EXHIBIT 1.1
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Series 2000-[.]
$[.] Class A [Floating Rate] [.]% Asset Backed Notes, Series [.]
$[.] Class B [Floating Rate] [.]% Asset Backed Notes, Series [.]
$[.] Class C [Floating Rate] [.]% Asset Backed Notes, Series [.]
UNDERWRITING AGREEMENT
[.], 2000
[.]
as Representative of the
Underwriters set forth herein (the "Representative")
[Address]
Dear Sirs:
Household Bank (Nevada), N.A. (the "Bank") has conveyed and proposes
to further convey, from time to time, the receivables (the "Receivables") that
are generated in a portfolio of certain consumer revolving credit card accounts
and other rights and property to Household Receivables Funding, Inc. III (the
"Transferor"), which has conveyed and will convey the Receivables to the
Household Credit Card Master Note Trust I (the "Issuer"), and the Transferor
proposes to cause the Issuer to sell to you and to the underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), $[.] Class A [Floating Rate] [.]% Asset
Backed Notes, Series [.] (the "Class A Notes"), $[.] Class B [Floating Rate]
[.]% Asset Backed Notes, Series [.] (the "Class B Notes") and $[.] Class C
[Floating Rate] [.]% Asset Backed Notes, Series [.] (the "Class C Notes" and,
together with the Class A Notes and the Class B Notes, the "Notes") in the
Trust. The Receivables have been, and will from time to time be, conveyed to
the Transferor by the Bank pursuant to a Receivables Purchase Agreement, dated
as of [.], 2000 (the "Receivables Purchase Agreement"), between the Bank and the
Transferor. The Receivables have been, and will from time to time be, conveyed
by the Transferor to the Issuer pursuant to a Transfer and Servicing Agreement,
dated as of [.], 2000 (the "Transfer and Servicing Agreement"), among the
Transferor, Household Finance Corporation ("HFC"), as servicer (the "Servicer"),
and the Issuer. The Bank, the Transferor and HFC are direct or indirect
subsidiaries of Household International, Inc. ("Household"). HFC, the Bank and
the Transferor are referred to collectively
herein as the "Household Entities".
The Issuer is a Delaware statutory business trust formed pursuant to
(a) a Trust Agreement, dated as of [.], 2000 (the "Trust Agreement"), between
the Transferor and Wilmington Trust Company ("WTC"), as owner trustee (the
"Owner Trustee") and (b) the filing of a certificate of trust with the Secretary
of State of Delaware on [.], 2000.
The Notes will be issued pursuant to a Master Indenture, dated as of
[.], 2000 (the "Master Indenture"), between the Issuer and Xxxxx Fargo Bank
Minnesota, N.A., as indenture trustee (the "Indenture Trustee"), as supplemented
by the Series 2000-[.] Indenture Supplement with respect to the Notes to be
dated as of [.], 2000 (the "Indenture Supplement," and together with the Master
Indenture, the "Indenture").
HFC has agreed to provide notices and perform on behalf of the Issuer
certain other administrative obligations required of the Issuer by the Transfer
and Servicing Agreement, the Master Indenture and each indenture supplement for
each series of Notes issued by the Issuer, pursuant to an Administration
Agreement, dated as of [.], 2000 (the "Administration Agreement"), between HFC,
as administrator (in such capacity, the "Administrator"), and the Issuer. The
Transfer and Servicing Agreement, the Receivables Purchase Agreement, the
Indenture, the Trust Agreement and the Administration Agreement are referred to
herein, collectively, as the "Transaction Documents."
The Notes will be sold pursuant to this Underwriting Agreement (this
"Agreement") and will represent undivided interests in certain assets of the
Trust (as hereinafter described).
Capitalized terms used herein without definition shall have the
meanings set forth in the Transaction Documents.
Representations and Warranties of the Bank and the Transferor.
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(a) Each of the Bank and the Transferor, each as to itself, represents
and warrants to, and agrees with, each Underwriter as set forth in this Section
1(a). Certain terms used in this Section 1(a) are defined in the second
paragraph of subsection 1(a)(i) below.
(i) A registration statement on Form S-3 (Nos. [.] and [.]),
including a form of prospectus and such amendments thereto as may have
been filed prior to the date hereof, relating to the Notes and the
offering thereof in accordance with Rule 415 under the Securities Act
of 1933, as amended (the "Act"), has been filed by the Transferor
with, and has been declared effective by, the Commission. If any
post-effective amendment to such registration statement has been filed
with the Commission prior to the execution and delivery of this
Agreement, the most recent such amendment has been declared effective
by the Commission.
The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective under the Act.
"Execution Time" shall mean the date
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and time that this Agreement is executed and delivered by the parties
hereto. "Registration Statement" shall mean the registration statement
referred to in the preceding paragraph and any registration statement
required to be filed under the Act or rules thereunder, including
amendments, incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the
event that any post-effective amendment thereto becomes effective
prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. "Rule 424" refers to such
rule under the Act. The Transferor proposes to file with the
Commission pursuant to Rule 424(b) ("Rule 424(b)") under the Act a
supplement (the "Prospectus Supplement") to the prospectus included in
the Registration Statement (such prospectus, in the form it appears in
the Registration Statement or in the form most recently revised and
filed with the Commission pursuant to Rule 424(b), is hereinafter
referred to as the "Base Prospectus") relating to the Notes and the
method of distribution thereof. The Base Prospectus and the Prospectus
Supplement, together with any amendment thereof or supplement thereto,
are hereinafter referred to as the "Prospectus."
(ii) On the Effective Date, the Registration Statement
conformed in all respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and the TIA and the rules
and regulations thereunder and did not include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and on the date of this Agreement, the Registration
Statement and the Prospectus conform, and at the time of filing of the
Prospectus pursuant to Rule 424(b) the Registration Statement and the
Prospectus will conform, in all respects with the requirements of the
Act and the Rules and Regulations and the TIA and the rules and
regulations thereunder and neither of such documents includes, or will
include, any untrue sta tement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
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however, that neither the Bank nor the Transferor makes any
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representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to the Bank or the Transferor by or
on behalf of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration
Statement or the Prospectus (or any supplements thereto).
(iii) The Bank is duly organized, validly existing and in good
standing as a national banking association under the laws of the
United States and the Transferor is a corporation duly organized and
validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Bank and the Transferor has
all requisite power and authority to own its properties and conduct
its business as presently conducted and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction which requires such qualification, except where failure
to have such requisite power and
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authority or to be so qualified would not have a material adverse
effect on the business or consolidated financial condition of the Bank
or the Transferor.
(iv) Neither the Transferor nor the Bank is in violation of
its charter or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it may be bound, or to
which any of the property or assets of the Transferor or the Bank, as
the case may be, is subject, except where any such violation or
default would not have a material adverse effect on the transactions
contemplated by this Agreement.
(v) The execution, delivery and performance by the
Transferor of each of this Agreement, the Receivables Purchase
Agreement, the Transfer and Servicing Agreement and the Trust
Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary
action or proceedings and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Transferor pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Transferor is
a party or by which it may be bound, or to which any of the property
or assets of the Transferor is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of the
Transferor or any applicable law, administrative regulation or
administrative or court decree, except where any such conflict,
breach, default, encumbrance or violation would not have a material
adverse effect on the transactions contemplated by this Agreement.
(vi) The execution, delivery and performance by the Bank of
this Agreement and the Receivables Purchase Agreement, and the
consummation of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Bank pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Bank is a party or by which it may be
bound, or to which any of the property or assets of the Bank is
subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Bank or any applicable
law, administrative regulation or administrative or court decree,
except where any such conflict, breach, default, encumbrance or
violation would not have a material adverse effect on the transactions
contemplated by this Agreement.
(vii) This Agreement, the Receivables Purchase Agreement, the
Transfer and Servicing Agreement and the Trust Agreement have been
duly executed and delivered by the Transferor; and this Agreement, the
Receivables Purchase Agreement, the Transfer and Servicing Agreement
and the Trust Agreement constitute legal, valid and binding
instruments enforceable against the
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Transferor in accordance with their respective terms, subject as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally and the rights and remedies of creditors of thrifts,
savings institutions or national banking associations, (B) to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (C) with respect to rights of
indemnity under this Agreement, to limitations of public policy under
applicable securities laws.
(viii) This Agreement and the Receivables Purchase Agreement
have been duly executed and delivered by the Bank; and this Agreement
and the Receivables Purchase Agreement constitute legal, valid and
binding instruments enforceable against the Bank in accordance with
their respective terms, subject as to the enforceability (A) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or national
banking associations, (B) to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law)
and (C) with respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities law.
