EXHIBIT 4.1
EXECUTION COPY
HOUSEHOLD CONSUMER LOAN CORPORATION,
as Seller and
as Holder of the
Designated Certificate
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
_________________________________________
TRUST AGREEMENT
Dated as of November 1, 1997
__________________________________________
Consumer Loan Asset Backed Certificates,
Series 1997-2
Table of Contents
Section Page
ARTICLE I
Definitions
1.01. Definitions. . . . . . . . . . . . . . . . . . 1
1.02. Other Definitional Provisions. . . . . . . . . 1
ARTICLE II
Organization
2.01. Name . . . . . . . . . . . . . . . . . . . . . 3
2.02. Office . . . . . . . . . . . . . . . . . . . . 3
2.03. Purposes and Powers. . . . . . . . . . . . . . 3
2.04. Appointment of Owner Trustee . . . . . . . . . 4
2.05. Initial Capital Contribution of Owner Trust
Estate. . . . . . . . . . . . . . . . . . . . 4
2.06. Declaration of Trust . . . . . . . . . . . . . 4
2.07. Liability of the Holder of the Designated
Certificate . . . . . . . . . . . . . . . . . 5
2.08. Title to Trust Property. . . . . . . . . . . . 5
2.09. Location of Corporate Trust Office . . . . . . 5
2.10. Representations and Warranties and Covenants
of HCLC . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
Conveyance of the Series 1997-2 Participation Interest;
Certificates
3.01. Conveyance of the Series 1997-2 Participation
Interest. . . . . . . . . . . . . . . . . . . 8
3.02. Initial Ownership. . . . . . . . . . . . . . . 8
3.03. The Certificates . . . . . . . . . . . . . . . 8
3.04. Authentication of Certificates . . . . . . . . 9
3.05. Registration of and Limitations on Transfer
and Exchange of Certificates. . . . . . . . . 9
3.06. Mutilated, Destroyed, Lost or Stolen Certif-
icates. . . . . . . . . . . . . . . . . . . . 12
3.07. Persons Deemed Certificateholders. . . . . . . 12
3.08. Access to List of Certificateholders' Names
and Addresses . . . . . . . . . . . . . . . . 13
3.09. Maintenance of Office or Agency. . . . . . . . 13
3.10. Certificate Paying Agent . . . . . . . . . . . 13
3.11. Ownership by HCLC. . . . . . . . . . . . . . . 14
3.12. RESERVED . . . . . . . . . . . . . . . . . . . 15
3.13. Optional Repurchase of the Series 1997-2
Participation Interest. . . . . . . . . . . . 15
ARTICLE IV
Actions by Owner Trustee
4.01. Prior Notice to Certificateholders with
Respect to Certain Matters. . . . . . . . . . 16
4.02. Action by Certificateholders with Respect to
Certain Matters . . . . . . . . . . . . . . . 17
4.03. Action by Certificateholders with Respect to
Bankruptcy. . . . . . . . . . . . . . . . . . 17
4.04. Restrictions on Certificateholders' Power. . . 17
4.05. Majority Control . . . . . . . . . . . . . . . 17
ARTICLE V
Application of Trust Funds
5.01. Distributions. . . . . . . . . . . . . . . . . 18
5.02. Method of Payment. . . . . . . . . . . . . . . 18
5.03. Signature on Returns . . . . . . . . . . . . . 19
5.04. Statements to Certificateholders . . . . . . . 19
5.05. Tax Reporting; Tax Elections . . . . . . . . . 19
5.06. Capital Accounts . . . . . . . . . . . . . . . 19
ARTICLE VI
Authority and Duties of Owner Trustee
6.01. General Authority. . . . . . . . . . . . . . . 22
6.02. General Duties . . . . . . . . . . . . . . . . 22
6.03. Action upon Instruction. . . . . . . . . . . . 22
6.04. No Duties Except as Specified in this Trust
Agreement or in Instructions. . . . . . . . . 23
6.05. No Action Except Under Specified Documents or
Instructions. . . . . . . . . . . . . . . . . 24
6.06. Restrictions . . . . . . . . . . . . . . . . . 24
ARTICLE VII
Concerning the Owner Trustee
7.01. Acceptance of Trusts and Duties. . . . . . . . 25
7.02. Furnishing of Documents. . . . . . . . . . . . 26
7.03. Representations and Warranties . . . . . . . . 26
7.04. Reliance; Advice of Counsel. . . . . . . . . . 27
7.05. Not Acting in Individual Capacity. . . . . . . 27
7.06. Owner Trustee Not Liable for Certificates. . . 28
7.07. Owner Trustee May Own Certificates and Notes . 28
ARTICLE VIII
Compensation of Owner Trustee
8.01. Owner Trustee's Fees and Expenses. . . . . . . 29
8.02. Indemnification. . . . . . . . . . . . . . . . 29
ARTICLE IX
Termination of Trust Agreement
9.01. Termination of Trust Agreement . . . . . . . . 31
9.02. Dissolution upon Bankruptcy of the Holder of
the Designated Certificate. . . . . . . . . . 32
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
10.01. Eligibility Requirements for Owner Trustee . . 34
10.02. Resignation or Removal of Owner Trustee. . . . 34
10.03. Successor Owner Trustee. . . . . . . . . . . . 35
10.04. Merger or Consolidation of Owner Trustee . . . 35
10.05. Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI
Miscellaneous
11.01. Amendments . . . . . . . . . . . . . . . . . . 38
11.02. No Legal Title to Owner Trust Estate in
Certificateholders. . . . . . . . . . . . . . 39
11.03. Limitations on Rights of Others. . . . . . . . 39
11.04. Notices. . . . . . . . . . . . . . . . . . . . 39
11.05. Severability . . . . . . . . . . . . . . . . . 40
11.06. Separate Counterparts. . . . . . . . . . . . . 40
11.07. Successors and Assigns . . . . . . . . . . . . 40
11.08. Covenants of the Seller. . . . . . . . . . . . 40
11.09. No Petition. . . . . . . . . . . . . . . . . . 41
11.10. No Recourse. . . . . . . . . . . . . . . . . . 41
11.11. Headings . . . . . . . . . . . . . . . . . . . 41
11.12. Governing Law. . . . . . . . . . . . . . . . . 41
11.13. Integration. . . . . . . . . . . . . . . . . . 41
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . .42
EXHIBITS
Exhibit A - Form of Certificate . . . . . . . . . . . . . . . A-1
Exhibit B - RESERVED. . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Certificate of Trust of Household
Consumer Loan Trust 1997-2. . . . . . . . . . . . C-1
Exhibit D - Form of 144A Investment Letter. . . . . . . . . . D-1
Exhibit E - Definitions . . . . . . . . . . . . . . . . . . . E-1
Exhibit F - Form of Certificate of Non-Foreign Status . . . . F-1
Exhibit G - Form of Investment Letter
for Accredited Investors. . . . . . . . . . . . . G-1
This Trust Agreement, dated as of November 1, 1997 (as amended
from time to time, this "Trust Agreement"), between HOUSEHOLD
CONSUMER LOAN CORPORATION, a Nevada corporation, as Seller and as
Holder of the Designated Certificate ("HCLC", the "Seller", and the
"Designated Certificateholder" as the context requires) and CHASE
MANHATTAN BANK DELAWARE, a Delaware banking corporation, as Owner
Trustee (the "Owner Trustee"),
WITNESSETH THAT:
In consideration of the mutual agreements herein contained,
HCLC and the Owner Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Trust
Agreement, except as otherwise expressly provided herein or unless
the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in
the Definitions attached hereto as Exhibit E, which is incorporated
by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the
defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Trust Agreement or in any such
certificate or other document, and accounting terms partly defined
in this Trust Agreement or in any such certificate or other
document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms
in this Trust Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained
in this Trust Agreement or in any such certificate or other
document shall control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Trust Agreement shall refer to
this Trust Agreement as a whole and not to any particular provision
of this Trust Agreement; Section and Exhibit references contained
in this Trust Agreement are references to Sections and Exhibits in
or to this Trust Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(d) The definitions contained in this Trust Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such terms.
(e) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as
from time to time amended, modified or supplemented and includes
(in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns.
ARTICLE II
Organization
Section 2.01. Name. The trust created hereby (the "Issuer")
shall be known as "Household Consumer Loan Trust 1997-2," in which
name the Owner Trustee may conduct the business of the Issuer, make
and execute contracts and other instruments on behalf of the Issuer
and xxx and be sued.
Section 2.02. Office. An office of the Issuer shall be in
care of the Owner Trustee at the Corporate Trust Office or at such
other address in Delaware as the Owner Trustee may designate by
written notice to the Certificateholders and the Seller.
Section 2.03. Purposes and Powers. The purpose of the Issuer
is to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell the
Notes and the Certificates;
(ii) to purchase the Series 1997-2 Participation Interest
and to pay or cause to be paid its organizational, start-up
and transactional expenses;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Indenture Trust Estate pursuant to the Indenture
and to hold, manage and distribute to the Certificateholders
pursuant to Section 5.01 any portion of the Indenture Trust
Estate released from the Lien of, and remitted to the Issuer
pursuant to the Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(v) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or
connected therewith, including, without limitation, to accept
additional contributions of equity that are not subject to the
Lien of the Indenture; and
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connec-
tion with conservation of the Owner Trust Estate and the
making of distributions to the Certificateholders and the
Noteholders.
The Issuer is hereby authorized to engage in the foregoing activi-
ties. The Issuer shall not engage in any activity other than in
connection with the foregoing or other than as required or autho-
rized by the terms of this Trust Agreement or the Basic Documents.
Section 2.04. Appointment of Owner Trustee. The Seller
hereby appoints the Owner Trustee as trustee of the Issuer
effective as of the date hereof, to have all the rights, powers and
duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust
Estate. The Seller hereby sells, assigns, transfers, conveys and
sets over to the Issuer, as of the date hereof, the sum of $1. The
Owner Trustee hereby acknowledges on behalf of the Issuer, receipt
in trust from the Seller, as of the date hereof, of the foregoing
contribution, which shall constitute the initial corpus of the
Issuer and shall be deposited in the Payment Account. The Owner
Trustee also acknowledges on behalf of the Issuer receipt of the
other property transferred and assigned to the Issuer pursuant to
Section 3.01, which shall constitute the Owner Trust Estate. The
Seller shall pay or cause to be paid organizational expenses of the
Issuer as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses
paid by the Owner Trustee. The Seller shall execute and deliver
any necessary state or federal securities law filings on behalf of
the Issuer.
