIDENCED HEREBY]
FOR VALUE RECEIVED hereby
sells, assigns and transfers unto
Please insert social security
or other identifying number
________________________________
______________________________
(Please print name and address
including zip code)
_______________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does
hereby irrevocably constitute and appoint Attorney, to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated: ________________________________
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this
Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member
broker of the New York Stock Exchange.)
Signature Guaranteed:
______________________________
<PAGE> 22
HOUSEHOLD FINANCE CORPORATION
Form of Warrant Agreement
(for warrants sold attached to debt securities)
THIS WARRANT AGREEMENT dated as of between
Household Finance Corporation, a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter
referred to) and as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company has entered into an Indenture dated as of
(the "Indenture"), with , as Trustee (the "Trustee"),
providing for the issuance from time to time of its unsecured debt securities
("Debt Securities"), to be issued in one or more series as provided in the
Indenture; and
WHEREAS, the Company proposes to sell [title of Debt
Securities being offered] (the "Offered Debt Securities"), with warrant
certificates evidencing one or more warrants (the "Warrants" or, individually a
"Warrant") representing the right to purchase [title of Debt Securities
purchasable through exercise of Warrants] (the "Warrant Debt Securities"), such
warrant certificates and other warrant certificates issued pursuant to this
Agreement hereinafter referred to as the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, exchanged, exercised
and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution
and Delivery of Warrant Certificates
SECTION 1.01. Issuance of Warrants. Warrants shall be
initially issued in connection with the issuance of the Offered Debt Securities
[but shall be separately transferable on and after , 19 (the
"Detachable Date")] [shall not be separately transferable] and each Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase a Warrant Debt Security in the principal amount of
$ . Warrant Certificates shall be initially issued in units with
<PAGE> 23
the Offered Debt Securities and each Warrant Certificate included in such unit
shall evidence Warrants for each $ principal amount of
Offered Debt Securities included in such unit.
SECTION 1.02. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in [bearer] [registered]
form substantially in the form set forth in Exhibit A hereto, shall be dated
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Warrant
Certificates may be listed, or to conform to usage. The Warrant Certificates
shall be signed on behalf of the Company by either its President, one of its
Vice Presidents or one of its Assistant Treasurers under its corporate seal and
attested by its Secretary or any of its Assistant Secretaries. Such signatures
may be manual or facsimile signatures of such authorized officers and may be
imprinted or otherwise reproduced on the Warrant Certificates. The seal of the
Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be exercisable, until such Warrant Certificate
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates has ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Warrant
Certificate, shall be the proper officers of the Company, although at the date
of the execution of this Agreement any such person was not such officer.
[If bearer Warrants -- The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean [If Offered Debt Securities with
Warrants which are not immediately detachable, prior to the Detachable Date,
the registered owner of the Offered
2
<PAGE> 24
Debt Security to which such Warrant Certificate was initially attached (or the
bearer if the Offered Debt Security is a bearer Debt Security), and after such
Detachable Date] the bearer of such Warrant Certificate.]
[If registered Warrants -- The term "holder" or "holder of a
Warrant Certificate" as used herein shall mean any person in whose name at the
time any Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose. [If Offered Debt Securities
with Warrants which are not immediately detachable, or upon the register of the
Offered Debt Securities prior to the Detachable Date. The Company will, or
will cause the registrar of the Offered Debt Securities to make available at
all times to the Warrant Agent such information as to holders of the Offered
Debt Securities with Warrants as may be necessary to keep the Warrant Agent's
records up to date.]]
SECTION 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate principal amount not
exceeding $ aggregate principal amount of Warrant Debt Securities
(except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Warrant
Agreement or from time to time thereafter. The Warrant Agent shall, upon
receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right to
purchase up to $ aggregate principal amount of Warrant Debt Securities and
shall deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously countersigned
Warrant Certificates, [If registered Warrants -- or in connection with their
transfer], as hereinafter provided or as provided in Section 2.03(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants
SECTION 2.01. Warrant Price.* [On , 19 the
exercise price of each Warrant is $ . During the period from
, 19 through and including , 19 the exercise price of each
Warrant will be $ plus [accrued amortization of the original issue
discount] [accrued interest] from , 19 . On , 19 the
exercise price of
- --------------
* Complete and modify the provisions of this Section as appropriate
to reflect the exact terms of the Offered Warrants and the Warrant
Debt Securities.
3
<PAGE> 25
each Warrant will be $ . During the period from , 19 ,
through and including , 19 , the exercise price of each Warrant
will be $ plus [accrued amortization of the original issue discount]
[accrued interest] from , 19 , [in each case, the original issue discount
will be amortized at a % annual rate, computed on an annual basis using a
360-day year consisting of twelve 30-day months]. Such purchase price of
Warrant Debt Securities is referred to in this Agreement as the "Warrant
Price." [The original issue discount for each $1,000 principal amount of
Warrant Debt Securities is $ ].
SECTION 2.02. Duration of Warrants. Each Warrant evidenced by a
Warrant Certificate may be exercised in whole at any time, as specified
herein, on or after [the date thereof] [ , 19 ] and at or before
5 p.m. time on , 19 (the "Expiration Date"). Each Warrant not
exercised at or before the close of business on the Expiration Date shall
become void, and all rights of the holder of the Warrant Certificate
evidencing such Warrant under this Agreement shall cease.