(ix) The Bank has authorized the conveyance of the
Receivables to the Transferor; the Transferor has authorized the
conveyance of the Receivables to the Issuer; and the Transferor has
directed the Issuer to issue and sell the Notes.
(x) The Bank will, upon request by the Representatives,
provide to the Representatives complete and correct copies of publicly
available portions of the Consolidated Reports of Condition and Income
of the Bank for the year ended [.], as submitted to the Comptroller of
the Currency. Except as set forth or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse
change in the consolidated condition (financial or otherwise) of the
Bank and its subsidiaries taken as a whole since [.].
(xi) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of this
Agreement, each of the Transaction Documents and the Notes shall have
been paid or will be paid by the Transferor at or prior to the Closing
Date.
(xii) The Notes have been duly and validly authorized, and,
when validly executed, authenticated, issued and delivered in
accordance with the Indenture and as provided herein will conform in
all material respects to the description thereof contained in the
Prospectus and will be validly issued and outstanding and entitled to
the benefits of the Indenture.
(xiii) There are no legal or governmental proceedings pending,
or to the knowledge of the Bank or the Transferor threatened, to which
the Bank or the Transferor is a party or of which any property of any
of them is the subject, other than proceedings which are not
reasonably expected, individually or in the aggregate, to have a
material adverse effect on the shareholder's equity or
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consolidated financial position of such person and its subsidiaries
taken as a whole, or which would have a material adverse effect upon
the consummation of this Agreement.
(xiv) [.] is an independent public accountant with respect to
the Bank and Transferor.
(xv) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or governmental agency or body of the United States is required
for the issue and sale of the Notes, or the consummation by the Bank
or the Transferor of the other transactions contemplated by this
Agreement or any Transaction Document to which it is a party, except
for (A) the registration under the Act of the Notes, (B) such
consents, approvals, authorizations, orders, registrations,
qualifications, licenses or permits as have been obtained or as may be
required under State securities or Blue Sky laws in connection with
the purchase of the Notes and the subsequent distribution of the Notes
by the Underwriters or (C) where the failure to obtain such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits would not have a material adverse
effect on the business or consolidated financial condition of the Bank
and its subsidiaries taken as a whole or the Transferor or the
transactions contemplated by such agreements.
(xvi) Neither the Bank nor the Transferor will conduct their
operations while any of the Notes are outstanding in a manner that
would require the Transferor or the Issuer to be registered as an
"investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act") as in effect on the date hereof.
(b) HFC represents and warrants to, and agrees with, each Underwriter
as set forth in this Section 1(b).
(i) HFC is a corporation duly organized and validly
existing and in good standing under the laws of its jurisdiction of
incorporation. HFC has all requisite power and authority to own its
properties and conduct its business as presently conducted and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction which requires such qualification,
except where the failure to have such power and authority or to be so
qualified would not have a material adverse effect on the business or
consolidated financial condition of HFC and its subsidiaries taken as
a whole.
(ii) HFC is not in violation of its restated articles of
incorporation or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which HFC is a party or by which it may be bound, or to
which any of the property or assets of HFC is subject except where any
such violation or default would not have a material adverse effect on
the transactions contemplated by this Agreement.
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(iii) The execution, delivery and performance by HFC of this
Agreement, the Transfer and Servicing Agreement and the Administration
Agreement and the consummation of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary
action or proceedings and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of HFC
pursuant to, any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which HFC is a party or by which it may
be bound, or to which any of the property or assets of HFC is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws of HFC or any applicable law, administrative
regulation or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not have a
material adverse effect on the transactions contemplated by this
Agreement.
(iv) This Agreement, the Transfer and Servicing Agreement
and the Administration Agreement have been duly executed and delivered
by HFC; and this Agreement, the Transfer and Servicing Agreement and
the Administration Agreement constitute legal, valid and binding
instruments enforceable against HFC in accordance with their
respective terms, subject as to enforceability (A) to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (B) to general principles
of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law) and (C) with respect to rights of indemnity under
this Agreement, to limitations of public policy under applicable
securities laws.
(v) HFC will, upon request by the Representatives, provide
to the Representatives complete and correct copies of all reports
filed by it with the Commission pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during 1997. Except as
set forth in or contemplated in such reports, there has been no
material adverse change in the consolidated financial condition of HFC
and its subsidiaries taken as a whole since the respective dates as of
which information is given in the Prospectus.
(vi) There are no legal or governmental proceedings pending,
or to the knowledge of HFC threatened, to which HFC is a party or of
which any of its property is the subject, other than proceedings which
are not reasonably expected, individually or in the aggregate, to have
a material adverse effect on the shareholder's equity or consolidated
financial position of HFC and its subsidiaries taken as a whole or
which would have a material adverse effect upon the consummation of
this Agreement.
(vii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or governmental agency or body of the United States is required
for the consummation by HFC of the transactions contemplated by this
Agreement, the Transfer and Servicing Agreement and the Administration
Agreement, except for (A) the registration under the Act of the Notes,
(B) such consents, approvals, authorizations, orders,
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registrations, filings, qualifications, licenses or permits as have
been obtained or as may be required under State securities or Blue Sky
laws in connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the failure
to obtain such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses or permits would not
have a material adverse effect on the business or consolidated
financial condition of HFC and its subsidiaries taken as a whole or
the transactions contemplated by such agreements.
(viii) [.] is an independent public accountant with respect to
HFC.
(c) Any certificate signed by an officer on behalf of any of the
Household Entities and delivered to the Underwriters or counsel for the
Underwriters in connection with an offering of the Notes shall be deemed, and
shall state that it is, a representation and warranty as to the matters covered
thereby to each person to whom the representations and warranties in this
Section 1 are made.
Purchase and Sale.
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(a) Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties herein set forth, the Transferor agrees to
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Transferor the principal
amount of Class A Notes set forth opposite such Underwriter's name in
Schedule I pursuant to the terms of this Agreement at a purchase price equal
to [.]% of the aggregate principal amount represented by the Class A Notes.
(b) Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties herein set forth, the Transferor agrees to
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Transferor the principal
amount of Class B Notes set forth opposite such Underwriter's name in
Schedule I pursuant to the terms of this Agreement at a purchase price equal
to [.]% of the aggregate principal amount represented by the Class B Notes.
(c) Subject to the terms and conditions and in reliance upon the covenants,
representations and warranties herein set forth, the Transferor agrees to
sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Transferor the principal
amount of Class C Notes set forth opposite such Underwriter's name in
Schedule I pursuant to the terms of this Agreement at a purchase price equal
to [.]% of the aggregate principal amount represented by the Class C Notes.
Delivery and Payment.
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Delivery of and payment for the Notes to be purchased by the
Underwriters in accordance with this Agreement shall be made at 9:00 A.M. at the
offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 on [.], which date, time or place may be postponed or changed by
agreement between the Representatives and the Transferor (such date and time of
delivery and payment for the Notes being herein referred to as the "Closing
Date"). Delivery of one or more global notes representing the Notes shall be
made
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to the accounts of the several Underwriters against payment by the several
Underwriters of the purchase price therefor, to or upon the order of the
Transferor by one or more wire transfers in immediately available funds. The
global notes to be so delivered shall be registered in the name of Cede & Co.,
as nominee for The Depository Trust Company ("DTC"). The interests of
beneficial owners of the Notes will be represented by book entries on the
records of DTC and participating members thereof. Definitive Notes representing
the Notes will be available only under limited circumstances as described in the
Indenture.
The Transferor agrees to have copies of the global notes or the
Definitive Notes available for inspection, checking and packaging by the
Underwriters in New York, New York, not later than 1:00 p.m., New York City
time, on the business day prior to the Closing Date.
Offering by Underwriters.
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(a) It is understood that the Underwriters propose to offer the Notes for sale
to the public as set forth in the Prospectus.
(b) Each Underwriter severally agrees that if it is a foreign broker dealer not
eligible for membership in the National Association of Securities Dealers,
Inc. (the "NASD"), it will not effect any transaction in the Notes within
the United States or induce or attempt to induce the purchase of or sale of
the Notes within the United States, except that it shall be permitted to
make sales to the other Underwriters or to its United States affiliates
provided that such sales are made in compliance with an exemption of certain
foreign brokers or dealers under Rule 15a-6 under the Exchange Act and in
conformity with the NASD's Conduct Rules as such Rules apply to non-NASD
brokers or dealers.