Section 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate on behalf of the
Issuer in trust upon and subject to the conditions set forth herein
for the use and benefit of the Certificateholders, subject to the
obligations of the Issuer under the Basic Documents. It is the
intention of the parties hereto that the Issuer constitute a
business trust under the Business Trust Statute and that this Trust
Agreement constitute the governing instrument of such business
trust. It is the intention of the parties hereto that, for income
and franchise tax purposes, the Issuer shall be treated as a
partnership, with the assets of the partnership being the Owner
Trust Estate, the partners of the partnership being the
Certificateholders, and the Notes being debt of the partnership.
Except as otherwise provided in this Trust Agreement, the rights of
the Certificateholders (other than the Holder of the Designated
Certificate) will be those of limited partners and the rights of
the Holder of the Designated Certificate, subject to Section 6.03
hereof, will be those of a general partner in a partnership formed
under the Delaware Revised Uniform Limited Partnership Act. The
parties agree that, unless otherwise required by appropriate tax
authorities, the Issuer will file or cause to be filed annual or
other necessary returns, reports and other forms consistent with
the characterization of the Issuer as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall
have all rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes
of the Issuer. The Owner Trustee has filed with the Secretary of
State of the State of Delaware a Certificate of Trust of the
Issuer.
Section 2.07. Liability of the Holder of the Designated
Certificate. (a) The Holder of the Designated Certificate shall
be liable directly to and will indemnify any injured party for all
losses, claims, damages, liabilities and expenses of the Issuer
(including Expenses, to the extent not paid out of the Owner Trust
Estate) to the extent that the Holder of the Designated Certificate
would be liable if the Issuer were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Holder of the
Designated Certificate were a general partner; provided, however,
that the Holder of the Designated Certificate shall not be liable
for payments required to be made on the Notes or the Certificates,
or for any losses incurred by a Certificateholder in the capacity
of an investor in the Certificates or a Noteholder in the capacity
of an investor in the Notes. In addition, any third party
creditors of the Issuer (other than in connection with the
obligations described in the preceding sentence for which the
Holder of the Designated Certificate shall not be liable) shall be
deemed third party beneficiaries of this subsection (a). The
obligations of the Holder of the Designated Certificate under this
subsection (a) shall be evidenced by the Designated Certificate.
(b) Subject to subsection (a) above, the Certificateholders
shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of
Delaware.
Section 2.08. Title to Trust Property. Legal title to the
Owner Trust Estate shall be vested at all times in the Issuer as a
separate legal entity except where applicable law in any juris-
diction requires title to any part of the Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
Section 2.09. Location of Corporate Trust Office. All bank
accounts maintained by the Owner Trustee on behalf of the Issuer
shall be located in the State of Delaware or the State of New York.
The Issuer shall not have any employees; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware or taking
actions outside the State of Delaware in order to comply with
Section 2.03. Payments will be received by the Issuer only in
Delaware or New York, and payments will be made by the Issuer only
from Delaware or New York. The Owner Trustee shall maintain its
Corporate Trust Office in the State of Delaware.
Section 2.10. Representations and Warranties and Covenants of
HCLC. (a) The Seller hereby represents and warrants to the Owner
Trustee that:
(i) The Seller is duly organized and validly existing as
a corporation in good standing under the laws of the State of
Nevada, with power and authority to own its properties and to
conduct its business as such properties are currently owned
and such business is presently conducted.
(ii) The Seller is duly qualified to do business as a
foreign corporation in good standing and has obtained all
necessary licenses and approvals in all jurisdictions in which
the ownership or lease of its property or the conduct of its
business shall require such qualifications and in which the
failure to so qualify would have a material adverse effect on
the business, properties, assets or condition (financial or
other) of the Seller.
(iii) The Seller has the power and authority to execute
and deliver this Trust Agreement and to carry out its terms;
the Seller has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the
Issuer, and the Seller has duly authorized such sale and
assignment and deposit to the Issuer by all necessary
corporate action; and the execution, delivery and performance
of this Trust Agreement have been duly authorized by the
Seller by all necessary corporate action.
(iv) The consummation of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation
or bylaws of the Seller, or any indenture, agreement or other
instrument to which the Seller is a party or by which it is
bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant
to the Basic Documents); nor violate any law or, to the best
of the Seller's knowledge, any order, rule or regulation
applicable to the Seller of any court or of any federal or
state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties.
(v) To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before any
court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties: (A) asserting the invalidity of
this Trust Agreement, (B) seeking to prevent the consummation
of any of the transactions contemplated by this Trust
Agreement or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or
enforceability of, this Trust Agreement.
(vi) Immediately prior to the conveyance by the Seller to
the Issuer of the Series 1997-2 Participation Interest as
contemplated by Section 3.01 hereof, the Seller owned the
Series 1997-2 Participation Interest free and clear of any
Lien.
ARTICLE III
Conveyance of the Series 1997-2 Participation Interest;
Certificates
Section 3.01. Conveyance of the Series 1997-2 Participation
Interest. The Seller, concurrently with the execution and delivery
hereof, does hereby transfer, convey, sell and assign to the
Issuer, on behalf of the Holders of the Notes and the Certificates,
without recourse, all its right, title and interest in and to the
Series 1997-2 Participation Interest free and clear of any Liens,
and all monies and the collections and proceeds due thereon and any
part thereof which consists of general intangibles (as defined in
the UCC) (the "Owner Trust Estate"). Simultaneous therewith and in
consideration thereof, the Seller shall receive from the Issuer the
Securities, including the Designated Certificate, and the
obligation of the Issuer to pay an amount equal to a deferred
stream of payments represented by the Holdback Amount in accordance
with Section 3.05 of the Indenture.
The parties hereto intend that the transaction set forth
herein be a sale by the Seller to the Issuer of all of its right,
title and interest in and to the Series 1997-2 Participation
Interest and the other property described above. In the event that
the transaction set forth herein is not deemed to be a sale, the
Seller hereby grants to the Issuer a security interest in all of
its right, title and interest in, to and under the Owner Trust
Estate, all distributions thereon and all proceeds thereof, and
this Trust Agreement shall constitute a security agreement under
applicable law.
Section 3.02. Initial Ownership. Upon the formation of the
Issuer by the contribution by the Seller pursuant to Section 2.05
and until the conveyance of the Series 1997-2 Participation
Interest pursuant to Section 3.01 and the issuance of the
Certificates, the Seller shall be the sole beneficiary of the
Issuer.
Section 3.03. The Certificates. The Certificates shall be
issued in minimum denominations of $1,000,000 and in integral
multiples of $100,000 in excess thereof; except for one Certificate
that may not be in an integral multiple of $100,000; provided,
however, that the Designated Certificate issued pursuant to
Section 3.11 may be issued in the amount of $420,000. The
Certificates may not be subdivided for resale into units that had
a Security Balance of less than $1,000,000 upon the Closing Date.
The Certificates shall be executed on behalf of the Issuer by
manual or facsimile signature of an authorized officer of the Owner
Trustee and authenticated in the manner provided in Section 3.04.
Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Issuer, shall be
validly issued and entitled to the benefit of this Trust Agreement,
notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. A Person shall
become a Certificateholder and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder upon
such Person's acceptance of a Certificate duly registered in such
Person's name, pursuant to Section 3.05. Each Person who shall
become a Certificateholder shall establish its non-foreign status
by submitting to the Certificate Paying Agent an IRS Form W-9 and
the Certificate of Non-Foreign Status set forth in Exhibit F
hereto.
A transferee of a Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations
of a Certificateholder hereunder upon such transferee's acceptance
of a Certificate duly registered in such transferee's name pursuant
to and upon satisfaction of the conditions set forth in Section
3.05.
Section 3.04. Authentication of Certificates. Concurrently
with the acquisition of the Series 1997-2 Participation Interest by
the Issuer, the Owner Trustee shall cause the Certificates in an
aggregate principal amount equal to the Initial Principal Balance
of the Certificates to be executed on behalf of the Issuer,
authenticated and delivered to or upon the written order of the
Seller, signed by its chairman of the board, its president, any
vice president, secretary, treasurer or any assistant treasurer,
without further corporate action by the Seller, in authorized
denominations. No Certificate shall entitle its Holder to any
benefit under this Trust Agreement or be valid for any purpose
unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A,
executed by the Owner Trustee or The Bank of New York, as the
Issuer's authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that such
Certificate shall have been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.05. Registration of and Limitations on Transfer and
Exchange of Certificates. The Certificate Registrar shall keep or
cause to be kept, at the office or agency maintained pursuant to
Section 3.09, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Bank of New York
shall be the initial Certificate Registrar.
Subject to satisfaction of the conditions set forth below and
to the provisions of Section 3.11 with respect to the Designated
Certificate, upon surrender for registration of transfer of any
Certificate at the office or agency maintained pursuant to
Section 3.09, the Issuer shall execute, authenticate and deliver
(or shall cause The Bank of New York as its authenticating agent to
authenticate and deliver) in the name of the designated transferee
or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authen-
tication by the Owner Trustee or any authenticating agent. At the
option of a Holder, Certificates may be exchanged for other
Certificates of authorized denominations of a like aggregate amount
upon surrender of the Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.09.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument
of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer
or exchange shall be cancelled and subsequently disposed of by the
Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
No transfer of a Certificate shall be made unless such
transfer is exempt from the registration requirements of the
Securities Act and any applicable state securities laws or is made
in accordance with said Securities Act and laws. In the event of
any such transfer, the Certificate Registrar or the Seller shall
require the transferee to execute (i) (a) an investment letter (in
substantially the form attached hereto as Exhibit D) in form and
substance reasonably satisfactory to the Certificate Registrar and
the Seller certifying to the Issuer, the Owner Trustee, the
Certificate Registrar and the Seller that such transferee is a
"qualified institutional buyer" under Rule 144A under the
Securities Act, or (b) an investment letter (in substantially the
form attached hereto as Exhibit G), acceptable to and in form and
substance reasonably satisfactory to the Certificate Registrar,
which investment letters shall not be an expense of the Issuer, the
Owner Trustee, the Certificate Registrar, the Servicer or the
Seller and (ii) the Certificate of Non-Foreign Status (in
substantially the form attached hereto as Exhibit F) acceptable to
and in form and substance reasonably satisfactory to the
Certificate Registrar, which certificate shall not be an expense of
the Issuer, the Owner Trustee, the Certificate Registrar, the
Servicer, the Administrator or the Seller. The Holder of a
Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Issuer, the Owner Trustee, the Certificate
Registrar, the Servicer and the Seller against any liability that
may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Certificate shall be made unless the Certif-
icate Registrar shall have received either (i) a representation
letter from the proposed transferee of such Certificate to the
effect that such proposed transferee is not an employee benefit
plan subject to the fiduciary responsibility provisions of ERISA,
or Section 4975 of the Code, or a Person acting on behalf of any
such plan or using the assets of any such plan, or if the proposed
transferee is an insurance company, a representation that the
proposed transferee is an insurance company which is purchasing
such certificates with funds contained in an "insurance company
general account" (as such term is defined in section v(e) of
prohibited transaction class exemption 95-60 ("ptce 95-60")), that
the purchase and holding of such certificates are covered under
ptce 95-60 and that ptce 95-60 remains a valid and available
exemption, which representation letter shall not be an expense of
the Issuer, Owner Trustee, the Certificate Registrar, the Servicer
or the Seller or (ii) in the case of any such certificate presented
for registration in the name of an employee benefit plan subject to
the fiduciary responsibility provisions of ERISA, or Section 4975
of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan, or any other Person who
is using the assets of any such plan to effect such acquisition, an
Opinion of Counsel, in form and substance reasonably satisfactory
to, and addressed and delivered to, the Issuer, the Certificate
Registrar and the Seller, to the effect that the purchase or
holding of such Certificate will not result in the assets of the
Owner Trust Estate being deemed to be "plan assets" and subject to
the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of the Code, will not constitute or result
in a prohibited transaction within the meaning of Section 406 or
Section 407 of ERISA or Section 4975 of the Code, and will not
subject the Issuer, the Owner Trustee, the Certificate Registrar,
the Servicer or the Seller to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those explicitly undertaken in this
Trust Agreement which Opinion of Counsel shall not be an expense of
the Issuer, the Owner Trustee, the Certificate Registrar, the
Servicer or Seller.