SECTION 2.03. Exercise of Warrants. (a) During the period specified
in Section 2.02 any whole number of Warrants may be exercised by providing
certain information set forth on the reverse side of the Warrant Certificate
and by paying in full, in lawful money of the United States of America, [in
cash or by certified check or official bank check or by bank wire transfer, in
each case,] [by bank wire transfer] in immediately available funds the Warrant
Price for each Warrant exercised to the Warrant Agent at its corporate trust
office [or at ], provided that such exercise is subject to receipt
within five business days of such [payment] [wire transfer] by the Warrant
Agent of the Warrant Certificate with the form of election to purchase Warrant
Debt Securities set forth on the reverse side of the Warrant Certificate
properly completed and duly executed. The date on which payment in full of the
Warrant Price is received by the Warrant Agent shall, subject to receipt of the
Warrant Certificate as aforesaid, be deemed to be the date on which the Warrant
is exercised. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of the Company maintained with it
and shall advise the Company by telephone at the end of each day on which a
[payment] [wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly confirm
such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company and the Trustee under the Indenture of (i) the
number of Warrants exercised in accordance with the terms and conditions of
this Agreement and the Warrant Certificates, (ii) the instructions of each
holder of the Warrant Certificates evidencing such Warrants with respect to
delivery of the Warrant Debt Securities to which such holder is entitled upon
4
<PAGE> 26
such exercise, (iii) delivery of Warrant Certificates evidencing the balance,
if any, of the Warrants remaining after such exercise, and (iv) such other
information as the Company or the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant,
the Company shall issue, pursuant to the Indenture, in authorized denominations
to or upon the order of the holder of the Warrant Certificate evidencing such
Warrant, the Warrant Debt Securities to which such holder is entitled, [in
fully registered form, registered in such name or names] [in bearer form] as
may be directed by such holder* ;[provided, however, the Company shall not be
required to deliver any unregistered Warrant Debt Securities in the United
States]. If fewer than all of the Warrants evidenced by such Warrant
Certificate were exercised, the Company shall execute, and an authorized
officer of the Warrant Agent shall manually countersign and deliver, a new
Warrant Certificate evidencing the number of such Warrants remaining
unexecuted.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Debt Securities; and in the
event that any such transfer is involved, the Company shall not be required to
issue or deliver any Warrant Debt Security until such tax or other charge shall
have been paid or it has been established to the Company's satisfaction that no
such tax or other charge is due.
[(e) Issuance of unregistered Warrant Debt Securities upon
exercise of Warrants shall be subject to such arrangements and procedures as
shall be provided pursuant to Section of the Indenture.]
ARTICLE III
Other Provisions Relating to Rights
of Holders of Warrant Certificates
SECTION 3.01. No Rights as Warrant Debt Security Holder
Conferred by Warrants or Warrant Certificates. No Warrant Certificate or
Warrant evidenced thereby shall entitle the holder thereof to any of the rights
of a holder of Warrant Debt Securities, including, without limitation, the
right to receive the payment of principal of, premium (if any) or interest on
Warrant Debt Securities or to enforce any of the covenants in the Indenture.
__________________
* Subject to change in accordance with changes in tax laws and
regulations.
5
<PAGE> 27
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Company and the Warrant Agent of evidence
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to them and, in the case of mutilation, upon surrender
thereof to the Warrant Agent for cancellation, then, in the absence of notice
to the Company or the Warrant Agent that such Warrant Certificate has been
acquired by a bona fide purchaser, the Company shall execute, and an authorized
officer of the Warrant Agent shall manually countersign and deliver, in
exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant
Certificate, a new Warrant Certificate of the same tenor and evidencing the
same number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Warrant
Agent) in connection therewith. Every substitute Warrant Certificate executed
and delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered 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 of mutilated, lost, stolen
or destroyed Warrant Certificates.
SECTION 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder of
a Warrant Certificate, without the consent of the Warrant Agent, the Trustee,
the holder of any Warrant Debt Securities or the holder of any other Warrant
Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce or otherwise in respect of, his right to exercise the
Warrants evidenced by his Warrant Certificate in the manner provided in his
Warrant Certificate and in this Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates
SECTION 4.01. Exchange and Transfer of Warrant Certificates.
[If Offered Debt Securities with Warrants which are immediately detachable --
Upon] [If Offered Debt Securities with Warrants which are not immediately
detachable -- Prior to the Detachable Date a Warrant Certificate may be
exchanged or transferred only together with the Offered Debt Security to which
6
<PAGE> 28
the Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered Debt
Security. Prior to the Detachable Date, each transfer of the Offered Debt
Security [on the register of the Offered Debt Securities] shall operate also to
transfer the related Warrant Certificates. After the Detachable Date upon]
surrender at the corporate trust office of the Warrant Agent [or ],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants [If registered
Warrants -- or may be transferred in whole or in part], provided that such
other Warrant Certificates evidence the same aggregate number of Warrants as
the Warrant Certificates so surrendered. [If registered Warrants -- The
Warrant Agent shall keep, at its corporate trust office [and at ],
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon the surrender of the Warrant Certificates to the
Warrant Agent at its corporate trust office [or ] for exchange [or
transfer], properly endorsed or accompanied by appropriate instruments of
transfer and written instructions for transfer, all in form satisfactory to the
Company and the Warrant Agent]. No service charge shall be made for any
exchange [or transfer] of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange
[or transfer]. Whenever any Warrant Certificates are so surrendered for
exchange [or transfer] an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or transfer] which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange [or
transfer] of Warrant Certificates shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificates surrendered for such exchange
[or transfer].
SECTION 4.02. Treatment of Holders of Warrant Certificates.
[If Offered Debt Securities with bearer Warrants which are not immediately
detachable -- Subject to Section 4.01, each] [If Offered Debt Securities with
bearer Warrants which are immediately detachable -- Each] Warrant Certificate
shall be transferable by delivery and shall be deemed negotiable and the bearer
of each Warrant Certificate may be treated by the Company, the Warrant Agent
and all other persons dealing with such bearer as the absolute owner thereof
for any purpose and as the person entitled to exercise the rights represented
by the Warrants evidenced thereby, any notice to the contrary notwithstanding.]
[If registered Warrants which are not immediately detachable --
7
<PAGE> 29
Every holder of a Warrant Certificate, by accepting the same, consents and
agrees with the Company, the Warrant Agent and with every subsequent holder of
such Warrant Certificate that until the Warrant Certificate is transferred on
the books of the Warrant Agent [or the register of the Offered Debt Securities
prior to the Detachable Date], the Company and the Warrant Agent may treat the
registered holder as the absolute owner thereof for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.]
SECTION 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange [transfer] or exercise of the
Warrants evidenced thereby shall, if surrendered to the Company, be delivered
to the Warrant Agent and all Warrant Certificates surrendered or so delivered
to the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall
not be reissued and, except as expressly permitted by this Agreement, no
Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall deliver to the Company from time to time or otherwise
dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
Concerning the Warrant Agent
SECTION 5.01. Warrant Agent. The Company hereby appoints
as Warrant Agent of the Company in respect of the Warrants and the
Warrant Certificates, upon the terms and subject to the conditions herein set
forth, and hereby accepts such appointment. The Warrant Agent
shall have the powers and authority granted to and conferred upon it in the
Warrant Certificates and hereby and such further powers and authority to act
on behalf of the Company as the Company may hereafter grant to or confer upon
it. All of the terms and provisions with respect to such powers and authority
contained in the Warrant Certificates are subject to and governed by the terms
and provisions hereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the
8
<PAGE> 30
Warrant Agent in connection with the services rendered hereunder by the Warrant
Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold
it harmless against, any loss, liability or expense incurred without negligence
or bad faith on the part of the Warrant Agent, arising out of or in connection
with its acting as Warrant Agent hereunder, as well as the costs and expenses
of defending against any claim of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advise of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice of such
counsel.
(d) Documents. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) Certain Transactions. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants, with the same rights that it or they would have if it
were not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Debt Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the
Warrant Agent from acting as Trustee under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall have
no liability for interest on any monies at any time received by it pursuant to
any of the provisions of this Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or
9
<PAGE> 31
representations herein or in the Warrant Certificates (except as to the Warrant
Agent's countersignature thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligations to take any action
hereunder which may tend to subject it to any expense or liability,
reimbursement for which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
responsible for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained herein or in the Warrant Certificates or in the case of
the receipt of any written demand from a holder of a Warrant Certificate with
respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 6.02 hereof,
to make any demand upon the Company.
SECTION 5.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided that
such date shall be not less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall
take effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall continue to
the extent set forth therein, notwithstanding the resignation or removal of the
Warrant Agent.
10
<PAGE> 32
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under Title II
of the United States Code, as now constituted or hereafter amended, or under
any other applicable Federal or State bankruptcy law or similar law or make an
assignment for the benefit of its creditors or shall consent to the appointment
of a receiver or custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts as they mature,
or if a receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be entered for
relief against it under the provisions of Title II of the United States Code,
as now constituted or hereafter amended, or under any other applicable Federal
or State bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as set forth in subsection (b) above, shall be appointed by
the Company by an instrument in writing, filed with the successor Warrant
Agent. Upon the appointment of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease to
be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer,
deliver and pay over, and such successor Warrant Agent shall be entitled to
receive, all monies, securities and other property on deposit with or held by
such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business of the
Warrant Agent shall be the successor Warrant Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that it shall be qualified as set forth above in
subsection (b).
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<PAGE> 33
ARTICLE VI
Miscellaneous
SECTION 6.01 Amendment. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided
that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
SECTION 6.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 6.03. Addresses. Any communications from the Company
to the Warrant Agent with respect to this Agreement shall be addressed
to , Attention: , and any
communications from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to
, Attention: (or such
other address as shall be specified in writing by the Warrant Agent or by the
Company).
SECTION 6.04. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued hereunder
and of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of .
SECTION 6.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Debt Securities deliverable upon exercise of Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the delivery
of the Warrant Debt Securities issued upon such exercise, a Prospectus.
SECTION 6.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and State laws (including without limitation a registration statement
in respect
12
<PAGE> 34
of the Warrants and Warrant Debt Securities under the Securities Act of 1933),
which may be or become requisite in connection with the issuance, sale,
transfer and delivery of the Warrant Certificates, the exercise of the
Warrants, the issuance, sale, transfer and delivery of the Warrant Debt
Securities issued upon exercise of the Warrants or upon the expiration of the
period during which the Warrants are exercisable.
SECTION 6.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement expressed or implied and nothing that may be inferred
from any of the provisions hereof is intended, or shall be construed, to confer
upon, or give to, any person or corporation other than the Company, the Warrant
Agent and the holders of the Warrant Certificates any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition,
stipulation, promise or agreement hereof; and all covenants, conditions,
stipulations, promises and agreements in this Agreement contained shall be for
the sole and exclusive benefit of the Company and the Warrant Agent and their
successors and of the holders of the Warrant Certificates.
SECTION 6.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
SECTION 6.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF, Household Finance Corporation has caused
this Agreement to be signed by one of its duly authorized officers, and its
corporate seal to be affixed hereunto, and the same to be attested by its
Secretary or one of its
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<PAGE> 35
Assistant Secretaries, all as of the day and year first above written.
HOUSEHOLD FINANCE CORPORATION
By_________________________________
Attest:
____________________
By__________________________________
as Warrant Agent
Attest:
_____________________
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<PAGE> 36
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend if Prior to this
----------------- Warrant Certificate cannot
Debt Securities with be transferred or exchanged
- -------------------- unless attached to a [Title
Warrants which are not of Offered Debt Securities]
- ----------------------
immediately detachable:
- ----------------------
Exercisable Only if Countersigned By the Warrant
Agent as Provided Herein
Warrant Certificates representing
Warrants to purchase
[Title of Warrant Debt Securities]
as described herein.
HOUSEHOLD FINANCE CORPORATION
Warrants to Purchase
[Title of Warrant Debt Securities]
Void After 5 P.M. Time on
, 19
[No.] Warrants
This certifies that [the bearer is the] [ or registered
assigns is the registered] owner of the above-indicated number of Warrants,
each Warrant entitling such [bearer] [owner] to purchase, at any time [after 5
P.M. time on , 19 and] on or before 5 P.M.
time on , 19 , $ principal amount of [Title of Warrant
Debt Securities] (the "Warrant Debt Securities"), of Household Finance
Corporation (the "Company"), issued and to be issued under the Indenture (as
hereinafter defined), on the following basis:* [on , 19 the
exercise price of each Warrant is $ ; during the period from , 19 ,
through and including
* Complete and modify the following provision as appropriate to
reflect the exact terms of the Offered Warrants and the Warrant Debt
Securities.
<PAGE> 37
, 19 , the exercise price of each Warrant will be $ plus [accrued
amortization of the original issue discount] [accrued interest] from
, 19 ; on , 19 the exercise price of each Warrant will be $ ;
during the period from , 19 , through and including ,
19 the exercise price of each Warrant will be $ plus [accrued
amortization of the original issue discount] [accrued interest] from ,
19 ; [in each case, the original issue discount will be amortized at a %
annual rate, computed on an annual basis, using a 360-day year consisting of
twelve 30-day months] (the "Warrant Price"). [The original issue discount for
each $1,000 principal amount of Warrant Debt Securities is $ .] The
holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full in lawful money
of the United States of America, [in cash or by certified check or official
bank check or by bank wire transfer, in each case,] [by bank wire transfer] in
immediately available funds, the Warrant Price for each Warrant exercised to
the Warrant Agent (as hereinafter defined) and by surrendering this Warrant
Certificate, with the purchase form on the back hereof duly executed at the
corporate trust office of [name of Warrant Agent], or its successor as warrant
agent (the "Warrant Agent"), [or ] at the address specified on the reverse
hereof and upon compliance with and subject to the conditions set forth herein
and in the Warrant Agreement (as hereinafter defined).
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Debt Securities in registered
form in denominations of $ and any integral multiples thereof. Upon
any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement, dated as of , 19 (the "Warrant
Agreement"), between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ].
The Warrant Debt Securities to be issued and delivered upon
the exercise of the Warrants evidenced by this Warrant Certificate will be
issued under and in accordance with an Indenture dated as of (the
"Indenture"), between the Company and , a
organized and existing under the laws of ,
as Trustee, ( and any successor to such Trustee
being hereinafter referred to as the "Trustee") and will be subject to the
terms and provisions contained in the Indenture.
2
<PAGE> 38
[In particular, issuance of unregistered Warrant Debt Securities upon exercise
of Warrants shall be subject to such arrangements and procedures as shall be
provided pursuant to Section of the Indenture.] Copies of the Indenture
and the form of the Warrant Debt Securities are on file at the corporate office
of the Trustee [and at ].
[If Offered Debt Securities with bearer Warrants which are not
immediately detachable -- Prior to , 19 this Warrant Certificate may
be exchanged or transferred only together with the [Title of Offered Debt
Securities] ("Offered Debt Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Debt Security. After such date,
this [If Offered Debt Securities with bearer Warrants which are immediately
detachable -- This] Warrant Certificate, and all rights hereunder, may be
transferred by delivery, and the Company and the Warrant Agent may treat the
bearer hereof as the owner for all purposes.]
[If Offered Debt Securities with registered Warrants which are
not immediately detachable -- Prior to , 19 this Warrant Certificate may
be exchanged or transferred only together with the [Title of Offered Debt
Securities] ("Offered Debt Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting, or in conjunction
with, an exchange or transfer of such Offered Debt Security. After such date,
this [If Offered Debt Securities with registered Warrants which are immediately
detachable -- This] Warrant Certificate may be transferred when surrendered at
the corporate trust office of the Warrant Agent [or ] by the
registered owner or his assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.]
[If Offered Debt Securities with Warrants which are not
immediately detachable -- Except as provided in the immediately preceding
paragraph, after] [If Offered Debt Securities with Warrants which are
immediately detachable -- After] countersignature by the Warrant Agent and
prior to the expiration of this Warrant Certificate, this Warrant Certificate
may be exchanged at the corporate trust office of the Warrant Agent for Warrant
Certificates representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Debt Securities, including,
without limitation, the right to receive payments of principal of (premium, if
any) or interest, if any, on the Warrant Debt Securities or to enforce any of
the covenants of the Indenture.
3
<PAGE> 39
This Warrant Certificate shall not be valid or obligatory for
any purpose until countersigned by the Warrant Agent.
Dated as of , 19 .
HOUSEHOLD FINANCE CORPORATION
By________________________________
Attest:
________________________
Countersigned:
________________________
As Warrant Agent
By______________________
Authorized Signature
4
<PAGE> 40
[Reverse of Warrant Certificate]
(Instructions for Exercise of Warrant)
To exercise the Warrants evidenced hereby, the holder must pay
[in cash or by certified check or official bank check or by bank wire transfer]
[by bank wire transfer] in immediately available funds the Warrant Price in
full for Warrants exercised to [insert name of Warrant Agent] Corporate Trust
Department [insert address of Warrant Agent], Attn. [or
], which [payment] [wire transfer] must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate
in person or by mail (registered mail is recommended) to the Warrant Agent at
the addresses set forth below. This Warrant Certificate, completed and duly
executed, must be received by the Warrant Agent within five business days of
the [payment] [wire transfer].
[Form of Election to Purchase]
(to be executed upon exercise of Warrant)
The undersigned hereby irrevocably elects to exercise
Warrants, evidenced by this Warrant Certificate, to purchase $
principal amount of the [Title of Debt Securities] (the "Warrant Debt
Securities") of and represents that he has tendered payment for
such Warrant Debt Securities [in cash or by certified check or official bank
check or by bank wire transfer, in each case,] [by bank wire transfer] in
immediately available funds to the order of Household Finance Corporation c/o
[insert name and address of Warrant Agent] in the amount of $ in
accordance with the terms hereof. The undersigned requests that said principal
amount of Warrant Debt Securities be in [bearer form in the authorized
denominations] [fully registered form in the authorized denominations,
registered in such names and delivered] all as specified in accordance with
the instructions set forth below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrants evidenced hereby be issued and
delivered to the undersigned unless otherwise specified in the instructions
below.
Dated:
___________________________
___________________________ Name_________________________________
(Insert Social Security (Please Print)
or Other Identifying Number
of Holder) Address______________________________
______________________________
Signature____________________________
<PAGE> 41
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at ______________________________________________
______________________________________________
______________________________________________
______________________________________________
By mail at ______________________________________________
______________________________________________
______________________________________________
______________________________________________
(Instructions as to form and delivery of Warrant Debt
Securities and, if applicable, Warrant Certificates evidencing unexercised
Warrants.)
2
<PAGE> 42
Reverse of Warrant Certificate
*[Certificate for Delivery of Bearer Bonds]
HOUSEHOLD FINANCE CORPORATION
Warrant Debt Securities
TO: HOUSEHOLD FINANCE CORPORATION
This certificate is submitted in connection with our request
that you deliver to us $ principal amount of Warrant Debt Securities in
bearer form upon exercise of Warrants. We hereby certify that either (a) none
of such Warrant Debt Securities will be held by or on behalf of a United States
Person, or (b) if a United States Person will have a beneficial interest in
such Warrant Debt Securities, such person is described in Section 165
(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1954, as
amended, and the regulations thereunder. As used herein, "United States
Person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or an estate or trust whose
income from sources without the United States is includible in gross income for
United States Federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
We understand that this certificate is required in connection
with certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
_____________________________________
(Please print name)
- -----------------------
* Subject to changes in accordance with changes in tax laws and
regulations.
<PAGE> 43
[If registered Warrant]
ASSIGNMENT
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For Value Received hereby
sells, assigns and transfers unto
Please insert social security
or other identifying number
________________________________
______________________________
(Please print name and address
including zip code)
__________________________________________________________________________
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer
said Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
________________________________
Signature
(Signature must conform in all
respects to name of holder as specified
on the face of this Warrant Certificate
and must bear a signature guarantee
by a bank, trust company or member
broker of the New York Stock Exchange.)
Signature Guaranteed:
______________________________
WARRANT.HFC
<PAGE> 1
EXHIBIT 5
August 3, 1998
Household Finance Corporation
2700 Sanders Road
Prospect Heights, IL 60070
Re: Household Finance Corporation
Registration Statement on Form S-3
for $3 Billion of Debt Securities
and Warrants to Purchase Debt Securities
Gentlemen:
As Vice President-Corporate Law and Assistant Secretary of Household
International, Inc., the parent company of Household Finance Corporation
("HFC"), I am generally familiar with the proceedings in connection with HFC's
Registration Statement on Form S-3 (the "Registration Statement") in which
$3,000,000,000 aggregate principal amount of Debt Securities and Warrants to
Purchase Debt Securities of HFC are being registered. Each issuance of Debt
Securities constituting senior debt of HFC and will be issuable under one of
several Indentures, such Indentures being dated as of October 1, 1992 between
HFC and U.S. Bank Trust National Association, formerly known as First Trust of
Illinois, as Trustee, successor in interest to BankAmerica of Illinois, formerly
known as Continental Bank, (National Association), as Trustee (the "U.S. Bank
Indenture"), The First National Bank of Chicago, as Trustee (the "First Chicago
Indenture"), dated November 1, 1994 between HFC and The Bank of New York, as
Trustee, successor in interest to NationsBank of Tennessee (the "Bank of New
York Indenture"), The First Nationa Bank of Maryland, as Trustee (the "First
Maryland Indenture"), and Harris Trust and Savings Bank, as Trustee (the "Harris
Senior Indenture"). Debt Securities constituting senior subordinated debt of HFC
will be issuable under an Indenture dated as of March 15, 1990, between HFC and
Harris Trust and Savings Bank, as Trustee (the "Harris Subordinated Indenture").
The Warrants, if and where
<PAGE> 2
Household Finance Corporation
August 3, 1998
Page 2
issued, will be issuable under a warrant agreement between HFC and a national or
state banking institution (the "Warrant Agreement"). The foregoing Indentures,
or forms thereof, and the forms of the Warrant Agreement have been filed with
the Securities and Exchange Commission (the "Commission") as exhibits to the
Registration Statement.
Based upon my review of the records and documents of HFC, I am of the opinion
that:
1. HFC is a corporation duly incorporated and validly existing under the
laws of the State of Delaware.
2. The First Trust Indenture, First Chicago Indenture, Bank of New York
Indenture, First Maryland Indenture, Harris Senior Indenture and Harris
Subordinated Indenture have been duly authorized, executed and
delivered by HFC, and constitute valid and legally binding instruments
of HFC enforceable in accordance with their terms, except as
enforcement of the provisions thereof may be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3. The Warrant Agreement will, after being duly authorized, executed and
delivered by HFC, constitute a valid and legally binding instrument of
HFC enforceable in accordance with its terms, except as enforcement of
the provisions thereof may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
4. When the issuance of the Debt Securities and the Warrants to Purchase
Debt Securities, as the case may be, has been duly authorized by
appropriate corporate action, and such Debt Securities and Warrants to
Purchase Debt Securities have been duly executed, authenticated, issued
and delivered against payment of the agreed consideration therefor in
accordance with the Indenture or the Warrant Agreement, and as
described in the Registration Statement, including the Prospectus and
Prospectus Supplement, relating to such Debt Securities and Warrants to
Purchase Debt Securities, such Debt Securities and Warrants to
<PAGE> 3
Household Finance Corporation
August 3, 1998
Page 3
Purchase Debt Securities will be legally and validly issued and will be
the legal and binding obligations of HFC enforceable in accordance with
their terms, except as enforcement of the provisions thereof may be
limited by bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of creditors' rights or by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
I hereby consent to the use of my name and my opinion in the Prospectus and
Prospectus Supplement filed pursuant to Rule 430A or 424 of Regulation C of the
Securities Act of 1933, as amended (the "Act"), in connection with the
Registration Statement relating thereto to be filed with the Commission on or
about August 3, 1998, including any references to my opinions set forth in the
documents incorporated by reference therein, and to the filing of this consent
as an exhibit to the Registration Statement. In giving such consent I do not
admit that I am in the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission thereunder.
/s/ John W. Blenke
<PAGE> 1
EXHIBIT 12
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Three Months
Ended
Year Ended December 31, March 31,
-------------------------------------------------------------------- --------------------
1997 1996 1995 1994 1993 1998 1997
-------- -------- ---------- --------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income $ 767.1 $ 650.0 $ 412.3 $ 434.1 $ 406.4 $ 324.5 $ 189.8
Income taxes 391.9 358.1 295.3 252.0 236.6 196.0 111.2
--------- --------- ---------- --------- ----------- -------- ---------
Income before income taxes 1,159.0 1,008.1 707.6 686.1 643.0 520.5 301.0
Fixed charges:
Interest expense (1) 1,863.0 1,727.9 1,675.9 1,330.2 1,166.1 502.2 454.9
Interest portion of rentals (2) 46.8 45.2 37.1 24.9 20.7 13.2 11.5
--------- ---------- ---------- --------- ----------- -------- ---------
Total fixed charges 1,909.8 1,773.1 1,713.0 1,355.1 1,186.8 515.4 466.4
Total earnings as defined $3,068.8 $2,781.2 $2,420.6 $2,041.2 $1,829.8 $1,035.9 $ 767.4
========== ========== ========= ========= ========== ========= =========
Ratio of earnings to fixed charges 1.61 1.57 1.41 1.51 1.54 2.01 1.65
========== ========== ========= ========= ========== ========= =========
Preferred stock dividends (3) $ 14.6 $ 19.4 $ 21.3 $ 19.6 $ 21.7 $ 2.2 $ 4.9
========== ========== ========= ========= ========== ========= =========
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.59 1.55 1.40 1.48 1.51 2.00 1.63
========== ========== ========= ========= ========== ========= =========
</TABLE>
(1) For financial statement purposes, these amounts are reduced for income
earned on temporary investment of excess funds, generally resulting
from over-subscriptions of commercial paper issuances.
(2) Represents that portion of rentals considered to approximate an
appropriate interest factor.
(3) Preferred stock dividends are grossed up to their pre-tax equivalents.
<PAGE> 1
[ARTHUR ANDERSEN LLP LETTERHEAD]
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household Finance Corporation:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-3 relating to the
offering of up to $3,000,000,000 of Debt Securities and Warrants to Purchase
Debt Securities, to be filed with the Securities and Exchange Commission on or
about August 3, 1998, of our report dated January 21, 1998, included in
Household Finance Corporation's Form 10-K for the year ended December 31, 1997
and our report dated June 30, 1998, included in Household Finance Corporation's
Current Report on Form 8-K dated June 30, 1998, and to all references to our
Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 3, 1998
<PAGE> 1
[DELOITTE & TOUCHE LLP LETTERHEAD]
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Household Finance Corporation on Form S-3 of our reports dated
January 28, 1998 relating to the financial statements of Beneficial
Corporation for the year ended December 31, 1997 appearing in the Current
Reports on Form 8-K of Household Finance Corporation as filed on June 2, 1998
and June 30, 1998, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
August 3, 1998
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
------------------------
Household Finance Corporation
(Exact Name of obligors as specified in their trust agreements)
Delaware 36-1239445
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2700 Sanders Road
Prospect Heights, Illinois 60070
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.;
Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of
the Federal Reserve System, Washington D.C..