(c) Each Underwriter severally represents and agrees that (i) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the Notes in, from
or otherwise involving the United Kingdom; (ii) it has only issued or passed
on and will only issue or pass on to any person in the United Kingdom any
document received by it in connection with the issue of the Notes if that
person is of a kind described in Article 9(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1988 (as amended); (iii)
if it is an authorized person under Chapter III of the Financial Services
Act 1986, it has only promoted and will only promote (as that term is
defined in Regulation 1.02 of the Financial Services (Promotion of
Unregulated Collective Investment Schemes) Regulations 1991) to any person
in the United Kingdom the scheme described in the Prospectus if that person
is of a kind described either in Section 76(2) of the Financial Services Act
1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Collective Investment Schemes) Regulations 1991; and (iv) it is
a person of a kind described in Article 9(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1988 (as amended).
Agreements. Each of the Household Entities, each as to itself,
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covenants and agrees with the several Underwriters that:
(a) Immediately following the execution of this Agreement, the Transferor will
prepare a Prospectus Supplement setting forth the amount of Notes covered
thereby and the terms thereof not otherwise specified in the Base
Prospectus, the price at which such Notes are to
9
be purchased by the Underwriters, the initial public offering price, the
selling concessions and allowances, and such other information as the
Transferor deems appropriate. The Transferor will transmit the Prospectus,
including such Prospectus Supplement, to the Commission pursuant to Rule
424(b) by a means reasonably calculated to result in filing with the
Commission pursuant to Rule 424(b). The Transferor will promptly advise the
Representatives (i) when the Registration Statement shall have become
effective, (ii) when any amendment thereof shall have become effective,
(iii) of any request by the Commission for any amendment or supplement of
the Registration Statement or the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of
the receipt by the Transferor of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose. The
Transferor will not file any amendment of the Registration Statement or
supplement to the Prospectus to which the Representatives reasonably object.
The Transferor will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a Prospectus relating to the Notes is required to be
delivered under the Act, any event occurs as a result of which the
Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were
made not misleading, or if it shall be necessary to supplement such
Prospectus to comply with the Act or the rules thereunder, the Transferor
shall be required to notify the Representatives and upon the
Representatives' request to prepare and furnish without charge to each
Underwriter as many copies as such Underwriter may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which shall correct such statement or omission or effect such
compliance.
(c) As soon as practicable, the Transferor will make generally available to
Noteholders and to the Representatives an earnings statement or statements
of the Issuer which will satisfy the provisions of Section 11(a) of the Act
and Rule 158 under the Act.
(d) The Transferor will furnish to the Representatives and counsel for the
Underwriters, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of the
Prospectus and any supplement thereto as the Underwriters may reasonably
request.
(e) The Household Entities, jointly and severally, agree to pay all expenses
incidental to the performance of their obligations under this Agreement,
including without limitation (i) expenses of preparing, printing and
reproducing the Registration Statement, the Prospectus, this Agreement, the
Transaction Documents and the Notes, (ii) any fees charged by any rating
agency for the rating of the Notes, (iii) any expenses (including reasonable
fees and disbursements of counsel not to exceed $[.]) incurred by the
Underwriters in connection with qualification of the Notes for sale under
the laws of such jurisdictions as the Representatives designate, (iv) the
fees and expenses of [accountants name], (v) the fees and expenses of the
Indenture Trustee and any agent of the Indenture Trustee and the fees and
disbursements of
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counsel for the Indenture Trustee in connection with the Indenture and the
Notes, and (vi) the cost of delivering the Notes to the offices of the
Underwriters, insured to the satisfaction of the Underwriters (it being
understood that, except as provided in this paragraph (e) and in Sections 7
and 8 hereof, the Underwriters will pay their own expenses, including the
expense of preparing, printing and reproducing this Agreement, any agreement
among underwriters, the fees and expenses of counsel for the Underwriters,
any transfer taxes on resale of any of the Notes by them and advertising
expenses connected with any offers that the Underwriters may make).
(f) The Transferor will take all reasonable actions requested by the
Underwriters to arrange for the qualification of the Notes for sale under
the laws of such jurisdictions within the United States or as necessary to
qualify for the Euroclear System or Clearstream Banking, societe anonyme and
as the Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Notes.
(g) For so long as the Notes are outstanding, the Transferor shall deliver to
the Representatives by first-class mail and as soon as practicable a copy of
all reports and notices related to Series 2000-[.] and delivered to the
Owner Trustee, the Indenture Trustee or the Noteholders under the Indenture.
(h) For so long as the Notes are outstanding, the Household Entities will
furnish to the Representatives as soon as practicable after filing, any
other information concerning the Household Entities filed with any
government or regulatory authority which is otherwise publicly available, as
the Representatives may reasonably request.
(i) To the extent, if any, that any rating provided with respect to the Notes
set forth in Sections 6(j), (k) and (l) hereof is conditional upon the
furnishing of documents reasonably available to the Household Entities, the
Household Entities shall furnish such documents.
Section 2. Conditions of Closing; Termination of Rights Under
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Section 2. The obligations of the Underwriters to purchase and pay for the Notes
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on the Closing Date shall be subject to the material accuracy of the
representations and warranties of the Household Entities contained herein as of
the Execution Time and as of the Closing Date, to the material accuracy of the
statements of the Household Entities made in any certificates delivered pursuant
to the provisions hereof, to the performance by the Household Entities of their
obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement;
and, prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) Each of the Household Entities shall have delivered a
certificate, dated the Closing Date, signed by its President or any Vice
President and its principal financial or principal accounting officer or its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant Secretary
to the effect that the signers of such certificate, on behalf of the named
Household Entity, have carefully examined this Agreement, each of the
Transaction Documents, the Prospectus (and any supplements thereto) and the
Registration Statement, stating that:
11
(i) the representations and warranties of such Household Entity
in this Agreement are true and correct in all material respects at and
as of the date of such certificate as if made on and as of such date
(except to the extent they expressly relate to an earlier date);
(ii) such Household Entity has complied, in all material
respects, with all the agreements and satisfied, in all material
respects, all the conditions on its part to be performed or satisfied
at or prior to the date of such certificate;
(iii) nothing has come to the attention of such Household Entity
that would lead it to believe that the Registration Statement contains
any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of the xxxxxx,
threatened.
(c) Xxxx X. Xxxxxx, Vice President - Corporate Law and Assistant
Secretary of Household, as counsel for the Household Entities, shall have
delivered a favorable opinion with respect to clauses (i) through (xiii) of this
paragraph (c), Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, special counsel to the
Household Entities, shall have delivered a favorable opinion with respect to
clauses (xiv) through (xvii) and [Xxxxxxxx and Wedge], special Nevada counsel to
the Household Entities, shall have delivered a favorable opinion with respect to
clause (xviii) of this paragraph (c) each opinion shall be dated the Closing
Date and satisfactory in form and substance to the Representatives and counsel
for the Underwriters, to the effect that:
(i) the Bank has been duly chartered as a national banking
association and is validly existing and in good standing under the
laws of the United States, is duly qualified to do business and is in
good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business, and has full power and authority to own
its properties, and to enter into and perform its obligations under
the Receivables Purchase Agreement, except where failure to have such
power and authority or to be so qualified will not have a material
adverse effect on the business or consolidated financial condition of
the Bank and its subsidiaries taken as a whole;
(ii) each of HFC and the Transferor is duly incorporated and
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation with corporate power and authority
to own its properties and to conduct its business, except where
failure to have such power and authority do not have a material
adverse effect, as the case may be, on the business or consolidated
financial condition of HFC and its subsidiaries, taken as a whole, or
the Transferor, to enter into and perform its obligations under this
Agreement and the Transaction Documents which it is a party thereto
and to consummate the transactions contemplated hereby and thereby;
12
(iii) this Agreement and each of the Transaction Documents have
been duly authorized, executed and delivered by HFC, the Bank or the
Transferor, as the case may be, and, when executed by the Indenture
Trustee and the Representatives, constitute the legal, valid and
binding agreement of HFC, the Bank or the Transferor, as the case may
be, enforceable in accordance with its terms subject, as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally and the rights and remedies of creditors of thrifts,
savings institutions or national banking associations, (B) to general
principles of equity (regardless of whether enforcement is sought in a
proceedings in equity or at law) and (C) with respect to rights of
indemnity under this Agreement, to limitations of public policy under
applicable securities laws;
(iv) the Notes have been duly created and, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued and outstanding, enforceable in
accordance with their terms subject, as to enforceability (A) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or national
banking associations and (B) to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law);
(v) neither the execution nor the delivery of this Agreement
or any Transaction Document nor the issuance or delivery of the Notes,
nor the consummation of any of the transactions contemplated herein or
therein, nor the fulfillment of the terms of the Notes, this Agreement
or any Transaction Document will conflict with or violate any term or
provision of the charter, by-laws or organizational documents of any