The Certificates shall not be listed for trading on an
established securities market, nor be readily tradeable on a
secondary market, nor be transferable through the substantial
equivalent of a secondary market, nor shall the Issuer be permitted
to have more than 100 partners, for income tax purposes, all within
the meaning of Code Section 7704, and its attendant regulations, as
applicable. If requested, in the discretion of the Seller,
transfer of a Certificate shall be made only if accompanied by an
Opinion of Counsel satisfactory to the Owner Trustee, which Opinion
of Counsel shall not be an expense of the Issuer, the Owner
Trustee, the Servicer or the Seller, to the effect such transfer
will not cause the Issuer to be a publicly traded partnership
taxable as a corporation, and will not cause the termination of the
Issuer under the federal income tax rules applicable to
partnerships in a manner having a material adverse tax impact to
any existing Certificateholder (unless such Certificateholder
provides its written consent to such transfer).
Each Certificateholder agrees to provide information to the
Administrator when so requested concerning the beneficial ownership
of its Certificates as necessary for the Issuer to assure its
compliance with the requirements for avoiding taxation at the
entity level as a publicly traded partnership or otherwise. Each
Certificateholder agrees to restrict the transfer of record owner-
ship and beneficial ownership of its Certificates as requested by
the Administrator based upon applicable governmental regulation,
rulings or notices and any judicial decisions as may exist from
time to time, as necessary or advisable for avoiding the Issuer's
treatment as a publicly-traded partnership taxable as a
corporation, or its termination for federal income tax purposes
under Code Section 708 in a manner having a material adverse tax
impact on any non-consenting existing Certificateholder.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certif-
icates. If (a) any mutilated Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall
receive evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there shall be delivered to the
Issuer, the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate
has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Issuer shall execute and the Owner Trustee or The
Bank of New York, as the Issuer's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of
any new Certificate under this Section 3.06, the Owner Trustee or
the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section 3.06 shall constitute conclusive
evidence of ownership in the Issuer, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
Section 3.07. Persons Deemed Certificateholders. Prior to
due presentation of a Certificate for registration of transfer, the
Owner Trustee, the Certificate Registrar or any Certificate Paying
Agent may treat the Person in whose name any Certificate is
registered in the Certificate Register as the owner of such
Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the
Issuer, the Owner Trustee, the Certificate Registrar or any Paying
Agent shall be bound by any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names and
Addresses. The Certificate Registrar shall furnish or cause to be
furnished to the Seller or the Owner Trustee, within 15 days after
receipt by the Certificate Registrar of a written request therefor
from the Seller or the Owner Trustee, a list, in such form as the
Seller or the Owner Trustee, as the case may be, may reasonably
require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Certificateholders
or one or more Holders of Certificates representing not less than
25% of the Security Balance of the Certificates apply in writing to
the Certificate Registrar, and such application states that the
applicants desire to communicate with other Certificateholders with
respect to their rights under the Basic Documents or under the
Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the
Certificate Registrar shall, within five Business Days after the
receipt of such application, afford such applicants access during
normal business hours to the current list of Certificateholders.
Each Holder, by receiving and holding a Certificate, shall be
deemed to have agreed not to hold any of the Issuer, the Seller,
the Holder of the Designated Certificate, the holder of the
Holdback Amount, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
Section 3.09. Maintenance of Office or Agency. The Certif-
icate Registrar, on behalf of the Issuer, shall maintain in the
city of New York, an office or offices or agency or agencies where
Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be
served. The Issuer initially designates the Corporate Trust Office
of the Indenture Trustee as its office for such purposes. The
Certificate Registrar shall give prompt written notice to the
Seller, the Owner Trustee, the Holder of the Designated Certificate
and the Certificateholders of any change in the location of the
Certificate Register or any such office or agency. The Certificate
Registrar shall immediately furnish to the Owner Trustee any
notices or demands to the Owner Trustee received by the Certificate
Registrar at the office maintained by it pursuant to this Section.
Section 3.10. Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from
the Payment Account pursuant to Section 3.05 of the Indenture. The
Issuer may revoke such power and remove the Certificate Paying
Agent if the Administrator determines in its sole discretion that
the Certificate Paying Agent shall have failed to perform its
obligations under this Trust Agreement or as set forth in Section
3.03 of the Indenture in any material respect; provided that at the
time of such removal, the Paying Agent shall also be removed by the
Issuer under the Indenture. The Bank of New York shall be
permitted to resign as Certificate Paying Agent upon 30 days
written notice to the Owner Trustee; provided that The Bank of New
York is also resigning as Paying Agent under the Indenture at such
time. In the event that The Bank of New York shall no longer be
the Certificate Paying Agent and Paying Agent under the Indenture,
the Administrator shall appoint a successor to act as Certificate
Paying Agent (which shall be a bank or trust company) and which
shall also be the successor Paying Agent under the Indenture. The
Administrator shall cause such successor Certificate Paying Agent
or any additional Certificate Paying Agent appointed by the
Administrator to execute and deliver to the Owner Trustee an
instrument to the effect set forth in Section 3.03 of the Indenture
as it relates to the Certificate Paying Agent. The Certificate
Paying Agent shall return all unclaimed funds to the Issuer and
upon removal of a Certificate Paying Agent such Certificate Paying
Agent shall also return all funds in its possession to the Issuer.
The provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to
the Certificate Paying Agent to the extent applicable. Any
reference in this Agreement to the Certificate Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 3.11. Ownership by HCLC. (a) HCLC shall receive on
the Closing Date, in partial consideration for the transfer of the
Series 1997-2 Participation Interest, a Certificate representing at
least 1% of the Initial Principal Balance of the Certificates (the
"Designated Certificate") and the right to the entire payment
stream represented by the Holdback Amount. The Owner Trustee shall
cause the Designated Certificate and any Successor Designated
Certificate created pursuant to Section 9.02 to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT UPON
SATISFACTION OF THE CONDITIONS IN SECTION 3.11(b) OF THE TRUST
AGREEMENT." For purposes of the Business Trust Statute, the
Designated Certificate and any Successor Designated Certificate
shall be deemed to be a separate class of Certificates from all
other Certificates issued by the Issuer; provided that the rights
and obligations evidenced by all Certificates, regardless of class,
shall, except as provided in this Section, be identical.
(b) The Designated Certificate and Holdback Amount shall, for
income and franchise tax purposes, be treated as the general
partnership interest of the Issuer. The Designated Certificate
shall at all times represent an investment in the Issuer of not
less than 1% of the capital represented by all Certificates. The
Designated Certificate and Holdback Amount shall not be separately
transferable. HCLC may transfer the Designated Certificate to an
Affiliate of HCLC if, (a) the applicable provisions of Section 3.05
are satisfied and (b) the Certificate Registrar receives an Opinion
of Counsel to the effect that the transfer of the Designated
Certificate shall not cause the Issuer to be subject to an entity
level tax. Otherwise, HCLC may transfer the Designated Certificate
if, (a) the conditions in clauses (a) and (b) in the preceding
sentence are satisfied, (b) a majority in interest by Security
Balance of the Certificates (exclusive of the Designated
Certificate) approves such transfer, which will not be unreasonably
withheld, and (c) the Rating Agencies shall consent to such
transfer.
Section 3.12. RESERVED
Section 3.13. Optional Repurchase of the Series 1997-2
Participation Interest. (a) The Seller may, with 10 days prior
written notice to the Owner Trustee, Servicer and the Indenture
Trustee, purchase the entire Series 1997-2 Participation Interest,
on any Payment Date in which the Aggregate Security Balance is
equal to or less than ten percent of the initial Aggregate Security
Balance. The Seller shall deposit into the Payment Account on the
Business Day prior to the Payment Date on which such purchase is to
occur, an amount equal to the principal balance of the Series 1997-
2 Participation Interest and the amount of interest and Certificate
Yield to be distributed to the Security holders pursuant to Section
3.05(a) of the Indenture as of such Payment Date.
ARTICLE IV
Actions by Owner Trustee
Section 4.01. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the
Owner Trustee shall not take action unless at least 30 days before
the taking of such action, the Owner Trustee shall have notified
the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative
direction:
(a) the initiation of any claim or lawsuit by the Issuer
(except claims or lawsuits brought in connection with the collec-
tion of the Series 1997-2 Participation Interest) and the com-
promise of any action, claim or lawsuit brought by or against the
Issuer (except with respect to the aforementioned claims or
lawsuits for collection of the Series 1997-2 Participation
Interest);
(b) the election by the Issuer to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental inden-
ture in circumstances where the consent of any Noteholder is
required;
(d) (i) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
not required and such amendment materially adversely affects the
interest of the Certificateholders or (ii) the amendment of the
Pooling and Servicing Agreement under circumstances where the
consent of the holder of Series Participation Interests is
required;
(e) the amendment, change or modification of the Adminis-
tration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that
would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or pursuant to
this Trust Agreement of a successor Certificate Registrar,
Certificate Paying Agent or Administrator or the consent to the
assignment by the Note Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar, Certificate Paying Agent or Administrator of
its obligations under the Indenture or this Trust Agreement, as
applicable.