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the laws
of the United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 28th day of July, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/ Steven M. Wagner
----------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITSL
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U
S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 28, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Household Finance
Corporation and The First National Bank of Chicago, as Trustee, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ Steven M. Wagner
------------------------------
STEVEN M. WAGNER
FIRST VICE PRESIDENT
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount
outstanding of the last business day of the quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1) ....... 0081 4,141,168 1.a
b. Interest-bearing balances(2) ................................ 0071 5,142,787 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) ... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D). 1773 7,819,811 2.b
3. Federal funds sold and securities purchased under agreements to
resell.......................................................... 1350 5,619,157 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C) .......................................................... 2122 26,140,376 4.a
b. LESS: Allowance for loan and lease losses ................... 3123 417,371 4.b
c. LESS: Allocated transfer risk reserve ....................... 3128 0 RCFD 4.c
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c) ........................ 2125 25,723,005 4.d
5. Trading assets (from Schedule RD-D) ............................ 3545 5,795,159 5.
6. Premises and fixed assets (including capitalized leases) 2145 757,033 6.
7. Other real estate owned (from Schedule RC-M) ................... 2150 6,547 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) ................................. 2130 135,327 8.
9. Customers' liability to this bank on acceptances outstanding 2155 512,763 9.
10. Intangible assets (from Schedule RC-M) ......................... 2143 261,456 10.
11. Other assets (from Schedule RC-F) .............................. 2160 2,223,495 11.
12. Total assets (sum of items 1 through 11) ....................... 2170 58,137,708 12.
</TABLE>
- ---------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/98 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
------------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1) ................................. 2200 21,551,932 13.a(1)
Noninterest-bearing(1) ...................................... 6631 9,361,049 13.a(1)
Interest-bearing ............................................ 6636 12,190,883 13.a(2)
b. In foreign offices, Edge and Agreement subsidiaries,and RCFN
----
IBFs (from Schedule RC-E, part II) ........................... 2200 14,511,110 13.b
Noninterest bearing .......................................... 6631 604,859 13.b(1)
Interest-bearing ............................................. 6636 13,906,251 13.b(2)
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 3.887,022 14
15. a. Demand notes issued to the U.S. Treasury...................... RCON 2840 63,092 15.a
b. Trading Liabilities(from Schedule RC-D)....................... RCFD 3548 5,918,194 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less ................... 2332 3,134,696 16.a
b. With original maturity of more than one year ................ A547 381,681 16.b
c. With original maturity of more than three years ............. A548 326,551 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.......... 2920 512,763 18.
19. Subordinated notes and debentures ............................... 3200 2,000,000 19.
20. Other liabilities (from Schedule RC-G) .......................... 2930 1,163,747 20.
21. Total liabilities (sum of items 13 through 20) .................. 2948 53,450,788 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ................... 3838 0 23.
24. Common stock .................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)......... 3839 3,107,585 25.
26. a. Undivided profits and capital reserves ....................... 3632 1,359,598 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities .................................................... 8434 18,975 26.b
27. Cumulative foreign currency translation adjustments ............. 3284 (96) 27.
28. Total equity capital (sum of items 23 through 27) ............... 3210 4,686,920 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................ 3300 58,137,708 29.
</TABLE>
<TABLE>
<S> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most _____________________
comprehensive level of auditing work performed for the bank by independent external Number
auditors as of any date during 1996 . . . . . . . . . . . . . . . .. . . . ....RCFD 6724 . .... 2 _________________ M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- ---------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE> 1
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2) ______
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 36-1194448
(State of Incorporation) (I.R.S. Employer Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Carolyn Potter, Harris Trust and Savings Bank,
311 West Monroe Street, Chicago, Illinois, 60606
312-461-2531 phone 312-461-3525 facsimile
(Name, address and telephone number for agent for service)
HOUSEHOLD FINANCE CORPORATION
(Name of obligor)
Delaware 36-1239445
(State of Incorporation) (I.R.S. Employer Identification No.)
2700 Sanders Road
Prospect Heights, Illinois 60070
(Address of principal executive offices)
Debt Securities
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of Governors
of the Federal Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee is now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as now
in effect and includes the authority of the Trustee to commence
business and to exercise corporate trust powers was filed in
connection with the Registration Statement of Louisville Gas and
Electric Company, File No. 2-44295, and is incorporated herein by
reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
1
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 28th day of July, 1998.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
------------------------------
C. Potter
Assistant Vice President
EXHIBIT A
The consents of the trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents
that reports of examinations of said trustee by Federal and State authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ C. Potter
------------------------------
C. Potter
Assistant Vice President
2
<PAGE> 4
EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of March 31, 1998, as published in accordance with a
call made by the State Banking Authority and by the Federal Reserve Bank of
the Seventh Reserve District.
HARRIS BANK
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on March 31, 1998, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner
of Banks and Trust Companies of the State of Illinois and by the Federal
Reserve Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin....................... $1,039,854
Interest bearing balances................................................. $290,921
Securities:.........................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $4,266,201
Federal funds sold and securities purchased under agreements to resell $82,000
Loans and lease financing receivables:
Loans and leases, net of unearned income.................................. $8,726,578
LESS: Allowance for loan and lease losses................................ $101,318
-------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)...................................................... $8,625,260
Assets held in trading accounts..................................................... $120,674
Premises and fixed assets (including capitalized leases)............................ $219,475
Other real estate owned............................................................. $699
Investments in unconsolidated subsidiaries and associated companies................. $120
Customer's liability to this bank on acceptances outstanding........................ $46,688
Intangible assets................................................................... $266,411
Other assets........................................................................ $773,386
--------------
TOTAL ASSETS $15,731,689
==============
</TABLE>
3
<PAGE> 5
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Deposits:
In domestic offices................................................................................... $8,270,648
Non-interest bearing............................................................................ $2,684,862
Interest bearing................................................................................ $5,585,786
In foreign offices, Edge and Agreement subsidiaries, and IBF's........................................ $1,307,928
Non-interest bearing............................................................................ $23,432
Interest bearing................................................................................ $1,284,496
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securities sold under agreements to repurchase................................. $3,599,510
Trading Liabilities...................................................................................... 74,487
Other borrowed money:....................................................................................
a. With remaining maturity of one year or less $471,692
b. With remaining maturity of more than one year $0
Bank's liability on acceptances executed and outstanding $46,688
Subordinated notes and debentures........................................................................ $325,000
Other liabilities........................................................................................ $386,442
----------------------
TOTAL LIABILITIES $14,482,395
======================
EQUITY CAPITAL
Common stock............................................................................................. $100,000
Surplus.................................................................................................. $601,026
a. Undivided profits and capital reserves............................................................... $545,185
b. Net unrealized holding gains (losses) on available-for-sale securities $2,802
----------------------
TOTAL EQUITY CAPITAL $1,249,294
======================
Total liabilities, limited-life preferred stock, and equity capital...................................... $15,731,689
======================
</TABLE>
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with
the instructions issued by the Board of Governors of the Federal Reserve
System and is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
1/30/98
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and, to the best of
our knowledge and belief, has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and the Commissioner of Banks and Trust Companies of the State of Illinois and
is true and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
RICHARD E. TERRY
Directors.
4
<PAGE> 1
EXHIBIT 25.3
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)___
_______________________________________________________
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
111 EAST WACKER DRIVE, SUITE 3000 36-4046888
CHICAGO, ILLINOIS 60601 I.R.S. Employer
(Address of principal executive offices) (Zip Code) Identification No.
Frank Sgaraglino
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Telephone (312) 228-9445
(Name, address and telephone number of agent for service)
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of 36-1239445
incorporation or organization) (I.R.S. Employer Identification No.)
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(Address of Principal Executive Offices) (Zip Code)
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
(Title of the Indenture Securities)
================================================================================
<PAGE> 2
FORM T-1
ITEM 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency
Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers.
Yes
ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation.
None
ITEMS 3-15 Not applicable because, to the best of Trustee's knowledge, the
Trustee is not a trustee under any other indenture under which
any other securities or certificates of interest or participation
in any other securities of the obligor are outstanding and there is
not, nor has there been, a default with respect to securities
issued under this indenture.
ITEM 16. LIST OF EXHIBITS: List below all exhibits filed as a part of
this statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee
now in effect, incorporated herein by reference to Exhibit 1 to
Item 16 of Form T-1, Registration No. 33-18235*
2. A copy of the certificate of authority of the Trustee
to commence business, incorporated herein by reference to
Exhibit 2 to Item 16 of Form T-1, Registration No. 33-64175.*
3. A copy of the certificate of authority of the Trustee
to exercise corporate trust powers, incorporated herein by
reference to Exhibit 3 to Item 16 of Form T-1, Registration No.
33-64175.*
4. A copy of the existing bylaws of the Trustee, as now in
effect, incorporated herein by reference to Exhibit 4 to Item
16 of Form T-1, Registration No. 3333-18235*
5. Not applicable.
6. The consent of the Trustee required by Section 321(b)
of the Trust Indenture Act of 1939, incorporated herein by
reference to Exhibit 6 of Form T-1, Registration No.
33-64175.*.
7. A copy of the latest report of condition of the Trustee
published pursuant to law or the requirements of its
supervisingor examining authority, filed herewith.
8. Not applicable.
9. Not applicable.
2
<PAGE> 3
* Exhibits thus designated are incorporated herein by reference to
Exhibits bearing identical numbers in Item 16 of the Form T-1 filed by the
Trustee with the Securities and Exchange Commission with the specific
references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, U.S. BANK TRUST NATIONAL ASSOCIATION, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago, State of Illinois on the 29th
day of July, 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: /s/ Frank Sgaraglino
---------------------------------
Frank Sgaraglino
Vice President and Assistant Secretary
3
<PAGE> 4
Exhibit 7
U.S. BANK TRUST NATIONAL ASSOCIATION
STATEMENT OF FINANCIAL CONDITION
AS OF 3/31/98
($000'S)
<TABLE>
<CAPTION>
3/31/98
-------
<S> <C>
ASSETS
Cash and Due From Depository Institutions $38,088
Federal Reserve Stock 3,426
Fixed Assets 649
Intangible Assets 72,870
Other Assets 6,422
-------
TOTAL ASSETS $121,455
LIABILITIES
Other Liabilities 7,912
-------
TOTAL LIABILITIES 7,912
EQUITY
Common and Preferred Stock 1,000
Surplus 120,932
Undivided Profits (8,389)
-------
TOTAL EQUITY CAPITAL 113,543
TOTAL LIABILITIES AND EQUITY CAPITAL $121,455
</TABLE>
================================================================================
To the best of the undersigned's determination, as of this date the above
financial information is true and correct.
U.S. Bank Trust National Association
By: /s/Frank Sgaraglino
---------------------
Vice President
Date: July 29, 1998
4
<PAGE> 1
EXHIBIT 25.4
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
------------------------
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 36-1239445
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2700 Sanders Road
Prospect Heights, Illinois 60070
(Address of principal executive offices) (Zip code)
------------------------
Debt Securities and Warrants to Purchase Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 28th day of July, 1998.
THE BANK OF NEW YORK
By: /s/MICHAEL CULHANE
---------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 28th day of July, 1998.
THE BANK OF NEW YORK
By: /s/Michael Culhane
---------------------------
Name: Michael Culhane
Title: Vice President
<PAGE> 6
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries, a member of the Federal Reserve
System, at the close of business March 31, 1998, published in accordance with a
call made by the Federal Reserve Bank of this District pursuant to the
provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 6,397,993
Interest-bearing balances ........... 1,138,362
Securities:
Held-to-maturity securities ......... 1,062,074
Available-for-sale securities ....... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell.... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................36,538,242
LESS: Allowance for loan and
lease losses ..............631,725
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve .... 35,906,517
Assets held in trading accounts ....... 2,145,149
Premises and fixed assets (including
capitalized leases) ............... 663,928
Other real estate owned ............... 10,895
Investments in unconsolidated
subsidiaries and associated
companies ......................... 237,991
Customers' liability to this bank on
acceptances outstanding ........... 992,747
Intangible assets ..................... 1,072,517
Other assets .......................... 1,643,173
-----------
Total assets .......................... $55,830,236
===========
LIABILITIES
Deposits
In domestic offices ................. $24,849,054
Noninterest-bearing ......10,011,422
Interest-bearing .........14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs .... 15,319,002
Noninterest-bearing .........707,820
Interest-bearing .........14,611,182
Federal funds purchased and Securities
sold under agreements to repurchase.. 1,906,066
Demand notes issued to the U.S.