of the applicable Household Entities, as the case may be, or result in
a breach or violation of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of any of the applicable Household Entities pursuant to, any
material statute currently applicable to any of them or any order or
regulation known to such counsel to be currently applicable to any of
them of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Bank or the Transferor,
as the case may be, or the terms of any indenture or other agreement
or instrument known to such counsel to which any of the applicable
Household Entities is a party or by which any of them or any of their
properties are bound, except where any such conflict, breach,
violation, default or encumbrance would not have a material adverse
effect on the transactions contemplated by this Agreement;
(vi) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator with respect
to this Agreement, the Notes or the Transaction Documents or any of
the transactions contemplated herein or therein or with respect to the
Household Entities which, in the case of any such action, suit or
proceeding with respect to any of them, would have a material
13
adverse effect on the Noteholders or upon the ability of any of them
to perform their obligations under any of such agreements; and the
statements included in the Registration Statement and Prospectus
describing statutes (other than those relating to tax and ERISA
matters), legal proceedings, contracts and other documents (other than
financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion)
fairly summarize the matters therein described;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424 has been made in the manner and within the time
period required by Rule 424; to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted
or threatened; the Registration Statement and the Prospectus (and any
supplements thereto) (other than financial and statistical information
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(viii) such counsel has no reason to believe that at any
Effective Date the Registration Statement (excluding any exhibits
filed therewith) contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or the
Prospectus, as of its date, includes any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading (other than financial and statistical
information contained therein as to which such counsel need express no
opinion);
(ix) no consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court, federal
or state governmental agency or regulatory body is required for any
Household Entity to consummate the transactions contemplated in this
Agreement or the Transaction Documents, except (A) such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been made or obtained or
as may be required under the State securities or blue sky laws of any
jurisdiction in connection with the purchase of the Notes by the
Underwriters and the subsequent distribution of the Notes by the
Underwriters or (B) where the failure to have such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits would not have a material adverse
effect on the Issuer's interests in the Receivables or the
transactions contemplated by such agreements;
(x) the Notes, this Agreement and the Transaction Documents
conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus;
14
(xi) the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and complies as to form
with the TIA and the rules and regulations of the Commission
thereunder;
(xii) the statements in the Registration Statement under the
heading "Certain Legal Aspects of the Receivables" to the extent that
they constitute statements of matters of law or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel or
attorneys under the control of such counsel and are correct in all
material respects;
(xiii) the Issuer is not required to be registered as an
"investment company" under the 1940 Act;
(xiv) to the extent that the transfer of the Receivables by the
Bank to the Transferor does not constitute an absolute assignment of
such Receivables, the Receivables Purchase Agreement creates in favor
of the Transferor a security interest in the rights of the Bank in
such Receivables, and to the extent that the transfer of the
Receivables by the Transferor to the Issuer does not constitute an
absolute assignment of such Receivables, the Transfer and Servicing
Agreement creates in favor of the Issuer a security interest in the
rights of the Transferor in such Receivables;
(xv) the Indenture creates in favor of the Indenture Trustee a
security interest in the rights of the Issuer in the Receivables;
(xvi) the statements in the Registration Statement and
Prospectus under the headings "Prospectus Summary--Tax Status" and
"Federal Income Tax Consequences", to the extent that they constitute
statements of matters of law or legal conclusions with respect
thereto, have been prepared or reviewed by such counsel and accurately
describe the material Federal income tax consequences to holders of
the Notes and the statements under the heading "ERISA Considerations",
to the extent that they constitute statements of matters of law or
legal conclusions with respect thereto, have been prepared or reviewed
by such counsel and accurately describe the material consequences to
holders of the Notes under XXXXX;
(xvii) If the FDIC is appointed as conservator or receiver for
the Bank and if a court were to determine that the Indenture Trustee
has a security interest in the Receivables and the proceeds thereof,
the court would hold that the security interest of the Indenture
Trustee would be enforceable against the Bank with respect to the
Receivables and such proceeds; and
(xviii) No other filings or other actions, with respect to the
Indenture Trustee's interest in the Receivables, are necessary to
perfect the interest of the Indenture Trustee in the Receivables, and
proceeds thereof, against third parties, except that appropriate
continuation statements must be filed in accordance with the
applicable state's requirements, which is presently at least every
five years.
In rendering such opinion, counsel may rely (A) as to matters
involving the
15
application of the law of any jurisdiction other than (i) with respect to the
opinion delivered by Xxxx X. Xxxxxx, Vice President-Corporate Law and Assistant
Secretary of Household, the State of Illinois, the United States Federal laws
and the corporation law of the State of Delaware and (ii) with respect to the
opinion delivered by Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, the State of New York,
the United States Federal Laws and the corporation law of the State of Delaware,
to the extent deemed proper and stated in each such opinion, upon the opinion of
other counsel of good standing believed by each such counsel to be reliable and
acceptable to you and your counsel, and (B) as to matters of fact on
certificates of responsible officers of the Issuer, Household Entities and
public officials. References to the Prospectus in this paragraph (c) include any
supplements thereto.
(d) Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, as counsel for the
Underwriters, shall have delivered a favorable opinion dated the Closing Date
with respect to the validity of the Notes, this Agreement, the Transfer and
Servicing Agreement, the Indenture, the Registration Statement, the Prospectus
and such other related matters as the Representatives may reasonably require and
the Household Entities shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass on such
matters. In giving their opinion, Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP may rely
(i) as to matters of Illinois law upon the opinions of counsel delivered
pursuant to subsection (c) above, (ii) as to matters involving the application
of laws of any jurisdiction other than the State of New York, the United States
Federal laws or the corporation law of the State of Delaware, to the extent
deemed proper and specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable, and (iii) as to matters of fact, to
the extent deemed proper and as stated therein on certificates of responsible
officers of the Issuer, Household Entities and public officials.
(e) At the Execution Time and at the Closing Date, [accountants name]
shall have furnished to the Representatives a letter or letters, dated
respectively as of the date of this Agreement and the date of the Closing Date,
in form and substance satisfactory to the Representatives and counsel for the
Underwriters, confirming that they are certified independent public accountants
within the meaning of the Act, the Exchange Act and the rules and regulations
promulgated thereunder and stating in effect that they have performed certain
specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from the general
accounting records of the Issuer, the Bank and the Transferor) set forth in the
Registration Statement and the Prospectus (and any supplements thereto), agrees
with the accounting records of the Issuer, and the Household Entities, excluding
any questions of legal interpretation, and (ii) they have performed certain
specified procedures with respect to the computer programs used to select the
Eligible Accounts and to generate information with respect to the Accounts set
forth in the Registration Statement and the Prospectus (and any supplements
thereto).
(f) The Representatives shall receive evidence satisfactory to them
that, on or before the Closing Date, UCC-1 financing statements are being or
have been filed in the offices of the Secretaries of State of [.] (and such
other states as may be necessary or desirable pursuant to applicable state law)
reflecting the interest of the Indenture Trustee in the Receivables and the
proceeds thereof.
16
(g) Counsel to the Indenture Trustee shall have delivered a favorable
opinion, dated the Closing Date, and satisfactory in form and substance to the
Representatives and counsel for the Underwriters, the Household Entities and
their counsel, to the effect that:
(i) the Indenture Trustee has been duly incorporated and
is validly existing and in good standing as a banking corporation
under the laws of the State of [.], is duly qualified to do business
in all jurisdictions where the nature of its operations as
contemplated by the Indenture requires such qualifications, and has
the power and authority (corporate and other) to issue, and to take
all action required of it under, Indenture;
(ii) the execution, delivery and performance by the
Indenture Trustee of the Indenture and the issuance of the Notes by
the Indenture Trustee have been duly authorized by all necessary
corporate action on the part of the Indenture Trustee, and under
present laws do not and will not contravene any law or governmental
regulation or order presently binding on the Indenture Trustee or the
charter or the by-laws of the Indenture Trustee or contravene any
provision of or constitute a default under any indenture, contract or
other instrument to which the Indenture Trustee is a party or by which
the Indenture Trustee is bound;
(iii) the execution, delivery and performance by the
Indenture Trustee of the Indenture and the issuance of the Notes by
the Indenture Trustee do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of any Federal, state or other governmental agency
or authority which has not previously been effected;
(iv) each of the Notes has been duly authenticated and
delivered by the Indenture Trustee and each of the Notes and the
Indenture constitute legal, valid and binding agreements of the
Indenture Trustee, enforceable against the Indenture Trustee in
accordance with its terms (subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally);
and
(v) no approval, authorization or other action by, or
filing with, any governmental authority of the United States of
America or the State of [.] having jurisdiction over the banking or
trust powers of the Indenture Trustee is required in connection with
its execution and delivery of the Indenture or the performance by the
Indenture Trustee of the terms of the Indenture.