Section 4.02. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee shall not have the power,
except upon the direction of the Certificateholders, to (a) remove
the Administrator under the Administration Agreement pursuant to
Section 8 thereof, (b) appoint a successor Administrator pursuant
to Section 8 of the Administration Agreement, (c) remove the
Servicer under the Pooling and Servicing Agreement pursuant to
Article X thereof or (d) except as expressly provided in the Basic
Documents, sell the Series 1997-2 Participation Interest after the
termination of the Indenture. The Owner Trustee shall take the
actions referred to in the preceding sentence only upon written
instructions signed by the Certificateholders.
Section 4.03. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence
a voluntary proceeding in bankruptcy relating to the Issuer without
the unanimous prior approval of all Certificateholders and the
delivery to the Owner Trustee by each such Certificateholder of a
certificate certifying that such Certificateholder reasonably
believes that the Issuer is insolvent.
Section 4.04. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to
refrain from taking any action if such action or inaction would be
contrary to any obligation of the Issuer or the Owner Trustee under
this Trust Agreement or any of the Basic Documents or would be
contrary to Section 2.03, nor shall the Owner Trustee be obligated
to follow any such direction, if given.
Section 4.05. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders
under this Trust Agreement may be taken by the Holders of
Certificates evidencing not less than a majority of the outstanding
Security Balance of the Certificates. Except as expressly provided
herein, any written notice of the Certificateholders delivered
pursuant to this Trust Agreement shall be effective if signed by
Holders of Certificates evidencing not less than a majority of the
outstanding Security Balance of the Certificates at the time of the
delivery of such notice.
ARTICLE V
Application of Trust Funds
Section 5.01. Distributions. (a) On each Payment Date, the
Certificate Paying Agent shall distribute out of the Payment
Account to the extent of funds on deposit therein and available
therefor, distributions on the Certificates and in payment of the
Holdback Amount as provided in Section 3.05 of the Indenture.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder,
such tax shall reduce the amount otherwise distributable to the
Certificateholder in accordance with Section 3.05 of the Indenture.
The Certificate Paying Agent is hereby authorized and directed to
retain or cause to be retained from amounts otherwise distributable
to the Certificateholders sufficient funds for the payment of any
tax that is legally owed by the Issuer (but such authorization
shall not prevent the Issuer or the effected Certificateholder with
the consent of the Designated Certificateholder), from contesting
any such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such pro-
ceedings). The amount of any withholding tax imposed with respect
to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Certificate
Paying Agent and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect
to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole
discretion withhold such amounts in accordance with this
paragraph (b).
(c) All calculations of the Certificate Yield on the
Certificates shall be made on the basis of the actual number of
days in an Interest Period and a year assumed to consist of 360
days.
Section 5.02. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any
Payment Date as provided in Section 3.05 of the Indenture shall be
made to each Certificateholder of record on the preceding Record
Date either by, in the case of any Certificateholder owning
Certificates, other than the Designated Certificate, having
denominations aggregating at least $1,000,000, wire transfer, in
immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business
Days prior to such Payment Date or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the
Certificate Register. All distributions in respect of the initial
Designated Certificate and the Holdback Amount shall be made to
HCLC, the initial Holder of the Designated Certificate or its
permitted transferee, as the case may be, by wire transfer, in
immediately available funds, to the account of such entity at a
bank or other entity having appropriate facilities therefor, as
specified in written instructions to the Certificate Paying Agent
on the fifth Business Day prior to the first Payment Date.
Section 5.03. Signature on Returns. The Holder of the
Designated Certificate shall sign on behalf of the Issuer the tax
returns of the Issuer.
Section 5.04. Statements to Certificateholders. No later
than the second Business Day prior to each Payment Date, the Owner
Trustee on behalf of the Issuer shall cause to be delivered to the
Certificate Paying Agent and the Indenture Trustee the Monthly
Security Report for such Payment Date prepared by the Administrator
substantially in the form set forth on Exhibit B to the Indenture.
On each Payment Date, the Certificate Paying Agent shall send to
each Certificateholder the statement or statements provided to the
Owner Trustee, the Certificate Paying Agent and the Indenture
Trustee by the Servicer pursuant to Article V of the Pooling and
Servicing Agreement with respect to such Payment Date.
Section 5.05. Tax Reporting; Tax Elections. The Holder of
the Designated Certificate shall cause the Issuer to file federal
and state income tax returns and information statements as a part-
nership for each of its taxable years. Within 90 days after the
end of each calendar year, the Holder of the Designated Certificate
shall cause the Issuer to provide to each Certificateholder an
Internal Revenue Service form "K-1" or any successor schedule and
supplemental information, if required by law, to enable each
Certificateholder to file its federal and state income tax returns.
The Holder of the Designated Certificate may from time to time make
and revoke such tax elections with respect to the Issuer as it
deems necessary or desirable in its sole discretion to carry out
the business of the Issuer or the purposes of this Trust Agreement
if permitted by applicable law. Notwithstanding the foregoing, an
election under Section 754 of the Code shall not be made without
the written consent of the Holder of the Designated Certificate,
which consent shall be given in the sole discretion of the Holder
of the Designated Certificate. The Holder of the Designated
Certificate shall serve as tax matters partner for the Issuer.
Section 5.06. Capital Accounts. Separate capital accounts
shall be maintained for each Certificateholder in accordance with
tax accounting principles. Each such account shall initially equal
the amount paid to the Issuer by the Certificateholder for its
Certificate and shall be (i) increased by the distributive share of
profits and capital gains of such Certificateholder, and (ii)
decreased by the amount of any cash and the fair market value of
any non-cash assets distributed to such Certificate-holder by the
Issuer pursuant to this Trust Agreement, and by such
Certificateholder's distributive share of losses.
The fiscal year of the Issuer shall end on the 31st day of
December in each year, unless otherwise required by the Code. For
each fiscal year of the Issuer, net profits shall be allocated
among the Certificateholders (including the Holder of the
Designated Certificate to which the payments in respect of the
Holdback Amount will be made to the extent possible) in such manner
as to cause their ending capital accounts (prior to any reduction
for distributions for such year and to the extent possible) to
reflect their respective rights to current and future distributions
with respect to income and the return of their investment. Such
allocation shall be made to the Certificateholders in the order of
their right to such distributions and proportionately among
Certificateholders having equal priority. For each fiscal year of
the Issuer, net losses shall be allocated among the
Certificateholders in such manner as to reflect the order and
amount in which they would respectively bear the economic burden of
such losses, and then in accordance with their relative Percentage
Interests.
The partnership tax returns of the Issuer shall be prepared in
such a manner as to fairly reflect the respective interest in the
Issuer of each Certificateholder in accordance with the principles
of the regulations under Code Section 704(b). Items of income and
gain shall be allocated in proportion to the overall allocation of
income to each Certificateholder, and items of loss, expense and
deduction shall be allocated in proportion to the overall
allocation of loss to each Certificateholder. Any unexpected
adjustments, allocations or distributions shall be offset by
allocations of items of income and gain as quickly as possible in
accordance with the qualified income offset provisions of the Code
Section 704(b) regulations.
If during any fiscal year of the Issuer there is a change in
any Certificateholder's interest as a result of the issuance,
transfer or redemption of any Certificates, profits and losses
shall be allocated among the Certificateholders so as to reflect
their varying interest in the Issuer during the period. The
allocation shall be made using the "interim closing of the books"
method or any other method permissible under Code Section 706
selected by the Administrator. The Administrator shall determine
when any transferee of a Certificate shall be deemed admitted to
the "partnership" for federal income tax purposes. Any transferee
shall succeed to that portion of the assignor's capital account
attributable to the interest so transferred.
The maintenance of capital accounts by the Issuer is solely
for the preparation of its income tax returns, and is not intended
to confer rights upon any third parties. No Certificateholder
shall have, by reason of its capital account, any right to demand
or receive any property or cash from the Issuer or any obligation
to contribute such items to the Issuer. No creditor of the Issuer
shall be deemed a third party beneficiary of any obligation of any
Certificateholder by reason of its capital account to contribute
capital or make loans or advances to the Issuer.
ARTICLE VI
Authority and Duties of Owner Trustee
Section 6.01. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents
to which the Issuer is to be a party and each certificate or other
document attached as an exhibit to or contemplated by the Basic
Documents to which the Issuer is to be a party and any amendment or
other agreement or instrument described herein, in each case, in
such form as the Administrator shall approve, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition
to the foregoing, the Owner Trustee is authorized, but shall not be
obligated, to take all actions required of the Issuer pursuant to
the Basic Documents. The Owner Trustee is further authorized from
time to time to take such action as the Administrator directs with
respect to the Basic Documents.
Section 6.02. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Trust Agreement and
the Basic Documents to which the Issuer is a party and to
administer the Issuer in the interest of the Certificateholders,
subject to the Basic Documents and in accordance with the pro-
visions of this Trust Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the
extent the Administrator has agreed in the Administration Agreement
to perform such acts or to discharge such duties of the Owner
Trustee or the Issuer hereunder or under any Basic Document, and
the Owner Trustee shall not be held liable for the default or
failure of the Administrator to carry out its obligations under the
Administration Agreement. The Designated Certificateholder may
delegate its duties hereunder, provided, however, that such
delegation of duties shall not relieve the Designated
Certificateholder of its obligations hereunder.
Section 6.03. Action upon Instruction. (a) Unless the Owner
Trustee has actual knowledge that an Insolvency Event or breach of
representation or violation of any material obligation under the
Basic Documents has occurred in respect of the Designated
Certificateholder or of any Affiliate thereof, the Designated
Certificateholder may by written instruction direct the Owner
Trustee in the management of the Issuer. In the event the Owner
Trustee has actual knowledge that an Insolvency Event or breach of
representation or violation of any material obligation under the
Basic Documents has occurred in respect of the Designated
Certificateholder or any Affiliate thereof, the Certificateholders
may by written instruction direct the Owner Trustee in the
management of the Issuer. Such direction may be exercised at any
time by written instruction of the Designated Certificateholder or
the Certificateholders as the case may be pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee
shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the
part of the Owner Trustee or is contrary to the terms hereof or of
any Basic Document or is otherwise contrary to law.
(calternative courses of action permitted or required by the terms of
this Trust Agreement or under any Basic Document, the Owner Trustee
shall promptly give notice (in such form as shall be appropriate
under the circumstances) to the Certificateholders requesting
instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any
written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no
duty to, take or refrain from taking such action not inconsistent
with this Trust Agreement or the Basic Documents, as it shall deem
to be in the best interests of the Certificateholders, and shall
have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Trust Agreement or any Basic
Document or any such provision is ambiguous as to its application,
or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Trust Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as
to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may
give notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders requesting instruction
and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice
(or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circum-
stances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust Agreement
or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to
any Person for such action or inaction.
Section 6.04. No Duties Except as Specified in this Trust
Agreement or in Instructions. The Owner Trustee shall not have any
duty or obligation to manage, make any payment with respect to,
register, record, sell, dispose of, or otherwise deal with the
Owner Trust Estate, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly
provided by the terms of this Trust Agreement or in any document or
written instruction received by the Owner Trustee pursuant to
Section 6.03; and no implied duties or obligations shall be read
into this Trust Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or
file any Securities and Exchange Commission filing for the Trust or
to record this Trust Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge
any liens on any part of the Owner Trust Estate that result from
actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust
Estate.
Section 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use,
sell, dispose of or otherwise deal with any part of the Owner Trust
Estate except (1) in accordance with the powers granted to and the
authority conferred upon the Owner Trustee pursuant to this Trust
Agreement, (2) in accordance with the Basic Documents and (3) in
accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.03.
Section 6.06. Restrictions. The Owner Trustee shall not take
any action (i) that is inconsistent with the purposes of the Issuer
set forth in Section 2.03 or (ii) that, to the actual knowledge of
the Owner Trustee, would result in the Issuer becoming taxable as
a corporation for federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.06.
ARTICLE VII
Concerning the Owner Trustee
Section 7.01. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trust hereby created and agrees to perform its
duties hereunder with respect to such trusts but only upon the
terms of this Trust Agreement. The Owner Trustee and the
Certificate Paying Agent also agree to disburse all moneys actually
received by it constituting part of the Owner Trust Estate upon the
terms of the Basic Documents and this Trust Agreement. The Owner
Trustee shall not be answerable or accountable hereunder or under
any Basic Document under any circumstances, except (i) for its own
willful misconduct, negligence or bad faith or (ii) in the case of
the inaccuracy of any representation or warranty contained in
Section 7.03 expressly made by the Owner Trustee. In particular,
but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Administrator, Holder of the Designated
Certificate or the Certificateholders;
(c) No provision of this Trust Agreement or any Basic Docu-
ment shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any
of its rights, duties or powers hereunder or under any Basic
Document if the Owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or
provided to it;
(d) Under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) The Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Trust Agreement or
for the due execution hereof by the Seller or the Holder of the
Designated Certificate or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate, or
for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the
Certificates, if executed by the Owner Trustee and the Owner
Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any Certificateholder, other
than as expressly provided for herein or expressly agreed to in the
Basic Documents;
(f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Certificate Paying Agent, the
Certificate Registrar, the Holder of the Designated Certificate,
the Seller, the Indenture Trustee or the Servicer under any of the
Basic Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Issuer
under this Trust Agreement or the Basic Documents that are required
to be performed by the Administrator under the Administration
Agreement, the Indenture Trustee, the Certificate Paying Agent, the
Certificate Registrar under this Trust Agreement or the Indenture
or the Seller under the Receivables Purchase Agreement; and
(g) The Owner Trustee shall be under no obligation to exer-
cise any of the rights or powers vested in it or duties imposed by
this Trust Agreement, or to institute, conduct or defend any
litigation under this Trust Agreement or otherwise or in relation
to this Trust Agreement or any Basic Document, at the request,
order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discre-
tionary act enumerated in this Trust Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its negligence or willful
misconduct in the performance of any such act.
Section 7.02. Furnishing of Documents. The Issuer shall
furnish to the Certificateholders promptly upon receipt of a
written reasonable request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Issuer under
the Basic Documents.
Section 7.03. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Seller, for the
benefit of the Certificateholders, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware.
It has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Trust Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Trust Agreement, and this
Trust Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this Trust
Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Trust Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any federal or Delaware law,
governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it,
or constitute any default under its charter documents or bylaws or
any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound.
Section 7.04. Reliance; Advice of Counsel. (a) The Owner
Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper
believed by it to be genuine and believed by it to be signed by the
proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is
in full force and effect. As to any fact or matter the method of
determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate,
signed by the president or any vice president or by the treasurer
or any assistant treasurer or other authorized officers of the
relevant party, as to such fact or matter and such certificate
shall constitute full protection to the Owner Trustee for any
action taken or omitted to be taken by it in good faith in reliance
thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this
Trust Agreement or the Basic Documents, the Owner Trustee (1) may
act directly or through its agents, attorneys or administrators
pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been
selected by the Owner Trustee with reasonable care, and (2) may
consult with counsel, accountants and other skilled persons to be
selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the written opinion or
advice of any such counsel, accountants or other such Persons and
not contrary to this Trust Agreement or any Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby cre-
ated, Chase Manhattan Bank Delaware acts solely as Owner Trustee
hereunder and not in its individual capacity, and all Persons
having any claim against the Owner Trustee by reason of the
transactions contemplated by this Trust Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 7.06. Owner Trustee Not Liable for Certificates. The
recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken
as the statements of the Seller, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this
Trust Agreement, of any Basic Document or of the Certificates
(other than the signatures of the Owner Trustee on the
Certificates) or the Notes. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to Certificateholders under this
Trust Agreement or the Noteholders under the Indenture, including,
the compliance by the Seller with any warranty or representation
made under any Basic Document or in any related document or the
accuracy of any such warranty or representation, or any action of
the Administrator, the Certificate Paying Agent, the Certificate
Registrar or the Indenture Trustee taken in the name of the Owner
Trustee.
Section 7.07. Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates or Notes and may deal
with the Seller, the Certificate Paying Agent, the Certificate
Registrar, the Administrator and the Indenture Trustee in banking
transactions with the same rights as it would have if it were not
Owner Trustee.
ARTICLE VIII
Compensation of Owner Trustee
Section 8.01. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date
hereof, and the Owner Trustee shall be reimbursed by HCLC, the
initial Holder of the Designated Certificate for its reasonable
expenses hereunder and under the Basic Documents, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and outside counsel as the Owner Trustee
may reasonably employ in connection with the exercise and perfor-
xxxxx of its rights and its duties hereunder and under the Basic
Documents.
Section 8.02. Indemnification. The Holder of the Designated
Certificate shall be liable as primary obligor for, and shall
indemnify the Owner Trustee and its successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages,
taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and
expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any
way relating to or arising out of this Trust Agreement, the Basic
Documents, the Owner Trust Estate, the administration of the Owner
Trust Estate or the action or inaction of the Owner Trustee
hereunder; provided that:
(i) the Holder of the Designated Certificate shall not
be liable for or required to indemnify an Indemnified Party
from and against Expenses arising or resulting from the Owner
Trustee's willful misconduct, negligence or bad faith or as a
result of any inaccuracy of a representation or warranty
contained in Section 7.03 expressly made by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified
Party shall have given the Holder of the Designated Certif-
icate written notice thereof promptly after the Indemnified
Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the
Holder of the Designated Certificate shall consult with the
Indemnified Party in preparing such defense; and
(iv) notwithstanding anything in this Agreement to the
contrary, the Holder of the Designated Certificate shall not
be liable for settlement of any claim by an Indemnified Party
entered into without the prior consent of the Holder of the
Designated Certificate which consent shall not be unreasonably
withheld.
The indemnities contained in this Section shall survive the
resignation or termination of the Owner Trustee or the termination
of this Trust Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel, if other than
the legal counsel retained by the Owner Trustee in connection with
the execution and delivery of this Trust Agreement, shall be
subject to the approval of the Holder of the Designated
Certificate, which approval shall not be unreasonably withheld. In
addition, upon written notice to the Owner Trustee and with the
consent of the Owner Trustee which consent shall not be unreason-
ably withheld, the Holder of the Designated Certificate has the
right to assume the defense of any claim, action or proceeding
against the Owner Trustee.
ARTICLE IX
Termination of Trust Agreement
Section 9.01. Termination of Trust Agreement. (a) This
Trust Agreement (other than Article VIII) and the Issuer shall
terminate and be of no further force or effect upon the earliest of
(i) upon the final distribution of all moneys or other property or
proceeds of the Owner Trust Estate in accordance with the terms of
the Indenture and this Trust Agreement, (ii) the Payment Date in
November 2007 or (iii) at the time provided for in Section 9.02.
The bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder, other than the Holder of the Designated
Certificate, shall not (x) operate to terminate this Trust
Agreement or the Issuer or (y) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take
any action or proceeding in any court for a partition or winding up
of all or any part of the Issuer or the Owner Trust Estate or
(z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 9.01(a), none of the
Seller, the Holder of the Designated Certificate or any other
Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Issuer, specifying the
Payment Date upon which Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the
final distribution and cancellation, shall be given by the
Certificate Paying Agent by letter to Certificateholders mailed
within five Business Days of receipt of notice of such termination
from the Administrator, stating (i) the Payment Date upon or with
respect to which final payment of the Certificates shall be made
upon presentation and surrender of the Certificates at the office
of the Certificate Paying Agent therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at
the office of the Certificate Payment Agent therein specified. The
Certificate Paying Agent shall give such notice to the Owner
Trustee and the Certificate Registrar at the time such notice is
given to Certificateholders. Upon presentation and surrender of
the Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such
Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months
after the date specified in the above mentioned written notice, the
Certificate Paying Agent shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of
funds, if within two years following the Payment Date on which
final payment of the Certificates was to have been made all the
Certificates shall not have been surrendered for cancellation, the
Certificate Paying Agent may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets
that shall remain subject to this Trust Agreement. Any funds
remaining in the Payment Account after exhaustion of such remedies
shall be distributed by the Certificate Paying Agent to the Holder
of the Designated Certificate.
(d) Upon the winding up of the Issuer and its termination,
the Owner Trustee shall cause the Certificate of Trust to be
cancelled by filing a certificate of cancellation with the
Secretary of State in accordance with the provisions of Section
3810(c) of the Business Trust Statute.
Section 9.02. Dissolution upon Bankruptcy of the Holder of
the Designated Certificate. In the event that an Insolvency Event
shall occur with respect to the Holder of the Designated
Certificate, this Agreement shall be terminated in accordance with
Section 9.01, 90 days after the date of such Insolvency Event,
unless, before the end of such 90-day period, the Owner Trustee
shall have received written instructions from Holders of
Certificates (other than the Holder of the Designated Certificate)
representing more than 50% of the Security Balance of the
Certificates (not including the Security Balance of the Designated
Certificate or any other Certificates held by HCLC or any Affiliate
thereof), to the effect that such Holders disapprove of the
termination of the Issuer and have elected or appointed any one of
such Holders or a transferee of Certificates meeting the requisite
conditions set forth in an Opinion of Counsel delivered to the
Owner Trustee as a new Designated Certificateholder (the "Successor
Designated Certificateholder") for the continuation of the tax
treatment of the Issuer. Such Successor Designated Certificate
shall represent at least 1% of the Initial Principal Balance of the
Certificates. The appointment of a Successor Designated
Certificateholder will not deprive HCLC or its transferee of its
economic interest in the Designated Certificate or Holdback Amount,
its Certificates or otherwise in the Owner Trust Estate. Promptly
after the occurrence of any Insolvency Event with respect to any
Holder of the Designated Certificate (A) the Holder of such
Designated Certificate or Successor Designated Certificate shall
give the Indenture Trustee and the Owner Trustee written notice of
such Insolvency Event, (B) the Owner Trustee shall, upon the
receipt of such written notice from the Holder of such Designated
Certificate, give prompt written notice to the Certificateholders
of the occurrence of such event and (C) the Indenture Trustee shall
give prompt written notice of such event to the Noteholders;
provided, however, that any failure to give a notice required by
this sentence shall not prevent or delay, in any manner, a
termination of the Issuer pursuant to the first sentence of this
Section 9.02. Upon a termination pursuant to this Section, the
Owner Trustee shall direct the Indenture Trustee promptly to sell
the assets of the Issuer (other than the Payment Account) in a
commercially reasonable manner and on commercially reasonable
terms. The proceeds of such a sale of the assets of the Issuer
shall be deposited to the Payment Account for distribution in
accordance with Section 5.03(a) of the Indenture.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
Section 10.01. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation satisfying
the provisions of Section 3807(a) of the Business Trust Statute;
authorized to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to super-
vision or examination by federal or state authorities; and having
(or having a parent that has) a rating of at least Baa3 by Moody's
(or a rating otherwise acceptable to Moody's). If such corporation
shall publish reports of condition at least annually pursuant to
law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner
Trustee shall cease to be eligible in accordance with the
provisions of this Section 10.01, the Owner Trustee shall resign
immediately in the manner and with the effect specified in
Section 10.02.
Section 10.02. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the
Administrator and the Designated Certificateholder. Upon receiving
such notice of resignation, the Designated Certificateholder shall
promptly appoint a successor Owner Trustee, by written instrument,
in duplicate, one copy of which instrument shall be delivered to
the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee
may petition any court of competent jurisdiction for the appoint-
ment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to
resign after written request therefor by the Designated
Certificateholder or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent,
or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of
the Owner Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Designated
Certificateholder may remove the Owner Trustee. If the Designated
Certificateholder shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Designated
Certificateholder shall promptly appoint a successor Owner Trustee
by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to
the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appoint-
ment of a successor Owner Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of
appointment by the successor Owner Trustee pursuant to
Section 10.03 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Administrator shall provide notice of
such resignation or removal of the Owner Trustee to each of the
Rating Agencies.
Section 10.03. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.02 shall execute,
acknowledge and deliver to the Designated Certificateholder and to
its predecessor Owner Trustee an instrument accepting such
appointment under this Trust Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall
become effective, and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under
this Trust Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of
its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Trust
Agreement; and the Designated Certificateholder and the predecessor
Owner Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section 10.03 unless at the time of such accep-
tance such successor Owner Trustee shall be eligible pursuant to
Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.03, the Administrator shall mail notice
thereof to all Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within 10 days after acceptance of such
appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the
Administrator.
Section 10.04. Merger or Consolidation of Owner Trustee. Any
Person into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Owner Trustee
shall be a party, or any Person succeeding to all or substantially
all of the corporate trust business of the Owner Trustee, shall be
the successor of the Owner Trustee hereunder, without the execution
or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary
notwithstanding; provided that such Person shall be eligible
pursuant to Section 10.01 and, provided, further, that the Owner
Trustee shall mail notice of such merger or consolidation to the
Rating Agencies.
Section 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Trust Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Owner Trust Estate may at the
time be located, the Designated Certificateholder and the Owner
Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by
the Designated Certificateholder and Owner Trustee to act as co-
trustee, jointly with the Owner Trustee, or as separate trustee or
separate trustees, of all or any part of the Owner Trust Estate,
and to vest in such Person, in such capacity, such title to the
Owner Trust Estate or any part thereof and, subject to the other
provisions of this Section, such powers, duties, obligations,
rights and trusts as the Designated Certificateholder and the Owner
Trustee may consider necessary or desirable. If the Designated
Certificateholder shall not have joined in such appointment within
15 days after the receipt by it of a request so to do, the Owner
Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee under this Trust Agreement shall be
required to meet the terms of eligibility as a successor Owner
Trustee pursuant to Section 10.01 and no notice of the appointment
of any co-trustee or separate trustee shall be required pursuant to
Section 10.03.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(a) All rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exer-
cised or performed by the Owner Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without
the Owner Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to the Owner Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Trust Agreement; and
(c) The Designated Certificateholder and the Owner Trustee
acting jointly may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee or
co-trustee shall refer to this Trust Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Owner Trustee or separately, as may be
provided therein, subject to all the provisions of this Trust
Agreement, specifically including every provision of this Trust
Agreement relating to the conduct of, affecting the liability of,
or affording protection to, the Owner Trustee. Each such instru-
ment shall be filed with the Owner Trustee and a copy thereof given
to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful
act under or in respect of this Trust Agreement on its behalf and
in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Owner Trustee, to the extent permitted by law,
without the appointment of a new or successor co-trustee or
separate trustee.
ARTICLE XI
Miscellaneous
Section 11.01. Amendments. (a) This Trust Agreement may be
amended from time to time by the parties hereto, by a written
instrument signed by each of them, without the consent of any of
the Securityholders; provided that an Opinion of Counsel for the
Seller (which Opinion of Counsel may, as to factual matters, rely
upon Officer's Certificates of the Seller) is addressed and
delivered to the Owner Trustee, dated the date of any such amend-
ment, to the effect that the conditions precedent to any such
amendment have been satisfied and the Seller shall have delivered
to the Owner Trustee an Officer's Certificate, dated the date of
any such Amendment, stating that the Seller reasonably believes
that such amendment will not have a material adverse effect on the
Securityholders. Notwithstanding the foregoing, the Trust
Agreement may be amended by the parties hereto, without delivery of
the foregoing Opinion of Counsel or Officer's Certificates, to
amend the per annum percentage that is added to LIBOR to calculate
the Certificate Rate related to the Certificates to an amount not
exceeding 1.25% per annum.
(b) This Agreement may also be amended from time to time with
the consent of the Holders of the Securities evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the
Security Balance of all affected Securityholders for which the
Seller has not delivered an Officer's Certificate stating that
there is no material adverse effect, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the
rights of the Securityholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments received that are required to be
distributed on any Certificate without the consent of the related
Certificateholder, or (ii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all such
Certificates then outstanding or cause any material adverse tax
consequences to any Certificateholders or Noteholders.
(c) If the purpose of the amendment is to (i) prevent the
imposition of any federal or state taxes at any time that any
Security is outstanding (i.e., technical in nature), or (ii)
eliminate the provisions for termination of this Trust Agreement
and replacement of the Holder of the Designated Certificate upon an
Insolvency Event with respect to the Holder, and eliminate Section
2.07(a) so that Section 2.07(b) applies as well to the Holder of
the Designated Certificate, or (iii) permit the election or
qualification of the Issuer as a "FASIT" or other similar form of
entity for federal income tax purposes pursuant to FASIT
legislation, it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with an Opinion of
Counsel that in the case of (i) above such amendment is necessary
or helpful to prevent the imposition of such taxes, or in the case
of (ii) or (iii) above such amendment will not cause the Issuer to
be subject to an entity level tax and the Seller shall deliver an
Officer's Certificate to the Owner Trustee stating that the Seller
reasonably believes that such amendment will not have a material
adverse effect on Securityholders.
(d) Promptly after the execution of any such amendment or
consent (other than an amendment pursuant to paragraph (a)), the
Owner Trustee shall furnish notification of the substance of such
amendment to each Certificateholder, and to each Rating Agency.
(e) It shall not be necessary for the consent of Certifi-
cateholders under this Section to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certif-
icate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State of the State of Delaware.
Section 11.02. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal
title to any part of the Owner Trust Estate. The Certificate-
holders shall be entitled to receive distributions with respect to
their undivided beneficial interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise,
of any right, title or interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate to
terminate this Trust Agreement or the trusts hereunder or entitle
any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
Section 11.03. Limitations on Rights of Others. Except for
Section 2.07, the provisions of this Trust Agreement are solely for
the benefit of the Owner Trustee, the Seller, the Holder of the
Designated Certificate, the Certificateholders, the Administrator
and, to the extent expressly provided herein, the Indenture Trustee
and the Noteholders, and nothing in this Trust Agreement (other
than Section 2.07), whether express or implied, shall be construed
to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this
Trust Agreement or any covenants, conditions or provisions
contained herein.
Section 11.04. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in
writing and shall be deemed given upon receipt by the intended
recipient or three Business Days after mailing if mailed by cer-
tified mail, postage prepaid (except that notice to the Owner
Trustee shall be deemed given only upon actual receipt by the Owner
Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Seller, addressed to Household Consumer Loan
Corporation, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, Attn:
Compliance Officer, with a copy to Household Finance Corporation,
0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, Attn:
Treasurer; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this
Trust Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or
the Issuer shall also be delivered to the Seller, the Administrator
and The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attn: Global Trust Services.
Section 11.05. Severability. Any provision of this Trust
Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforce-
ability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.06. Separate Counterparts. This Trust Agreement
may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the
same instrument.
Section 11.07. Successors and Assigns. All representations,
warranties, covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, each of the Seller, the
Owner Trustee and its successors and each Certificateholder and its
successors and permitted assigns. Any request, notice, direction,
consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
Section 11.08. Covenants of the Seller. Neither the Seller
nor the Holder of the Designated Certificate will at any time
institute against the Issuer any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law in con-
nection with any obligations relating to the Certificates, the
Notes, this Trust Agreement or any of the Basic Documents.
Section 11.09. No Petition. The Owner Trustee, by entering
into this Trust Agreement, and each Certificateholder, by accepting
a Certificate, hereby covenant and agree that they will not at any
time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of any bankruptcy
proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations to the Certificates,
the Notes, this Trust Agreement or any of the Basic Documents.
Section 11.10. No Recourse. Each Certificateholder by
accepting a Certificate acknowledges that such Certificateholder's
Certificates represent beneficial interests in the Issuer only and
do not represent interests in or obligations of the Seller, the
Holder of the Designated Certificate, the Administrator, the Owner
Trustee, the Indenture Trustee or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as
may be expressly set forth or contemplated in this Trust Agreement,
the Certificates or the Basic Documents.
Section 11.11. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only
and shall not define or limit any of the terms or provisions
hereof.
Section 11.12. Governing Law. THIS TRUST AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. Integration. This Trust Agreement constitutes
the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements and
understanding pertaining thereto.
IN WITNESS WHEREOF, the Seller and the Owner Trustee have
caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above
written.
HOUSEHOLD CONSUMER LOAN CORPORATION,
as Seller and Holder of the
Designated Certificate
By:________________________________
Name: Xxxxxx X. Xxxxx
Title: Vice President and Assistant
Treasurer
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely
as Owner Trustee
By:________________________________
Name:
Title:
Acknowledged and Agreed:
THE BANK OF NEW YORK, as Certificate
Registrar and Certificate
Paying Agent
By:_________________________
Name:
Title:
EXHIBIT A
[FORM OF CERTIFICATE]
[Face]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT REFERRED TO
HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI-
CATE REGISTRAR SHALL HAVE RECEIVED (I) A REPRESENTATION LETTER FROM
THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON
ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH
PLAN, (II) IF THIS CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE
NAME OF A PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS
OF ERISA, OR SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF
ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH PLAN, OR ANY
OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT
SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE
PURCHASE OR HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE
ASSETS OF THE OWNER TRUST ESTATE BEING DEEMED TO BE "PLAN ASSETS"
AND SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR
THE PROHIBITED TRANSACTION PROVISIONS OF THE CODE, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE MEANING
OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE,
AND WILL NOT SUBJECT THE OWNER TRUSTEE OR THE SELLER TO ANY
OBLIGATION OR LIABILITY, (III) OR IF THE PURCHASER IS AN INSURANCE
COMPANY, A REPRESENTATION THAT THE PURCHASER IS AN INSURANCE
COMPANY WHICH IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED
IN AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED
IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
("PTCE 95-60")), THAT THE PURCHASE AND HOLDING OF SUCH CERTIFICATES
ARE COVERED UNDER PTCE 95-60 AND THAT PTCE 95-60 REMAINS A VALID
AND AVAILABLE EXEMPTION, OR (IV) IN THE CASE OF ANY SUCH PROPOSED
TRANSFEREE WHICH IS A PLAN, AN OPINION OF COUNSEL SATISFACTORY TO
THE OWNER TRUSTEE AND THE SELLER TO THE EFFECT SET FORTH IN THE
TRUST AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI-
CATE REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN
STATUS CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR
CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE SERVICER, THE INDENTURE TRUSTEE, THE ADMINISTRATOR
OR THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT
AS EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR THE BASIC
DOCUMENTS.
Certificate No. ___
Original principal amount ("Denomination") of
this Certificate: $____________
Aggregate Denominations of all Certificates:
$42,000,000
Certificate Rate: Floating
Closing Date: November 19, 1997
First Payment Date
December 15, 1997
CUSIP NO. _________
HOUSEHOLD CONSUMER LOAN TRUST 1997-2
Evidencing a fractional undivided interest in the Owner Trust
Estate, the property of which consists primarily of the Series
1997-2 Participation Interest in the Receivables, sold by
HOUSEHOLD CONSUMER LOAN CORPORATION, AS SELLER
This certifies that [name of Holder] is the registered owner
of the Percentage Interest represented hereby in the Household
Consumer Loan Trust 1997-2 (the "Issuer").
The Issuer was created pursuant to a Trust Agreement dated as
of November 1, 1997 (as amended and supplemented from time to time,
the "Trust Agreement") among the Seller, as seller and as holder of
the Designated Certificate, and Chase Manhattan Bank Delaware, as
owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereinafter. This
Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of Consumer
Loan Asset Backed Certificates, Series 1997-2 (the "Certificates")
issued under the Trust Agreement to which reference is hereby made
for a statement of the respective rights thereunder of the Seller,
the Designated Certificateholder, the Owner Trustee and the Holders
of the Certificates and the terms upon which the Certificates are
executed and delivered. All terms used in this Certificate which
are defined in the Trust Agreement shall have the meanings assigned
to them in the Trust Agreement. The Owner Trust Estate consists of
the Series 1997-2 Participation Interest and all monies and the
collections and proceeds due thereon and any part thereof which
consists of general intangibles (as defined in the UCC). The
rights of the Holders of the Certificates are subordinated to the
rights of the Holders of the Notes, as set forth in the Indenture
(as defined herein).
There will be distributed on the fifteenth day of each month
or, if such fifteenth day is not a Business Day, the next Business
Day (each, a "Payment Date"), commencing in December 1997, to the
Person in whose name this Certificate is registered at the close of
business on the last Business Day of the month preceding the month
of such Payment Date (the "Record Date"), such Certificateholder's
Percentage Interest (obtained by dividing the Denomination of this
Certificate by the aggregate Denominations of all Certificates) in
the amount to be distributed to Certificateholders on such Payment
Date.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the
Payment Account that have been released from the Lien of the
Indenture for payment hereunder and that neither the Owner Trustee
in its individual capacity nor the Seller is personally liable to
the Certificateholders for any amount payable under this
Certificate or the Trust Agreement or, except as expressly provided
in the Trust Agreement, subject to any liability under the Trust
Agreement.
The Holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certificate
are subordinated to the rights of the Noteholders as described in
the Indenture, dated as of November 1, 1997, between the Issuer and
The Bank of New York, as Indenture Trustee (the "Indenture").
It is the intent of the Seller and the Certificateholders
that, for purposes of federal income, state and local income and
single business tax and any other income taxes, the Issuer will be
treated as a partnership. The Seller and the other Certif-
icateholders, by acceptance of a Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Certif-
icates for such tax purposes as an equity interest in a partner-
ship.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any
time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations
relating to the Certificates, the Notes, the Trust Agreement or any
of the Basic Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Certificate Paying Agent to each
Certificateholder of record on the preceding Record Date either by,
in the case of any Certificateholder owning Certificates having
denominations aggregating at least $1,000,000, wire transfer, in
immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business
Days prior to such Payment Date or, if not, by check mailed to such
Certificateholder at the address of such Holder appearing in the
Certificate Register. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Certificate
Paying Agent of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or
agency maintained by the Certificate Registrar for that purpose by
the Issuer in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, or an
authenticating agent by manual signature, this Certificate shall
not entitle the Holder hereof to any benefit under the Trust
Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Certificate to
be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST
1997-2
By: Chase Manhattan Bank
Delaware, not in its
individual capacity but
solely as Owner Trustee
Dated: November ___, 1997
Name:
Title:
Certificate of Authentication
This is one of the Certificates referred to in the within mentioned
Trust Agreement.
Chase Manhattan Bank Delaware,
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Name:
Title:
or
The Bank of New York,
as Authenticating Agent of the Issuer
By:______________________________
Name:
Title:
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee or any Affiliates of any of them and no recourse may
be had against such parties or their assets, except as expressly
set forth or contemplated herein or in the Trust Agreement or the
Basic Documents. In addition, this Certificate is not guaranteed
by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect
to the Series 1997-2 Participation Interest (and certain other
amounts), all as more specifically set forth herein. A copy of the
Trust Agreement may be examined by any Certificateholder upon
written request during normal business hours at the principal
office of the Seller and at such other places, if any, designated
by the Seller.
The Trust Agreement permits the amendment thereof as specified
below; provided that any amendment be accompanied by an Opinion of
Counsel for the Seller (which Opinion of Counsel may, as to factual
matters, rely upon Officer's Certificates of the Seller) addressed
and delivered to the Owner Trustee, to the effect that the
conditions precedent in the Trust Agreement to any such amendment
have been satisfied and the Seller shall have delivered to the
Owner Trustee an Officer's Certificate, stating that the Seller
reasonably believes that such amendment will not have a material
adverse effect on the Securityholders. If the purpose of the
amendment is to (i) prevent the imposition of any federal or state
taxes at any time that any Security is outstanding (i.e., technical
in nature), or (ii) eliminate or modify certain provisions relating
to the Designated Certificate or to permit the election or
qualification of the Issuer as a "FASIT" or other similar form of
entity for federal income tax purposes pursuant to FASIT
legislation, it shall not be necessary to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with an Opinion of
Counsel that in the case of (i) above such amendment is necessary
or helpful to prevent the imposition of such taxes, or in the case
of (ii) above such amendment will not cause the Issuer to be
subject to an entity level tax. If the purpose of the amendment is
to add or eliminate or change any provision of the Trust Agreement,
other than as specified in the preceding two sentences, the
amendment shall require the consent of the Holders of the
Certificates evidencing not less than 66-2/3% of the aggregate
unpaid Security Balance of all affected Certificateholders;
provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received
that are required to be distributed on any Certificate without the
consent of the related Certificateholder, or (ii) reduce the
aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment, without the consent of
the Holders of all such Certificates then outstanding or cause any
material adverse tax consequences to any Certificateholders or
Noteholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the offices or agencies
of the Certificate Registrar maintained by the Issuer in the
Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Certif-
icate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same
aggregate interest in the Issuer will be issued to the designated
transferee. The initial Certificate Registrar appointed under the
Trust Agreement is The Bank of New York.
Except as provided in the Trust Agreement, the Certificates
are issuable only in minimum denominations of $1,000,000 and in
integral multiples of $100,000 in excess thereof, except for one
Certificate issued in a denomination of $420,000 which will be held
by the Seller and one other Certificate that may not be in an
integral multiple of $100,000. As provided in the Trust Agreement
and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the
Holder surrendering the same. No service charge will be made for
any such registration of transfer or exchange, but the Owner
Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certif-
icate Registrar and any agent of the Owner Trustee, the Certificate
Paying Agent, or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Owner Trustee, the Certificate Paying
Agent, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Issuer created thereby shall terminate (i) upon
the final distribution of all moneys or other property or proceeds
of the Owner Trust Estate in accordance with the terms of the
Indenture and the Trust Agreement, (ii) the Payment Date in
November 2007, or (iii) upon the bankruptcy or insolvency of the
Holder of the Designated Certificate and the satisfaction of other
conditions specified in Section 9.01 of the Trust Agreement.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code,
of assignee)
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
to transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_________________
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the
within Certificate in every particular, without alteration,
enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements
include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information
of the Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately
available funds to
for the account of ,
account number , or, if mailed by check, to
.
Applicable statements should be mailed to
.
______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT B
[RESERVED]
EXHIBIT C
CERTIFICATE OF TRUST OF
HOUSEHOLD CONSUMER LOAN TRUST 1997-2
This Certificate of Trust of HOUSEHOLD CONSUMER LOAN
TRUST 1997-2 (the "Trust"), dated as of November ___, 1997, is
being duly executed and filed by Chase Manhattan Bank Delaware, a
Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. Code, Section 3801 et
seq.).
1. Name. The name of the business trust formed hereby
is HOUSEHOLD CONSUMER LOAN TRUST 1997-2.
2. Delaware Trustee. The name and business address of
the trustee of the Trust in the State of Delaware is Chase
Manhattan Bank Delaware, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trustee Administration.
3. Effective Date. This Certificate of Trust shall be
effective on November ___, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole
trustee of the Trust, has executed this Certificate of Trust as of
the date first above written.
Chase Manhattan Bank Delaware,
as Owner Trustee
By:
Name:
Title:
EXHIBIT D
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned seller, as registered holder (the
"Seller"), intends to transfer the Rule 144A Securities described
above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance
with the agreements pursuant to which the Rule 144A Securities were
issued, the Seller hereby certifies the following facts: Neither
the Seller nor anyone acting on its behalf has offered, trans-
ferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities,
any interest in the Rule 144A Securities or any other similar
security from, or otherwise approached or negotiated with respect
to the Rule 144A Securities, any interest in the Rule 144A Securi-
ties or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would consti-
tute a distribution of the Rule 144A Securities under the Securi-
ties Act of 1933, as amended (the "1933 Act"), or that would render
the disposition of the Rule 144A Securities a violation of Section
5 of the 1933 Act or require registration pursuant thereto, and
that the Seller has not offered the Rule 144A Securities to any
person other than the Buyer or another "qualified institutional
buyer" as defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants
with, the Owner Trustee and the Seller (as defined in the Trust
Agreement (the "Agreement"), dated as of November 1, 1997 among
Household Consumer Loan Corporation, as Seller, and as Holder of
the Designated Certificate and Chase Manhattan Bank Delaware, as
Owner Trustee) pursuant to Section 3.05 of the Agreement, as
follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in
the Rule 144A Securities.
c. The Buyer has been furnished with all informa-
tion regarding the Rule 144A Securities that it has requested
from the Seller, the Indenture Trustee, the Owner Trustee or
the Servicer.
d. Neither the Buyer nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other dispo-
sition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or other-
wise approached or negotiated with respect to the Rule 144A
Securities, any interest in the Rule 144A Securities or any
other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in
any other manner, or taken any other action, that would con-
stitute a distribution of the Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer"
as that term is defined in Rule 144A under the 1933 Act and
has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Buyer is
aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its
own account or the accounts of other qualified institutional
buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institu-
tional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933
Act.
[3. The Buyer warrants and represents to, and covenants
with, the Seller, the Indenture Trustee, Owner Trustee, Servicer
and the Seller that either (1) the Buyer is (A) not an employee
benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), or
a plan (within the meaning of Section 4975(e)(1) of the Internal
Revenue Code of 1986 ("Code")), which (in either case) is subject
to ERISA or Section 4975 of the Code (both a "Plan"), and (B) is
not directly or indirectly purchasing the Rule 144A Securities on
behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with "plan assets" of a Plan, or (2) the Buyer
understands that registration of transfer of any Rule 144A
Securities to any Plan, or to any Person acting on behalf of any
Plan, will not be made unless such Plan delivers an opinion of its
counsel, addressed and satisfactory to the Certificate Registrar
and the Seller, to the effect that the purchase and holding of the
Rule 144A Securities by, on behalf of or with "plan assets" of any
Plan would not constitute or result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code, and would
not subject the Seller, the Servicer, the Indenture Trustee or the
Issuer to any obligation or liability (including liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken
in the Agreement or any other liability.]
4. This document may be executed in one or more counter-
parts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original;
such counterparts, together, shall constitute one and the same
document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
Annex 1 to Exhibit D
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification
is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive
officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is
a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the
Buyer owned and/or invested on a discretionary basis
$______________________ in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A) and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association,
cooperative bank, homestead association or similar
institution, which is supervised and examined by a
State or Federal authority having supervision over any
such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as
demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act
of 1934.
___ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is
subject to supervision by the insurance commissioner
or a similar official or agency of a State or
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its
political subdivisions, for the benefit of its
employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ Investment Adviser. The Buyer is an investment
adviser registered under the Investment Advisers Act
of 1940.
___ SBIC. The Buyer is a Small Business Investment
Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee
is a bank or trust company and whose participants are
exclusively (a) plans established and maintained by a
State, its political subdivisions, or any agency or
instrumentality of the State or its political
subdivisions, for the benefit of its employees, or
(b) employee benefit plans within the meaning of Title
I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10
plans.
3. The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer, (ii)
securities that are part of an unsold allotment to or subscription
by the Buyer, if the Buyer is a dealer, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a
repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the
Buyer, the Buyer used the cost of such securities to the Buyer and
did not include any of the securities referred to in the preceding
paragraph. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the
Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of
such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and
the Buyer is not itself a reporting company under the Securities
Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule
144A and understands that the seller to it and other parties
related to the Certificates are relying and will continue to rely
on the statements made herein because one or more sales to the
Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the
Buyer agrees that, in connection with any purchase of securities
sold to the Buyer for the account of a third party (including any
separate account) in reliance on Rule 144A, the Buyer will only
purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a
current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such
third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation of
this certification as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
Annex 2 to Exhibit D
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection
with the Rule 144A Investment Representation to which this
Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or,
if the Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act of 1933 ("Rule 144A")
because Buyer is part of a Family of Investment Companies (as
defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because
(i) the Buyer is an investment company registered under the
Investment Company Act of 1940, and (ii) as marked below, the Buyer
alone, or the Buyer's Family of Investment Companies, owned at
least $100,000,000 in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment
Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other
than the excluded securities referred to below) as of the
end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $______________ in
securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series
thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned
subsidiaries of the same parent or because one investment adviser
is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with the
Buyer or are part of the Buyer's Family of Investment Companies,
(ii) bank deposit notes and certificates of deposit, (iii) loan
participations, (iv) repurchase agreements, (v) securities owned
but subject to a repurchase agreement and (vi) currency, interest
rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands
that each of the parties to which this certification is made are
relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on
Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to
which this certification is made of any changes in the information
and conclusions herein. Until such notice, the Buyer's purchase of
Rule 144A Securities will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT E
DEFINITIONS
[See Appendix A attached to the Indenture]
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is
delivered pursuant to Section 3.03 of the Trust Agreement, dated as
of November 1, 1997 (the "Trust Agreement"), among the Household
Consumer Loan Corporation, as seller and the entity who is the
general partner for tax purposes (the "Designated Holder") and
Chase Manhattan Bank Delaware, as Owner Trustee, in connection with
the acquisition of, transfer to or possession by the undersigned,
whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the Household Consumer Loan Asset
Backed Certificates, Series 1997-2 (the "Certificate").
Capitalized terms used but not defined in this certificate have the
respective meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a
nominee), and in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS
Form W-9 relating to such holder.
To confirm to the Issuer that the provisions of Section 1446 of the
Internal Revenue Code (relating to withholding tax on foreign
partners) do not apply in respect of the Certificate held by the
undersigned, the undersigned hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is) not a non-
resident alien for purposes of U.S. income
taxation;
2. My (The Beneficial Owner's) name and home
address are:
; and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security Number)
is .
B. Corporate, Partnership or Other Entity as Beneficial
Owner
1. (Name of the
Beneficial Owner) is not a foreign
corporation, foreign partnership, foreign
trust or foreign estate (as those terms are
defined in the Code and Treasury Regulations);
2. The Beneficial Owner's office address and
place of incorporation (if applicable) is
; and
3. The Beneficial Owner's U.S. employer
identification number is .
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner,
the undersigned certifies that this certificate has been made in
reliance upon information contained in:
an IRS Form W-9
a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the
undersigned agrees to notify the Issuer at least thirty (30) days
prior to the date that the form relied upon becomes obsolete, and
(ii) in connection with change in Beneficial Owners, the
undersigned agrees to submit a new Certificate of Non-Foreign
Status to the Issuer promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof,
agrees to notify the Issuer within sixty (60) days of the date that
the Beneficial Owner becomes a foreign person. The undersigned
understands that this certificate may be disclosed to the Internal
Revenue Service by the Issuer and any false statement contained
therein could be punishable by fines, imprisonment or both.
Under penalties of perjury, I declare that I have examined
this certificate and to the best of my knowledge and belief it is
true, correct and complete and will further declare that I will
inform the Issuer of any change in the information provided above,
and, if applicable, I further declare that I have the authority* to
sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of
attorney must accompany this certificate.
EXHIBIT G
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
[Certificate Registrar]
Re: Household Consumer Loan Trust 1997-2
Consumer Loan Asset Backed Certificates,
Series 1997-2 (the "Certificates")
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates, we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws and are
being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are
an "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to
review the Trust Agreement, Indenture and Pooling and Servicing
Agreement and we have had the opportunity to ask questions of and
receive answers from the Seller concerning the purchase of the
Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the
Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan that is subject to Section 4975 of the Internal
Revenue Code of 1986, as amended, nor are we acting on behalf of or
using the assets of any such plan, [or if the Purchaser is an
insurance company, a representation that the Purchaser is an
insurance company which is purchasing such certificates with funds
contained in an "insurance company general account" (as such term
is defined in section v(e) of prohibited transaction class
exemption 95-60 ("ptce 95-60")), that the purchase and holding of
such certificates are covered under ptce 95-60 and that ptce 95-60
is a valid and available exemption,] or (iv) in the case of any
such proposed transferee which is a plan, an opinion of counsel
satisfactory to the Owner Trustee and the Seller to the effect set
forth in the agreement (e) we are acquiring the Certificates for
investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificates
in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other
action which would result in a violation of Section 5 of the Act,
(g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is
made pursuant to an effective registration statement under the Act
or is exempt from such registration requirements, and if such
transfer is made pursuant to an exemption other than Rule 144A, we
will, if requested, at our expense provide an opinion of counsel
satisfactory to the addressees of this certificate that such sale,
transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate
has executed and delivered to you a certificate to substantially
the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer
set forth in the Trust Agreement, and (h), either (i) we are a "C
Corporation" under the Internal Revenue Code of 1986, as amended,
or (ii) we have provided such disclosure concerning our status for
federal income tax purposes and the status and economic interest of
our beneficial owners, as the Issuer or its representatives have
reasonably requested to determine that our acquisition of the
Certificates will not subject the Issuer to an entity level tax.
Very truly yours,
[TRANSFEREE]
By:
Authorized Officer