Treasury ............................ 215,985
Trading liabilities ................... 1,591,288
Other borrowed money:
With remaining maturity of one year
or less ........................... 1,991,119
With remaining maturity of more than
one year through three years....... 0
With remaining maturity of more than
three years ....................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding ............... 998,145
Subordinated notes and debentures ..... 1,314,000
Other liabilities ..................... 2,421,281
-----------
Total liabilities ..................... 50,631,514
-----------
EQUITY CAPITAL
Common stock .......................... 1,135,284
Surplus ............................... 731,319
Undivided profits and capital
reserves ............................ 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities .......................... 40,198
Cumulative foreign currency transla-
tion adjustments .................... ( 36,129)
-----------
Total equity capital .................. 5,198,722
-----------
Total liabilities and equity
capital ............................. $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi
Alan R. Griffith Directors
J. Carter Bacot
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 25.5
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
____________________
THE FIRST NATIONAL BANK OF MARYLAND
(Exact name of trustee as specified in its charter)
UNITED STATES 52-0312840
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or formation)
25 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of principal (Zip code)
executive offices)
GREGORY K. THORESON, GENERAL COUNSEL
THE FIRST NATIONAL BANK OF MARYLAND
25 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(410) 244-3800
(Name, address and telephone number of agent
for service of process)
HOUSEHOLD FINANCE CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 36-1239445
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or formation)
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(Address of principal (Zip code)
executive offices)
Debt Securities
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency, Washington, D.C. 20219.
Federal Reserve Bank of Richmond, Richmond, Virginia 23261.
Federal Deposit Insurance Corporation, Washington, D.C. 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
(Because responses from the obligor and the underwriters have not yet been
received, Item 2 is at the date hereof based upon incomplete information
but is believed to be correct and may be considered to be complete unless
modified by an amendment to this Form T-1).
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of eligibility.
Exhibit
1 A copy of the articles of association of the trustee as now in effect is
incorporated herein by refererence to Exhibit 1 to Form T-1 (Exhibit 25 to
the Registration Statement on Form S-3, Registration No. 333-27305)
2 A copy of the certificate of authority of the trustee to commence business
is incorporated herein by reference to Exhibit T1-2 to Form T-1 (Exhibit 26
to the Registration Statement on Form S-2, Registration No. 2-98697)
3 A copy of the authorization of the trustee to exercise corporate trust
powers is incorporated herein by reference to Exhibit T1-3 of Amendment No.
1 to Form T-1 (Exhibit 26 to the Registration Statement on Form S-3,
Registration No. 33-18373)
<PAGE> 3
4 A copy of the existing bylaws of the trustee is incorporated herein by
refererence to Exhibit 4 to Form T-1 (Exhibit 25 to the Registration
Statement on Form S-3, Registration No. 333-27305)
5 Not applicable
6 The consent of the trustee required by Section 321(b) of the Act
7 A copy of the latest report of condition of the trustee published pursuant
to law or the requirements of its supervising or examining authority
8 Not applicable
9 Not applicable
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, The First National Bank of Maryland, a corporation organized and
existing under the laws of the United States of America, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Baltimore and State of Maryland,
on July 29, 1998.
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ Donald C. Hargadon
--------------------------
Donald C. Hargadon
Assistant Vice President
<PAGE> 5
EXHIBIT 6
Consent of Trustee
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, in connection with the issuance by CIT Group Securitization
Corporation II, we hereby consent that reports of examination by Federal,
state, territorial or district authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ Donald C. Hargadon
---------------------------
Donald C. Hargadon
Assistant Vice President
<PAGE> 6
EXHIBIT 7
Report of Condition Consolidating Domestic and Foreign Subsidiaries of The
First National Bank of Maryland, Baltimore, Maryland at the close of business
on December 31, 1997 published in response to call made by Comptroller of the
Currency, under Title 12, United States Code, Section 161, Charter No. 04822,
Comptroller of the Currency, Richmond District.
CONSOLIDATED REPORT OF CONDITION
(Dollars in Thousands)
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ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances
and currency and coin...................... $ 788,621
Interest-bearing balances.................... 986
Securities:
Held-to-maturity securities.................... -0-
Available-for-sale securities.................. 2,656,568
Federal funds sold and securities purchased
under agreements to resell..................... 193,304
Loans and lease financing receivables:
Loans and leases, net of unearned income....... 6,055,422
LESS: Allowance for loan and lease losses...... 103,381
LESS: Allocated transfer risk reserve.......... 1,400
Loans and leases, net of unearned income,
allowance, and reserve...................... 5,950,641
Trading assets................................... 113,364
Premises and fixed assets (including
capitalized leases)............................ 95,787
Other real estate owned.......................... 9,751
Investments in unconsolidated subsidiaries
and associated companies....................... 37,116
Customers' liability to this bank
on acceptances outstanding..................... 11,050
Intangible assets................................ 48,819
Other assets..................................... 205,370
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TOTAL ASSETS................................ 10,111,377
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LIABILITIES
Deposits:
In domestic offices............................. $ 6,918,347
Noninterest-bearing........................... 2,382,713
Interest-bearing.............................. 4,535,634
In foreign offices, Edge and Agreement
subsidiaries, and IBFs........................ 489,086
Noninterest-bearing.......................... 0
Interest-bearing............................. 489,086
Federal funds purchased and securities
sold under agreements to repurchase............. 1,333,730
Demand notes issued to the U.S. Treasury.......... 6,001
Trading liabilities............................... 70,580
Other borrowed money:
With a remaining maturity of one year or less... -0-
With a remaining maturity of more than one year
through three years........................... -0-
With a remaining maturity of more than three
years......................................... -0-
Bank's liability on acceptances
executed and outstanding........................ 11,050
Subordinated notes and debentures................. 174,000
Other liabilities................................. 362,895
TOTAL LIABILITIES........................... $ 9,365,689
-----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus..... -0-
Common Stock...................................... 18,448
Surplus........................................... 253,832
Undivided profits and capital reserves............ 465,608
Net unrealized holding gains (losses)
on available-for-sale securities................ 7,800
Cumulative foreign currency transalation
adjustments..................................... -0-
TOTAL EQUITY CAPITAL........................ $ 745,688
-----------
TOTAL LIABILITIES AND EQUITY CAPITAL........ $10,111,377
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