(h) Counsel to the Owner Trustee shall have delivered a favorable
opinion, dated the Closing Date, and satisfactory in form and substance to the
Representatives and counsel for the Underwriters, the Household Entities and
their counsel, to the effect that:
(i) the Owner Trustee is duly incorporated and validly
existing as a banking corporation in good standing under the laws of
the State of Delaware and has the power and authority to execute,
deliver and perform the Trust Agreement and to consummate the
transactions contemplated thereby;
17
(ii) the Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee and constitutes a legal, valid and
binding obligation of the Owner Trustee, enforceable against the Owner
Trustee in accordance with its terms;
(iii) each of the Indenture, the Trust Agreement and the Transfer
and Servicing Agreement (collectively referred to in this subsection
(h) as the "Trust Documents") has been duly executed and delivered by
the Owner Trustee, as Owner Trustee on behalf of the Issuer;
(iv) neither the execution, delivery or performance by the Owner
Trustee, in its individual capacity or as Owner Trustee, as the case
may be, of the Trust Documents, nor the consummation of the
transactions by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, contemplated thereby, requires the
consent or approval of, the withholding of objection on the part of,
the giving of notice to, the filing, registration or qualification
with, or the taking of any other action in respect of, any
governmental authority or agency of the State of Delaware or the
United States of America governing the banking or trust powers of the
Owner Trustee (other than the filing of the certificate of trust with
the Delaware Secretary of State, which certificate of trust has been
duly filed);
(v) neither the execution, delivery and performance by the
Owner Trustee, in its individual capacity or as Owner Trustee, as the
case may be, of the Trust Documents, nor the consummation of the
transactions by the Owner Trustee, in its individual capacity or as
Owner Trustee, as the case may be, contemplated thereby, is in
violation of the charter or bylaws of the Owner Trustee or of any law,
governmental rule or regulation of the State of Delaware or of the
United States of America governing the banking or trust powers of the
Owner Trustee or, to such counsel's knowledge, without independent
investigation, any indenture, mortgage, bank credit agreement, note or
bond purchase agreement, long-term lease, license or other agreement
or instrument to which it is a party or by which it is bound or, to
such counsel's knowledge, without independent investigation, of any
judgment or order applicable to the Owner Trustee;
(vi) no consent, approval or other authorization of, or
registration, declaration or filing with, any court or governmental
agency or commission of the State of Delaware is required by or with
respect to the Owner Trustee, in its individual capacity or as Owner
Trustee, as the case may be, for the valid execution and delivery of
the Trust Documents, or for the validity or enforceability thereof
(other than the filing of the certificate of trust, which certificate
of trust has been duly filed); and
(vii) to such counsel's knowledge, without independent
investigation, there are no pending or threatened actions, suits or
proceedings affecting the Owner Trustee before any court or other
governmental authority which, if
18
adversely determined, would materially and adversely affect the
ability of the Owner Trustee to carry out the transactions
contemplated by the Trust Agreement.
(i) Special Delaware counsel to the Issuer shall have delivered a
favorable opinion, dated the Closing Date, and satisfactory in form and
substance to the Representatives and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that;
(i) the Issuer has been duly formed and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, 12 Del. C 3801 et seq. (referred to in this
subsection (i) as the "Delaware Act");
(ii) the Trust Agreement constitutes a legal, valid and
binding obligation of the Owner Trustee and the Transferor,
enforceable against the Owner Trustee and the Transferor, in
accordance with its terms;
(iii) under the Delaware Act and the Trust Agreement, the
execution and delivery of the Transfer and Servicing Agreement and the
Indenture, the issuance of the Notes, the Transferor Certificate and
the Ownership Interest Certificate and the granting of the Collateral
to the Indenture Trustee as security for the Notes has been duly
authorized by all necessary trust action on the part of the Issuer;
(iv) under the Delaware Act and the Trust Agreement, the
Issuer has (i) the trust power and authority to execute, deliver and
perform its obligations under the Administration Agreement, the
Indenture and the Transfer and Servicing Agreement (collectively
referred to in this subsection (i) as the "Trust Documents"), the
Notes, the Transferor Certificate and the Owner Interest Certificate
and (ii) duly authorized, executed and delivered such agreements and
obligations;
(v) when the Transferor Certificate and Ownership Interest
Certificate have been duly executed and issued by the Issuer and duly
authenticated by the Owner Trustee in accordance with the Trust
Agreement, the Transferor Certificate and Ownership Interest
Certificate will be validly issued and entitled to the benefits of the
Trust Agreement;
(vi) neither the execution, delivery and performance by the
Issuer of the Trust Documents, the Notes, the Transferor Certificate
or the Ownership Interest Certificate, nor the consummation by the
Issuer of any of the transactions by the Issuer contemplated thereby,
requires the consent or approval of, the withholding of objection on
the part of, the giving of notice to, the filing, registration or
qualification with, or the taking of any other action in respect of,
any governmental authority or agency of the State of Delaware, other
than the filing of the certificate of trust with the Delaware
Secretary of State (which certificate of trust has been duly filed)
and the filing of any financing statements with the Delaware Secretary
of State in connection with the Indenture;
(vii) neither the execution, delivery and performance by the
Issuer of the Trust Documents, nor the consummation by the Issuer of
the transactions
19
contemplated thereby, is in violation of the Trust Agreement or of any
law, rule or regulation of the State of Delaware applicable to the
Issuer;
(viii) under Section 3805(b) of the Delaware Act, no
creditor of the Owner shall have any right to obtain possession of, or
otherwise exercise legal or equitable remedies with respect to, the
property of the Issuer except in accordance with the terms of the
Trust Agreement;
(ix) under Section 3808(a) and (b) of the Delaware Act,
the Issuer may not be terminated or revoked by the Owner, and the
dissolution, termination or bankruptcy of the Owner shall not result
in the termination or dissolution of the Issuer, except to the extent
otherwise provided in the Trust Agreement;
(x) the Owner Trustee is not required to hold legal title
to the Trust Estate in order for the Issuer to qualify as a business
trust under the Delaware Act;
(xi) with respect to the Issuer and the Receivables: (a)
there is no document, stamp, exercise or other similar tax imposed by
the State of Delaware upon the perfection of a security interest in
the Receivables, in the transfer of the Receivables to or from the
Issuer, or upon the issuance of the Notes; (b) there is no personal
property tax imposed by the State of Delaware upon or measured by the
corpus of the Issuer; (c) the characterization of the Issuer for
federal income tax purposes will be determinative of the
characterization of the Issuer for Delaware income tax purposes and
assuming that the Issuer will be taxed as a partnership for federal
income tax purposes, the Issuer will not be subject to Delaware income
tax and Noteholders who are not otherwise subject to Delaware income
tax will not be subject to tax by reason of their ownership of the
Notes and the receipt of income therefrom; and (d) any income tax
imposed by the State of Delaware that might be applicable to the
Issuer would be based upon "federal taxable income," and for the
purposes of determining such income, the characterization of such
income for federal income tax purposes will be determinative, whether
the characterization of the transaction is that of a sale or a loan;
and
(xii) the Owner is the sole beneficial owner of the Issuer.
(j) The Class A Notes shall be given the highest investment grade
rating by both Xxxxx'x Investors Service, Inc. ("Xxxxx'x"), and Standard &
Poor's Ratings Services ("S&P") and neither Xxxxx'x nor S&P shall have placed
the Class A Notes under review with possible negative implications.
(k) The Class B Notes shall be rated at least "[.]" or its equivalent
by both Xxxxx'x and S&P and neither Xxxxx'x nor S&P shall have placed the Class
B Notes under review with possible negative implications.
(l) The Class C Notes shall be rated at least "[.]" or its equivalent
by both Xxxxx'x and S&P and neither Xxxxx'x nor S&P shall have placed the Class
C Notes under review with possible negative implications.
20
(m) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective change, in or
affecting the business or properties of the Issuer or any of the Household
Entities other than as set forth or contemplated in the Registration Statement
or Prospectus, the effect of which, in any case referred to above, is, in the
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the delivery of the
Notes as contemplated by the Registration Statement and the Prospectus.
(n) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, and the Representatives and counsel for the Underwriters shall
have received such information, certificates and documents as the
Representatives or counsel for the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Representatives and the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Indenture
Trustee and the Transferor in writing or by telephone or telegraph confirmed in
writing.
Section 3. Reimbursement of Expenses. If the sale of the Notes provided
-------------------------
for herein is not consummated because any condition to the Representatives'
obligations set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Indenture Trustee or the Household Entities to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by the Representatives or the Underwriters, the Household
Entities, jointly and severally, will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Notes.
Section 4. Indemnification and Contribution.
--------------------------------
(a) As an inducement to the Underwriters to participate in the public
offering of the Notes, the Transferor and HFC, jointly and severally (and the
Bank with respect to any information that it has provided in connection with the
preparation of the Prospectus and, with respect to the breach of any of its
representations and warranties under Section 1 hereunder), agree to indemnify
and hold harmless each Underwriter and each person who controls any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, or in the Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon
21
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however
-------- -------
that (i) the Household Entities will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Household Entities by or on behalf of any
Underwriter through the Representatives specifically for use in connection with
the preparation thereof, and (ii) such indemnity with respect to any such untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Notes which are the subject thereof if
such person was not sent a copy of the Prospectus (or the Prospectus as
supplemented) at or prior to the confirmation of the sale of such Notes to such
person in any case where such delivery is required by the Act. This indemnity
agreement will be in addition to any liability which the Household Entities may
otherwise have.
(b) Each Underwriter, severally, agrees to indemnify and hold
harmless each of the Household Entities, each of their directors, each of the
officers who signs the Registration Statement, and each person who controls any
Household Entity within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnities from the
Household Entities to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Household Entities by
or on behalf of such Underwriter specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise have. [The
Household Entities acknowledge that the statements relating to the Underwriters
set forth in the last paragraph of the cover page, the second paragraph under
the heading "Reports to Noteholders", the second sentence under the heading
"Risk Factors -Limited Liquidity," and the statements under the heading
"Underwriting" in the Prospectus constitute the only information furnished in
writing by the Underwriters or on behalf of the Underwriters for inclusion in
the Prospectus].
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election
22
to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Household Entities on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Household Entities on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Household Entities on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Household Entities bears to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Household Entities or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection
23
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Section 5. Default by an Underwriter. If any one or more
-------------------------
Underwriters shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Underwriter or Underwriters hereunder on the Closing Date and
such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Notes set forth opposite their names in Schedule I with respect to
the Closing Date hereto bears to the aggregate amount of Notes set forth
opposite the names of all the remaining Underwriters) the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate amount of Notes which the
-------
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Notes set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Notes, and if such nondefaulting
Underwriters do not purchase all the Notes, the obligations will terminate
without liability of any nondefaulting Underwriter, the Issuer, or any Household
Entity. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Transferor, HFC, the Bank and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
Section 6. Termination. This Agreement shall be subject to
-----------
termination in the absolute discretion of the Representatives, by notice given
to the Transferor if after the Execution Time and prior to delivery of and
payment for the Notes on the Closing Date, (i) trading in the Common Stock of
Household International, Inc. shall have been suspended by the Commission or the
New York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
by Federal or State of New York authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities involving the United States of
America, declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the reasonable judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Notes as contemplated by the Prospectus.
Section 7. Representations and Indemnities to Survive. The
------------------------------------------
respective agreements, representations, warranties, indemnities and other
statements of the Household Entities or the officers of each of them and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriters, the Household Entities or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Notes. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
24
Section 8. Notices. All communications hereunder shall be in writing
-------
and effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telegraphed and confirmed to the Representative at [.] Attention:
[.]; if sent to any Household Entity, will be mailed, delivered or telegraphed
and confirmed to them at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
attention of General Counsel; provided, however, that any notice to an
Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
Section 9. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
--------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 8 hereof, and
no other person will have any right or obligation hereunder.
Section 11. Counterparts. This Agreement may be executed by one or
------------
more parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
Section 12. Miscellaneous. This agreement supersedes all prior
-------------
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
25
If you are in agreement with the foregoing, please sign two
counterparts hereof and return one to each of the Bank and the Transferor
whereupon this letter and your acceptance shall become a binding agreement among
the Household Entities and the several Underwriters.
Very truly yours,
HOUSEHOLD BANK (NEVADA), N.A.
By: __________________________________
Name:
Title:
HOUSEHOLD RECEIVABLES FUNDING, INC. III
By: __________________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By: __________________________________
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date hereof.
[Name]
By [.]
By _____________________________
Name:
Title:
For themselves and the other
several Underwriters named
in Schedule I to the
foregoing Agreement.
26
Schedule I
----------
CLASS A NOTES
-------------
Principal
Amount
---------------
CLASS B NOTES
-------------
Principal
Amount
---------------
CLASS C NOTES
-------------
Principal
Amount
---------------
EXHIBIT 10.2
--------------------------------------------------------------------------------
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I
Issuer
and
HOUSEHOLD FINANCE CORPORATION
Administrator
ADMINISTRATION AGREEMENT
Dated as of [.], 2000
--------------------------------------------------------------------------------
TABLE OF CONTENTS
SECTION 1 DUTIES OF ADMINISTRATOR.................................................... 1
SECTION 2 RECORDS.................................................................... 6
SECTION 3 COMPENSATION............................................................... 6
SECTION 4 ADDITIONAL INFORMATION TO BE FURNISHED TO ISSUER........................... 6
SECTION 5 INDEPENDENCE OF ADMINISTRATOR.............................................. 6
SECTION 6 NO JOINT VENTURE........................................................... 6
SECTION 7 OTHER ACTIVITIES OF ADMINISTRATOR.......................................... 6
SECTION 8 TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR........... 6
SECTION 9 ACTION UPON TERMINATION, RESIGNATION OR REMOVAL............................ 7
SECTION 10 NOTICES.................................................................... 7
SECTION 11 AMENDMENTS................................................................. 8
SECTION 12 SUCCESSORS AND ASSIGNS..................................................... 9
SECTION 13 GOVERNING LAW.............................................................. 9
SECTION 14 HEADINGS................................................................... 9
SECTION 15 COUNTERPARTS............................................................... 9
SECTION 16 SEVERABILITY............................................................... 9
SECTION 17 NOT APPLICABLE TO HOUSEHOLD FINANCE CORPORATION IN OTHER CAPACITIES... 9
SECTION 18 LIMITATION OF LIABILITY OF OWNER TRUSTEE AND TRUSTEE....................... 9
SECTION 19 THIRD-PARTY BENEFICIARY.................................................... 10
SECTION 20 NONPETITION COVENANTS...................................................... 10
SECTION 21 SUCCESSOR ADMINISTRATOR.................................................... 10
SCHEDULE 1 - Administration Fee
EXHIBIT A - Form of Power of Attorney
ADMINISTRATION AGREEMENT dated as of [.], 2000 (the "Administration
--------------
Agreement"), between HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, a business trust
---------
organized and existing under the laws of the State of Delaware (herein, the
"Issuer"), and HOUSEHOLD FINANCE CORPORATION, a Delaware corporation ("Household
------- ---------
Finance Corporation"), as administrator (herein, the "Administrator").
------------------- -------------
W I T N E S S E T H :
WHEREAS the Issuer has entered into a Master Indenture, dated as of the
Closing Date (as amended, modified or supplemented from time to time in
accordance with the provisions thereof, the "Indenture"), between the Issuer and
---------
Xxxxx Fargo Bank Minnesota, N.A., a national banking association, as indenture
trustee (the "Indenture Trustee") to provide for the issuance of its asset
-----------------
backed notes (the "Notes");
-----
WHEREAS the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of the beneficial ownership interest of the
Issuer, including (i) a Transfer and Servicing Agreement, dated as of the
Closing Date (as amended, modified or supplemented from time to time in
accordance with the provisions thereof, the "Transfer and Servicing Agreement"),
--------------------------------
among Household Receivables Funding, Inc. III, as Transferor (the "Transferor"),
----------
Household Finance Corporation, as Servicer (in such capacity, the "Servicer"),
--------
and the Issuer, (ii) a Depository Agreement, dated [.], 2000 (the "Depository
----------
Agreement"), among the Issuer, the Indenture Trustee, and The Depository Trust
---------
Company, and (iii) the Indenture (the Transfer and Servicing Agreement, the
Depository Agreement, the Trust Agreement and the Indenture being hereinafter
referred to collectively as the "Related Agreements") (capitalized terms used
------------------
herein and not defined herein shall have the meanings assigned to such terms in
the Transfer and Servicing Agreement, or if not defined therein, in the
Indenture);
WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the Notes
and the collateral therefor pledged pursuant to the Indenture (the
"Receivables") and (b) the beneficial ownership interest in the Issuer (the
-----------
holder of such interest being referred to herein as the "Owner");
-----
WHEREAS the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to in
the preceding clause, and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer and the
Owner Trustee may from time to time request;
WHEREAS the Administrator has the capacity to provide the services required
hereby and is willing to perform such services for the Issuer and the Owner
Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
Section 1. Duties of Administrator.
-----------------------
(a) Duties with Respect to the Related Agreements.
---------------------------------------------
(i) The Administrator shall consult with the Owner Trustee regarding
the duties of the Issuer and the Owner Trustee under the Related
Agreements. The Administrator shall monitor the performance of the Issuer
and shall advise the Owner Trustee when action is necessary to comply with
the Issuer's or the Owner Trustee's duties under the Related Agreements.
The
Administrator shall prepare for execution by the Issuer or the Owner
Trustee or shall cause the preparation by other appropriate persons of all
such documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to any Related Agreement. In furtherance of the
foregoing, the Administrator shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the
Indenture including, without limitation, such of the foregoing as are
required with respect to the following matters under the Indenture
(references are to sections of the Indenture):
(1) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes, if any, and
delivery of the same to the Indenture Trustee (Section 2.03);
(2) the duty to cause the Note Register to be kept and to give
the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note
Register (Section 2.05);
(3) the furnishing of the Indenture Trustee, the Servicer, any
Noteholder or the Paying Agent with the names and addresses of
Noteholders after receipt of a written request therefor from the
Indenture Trustee, the Servicer, any Noteholder or the Paying Agent,
respectively (Section 2.09(a));
(4) the preparation, obtaining or filing of the instruments,
opinions and certificates and other documents required for the release
of collateral (Section 2.11);
(5) the payment of principal and interest in accordance with the
terms of the Notes as specified in the relevant Indenture Supplement
(Section 3.01(a));
(6) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.03);
(7) the direction to Paying Agents to pay to the Indenture
Trustee all sums held in trust by such Paying Agents (Section 3.03);
(8) the obtaining and preservation of the Issuer's qualification
to do business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Receivables and each other instrument and
agreement (Section 3.04);
(9) the preparation of all supplements, amendments, financing
statements, continuation statements, if any, instruments of further
assurance and other instruments necessary to protect the Trust Estate
(Section 3.05);
(10) the obtaining of the Opinion of Counsel on the Closing Date
and the annual delivery of Opinions of Counsel as to the Trust Estate,
and the annual delivery of the Officers' Certificate and certain other
statements as to compliance with the Indenture (Sections 3.06 and
3.09);
(11) the identification to the Indenture Trustee in an Officers'
Certificate of a Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.07(b));
2
(12) the delivery of notice to the Indenture Trustee of the
occurrence of any Servicer Default of which the Issuer has knowledge
and the action, if any, the Issuer is taking in connection with such
default (Section 3.07(d));
(13) the delivery to the Indenture Trustee, within 120 days after
the end of each fiscal year of the Issuer of an Officer's Certificate
with respect to various matters relating to compliance with the
Indenture (Section 3.09);
(14) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligation under the
Indenture (Section 3.10);
(15) the delivery of notice to the Indenture Trustee of each
Event of Default and each default by the Servicer or the Transferor
under the Transfer and Servicing Agreement (Section 3.19);
(16) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officers' Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);
(17) the taking of all reasonable steps available to remedy the
consequences of the occurrence and continuation of an Event of Default
specified in clauses (c) and (d) of Section 5.02 of the Indenture and
the compliance with any written directive of the Indenture Trustee
with respect to the sale of the Trust Estate in a commercially
reasonable manner if an Event of Default specified in clause (a) or
(b) of Section 5.02 of the Indenture shall have occurred and be
continuing (Section 5.05);
(18) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee
and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.10);
(19) the preparation of an Issuer Request and Officers'
Certificate and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Trust Estate
(Sections 8.09 and 8.10);
(20) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures and the mailing to the Noteholders of notices with respect
to such supplemental indentures (Sections 10.01, 10.02 and 10.03);
(21) the execution of new Notes conforming to any supplemental
indenture (Section 10.06);
(22) the preparation of all Officers' Certificates, Opinions of
Counsel and Independent Certificates with respect to any requests by
the Issuer to the Indenture Trustee to take any action under the
Indenture (Section 12.01(a));
(23) the preparation and delivery of Officers' Certificates and
the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 12.01(b));
3
(24) the notification of each Rating Agency of the information
required pursuant to Section 12.05 of the Indenture (Section 12.05);
(25) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 12.06); and
(26) comply with the provisions of the Transfer and Servicing
Agreement.
(ii) The Administrator will:
(1) pay the Indenture Trustee from time to time reasonable
compensation for all services rendered by the Indenture Trustee under
the Indenture (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of the Indenture (including
the reasonable compensation, expenses and disbursements of its agents
and either in-house counsel or outside counsel, but not both), except
any such expense, disbursement or advance as may be attributable to
its negligence or bad faith;
(3) indemnify, to the fullest extent permitted by law, the
Indenture Trustee and its officers, directors, employees and agents
for, and to hold them harmless against, any losses, liability or
expense incurred without negligence or bad faith on their part,
arising out of or in connection with the acceptance or administration
of the transactions contemplated by the Indenture, including the
reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of
any of their powers or duties under the Indenture; and
(4) indemnify, to the fullest extent permitted by law, the Owner
Trustee and its officers, directors, employees and agents for, and to
hold them harmless against, any losses, liability or expense incurred
without negligence or bad faith on their part, arising out of or in
connection with the acceptance or administration of the transactions
contemplated by the Trust Agreement, including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or
duties under the Trust Agreement.
(b) Additional Duties.
-----------------
(i) In addition to the duties of the Administrator set forth above,
the Administrator shall perform all duties and obligations of the Issuer
under the Related Agreements and shall perform such calculations and shall
prepare for execution by the Issuer and shall cause the preparation by
other appropriate persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Related Agreements, and at the request of the Issuer shall take all
appropriate action that it is the duty of the Issuer or the Owner Trustee
to take pursuant to the Related Agreements. Subject to Section 5 of this
Agreement, and in accordance with the directions of the Issuer, the
Administrator shall administer, perform or supervise the performance of
such other activities in connection with the Receivables (including the
Related Agreements) as
4
are not covered by any of the foregoing provisions and as are expressly
requested by the Owner Trustee and are reasonably within the capability of
the Administrator.
(ii) The Administrator shall perform the duties of the Administrator
specified in Section 9.02 of the Trust Agreement required to be performed
in connection with the resignation or removal of the Owner Trustee, and any
other duties expressly required to be performed by the Administrator under
the Trust Agreement.
(iii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in
the Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.
(iv) It is the intention of the parties hereto that the
Administrator shall, and the Administrator hereby agrees to, prepare, file
and deliver on behalf of the Issuer all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Related Documents. In
furtherance thereof, the Owner Trustee shall, on behalf of the Issuer,
execute and deliver to the Administrator and its agents, and to each
successor Administrator appointed pursuant to the terms hereof, one or more
powers of attorney substantially in the form of Exhibit A hereto,
appointing the Administrator the attorney-in-fact of the Issuer for the
purpose of executing on behalf of the Issuer all such documents, reports,
filings, instruments, certificates and opinions.
(c) Non-Ministerial Matters.
-----------------------
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any
action unless within a reasonable time before the taking of such action,
the Administrator shall have notified the Owner Trustee of the proposed
action and the Owner Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence, "non-
ministerial matters" shall include, without limitation:
(1) the amendment of or any supplement to the Indenture;
(2) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection or
enforcement of the Collateral);
(3) the amendment, change or modification of the Related
Agreements;
(4) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators, or the
consent to the assignment by the Note Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture; and
(5) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (A) make any
payments to the Noteholders or the Owner under the Related Agreements, (B)
sell the Trust Estate pursuant to Section 5.05 of the Indenture
5
other than pursuant to a written directive of the Indenture Trustee or (C)
take any other action that the Issuer directs the Administrator not to take
on its behalf.
Section 2. Records. The Administrator shall maintain appropriate books of
-------
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the Owner
Trustee, the Indenture Trustee and the Transferor at any time during normal
business hours.
Section 3. Compensation. As compensation for the performance of the
------------
Administrator's obligations under this Agreement, the Administrator shall be
entitled to the amount set forth on Schedule 1 which shall be payable in
----------
accordance with the applicable Indenture Supplement. The Transferor shall be
responsible for payment of the Administrator's fees (to the extent not paid
pursuant to the applicable Indenture Supplement) and shall reimburse the
Administrator for any of its liabilities and extra out-of-pocket expenses
related to its performance hereunder or under any Related Document (including
without limitation those expenses set forth in Section 1(a)(ii) of this
Agreement).
Section 4. Additional Information to be Furnished to Issuer. The
------------------------------------------------
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Receivables as the Issuer shall reasonably request.
Section 5. Independence of Administrator. For all purposes of this
-----------------------------
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.
Section 6. No Joint Venture. Nothing contained in this Agreement shall
----------------
(a) constitute the Administrator and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) be construed to impose any
liability as such on any of them or (c) be deemed to confer on any of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the others.
Section 7. Other Activities of Administrator. Nothing herein shall
---------------------------------
prevent the Administrator or its affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.
Section 8. Term of Agreement; Resignation and Removal of Administrator.
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(a) This Agreement shall continue in force until the termination of the
Issuer, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 8(e) and (f), the Administrator may resign its
--------------------
duties hereunder by providing the Issuer with at least 60 days prior written
notice.
(c) Subject to Section 8(e) and (f), the Issuer may remove the
--------------------
Administrator without cause by providing the Administrator with at least 60 days
prior written notice.
6
(d) Subject to Section 8(e) and (f), at the sole option of the Issuer, the
--------------------
Administrator may be removed immediately upon written notice of termination from
the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its
duties under this Agreement and, after notice of such default, shall not
cure such default within 30 days (or, if such default cannot be cured in
such time, shall not give within 30 days such assurance of cure as shall be
reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a decree
or order for relief, and such decree or order shall not have been vacated
within 60 days, in respect of the Administrator in any involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for the Administrator or any
substantial part of its property or order the winding-up or liquidation of
its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official
for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.
The Administrator agrees that if any of the events specified in
clause (ii) or (iii) of this Section 8(d) shall occur, it shall give
written notice thereof to the Issuer and the Indenture Trustee within seven
days after the happening of such event.
(e) No resignation or removal of the Administrator pursuant to this
Section 8 shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.
(f) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.
Section 9. Action upon Termination, Resignation or Removal. Promptly upon
-----------------------------------------------
the effective date of termination of this Agreement pursuant to Section 8(a) or
the resignation or removal of the Administrator pursuant to Section 8(b) or (c),
respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
8(b), (c) or (d), respectively, the Administrator shall cooperate with the
Issuer and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.
Section 10. Notices. Any notice, report or other communication given
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hereunder shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to
7
Household Credit Card Master Note Trust I
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Telephone: 000-000-0000
(b) if to the Administrator or the Transferor, to
Household Finance Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
(c) if to the Indenture Trustee, to
Xxxxx Fargo Bank Minnesota, N.A.
MAC N9311-000, 0xx & Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Attention: Asset Backed Securities
Telephone: 000-000-0000
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above, except that notices to the
Indenture Trustee are effective only upon receipt.
Section 11. Amendments. This Agreement may be amended from time to time,
----------
by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Transferor, with the written consent of the Owner Trustee
(and with respect to subsections 1(a)(ii)(1), (2) and (3), the Indenture
Trustee), without the consent of any of the Noteholders or the Owner, (i) to
cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be inconsistent with any other provisions herein, (iii) to add any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement, (iv) to
change, modify, delete or add any other obligation of the Issuer and Household
Finance Corporation; provided, however that no amendment pursuant to clause (iv)
of this Section 11 shall be effective unless the Issuer and Household Finance
Corporation have been notified in writing that the Rating Agency Condition has
been satisfied; provided, further, the Issuer and Household Finance Corporation
shall have delivered to the Indenture Trustee an Officer's Certificate, dated
the date of any such action, stating that each of the Issuer and Household
Finance Corporation reasonably believes that such action will not have an
Adverse Effect, unless the Owner Trustee and the Indenture Trustee shall consent
thereto.
This Agreement may also be amended from time to time, by a written
amendment duly executed and delivered by the Issuer, the Administrator and the
Transferor, with the written consent of the Owner Trustee, the holders of Notes
evidencing not less than a majority in the Outstanding Amount of the Notes and
the Owner, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of Noteholders or the Owner; provided, however, that, without
the consent of the Holders of all of the Notes then outstanding, no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Receivables or
distributions that are required to be made for the benefit of
8
the Noteholders or (b) reduce the aforesaid portion of the Outstanding Amount of
the Notes, the Holders of which are required to consent to any such amendment
Prior to the execution of any such amendment or consent, the Administrator
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, the Administrator shall furnish written notification of the substance
of such amendment or consent to the Indenture Trustee.
It shall not be necessary for the consent of Noteholders pursuant to this
Section 11 to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance thereof.
Section 12. Successors and Assigns. This Agreement may not be assigned by
----------------------
the Administrator unless such assignment is previously consented to in writing
by the Issuer, the Transferor and the Owner Trustee and subject to the
satisfaction of the Rating Agency Condition in respect thereof. An assignment
with such consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, this Agreement may be assigned by the
Administrator without the consent of the Issuer, the Transferor, the Owner
Trustee or the Rating Agencies to a corporation or other organization that is a
successor (by merger, consolidation or purchase of assets) to the Administrator,
provided that such successor organization executes and delivers to the Issuer,
the Transferor and the Owner Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of said assignment
in the same manner as the Administrator is bound hereunder. Subject to the
foregoing, this Agreement shall bind any successors or assigns of the parties
hereto.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 14. Headings. The section headings hereof have been inserted for
--------
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
Section 15 Counterparts. This Agreement may be executed in counterparts,
------------
each of which when so executed shall together constitute but one and the same
agreement.
Section 16. Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 17. Not Applicable to Household Finance Corporation in Other
--------------------------------------------------------
Capacities. Nothing in this Agreement shall affect any obligation Household
----------
Finance Corporation may have in any other capacity.
Section 18. Limitation of Liability of Owner Trustee and Trustee.
----------------------------------------------------
Notwithstanding anything contained herein to the contrary, this instrument has
been signed by Wilmington Trust Company not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall
Wilmington Trust Company in its individual capacity or any beneficial owner of
the Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder, as to all of which
recourse shall be had solely to the assets of the Issuer. For all purposes of
9
this Agreement, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles IV, V, VI and VII of the Trust
Agreement.
Section 19. Third-Party Beneficiary.
-----------------------
(a) The Owner Trustee is a third-party beneficiary to this Agreement and
is entitled to the rights and benefits hereunder and may enforce the provisions
hereof as if it were a party hereto.
(b) Solely with respect to any amounts owing to the Indenture Trustee
pursuant to Section 6.07 of the Indenture, the Indenture Trustee is a third-
party beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
Section 20. Nonpetition Covenants. Notwithstanding any prior termination
---------------------
of this Agreement, the Administrator shall not at any time with respect to the
Issuer or the Transferor acquiesce, petition or otherwise invoke or cause the
Issuer or the Transferor to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
or the Transferor under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, conservator, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or the
Transferor or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Issuer or the Transferor; provided,
however, that this Section 20 shall not operate to preclude any remedy described
in Article V of the Indenture.
Section 21. Successor Administrator. In the event of a servicing transfer
-----------------------
pursuant to Article V of the Transfer and Servicing Agreement, the successor
servicer under the Transfer and Servicing Agreement shall, upon the date of such
servicing transfer, become the successor Administrator hereunder.
"Administrator" shall mean initially Household Finance Corporation and
--------------
thereafter its permitted successor and assigns as provided in Section 12 or any
successor Administrator as provided in this Section 21.
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
HOUSEHOLD CREDIT CARD MASTER NOTE
TRUST I
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee,
By: ____________________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION,
as Administrator,
By: ____________________________________
Name:
Title:
[Signature Page to Administration Agreement]
SCHEDULE 1
EXHIBIT A
[Form of Power of Attorney]
POWER OF ATTORNEY
STATE OF DELAWARE )
)
COUNTY OF ___________ )
KNOW ALL MEN BY THESE PRESENTS, that Household Credit Card Master Note
Trust I, a Delaware statutory business trust ("Trust"), does hereby make,
-----
constitute and appoint Household Finance Corporation, as Administrator under the
Administration Agreement (as defined below), and its agents and attorneys, as
Attorneys-in-Fact to execute on behalf of the Trust all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Trust to prepare, file or deliver pursuant to the Related Documents (as defined
in the Administration Agreement), including, without limitation, to appear for
and represent the Trust in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Trust, and with full
power to perform any and all acts associated with such returns and audits that
the Trust could perform, including without limitation, the right to distribute
and receive confidential information, defend and assert positions in response to
audits, initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements. For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Administration
------------------------
Agreement, dated as of _____ __, 2000, between the Trust and Household Finance
Corporation, as Administrator and as such may be amended from time to time.
This power of attorney is coupled with an interest and shall survive
and not be affected by the subsequent bankruptcy or dissolution of the Trust.
All powers of attorney for this purpose heretofore filed or executed by the
Trust are hereby revoked.
EXECUTED this __ day of ________, 2000.
HOUSEHOLD CREDIT CARD MASTER
NOTE TRUST I
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By: _______________________
Name:
Title:
