EXHIBIT 1
EXECUTION COPY
HOUSEHOLD CONSUMER LOAN TRUST 1997-2
HOUSEHOLD CONSUMER LOAN ASSET BACKED NOTES,
Series 1997-2, Class A-1, Class A-2 and Class A-3
HOUSEHOLD FINANCE CORPORATION
(Servicer)
HOUSEHOLD CONSUMER LOAN CORPORATION
(Seller)
UNDERWRITING AGREEMENT
November 7, 1997
X.X. XXXXXX SECURITIES INC.
as Representative of the several Underwriters
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Household Consumer Loan Corporation, a Nevada corporation (the
"Seller") and a wholly-owned, special purpose subsidiary of
Household Finance Corporation ("HFC"), has entered into a Trust
Agreement dated as of November 1, 1997 (the "Trust Agreement") with
Chase Manhattan Bank Delaware (the "Owner Trustee"), creating
Household Consumer Loan Trust 1997-2 (the "Issuer"), a statutory
business trust established under the laws of the State of Delaware.
The Seller proposes to direct the Owner Trustee under the Trust
Agreement to cause the Issuer to issue Household Consumer Loan
Asset Backed Notes, Series 1997-2, Class A-1 Notes, Class A-2
Notes, Class A-3 Notes and Class B Notes (collectively, the
"Notes") and Household Consumer Loan Asset Backed Certificates,
Series 1997-2 (the "Certificates" and, together with the Notes, the
"Securities"). The Class A-1, Class A-2 and Class A-3 Notes are
collectively referred to herein as the "Class A Notes". Only the
Class A Notes are being purchased by the underwriters named in
Schedule A hereto (the "Underwriters") for whom X.X. Xxxxxx
Securities Inc. is acting as representative (the "Representative").
The Seller and HFC understand that the Underwriters propose to make
a public offering of the Class A Notes as soon as the Underwriters
deem advisable after the date hereof.
The Notes will be issued pursuant to an Indenture dated as of
November 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York (the "Indenture Trustee") and will represent
indebtedness of the Issuer. The Certificates will be issued
pursuant to the Trust Agreement. The Notes will be secured by (i)
a participation interest (the "Series 1997-2 Participation
Interest") in (a) receivables held in Household Consumer Loan
Deposit Trust I (the "Deposit Trust") arising under certain fixed
and variable rate revolving unsecured consumer credit lines (the
"Credit Lines") and (b) the preferred stock of the Seller held by
the Deposit Trustee (as defined herein), (ii) amounts on deposit in
certain accounts of the Issuer held for the benefit of the holders
of the Securities and (iii) an assignment of the Issuer's rights
under the Series 1997-2 Supplement (as defined below)
(collectively, the "Trust Assets"). The Deposit Trust was formed
pursuant to a Pooling and Servicing Agreement dated as of September
1, 1995 (the "Base Pooling and Servicing Agreement") among the
Seller, HFC, as Servicer (the "Servicer"), and Texas Commerce Bank
National Association as successor trustee to The Chase Manhattan
Bank, N.A., as Deposit Trustee (the "Deposit Trustee"). The Series
1997-2 Participation Interest was issued pursuant to the Supplement
for Series 1997-2 dated as of November 1, 1997 among the Seller,
the Servicer and the Deposit Trustee (the "Supplement" and,
together with the Base Pooling and Servicing Agreement, the
"Pooling and Servicing Agreement"). The Pooling and Servicing
Agreement, together with the Trust Agreement, the Certificate of
Trust, the Indenture, the Receivables Purchase Agreement, the
Administration Agreement and this Agreement, constitute the "Basic
Documents" herein. Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Indenture.
The Notes are more fully described in the Registration
Statement (as defined below) which the Seller has furnished to the
Underwriters.
SECTION 1. Representations and Warranties of the Seller
and the Credit Line Owners. Each of the Credit Line Owners (as
defined in the Pooling and Servicing Agreement) and the Seller,
each as to itself, represents and warrants to, and agrees with the
Underwriters that:
(a) A registration statement on Form S-3 (Nos. 000-00000-00
and 333-36405-02) in respect of the Notes and a registration
statement on Form S-1 (No. 333-36405) in respect of the Series
1997-2 Participation Interest, including a prospectus and such
amendments thereto as may have been required on the date hereof,
relating to the Class A Notes and the Series 1997-2 Participation
Interest, have been filed with the Securities and Exchange
Commission (the "Commission"). The conditions to the use of a
registration statement on Form S-3 and Form S-1 under the
Securities Act of 1933, as amended (the "Act"), as set forth in the
General Instructions to Form S-3 and Form S-1, as applicable, have
been, or will prior to the effective date of the Registration
Statement (defined herein) be, satisfied in all material respects
with respect to the Seller and the Registration Statement. The
Commission has not issued any order preventing or suspending the
use of the Preliminary Prospectus. There are no contracts or
documents of the Seller which are required to be filed as exhibits
to the Registration Statement pursuant to the Act or the Rules and
Regulations (defined herein) which have not been so filed or
incorporated by reference therein on or prior to the Effective Date
of the Registration Statement, assuming compliance by each
Underwriter with Section 2(a) hereof.
(b) The Seller will next file with the Commission either, (i)
prior to the effectiveness of the Registration Statement, a further
amendment thereto (including the form of final prospectus) or (ii)
after effectiveness of the Registration Statement, a final
prospectus in accordance with Rules 430A and 424(b)(1) or (4) of
the Rules and Regulations. In the case of clause (ii), the Seller
has included in such Registration Statement, as amended at the
Effective Date (defined herein), all information (other than Rule
430A Information (defined herein)) required by the Act and the
rules and regulations thereunder (the "Rules and Regulations") to
be included in the Registration Statement with respect to the
Series 1997-2 Participation Interest and the Notes and the offering
of the Notes. As filed, such amendment and form of final
prospectus, or such final prospectus, shall include all Rule 430A
Information and, except to the extent the Underwriters shall agree
in writing to a modification, shall be in all substantive respects
in the form furnished to the Underwriters prior to the Execution
Time (defined herein) or, to the extent not completed at the Execu-
tion Time, shall contain only such specific additional information
and other changes (beyond that contained in the Preliminary
Prospectus which has previously been furnished to the Underwriters)
as the Seller has advised the Underwriters, prior to the Execution
Time, will be included or made therein.
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 and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
included in the Registration Statement, or amendments thereof,
which, as completed, is proposed to be used in connection with the
sale of the Class A Notes and any prospectus subsequently filed
with the Commission by the Seller with the consent of the Under-
writers pursuant to Rule 424(a) of the Rules and Regulations.
"Prospectus" shall mean the prospectus relating to the Notes that
is first filed with the Commission pursuant to Rule 424(b) and any
prospectus subsequently filed pursuant to Rule 424 or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus included in the Registration Statement at the Effective
Date. Reference made herein to the Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment
or supplement to the Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of the Preliminary Prospectus or the Prospectus and
incorporated by reference in the Preliminary Prospectus or the
Prospectus; and any reference to any amendment to the Registration
Statement shall be deemed to include any report of the Seller filed
with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. "Registration Statement"
shall mean both registration statements referred to in Section 1(a)
hereof and any registration statements required to be filed under
the Act or the Rules and Regulations, including incorporated docu-
ments, exhibits and financial statements, in the form in which it
has or shall become effective and, in the event of any post-
effective amendment thereto which becomes effective prior to the
Closing Date (defined herein), shall also mean such Registration
Statement as so amended and including the Rule 430A Information
deemed to be included therein at the Effective Date as provided by
Rule 430A. "Rule 424" and "Rule 430A" refer to such rules and
regulations under the Act. "Rule 430A Information" means
information with respect to the Class A Notes and the offering
thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A.
(c) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable
requirements of the Act and the Rules and Regulations; assuming
compliance by each Underwriter with Section 2(a), 2(b) and 2(c)
hereof when the Prospectus is first filed (if required) in
accordance with Rule 424(b), as of its date and on the Closing
Date, the Prospectus (and any supplements thereto) will comply in
all material respects with the applicable requirements of the Act
and the Rules and Regulations; on the Effective Date, the Regis-
tration Statement, did or will not contain any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and, as of its date and on the date of any filing
pursuant to Rule 424(b) (if required) and on the Closing Date, the
Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the Seller makes no repre-
sentations 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 Seller by or on behalf of
the Underwriters specifically for use in connection with the
preparation of the Registration Statement or the Prospectus (or any
supplements thereto).
(d) Since the respective dates as of which information is
given in the Prospectus, or the Prospectus, as amended and
supplemented at the Closing Time, there has not been any material
adverse change in the general affairs, management, financial
condition, or results of operations of any of the Credit Line
Owners or the Seller or of their subsidiaries, otherwise than as
set forth or contemplated in the Prospectus or the Prospectus as
amended and supplemented at the Closing Time.
(e) Each of the Credit Line Owners and the Seller has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of
incorporation, with the full right, power and authority (corporate
and other) to own, lease and operate its properties and conduct its
business as described in the Prospectus and to enter into and
perform its obligations under the Basic Documents to which each is
a party, and with respect to the Seller, to authorize the
execution, delivery and performance of the Indenture and the
issuance of the Notes and the Certificates, respectively, by the
Issuer; each of the Credit Line Owners and the Seller 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 be so qualified would not
have a material adverse effect on the business or financial
condition of any such Credit Line Owner or the Seller; and each
Credit Line Owner is duly authorized under the statutes which
regulate the business of making loans or of financing the sale of
goods (commonly called "small loan laws," "consumer finance laws,"
or "sales finance laws"), or is permitted under the general
interest statutes and related laws and court decisions, to conduct
in the various jurisdictions in which any of them do business the
businesses as currently conducted therein by any of them.
(f) There are no legal or governmental proceedings pending to
which any Credit Line Owner or the Seller is a party or of which
any property of any Credit Line Owner or the Seller is the subject,
which if determined adversely to any Credit Line Owner or the
Seller would individually or in the aggregate have a material
adverse effect on the financial position, shareholders' equity or
results of operations of such Credit Line Owner or the Seller; and
to the best knowledge of the Credit Line Owners and the Seller, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(g) Each of the Basic Documents to which the Seller or the
Credit Line Owners are a party, when executed and delivered as
contemplated thereby, will have been duly authorized, executed and
delivered by the Seller and the Credit Line Owners, as applicable,
and the Basic Documents to which the Seller or the Credit Line
Owners are a party when executed and delivered as contemplated
herein will constitute, legal, valid and binding instruments
enforceable against the Seller or the Credit Line Owners, as
applicable, in accordance with their respective terms, subject as
to enforceability (i) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (ii) to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at
law) and (iii) with respect to rights of indemnity under this
Agreement, to limitations of public policy under applicable
securities laws.
(h) The issuance and delivery of the Securities, the
consummation of any other of the transactions contemplated herein
or in the Basic Documents, or the fulfillment of the terms of the
Basic Documents, do not and will not conflict with or violate any
term or provision of the Certificate or Articles of Incorporation
or Bylaws of any of the Credit Line Owners or the Seller, any
statute, order or regulation applicable to any of the Credit Line
Owners or the Seller of any court, regulatory body, administrative
agency or governmental body having jurisdiction over any of the
Credit Line Owners or the Seller and do not and will not conflict
with, result in a breach or violation or the acceleration of or
constitute a default under or result in the creation or imposition
of any lien, charge or encumbrance upon any of the property or
assets of any of the Credit Line Owners or the Seller pursuant to
the terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the
Credit Line Owners or the Seller is a party or by which any of the
Credit Line Owners or the Seller may be bound or to which any of
the property or assets of any of the Credit Line Owners or the
Seller may be subject except for conflicts, violations, breaches,
accelerations and defaults which would not, individually or in the
aggregate, be materially adverse to any of the Credit Line Owners
or the Seller or materially adverse to the transactions
contemplated by this Agreement.
(i) Xxxxxx Xxxxxxxx LLP is an independent public accountant
with respect to the Credit Line Owners and the Seller as required
by the Act and the Rules and Regulations.
(j) The direction by the Seller to the Deposit Trustee to
execute, countersign, issue and deliver the Series 1997-2
Participation Interest has been duly authorized by the Seller, and
assuming the Deposit Trustee has been duly authorized to do so,
when executed, countersigned, issued and delivered by the Deposit
Trustee in accordance with Pooling and Servicing Agreement, the
Series 1997-2 Participation Interest will be validly issued and
outstanding and will be entitled to the benefits provided by the
Pooling and Servicing Agreement.
(k) The Seller has directed the Issuer to execute, issue and
deliver the Notes and the Issuer has directed the Indenture Trustee
to authenticate the Notes and assuming such direction has been duly
authorized by the Issuer, and assuming the Indenture Trustee has
been duly authorized to do so, when executed, countersigned, issued
and delivered in accordance with the Indenture, the Notes will be
validly issued and outstanding and will be entitled to the benefits
provided by the Indenture.
(l) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or
body of the United States is required for the issue and sale of the
Class A Notes to the Underwriters, or the consummation by any of
the Credit Line Owners, the Seller or the Issuer of the other
transactions contemplated by the Basic Documents, except the
registration under the Act of the Class A Notes and such consents,
approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Class A Notes by the
Underwriters or as have been obtained.
(m) Each of the Credit Line Owners and the Seller possesses
all material licenses, certificates, authorities or permits issued
by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now conducted by it and as
described in the Prospectus and none of the Credit Line Owners or
the Seller has received notice of proceedings relating to the
revocation or modification of any such license, certificate,
authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the conduct of its business,
operations or financial condition.
(n) As of the date any Receivables are transferred to the
Deposit Trustee, (i) each Credit Line Owner will have good and
marketable title to the Receivables being transferred by it to the
Seller free and clear of any lien, mortgage, pledge, charge,
encumbrance, adverse claim or other security interest
(collectively, "Liens"), (ii) each Credit Line Owner will not have
assigned to any person any of its right, title or interest in such
Receivables or in the Receivables Purchase Agreement and (iii) each
Credit Line Owner will have the power and authority to sell such
Receivables to the Seller; and upon the consummation of the sale
and the assignment provided for pursuant to the terms of the
Receivables Purchase Agreement, the Seller will have acquired all
the related Credit Line Owners' right, title and interest in and to
the Receivables.
(o) As of the date any Receivables are transferred to the
Deposit Trustee, the Seller (i) will have good and marketable title
to the Receivables being transferred by it to the Deposit Trustee
pursuant to the Pooling and Servicing Agreement, free and clear of
any Liens, (ii) will not have assigned to any person any of its
right, title or interest in such Receivables or in the Receivables
Purchase Agreement, and (iii) will have the power and authority to
sell such Receivables to the Deposit Trustee and assuming due
execution and delivery of the Pooling and Servicing Agreement and
any Assignment of Receivables in Credit Lines by the Deposit
Trustee, the Deposit Trustee will have acquired all of the Seller's
right, title and interest in and to the Receivables. As of the
Closing Date, the Seller (i) will not have assigned to any person
other than the Issuer any of its right, title or interest in the
Series 1997-2 Participation Interest being issued pursuant to the
Pooling and Servicing Agreement and (ii) will have the power and
authority to convey the Series 1997-2 Participation Interest to the
Issuer pursuant to the Trust Agreement.
(p) At the Closing Time, the Seller will (i) have good and
marketable title to the Series 1997-2 Participation Interest, free
and clear of any Lien and (ii) have the power and authority to sell
the Series 1997-2 Participation Interest to the Issuer and to
authorize the Issuer to issue the Securities. Upon execution and
delivery of the Trust Agreement by the Seller and the conveyance of
the Series 1997-2 Participation Interest from the Seller to the
Issuer, the Issuer will have acquired ownership of all of the
Seller's right, title and interest in and to the Series 1997-2
Participation Interest.
(q) As of the Closing Time, each of the Initial Receivables
will meet the eligibility criteria described in the Prospectus and
Pooling and Servicing Agreement.
(r) None of the Credit Line Owners, the Seller, the Deposit
Trust or the Issuer will conduct its operations while any of the
Securities are outstanding in a manner that would require any
Credit Line Owner, the Seller, the Deposit Trust 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.
(s) At the Closing Time, the Securities and the Basic
Documents that are described in the Prospectus will conform in all
material respects to the descriptions thereof.
(t) At the Closing Time, Xxxxx'x and Standard & Poor's each
shall have assigned to each class of the Notes the respective
ratings for the Notes as set forth in the Prospectus.
(u) Any taxes, fees and other governmental charges in
connection with the execution and delivery of the Basic Documents
and the issuance of the Securities have been paid or will be paid
at or prior to the Closing Time.
(v) At the Closing Time, each of the representations and
warranties of the Seller and the Credit Line Owners set forth in
this Agreement will be true and correct in all material respects.
Any certificate signed by an officer of any Credit Line Owner
or the Seller and delivered to the Underwriter or counsel for the
Underwriter in connection with an offering of the Securities shall
be deemed, and shall state that it is, a representation and
warranty as to the matters covered thereby to each person to whom
the representations and warranties in this Section 1 are made.
SECTION 2. Representations and Warranties of the
Underwriters. Each Underwriter severally, and not jointly,
represents and warrants to, and agrees with the other Underwriters,
the Credit Line Owners, the Seller, the Servicer and HFC that:
(a) Such Underwriter has not furnished and will not furnish,
in writing or by electronic transmission, any Derived Information
relating to the Class A Notes to any such prospective investor,
except as otherwise contained in the Preliminary Prospectus dated
November 5, 1997 relating to the Class A Notes.
For purposes of this Agreement, "Derived Information" means
the type of information defined as Collateral Term Sheets,
Structural Term Sheets or Computational Materials (as such terms
are interpreted in the No-Action Letters (as defined below)), if
any, that have been distributed to prospective investors in written
form or by electronic transmission that:
(i) is not contained in the Prospectus without taking
into account information incorporated therein by reference;
and
(ii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means the information contained on
any computer tape furnished to the Underwriters by the Seller
concerning the assets comprising the Issuer.
The terms "Collateral Term Sheet" and "Structural Term Sheet"
shall have the respective meanings assigned to them in the
February 13, 1995 letter (the "PSA Letter") of Cleary, Gottlieb,
Xxxxx & Xxxxxxxx on behalf of the Public Securities Association
(which letter, and the Commission staff's response thereto, were
publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet
that reflects a substantive change in the information presented.
The term "Computational Materials" has the meaning assigned to it
in the May 17, 1994 letter (the "Xxxxxx Letter" and together with
the PSA Letter, the "No-Action Letters") of Xxxxx & Xxxx on behalf
of Xxxxxx, Peabody & Co., Inc. (which letter, and the Commission
staff's response thereto, were publicly available May 20, 1994).
(b) Each Underwriter acknowledges that the Credit Line
Owners, the Seller or HFC will not be deemed to have breached any
representation and warranty or to have failed to satisfy any other
agreement contained herein, to the extent any such breach or
failure on the part of such party resulted solely from an
Underwriter's breach of the representation and warranty set forth
in subsection (a) above; provided, however, that the rights and
obligations otherwise available to an Underwriter pursuant to
Sections 9 and 10 hereof are not limited solely as a result of an
Underwriter's breach of the representation and warranty set forth
in subsection (a) above.
SECTION 3. Purchase and Sale. The commitment of the
Underwriters to purchase and of the Seller to sell the Class A
Notes pursuant to this Agreement shall be deemed to have been made
on the basis of the respective representations and warranties of
each of the parties herein contained and shall be subject to the
terms and conditions herein set forth. The Seller agrees to
instruct the Issuer to issue and agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly
(except as provided in Section 12 hereof), to purchase from the
Seller, at a purchase price for each Class of the Notes set forth
on Schedule A hereto, the respective principal amount of each Class
of the Notes set forth opposite the name of such Underwriter on
Schedule A hereto.
SECTION 4. Delivery and Payment. Payment of the purchase
price for, and delivery of, any of the Class A Notes to be
purchased by the Underwriters shall be made at the office of Xxxxxx
Xxxxxx & Xxxxx, of Chicago, Illinois or at such other place as
shall be agreed upon by the Underwriters, the Seller and HFC at
10:00 a.m. eastern time on November 19, 1997 or at such other time
or date as shall be agreed upon in writing by the Underwriters, the
Seller and HFC (the "Closing Time"). The Class A Notes will be
delivered in book-entry form through the facilities of the
Depository Trust Company, Cedel Bank, Societe Anonyme and the
Euroclear System. Payment shall be made to the Seller by wire
transfer of same day funds payable to the account of the Seller.
Delivery of the Class A Notes shall be made to the Underwriters for
the respective accounts of the Underwriters against payment of the
purchase price thereof. Such Notes shall be in such denominations
and registered in such names as the Underwriters may request in
writing at least one business day prior to the applicable Closing
Time. Such Notes, which may be in temporary form, will be made
available for examination and packaging by the Underwriters no
later than 3:00 p.m. central time on the first business day prior
to the Closing Time.
SECTION 5. Offering by the Underwriters. It is understood
that the Underwriters propose to offer the Class A Notes for sale
to the public as set forth in the Prospectus.
SECTION 6. Covenants of the Seller and HFC. The Seller
and HFC covenant with each of the Underwriters as follows:
(a) If at any time when the Prospectus as amended or
supplemented is required by the Act to be delivered in connection
with sales of the Class A Notes by the Underwriters, any event
shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel to the Underwriters or counsel
for the Seller, to further amend or supplement the Prospectus as
then amended or supplemented in order that the Prospectus as
amended or supplemented will not include an untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein, in the light of circumstances under which
they were made, not misleading or if it shall be necessary, in the
opinion of any such counsel, at any such time to amend or
supplement the Registration Statement or the Prospectus as then
amended or supplemented in order to comply with the requirements of
the Act or the Rules and Regulations, or if required by such Rules
and Regulations, including Rule 430A thereunder, to file a
post-effective amendment to such Registration Statement (including
an amended Prospectus), the Seller will promptly prepare and file
with the Commission such amendment or supplement as may be
necessary to correct such untrue statement or omission or to make
the Registration Statement comply with such requirements, and
within two business days will furnish to the Underwriters as many
copies of the Prospectus, as amended or supplemented, as the
Underwriters shall reasonably request.
(b) The Seller will give the Underwriters reasonable notice
of its intention to file any amendment to the Registration
Statement, the Prospectus or the Prospectus as amended or
supplemented, pursuant to the Act, will furnish the Underwriters
with copies of any such amendment or supplement proposed to be
filed a reasonable time in advance of filing, and will not file any
such amendment or supplement to which the Underwriters or counsel
to the Underwriters shall object.
(c) The Seller will notify the Underwriters immediately, and
confirm the notice in writing, (i) of the effectiveness of any
amendment to the Registration Statement, (ii) of the mailing or the
delivery to the Commission for filing of any supplement to the
Prospectus or the Prospectus as amended or supplemented, (iii) of
the receipt of any comments from the Commission with respect to the
Registration Statement or the Prospectus or the Prospectus as
amended or supplemented, (iv) of any request by the Commission for
any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information and (v)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Seller will make every
reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(d) The Seller will deliver to the Underwriters as many
signed and as many conformed copies of the Registration Statement
(as originally filed) and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as you may
reasonably request.
(e) The Seller will make generally available to holders of
the Notes as soon as practicable, but in any event not later than
120 days after the close of the period covered thereby, an earning
statement of the Issuer (which need not be audited) complying with
Section 11(a) of the Act and the Rules and Regulations (including,
at the option of the Seller, Rule 158) and covering a period of at
least twelve consecutive months beginning not later than the first
day of the first fiscal quarter following the Closing Time.
(f) The Seller will endeavor, in cooperation with you, to
qualify the Class A Notes for offering and sale under the
applicable securities laws of such states and other jurisdictions
of the United States as you may designate, and will maintain or
cause to be maintained such qualifications in effect for as long as
may be required for the distribution of the Class A Notes. The
Seller will file or cause the filing of such statements and reports
as may be required by the laws of each jurisdiction in which the
Class A Notes have been qualified as above provided.
(g) Neither the Seller nor HFC will, without your prior
written consent, publicly offer or sell or contract to sell any
asset-backed securities or participation interests or other similar
securities representing interests in or secured by other consumer
loan-related assets originated or owned by the Seller or HFC for a
period of five days following the commencement of the offering of
the Class A Notes to the public.
(h) So long as the Class A Notes shall be outstanding, the
Seller will cause the Issuer to deliver to the Underwriters the
annual statement as to compliance delivered to the Indenture
Trustee pursuant to Section 3.10 of the Indenture and each monthly
report delivered pursuant to Section 3.23 of the Indenture. So
long as the Class A Notes are outstanding, the Servicer will
deliver to the Underwriters the annual statement of a firm of
independent public accountants furnished to the Deposit Trustee
pursuant to Section 3.06 of the Pooling and Servicing Agreement and
the monthly servicing report delivered pursuant to Article V of the
Pooling and Servicing Agreement.
(i) The Seller will apply the net proceeds from the sale of
the Class A Notes in the manner set forth in the Prospectus.
(j) If, between the date hereof and the Closing Time, to the
knowledge of HFC or the Seller there are any legal or governmental
proceedings instituted or threatened against HFC or the Seller
which, if determined adversely to HFC or the Seller would
individually or in the aggregate have a material adverse effect on
the financial condition, shareholders' equity or results of
operations of HFC or the Seller, and HFC and the Seller, as
applicable, will give prompt written notice thereof to the
Underwriters.
SECTION 7. Conditions to Underwriters' Obligations. The
respective obligations of the Underwriters to purchase, and of the
Seller to sell, the Class A Notes pursuant to this Agreement are
subject to the accuracy on and as of the Closing Time of the
representations and warranties on the part of the Credit Line
Owners and the Seller on the one hand and the Underwriters on the
other, each as herein contained, and to the material accuracy of
the statements of officers of the Credit Line Owners, the Seller
and HFC, respectively, made pursuant hereto, to the performance by
the Credit Line Owners, the Seller and HFC of all of their
respective obligations hereunder and to the following conditions at
the Closing Time:
(a) If the Registration Statement has not become effective
prior to the date of this Agreement, unless the Underwriters agree
in writing to a later time, the Registration Statement shall have
become effective not later than (i) 6:00 p.m. New York City time on
the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 a.m. New York City time
on such date, or (ii) 3:00 p.m. on the business day following the
day on which the public offering price was determined, if such
determination occurred after 10:00 a.m. New York City time on such
date; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus shall be filed in
the manner and within the time period required by Rule 424(b); and
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) There shall not have come to the Underwriters' attention
any facts that would cause the Underwriters to believe that the
Prospectus, at the time it was required to be delivered to a
purchaser of the Class A Notes, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) The Underwriters shall have received the favorable
opinion, dated the date of the Closing Time, of Xxxx X. Xxxxxx,
Esq., Vice President--Corporate Law of Household International,
Inc., the parent company of HFC, in the form attached hereto as
Exhibit A.
(d) The Underwriters shall have received the favorable
opinion, dated the date of the Closing Time, of Xxxx X. Xxxxxx,
Esq., Vice President--Corporate Law of Household International,
Inc., the parent company of HFC, in form and substance satisfactory
to the Underwriters, to the effect that:
(i) HFC has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power to own its
properties, to conduct its business as described in the
Prospectus and to enter into and perform its obligations under
the Basic Documents to which it is a party.
(ii) The Seller has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power to own its
properties, to conduct its business as described in the
Prospectus and to enter into and perform its obligations under
the Basic Documents to which it is a party.
(iii) Each of the Credit Line Owners has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with corporate power to own its properties, to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under the Basic Documents to which it
is a party.
(iv) HFC has full corporate power and authority to
serve in the capacity of servicer of the Receivables as
contemplated by the Pooling and Servicing Agreement.
(v) Each of the Credit Line Owners, the Seller and
HFC is duly authorized under related statutes, laws and court
decisions, to conduct in the various jurisdictions in which
they do business the respective businesses therein currently
conducted by them, except where failure to be so permitted or
failure to be so authorized will not have a material adverse
effect on the business or financial condition of the Credit
Line Owners, the Seller or HFC, and the Credit Line Owners are
duly authorized under the statutes which regulate the business
of making loans or of financing the sale of goods (commonly
called "small loan laws," "consumer finance laws," or "sales
finance laws"), or are permitted under the general interest
statutes and related laws and court decisions, to conduct in
the various jurisdictions in which any of them do business the
businesses as currently conducted therein by any of them.
(vi) None of the Credit Line Owners, the Seller or
HFC is in violation of its Certificate or Articles of
Incorporation or Bylaws or, to the best of such counsel's
knowledge, 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 known to such
counsel to which any of the Credit Line Owners, the Seller or
HFC is a party or by which it or its properties may be bound,
which default might result in any material adverse changes in
the financial condition, earnings, affairs or business of any
of the Credit Line Owners, the Seller or HFC or which might
materially and adversely affect the properties or assets,
taken as a whole, of any of the Credit Line Owners, the Seller
or of HFC.
(vii) Each of the Basic Documents to which HFC, the
Seller and the Credit Line Owners are a party has been duly
authorized, executed and delivered by HFC, the Seller and the
Credit Line Owners, as applicable, and, assuming the due
authorization, execution and delivery of such agreements by
the other parties thereto, such agreements constitute the
valid and binding obligation of each of the Seller, HFC and
the Credit Line Owners, enforceable against each of the
Seller, HFC and the Credit Line Owners, in accordance with its
terms, except that in each case as to enforceability (A) such
enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally,
(B) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought and (C) the enforceability
as to rights to indemnification under this Agreement (to the
extent indemnification under this Agreement relates to
liability under the Act) may be subject to limitations of
public policy under applicable securities laws.
(viii) The issuance and delivery of the Securities and
the Series 1997-2 Participation Interest, the consummation of
any other of the transactions contemplated hereby or by the
Basic Documents, or the fulfillment of the terms of such
agreements do not and will not conflict with or violate any
term or provision of the Articles of Incorporation or Bylaws
of the Seller or, to the best of such counsel's knowledge, any
statute, order or regulation applicable to the Seller of any
court, regulatory body, administrative agency or governmental
body having jurisdiction over the Seller and do not and will
not conflict with, result in a breach or violation or the
acceleration of or constitute a default under or result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Seller pursuant to the
terms of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Seller is a party or by which the Seller
may be bound or to which any of the property or assets of the
Seller may be subject except for conflicts, violations,
breaches, accelerations and defaults which would not,
individually or in the aggregate, be materially adverse to the
Seller or materially adverse to the transactions contemplated
by this Agreement.
(ix) The consummation of any of the transactions
contemplated by the Basic Documents to which the Credit Line
Owners are a party and the fulfillment of the terms of such
documents, do not and will not conflict with or violate any
terms or provision of the Certificate or Articles of
Incorporation or Bylaws of any of the Credit Line Owners or,
to the best of such counsel's knowledge, any statute, order or
regulation applicable to any of the Credit Line Owners or, to
the best of such counsel's knowledge, any statute, order or
regulation applicable to any of the Credit Line Owners and do
not and will not conflict with, result in a breach or
violation or the acceleration of or constitute a default under
or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of any of the
Credit Line Owners pursuant to the terms of, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any of the Credit
Line Owners may be bound or to which any of the property or
assets of any of the Credit Line Owners may be subject except
for conflicts, violations, breaches, accelerations and
defaults which would not, individually or in the aggregate, be
materially adverse to the applicable Credit Line Owners or
materially adverse to the transactions contemplated by this
Agreement.
(x) The consummation of any of the transactions
contemplated herein or the fulfillment of the terms of the
Basic Documents do not and will not conflict with or violate
any term or provision of the Certificate of Incorporation or
By-laws of HFC or, to the best of such counsel's knowledge,
any statute, order or regulation applicable to HFC and do not
and will not conflict with, result in a breach or violation or
the acceleration of or constitute a default under or result in
the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of HFC pursuant to the
terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which HFC is a party or by which HFC may be bound
or to which any of the property or assets of HFC may be
subject except for conflicts, violations, breaches,
accelerations and defaults which would not, individually or in
the aggregate, be materially adverse to HFC or materially
adverse to the transactions contemplated by this Agreement.
(xi) The direction by the Seller to the Deposit
Trustee to execute, issue, countersign and deliver the Series
1997-2 Participation Interest has been duly authorized by the
Seller and, assuming that the Deposit Trustee has been duly
authorized to do so and when executed and countersigned and
delivered by the Deposit Trustee in accordance with the
Pooling and Servicing Agreement, the Series 1997-2
Participation Interest will be validly issued and outstanding
and will be entitled to the benefits of the Pooling and
Servicing Agreement.
(xii) The direction by the Seller to the Owner Trustee
to execute, issue, countersign and deliver the Certificates on
behalf of the Issuer has been duly authorized by the Seller
and, assuming that the Owner Trustee has been duly authorized
to do so and when executed and countersigned and delivered by
the Owner Trustee in accordance with the Trust Agreement, the
Certificates will be validly issued and outstanding and will
be entitled to the benefits of the Trust Agreement.
(xiii) To the best of such counsel's knowledge, no
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body of the United States is required for the issuance of the
Securities and the sale of the Securities to the Underwriters,
or the consummation by the Credit Line Owners, the Seller and
HFC of the other transactions contemplated by the Basic
Documents, except the registration under the Act of the
Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters or as
have been obtained.
(xiv) The Registration Statement is effective under
the Act and to the best of such counsel's knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act or
proceedings therefor initiated or threatened by the
Commission.
(xv) The conditions to the use by the Seller of a
registration statement on Form S-3 and Form S-1 under the Act,
as set forth in the General Instructions to Form S-3 and Form
S-1, have been satisfied with respect to the Registration
Statement and the Prospectus. To the best of such counsel's
knowledge, there are no contracts or documents of the Seller
which are required to be filed as exhibits to the Registration
Statement pursuant to the Act or the Rules and Regulations
thereunder which have not been so filed. The statements in
the Prospectus under the caption "Risk Factors--Legal
Considerations" and under the caption "Certain Legal Aspects
of the Receivables", to the extent that statements in such
sections constitute matters of law or legal conclusions with
respect thereto, have been reviewed by attorneys under such
counsel's supervision and are complete and correct in all
material respects.
(xvi) There are no actions, proceedings or
investigations pending before or, to the best knowledge of
such counsel, threatened by any court, administrative agency
or other tribunal to which any of the Credit Line Owners, HFC
or the Seller is a party or of which any of their respective
properties is the subject (A) which if determined adversely to
any of the Credit Line Owners, HFC or the Seller would have a
material adverse effect on the business or financial condition
of any of the Credit Line Owners, HFC or the Seller, (B)
asserting the invalidity of any of the Basic Documents, or the
Securities, (C) seeking to prevent the issuance of the
Securities or the consummation by any of the Credit Line
Owners, HFC or the Seller of any of the transactions
contemplated by any of the Basic Documents, as the case may
be, or (D) which might materially and adversely affect the
performance by any of the Credit Line Owners, HFC or the
Seller of their respective obligations under, or the validity
or enforceability of any of the Basic Documents or the
Securities.
(xvii) The Registration Statement at the time it
became effective, and any amendment thereto at the time such
amendment becomes effective, complied as to form in all
material respects with the applicable requirements of the Act
and the Rules and Regulations.
(xviii) Such counsel has no reason to believe that (A)
the Registration Statement and the Prospectus, as of the date
the Registration Statement became effective, or the
Registration Statement (excluding the exhibits thereto) as of
the date that the most recent post-effective amendment thereto
became effective, contained or contains any untrue statement
of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary in order to
make the statements therein not misleading or (B) assuming
compliance by each of the Underwriters with Section 2(a)
hereof, the Prospectus, as of its date and the date of such
opinion, contained or contains any untrue statement of a
material fact or omitted 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 (it being understood that such counsel need express
no opinion as to information set forth in the financial
statements or other financial and statistical data contained
or incorporated by reference in the Registration Statement).
Such opinion may express its reliance as to factual matters on
the representations and warranties made by the parties hereto, and
on certificates or other documents furnished by officers of such
parties to the instruments and documents referred to therein. Such
opinion may be qualified, insofar as it concerns the enforceability
of the documents referred to therein, to the extent that such
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights in general, or by general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) and no opinion need be given as to
the enforceability of Section 9 of this Agreement.
(e) The Underwriters shall have received the favorable
opinion of counsel to the Indenture Trustee, dated the date of the
Closing Time, addressed to the Underwriters and in form and scope
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Indenture Trustee has duly authorized,
executed and delivered the Indenture which constitute the
valid and legally binding agreements of the Indenture Trustee,
are enforceable against the Indenture Trustee in accordance
with its terms, subject, as to enforcement of remedies, (A) to
applicable bankruptcy, insolvency, reorganization, and other
similar laws affecting the rights of creditors generally and
(B) to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or
at law).
(ii) The Indenture Trustee has duly countersigned
the Notes issued on the date hereof on behalf of the Issuer.
(iii) The execution and delivery by the Indenture
Trustee of the Indenture and the performance by the Indenture
Trustee of its obligations thereunder do not conflict with or
result in a violation of the organizational charter or Bylaws
of the Indenture Trustee.
(iv) The Indenture Trustee has full power and
authority to execute and deliver the Indenture and to perform
its obligations thereunder.
(v) To the best of such counsel's knowledge, there
are no actions, proceedings or investigations pending or
threatened against or affecting the Indenture Trustee before
or by any court, arbitrator, administrative agency or other
governmental authority which, if adversely decided, would
materially and adversely affect the ability of the Indenture
Trustee to carry out the transactions contemplated by the
Indenture.
(vi) No consent, approval or authorization of, or
registration, declaration or filing with, any court or
governmental agency or body of the United States of America or
any state thereof is required for the execution, delivery or
performance by the Indenture Trustee of the Indenture.
(f) The Underwriters shall have received the favorable
opinion of counsel to the Owner Trustee, dated the Closing Date,
addressed to the Underwriters, satisfactory to counsel to the
Underwriters, to the effect that:
(i) The Owner Trustee is duly incorporated and
validly existing as a banking corporation under the laws
of the State of Delaware and has the power and authority
to execute and deliver the Basic Documents to which it is
a party;
(ii) The Basic Documents to which it is a party
have been duly authorized, executed and delivered to the
Owner Trustee and constitutes the legal, valid and
binding agreements of the Owner Trustee, enforceable
against the Owner Trustee in accordance with its
respective terms;
(iii) The Securities have been duly authorized,
executed and delivered by Owner Trustee on behalf of the
Issuer;
(iv) 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 or the Issuer for the issuance and sale of the
Securities or the valid execution and delivery of the
Trust Agreement, or for the validity and enforceability
thereof, or for the payment of any amounts by the Issuer
thereunder;
(v) Neither the execution and delivery by the
Owner Trustee of the Basic Documents to which it is a
party, nor the issuance, execution and delivery by the
Issuer of the Securities, nor the consummation of the
transactions contemplated thereby, nor compliance with
the terms thereof, (i) conflicts with or results in a
breach of, or constitutes a default under, the provisions
of the Trust Agreement or the Certificate of
Incorporation of the Owner Trustee or any law, rule or
regulation of the State of Delaware applicable to the
Owner Trustee or, to such counsel's knowledge, any
judgment or order applicable to the Owner Trustee or
their respective properties or, to such counsel's
knowledge, any indenture, mortgage, contract or other
agreement or instrument to which the Owner Trustee is a
party or by which it is bound or (ii) to such counsel's
knowledge, results in the creation or imposition or any
lien, charge or encumbrance upon the Owner Trustee's
properties or the Owner Trust Estate (except as permitted
by the Trust Agreement);
(vi) To such counsel's knowledge, there are no
pending or threatened actions, suits or proceedings
affecting the Issuer or the Owner Trustee before any
court or other governmental authority which, if adversely
decided, would materially and adversely affect the
ability of the Issuer or the Owner Trustee, as the case
may be, to carry out the transactions contemplated in the
Trust Agreement;
(vii) The Issuer has been duly formed and is validly
existing as a business trust under the Delaware Business
Trust Act 12 Del. C. Section 3801 et seq.
(g) The Underwriters shall have received the favorable
opinion of counsel to the Deposit Trustee, dated the Closing Date,
addressed to the Underwriters, satisfactory to counsel to the
Underwriters, to the effect that:
(i) The Deposit Trustee is duly incorporated and
validly existing as a banking corporation under the laws
of the United States and has the power and authority to
execute and deliver the Pooling and Servicing Agreement;
(ii) The Pooling and Servicing Agreement has been
duly authorized, executed and delivered to the Deposit
Trustee and constitutes the legal, valid and binding
agreements of the Deposit Trustee, enforceable against
the Deposit Trustee in accordance with its respective
terms;
(iii) The Series 1997-2 Participation Interest has
been duly authorized, executed and delivered by the
Deposit Trust, and, when authenticated in accordance with
the provisions of the Pooling and Servicing Agreement,
and when delivered to and paid for by the Seller, will be
entitled to the benefits and security afforded by the
Pooling and Servicing Agreement, and will constitute
legal, valid and binding obligations of the Deposit
Trust, enforceable against the Deposit Trust in
accordance with the terms of the Pooling and Servicing
Agreement;
(iv) No consent, approval or other authorization
of, or registration, declaration or filing with, any
court or governmental agency or commission is required by
or with respect to the Deposit Trustee or the Deposit
Trust for the issuance and sale of the Series 1997-2
Participation Interest or the valid execution and
delivery of the Pooling and Servicing Agreement, or for
the validity and enforceability thereof, or for the
payment of any amounts by the Deposit Trust thereunder;
(v) Neither the execution and delivery by the
Deposit Trustee of the Pooling and Servicing Agreement,
nor the issuance, execution and delivery by the Deposit
Trustee of the Series 1997-2 Participation Interest, nor
the consummation of the transactions contemplated
thereby, nor compliance with the terms thereof, (i)
conflicts with or results in a breach of, or constitutes
a default under, the provisions of the Pooling and
Servicing Agreement or the certificate of incorporation
of the Deposit Trustee or any law, rule or regulation of
the United States applicable to the Deposit Trustee or,
to such counsel's knowledge, any judgment or order
applicable to the Deposit Trustee or their respective
properties or, to such counsel's knowledge, any
indenture, mortgage, contract or other agreement or
instrument to which the Deposit Trustee is a party or by
which it is bound or (ii) to such counsel's knowledge,
results in the creation or imposition or any lien, charge
or encumbrance upon the Deposit Trustee's properties or
the Deposit Trust's properties (except as permitted by
the Pooling and Servicing Agreement); and
(vi) To such counsel's knowledge, there are no
pending or threatened actions, suits or proceedings
affecting the Deposit Trust or the Deposit Trustee before
any court or other governmental authority which, if
adversely decided, would materially and adversely affect
the ability of the Deposit Trust or the Deposit Trustee,
as the case may be, to carry out the transactions
contemplated in the Basic Documents.
(h) The Underwriters shall have received the favorable
opinion or opinions, dated the date of the Closing Time, of Xxxxx
& Wood LLP, as counsel for the Underwriters, with respect to the
issue and sale of the Notes, the Registration Statement, this
Agreement, the Prospectus and such other related matters as the
Underwriters may require.
(i) The Underwriters shall have received opinions, dated the
date of the Closing Time, of Xxxxxx Xxxxxx & Xxxxx, as special
counsel to the Seller and HFC, addressed to the Indenture Trustee,
the Seller and the Underwriters relating to certain matters
specified in Section 2.03(iii) of the Indenture.
(j) The Underwriters shall have received an opinion, dated
the date of the Closing Time, of Xxxxxx Xxxxxx & Zavis, as special
counsel to the Seller and HFC addressed to the Seller and
satisfactory to the Rating Agencies relating to (i) the sale of the
Receivables to the Seller, (ii) the transfer of the Receivables to
the Deposit Trustee and (iii) the transfer of the Series 1997-2
Participation Interest from the Seller to the Issuer and such
counsel shall have consented to reliance by the Rating Agencies and
the Underwriters on such opinion as though such opinion had been
addressed to each such party.
(k) Each of the Credit Line Owners, the Seller and HFC shall
have furnished to the Underwriters a certificate signed on behalf
of the Credit Line Owners, the Seller and HFC by the respective
principal accounting or principal financial officer thereof, dated
the date of the Closing Time, as to (i) the accuracy of the
representations and warranties (except for the representations made
in Section 1(f) hereof) of the Credit Line Owners and the Seller
herein at and as of the Closing Time, (ii) there being no legal or
governmental proceedings pending, other than those, if any,
referred to in the Prospectus to which any of the Credit Line
Owners, the Seller or HFC is a party or of which any property of
any of the Credit Line Owners, the Seller or HFC is the subject,
which, in the judgment of any of the Credit Line Owners, the Seller
or HFC, as applicable, have a reasonable likelihood of resulting in
a material adverse change in the financial condition, shareholders'
equity or results of operations of the Credit Line Owners, the
Seller or HFC; and to the best knowledge of each of the Credit Line
Owners, the Seller or HFC, as applicable, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others, (iii) the performance by the Credit Line
Owners, the Seller and HFC of all of their respective obligations
hereunder to be performed at or prior to the Closing Time, and (iv)
such other matters as the Underwriters may reasonably request.
(l) The Indenture Trustee shall have furnished to the
Underwriters a certificate of the Indenture Trustee, signed by one
or more duly authorized officers of the Indenture Trustee, dated
the Closing Time, as to the due authorization, execution and
delivery of the Indenture by the Indenture Trustee and the
acceptance by the Indenture Trustee of the trusts created by the
Indenture and the due execution and delivery of the Notes by the
Indenture Trustee thereunder and such other matters as the
Underwriters shall reasonably request.
(m) The Owner Trustee shall have furnished to the
Underwriters a certificate of the Owner Trustee, signed by one or
more duly authorized officers of the Owner Trustee, dated the
Closing Time, as to the due authorization, execution and delivery
of the Trust Agreement by the Owner Trustee and the acceptance by
the Owner Trustee of the trusts created by the Trust Agreement and
the due execution and delivery of the Notes by the Issuer under the
Indenture and such other matters as the Underwriters shall
reasonably request.
(n) The Deposit Trustee shall have furnished to the
Underwriters a certificate of the Deposit Trustee, signed by one or
more duly authorized officers of the Deposit Trustee, dated the
Closing Time, as to the due authorization, execution and delivery
of the Pooling and Servicing Agreement by the Deposit Trustee and
the acceptance by the Deposit Trustee of the trusts created by the
Pooling and Servicing Agreement and the due execution and delivery
of the Series 1997-2 Participation Interest by the Deposit Trustee
thereunder and such other matters as the Underwriters shall
reasonably request.
(o) The Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes shall have been rated at least "AAA", "AA" and "A",
respectively, by at least two nationally recognized rating
organizations, two of which shall be Standard & Poor's and Xxxxx'x.
(p) Counsel and special counsel to HFC and the Seller shall
have furnished to the Underwriters any opinions supplied to the
Rating Agencies relating to certain matters with respect to the
Notes.
(q) The Underwriters shall have received from Xxxxxx Xxxxxxxx
LLP, or other independent certified public accountants acceptable
to the Underwriters, a letter, dated as of the date of this
Agreement in the form heretofore agreed to.
(r) Prior to the Closing Time, Xxxxx & Wood LLP, as counsel
for the Underwriters, shall have been furnished with such documents
and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Class A
Notes as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Seller and HFC in connection with the issuance and sale of the
Class A Notes as herein contemplated shall be satisfactory in form
and substance to the Underwriters and Xxxxx & Xxxx LLP.
(s) Since the respective dates as of which information is
given in the Prospectus, there shall not have been any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial condition, stockholders'
equity or results of operations of the Seller, any of the Credit
Line Owners or HFC otherwise than as set forth or contemplated in
the Prospectus, the effect of which is in the judgment of the
Underwriters so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of
the Notes on the terms and in the manner contemplated in the
Prospectus.
(t) Prior to the Closing Time, the Credit Line Owners, the
Seller and HFC shall have furnished to the Underwriters such
further information, certificates and documents as the Underwriters
may reasonably request.
If any condition specified in this Section 7 shall not have
been fulfilled when and as required to be fulfilled, this Agreement
may be terminated by the Underwriters by notice to the Seller at
any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except
as provided in Section 7.
SECTION 8. Payment of Expenses. The Seller, the Credit
Line Owners and HFC jointly and severally agree to pay all expenses
incident to the performance of their obligations under this
Agreement, including without limitation those related to (i) the
filing of the Registration Statement and all amendments thereto,
(ii) the preparation, issuance and delivery of the Notes, (iii) the
fees and disbursements of Xxxxxx Xxxxxx & Zavis, as special counsel
for the Seller and HFC, and Xxxxxx Xxxxxxxx LLP, accountants of the
Seller and HFC, (iv) the qualification of the Class A Notes under
securities and Blue Sky laws and the determination of the
eligibility of the Class A Notes for investment in accordance with
the provisions of Section 6(f) including filing fees, and the fees
and disbursements of Xxxxx & Wood LLP, as counsel for the
Underwriters (not to exceed $28,000), in connection therewith and
in connection with the preparation of any Blue Sky Survey, (v) the
printing and delivery to the Underwriters, in such quantities as
the Underwriters may reasonably request, of copies of the
Registration Statement and Prospectus and all amendments and
supplements thereto, and of any Blue Sky Survey, (vi) the delivery
to the Underwriters, in such quantities as the Underwriters may
reasonably request, of copies of the Basic Documents and (vii) the
fees charged by nationally recognized statistical rating agencies
for rating the Notes, and (viii) the fees and expenses of the
Deposit Trustee, the Indenture Trustee and the Owner Trustee and
their counsel, respectively.
If this Agreement is terminated by the Underwriters in
accordance with the provisions of Section 7, the Seller, the Credit
Line Owners and HFC shall reimburse the Underwriters for all
reasonable out-of-pocket expenses, including the fees and
disbursements of Xxxxx & Xxxx LLP, as counsel for the Underwriters.
SECTION 9. Indemnification. (a) HFC and the Seller
jointly and severally agree to indemnify and hold harmless the
Underwriters and each person, if any, who controls the Underwriters
within the meaning of Section 15 of the Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment
thereto), including the information deemed to be a part of the
Registration Statement pursuant to Rule 430A under the Act, if
applicable, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading, unless (a) such untrue
statement or omission or alleged untrue statement or omission
was made in reliance upon and in conformity with written
information furnished to the Seller, or information, if any,
electronically transmitted to the Seller by the Underwriters
expressly for use in the Registration Statement (or any
amendment thereof) or (b) such loss, liability, claim, damage
or expense is incurred by an Underwriter solely as a result of
the dissemination by it of Derived Information in violation of
Section 2(a) hereof;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is
effected with the written consent of the Seller; and
(iii) against any and all expense whatsoever
(including the fees and disbursements of counsel chosen by the
Underwriters) as reasonably incurred in investigating,
preparing to defend or defending against or appearing as a
third party witness with respect to any litigation, or
investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, as such expense is
incurred and to the extent that any such expense is not paid
under (i) or (ii) above.
This indemnity agreement will be in addition to any liability
which the Seller may otherwise have.
(b) Each of the Underwriters severally agree to indemnify and
hold harmless the Seller, each of its directors, each of its
officers who signed the Registration Statement, and each person, if
any, who controls the Seller within the meaning of Section 15 of
the Act (each, an "Indemnified Party") against any and all loss,
liability, claim, damage and expense, as incurred, described in the
indemnity contained in subsection (a) of this Section 9, arising
out of any untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Seller by such Underwriter expressly
for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto). The
parties hereto acknowledge that the only information supplied to
the Seller by the Underwriter expressly for use in the Registration
Statement or the Prospectus is limited to the information set forth
in the last paragraph on the cover, the first paragraph on page 2
and the second paragraph under the caption "Underwriting" in the
Prospectus. This indemnity agreement will be in addition to any
liability which the Underwriters may otherwise have.
(c) [Reserved].
(d) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it with respect
to which indemnity may be sought hereunder but failure to so notify
an indemnifying party shall not relieve it from any liability which
it may have hereunder unless it has been materially prejudiced by
such failure to notify or from any liability which it may have
otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties
be liable for the fees and expenses of more than one counsel for
all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances,
unless (i) if the defendants in any such action include one or more
of the indemnified parties and the indemnifying party, one or more
of the indemnified parties shall have employed separate counsel
after having reasonably concluded that there may be legal defenses
available to it or them that are different from or additional to
those available to the indemnifying party or to one or more of the
other indemnified parties or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time
after notice of the commencement of the action.
SECTION 10. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity
agreement provided for in Section 9 is for any reason held to be
unenforceable by the indemnified parties although applicable in
accordance with its terms, HFC and the Seller on the one hand, and
the Underwriters (or Underwriter, if such loss, liability, claim,
damage or expense arises solely as a result of such Underwriter's
breach of a representation and warranty set forth in Section 2(a)
hereof) on the other, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by the Seller and
one or more of the Underwriters (i) except for any Underwriter's
indemnification arising solely from a breach of its representation
and warranty set forth in Section 2(a) hereof, in such proportion
as is appropriate to reflect the relative benefits to HFC and the
Seller on the one hand and the Underwriters or such Underwriter in
the case of a breach of a representation or warranty set forth in
Section 2(a) hereof on the other in connection with the matter to
which the indemnification relates, which relative benefits shall be
deemed to be in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount on the cover of the Prospectus as amended or
supplemented bears to the initial public offering price as set
forth thereon, and HFC and the Seller shall be jointly and
severally responsible for the balance or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law or
otherwise prohibited hereby, 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 HFC and the Seller on the one
hand and the Underwriters or Underwriter, as applicable, on the
other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, or actions in
respect thereof, as well as any other relevant equitable
considerations; provided, however, that 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. 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 HFC or the Seller, on the one
hand, or the Underwriters, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. HFC, the
Seller and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
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 into account the equitable
considerations referred to in the first sentence of this Section
10. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect
thereof) referred to in the first sentence of this Section 10 shall
be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating, preparing to defend or defending against any action
or claim which is the subject of this Section 10. Notwithstanding
the provisions of this Section 10, except for any loss, claim,
damage, liability or expense resulting solely from a breach of any
Underwriter's breach of the representation and warranty set forth
in Section 2(a) hereof, 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 such Underwriter 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 in respect of such losses, liabilities, claims,
damages and expenses. The Underwriters' obligations in this
Section 10 to contribute are several in proportion to their
respective underwriting obligations and not joint and no
Underwriter shall be required to contribute to any loss, liability,
claim, damage or expense as a result of another Underwriter's
breach of the representation and warranty set forth in Section 2(a)
hereof. Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any
action instituted against it in respect to which contribution may
be sought, it shall promptly give written notice of such service to
the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought
for any obligation it may have hereunder or otherwise (except as
specifically provided in Section 9 hereof). For purposes of this
Section 10, each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act shall have the same
rights to contribution as such Underwriter and each respective
director of the Seller, each respective officer of the Seller who
signed the Registration Statement, and each person, if any, who
controls the Seller within the meaning of Section 15 of the Act
shall have the same rights to contribution as the Seller.
SECTION 11. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement or contained in certificates of
officers of the Credit Line Owners, the Seller or HFC submitted
pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the
Underwriters or controlling person thereof, or by or on behalf of
the Credit Line Owners, the Seller or HFC and shall survive
delivery of any Class A Notes to the Underwriters.
SECTION 12. Termination of Agreement. You, as representative
of the Underwriters, may terminate this Agreement, immediately upon
notice to the Seller, at any time at or prior to the Closing Time
(i) if there has been an outbreak or material escalation of
hostilities involving the United States of America where armed
conflict appears imminent, or the declaration by the United States
of America of a national emergency or war, if the effect of any
such event in the Underwriter's reasonable judgment makes it
impracticable or inadvisable to proceed with the public offering of
the Notes or (ii) if trading generally on the New York Stock
Exchange has been suspended, or minimum prices have been
established by the exchange or by order of the Commission or any
other governmental authority, or if a banking moratorium has been
declared by either federal or New York State authorities. In the
event of any such termination, the covenant set forth in subsection
6(b), the provisions of Section 8, the indemnity agreement set
forth in Section 9, and the provisions of Sections 10 and 15 shall
remain in effect.
SECTION 13. Default by One or More of the Underwriters. If
one or more of the Underwriters participating in the public
offering of the Class A Notes shall fail at the Closing Time to
purchase the Notes which it is (or they are) obligated to purchase
hereunder (the "Defaulted Notes"), then such of the non-defaulting
Underwriters shall have the right, within 24 hours thereafter, to
make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Notes in such amounts as may be
agreed upon and upon the terms herein set forth. If, however, the
Underwriters have not completed such arrangements within such
24-hour period, then:
(i) if the aggregate principal amount of Defaulted
Notes does not exceed 10% of the aggregate principal amount of
the Class A Notes to be purchased pursuant to this Agreement,
the non-defaulting Underwriters named in this Agreement shall
be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all such
non-defaulting Underwriters, or
(ii) if the aggregate principal amount of Defaulted
Notes exceeds 10% of the aggregate principal amount of the
Notes to be purchased pursuant to this Agreement, this
Agreement shall terminate, without any liability on the part
of any non-defaulting Underwriters.
No action taken pursuant to this Section 13 shall relieve any
defaulting Underwriter from the liability with respect to any
default of such Underwriter under this Agreement.
In the event of a default by the Underwriters as set forth in
this Section 13, either the Underwriters or the Seller shall have
the right to postpone the Closing Time for a period not exceeding
five Business Days in order that any required changes in the
Registration Statement or Prospectus or in any other documents or
arrangements may be effected.
SECTION 14. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed
to them at the address set forth on the first page hereof. Notices
to the Seller or HFC shall be directed to Household Finance
Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
to the attention of the Secretary, with a copy to the Treasurer.
SECTION 15. Parties. This Agreement shall inure to the
benefit of and be binding upon the Underwriter, the Credit Line
Owners, the Seller and HFC, and their respective successors.
Nothing expressed or mentioned in this Agreement is intended nor
shall it be construed to give any person, firm or corporation,
other than the parties hereto or thereto and their respective
successors and the controlling persons and officers and directors
referred to in Sections 9 and 10 and their heirs and legal
representatives any legal or equitable right, remedy or claim under
or with respect to this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof
are intended to be for the sole and exclusive benefit of the
parties and their respective successors and said controlling
persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein
and therein) and except as provided above for the benefit of no
other person, firm or corporation. No purchaser of Class A Notes
from the Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 16. Governing Law and Time. This Agreement shall be
governed by the law of the State of New York and shall be construed
in accordance with such law. Specified times of day refer to New
York City time.
SECTION 17. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall
together constitute a single instrument.
If the foregoing is in accordance with the Underwriters'
understanding of our agreement, please sign and return to us a
counterpart hereof, whereupon this instrument along with all
counterparts will become a binding agreement among the
Underwriters, the Seller, HFC and the Credit Line Owners in
accordance with its terms.
Very truly yours,
HOUSEHOLD CONSUMER LOAN CORPORATION
By:
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By:
Name:
Title:
HOUSEHOLD REALTY CORPORATION,
HOUSEHOLD FINANCE CORPORATION OF
CALIFORNIA,
HOUSEHOLD FINANCE CORPORATION II,
HOUSEHOLD FINANCE CORPORATION III,
HOUSEHOLD FINANCE INDUSTRIAL LOAN
COMPANY,
HOUSEHOLD FINANCE REALTY CORPORATION
OF NEW YORK,
HOUSEHOLD FINANCIAL CENTER, INC.,
HOUSEHOLD FINANCE CORPORATION OF ALABAMA,
HOUSEHOLD FINANCE CORPORATION OF
NEVADA,
HOUSEHOLD FINANCE REALTY CORPORATION
OF NEVADA,
HOUSEHOLD INDUSTRIAL LOAN COMPANY
OF KENTUCKY,
HOUSEHOLD FINANCE INDUSTRIAL LOAN
COMPANY OF IOWA,
HOUSEHOLD FINANCE CONSUMER DISCOUNT
COMPANY,
HOUSEHOLD INDUSTRIAL FINANCE
COMPANY, AND
MORTGAGE ONE CORPORATION
By:
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
X.X. XXXXXX SECURITIES INC.,
as Representative of the several Underwriters
By:
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
Schedule A
Underwriting
Class A-1 Notes Purchase Price
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . .$228,000,000
Xxxxxx Brothers Inc.. . . . . . . . . . . . . . . . 228,000,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . 228,000,000
Salomon Brothers Inc. . . . . . . . . . . . . . . . 228,000,000
Total . . . . . . . . . . . . . . . . . . . . . .$912,000,000
Class A-2 Notes
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . . $12,000,000
Xxxxxx Brothers Inc.. . . . . . . . . . . . . . . . . 12,000,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . . 12,000,000
Salomon Brothers Inc. . . . . . . . . . . . . . . . . 12,000,000
Total . . . . . . . . . . . . . . . . . . . . . . $48,000,000
Class A-3 Notes
X.X. Xxxxxx Securities Inc. . . . . . . . . . . . . . $22,500,000
Xxxxxx Brothers Inc.. . . . . . . . . . . . . . . . . 22,500,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . . . . 22,500,000
Salomon Brothers Inc. . . . . . . . . . . . . . . . . 22,500,000
Total . . . . . . . . . . . . . . . . . . . . . . $90,000,000
EXHIBIT A
Opinion of Xxxx X. Xxxxxx, Esq.
Section 7(c) of the Underwriting Agreement
November ___, 1997
X.X. XXXXXX SECURITIES INC.
as Representative of the several Underwriters
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Household Consumer Loan Asset
Backed Notes and Certificates,
Series 1997-2
Ladies and Gentlemen:
I address this opinion to the Underwriters pursuant to Section
7(c) of the Underwriting Agreement dated November ___, 1997 (the
"Underwriting Agreement") among Household Consumer Loan Corporation
(the "Seller"), Household Finance Corporation, a Delaware
corporation (the "Company"), Household Realty Corporation,
Household Finance Corporation of California, Household Finance
Corporation II, Household Finance Corporation III, Household
Finance Industrial Loan Company, Household Finance Realty
Corporation of New York, Household Financial Center, Inc.,
Household Finance Corporation of Alabama, Household Finance
Corporation of Nevada, Household Finance Realty Corporation of
Nevada, Household Industrial Loan Company of Kentucky, Household
Finance Industrial Loan Company of Iowa, Household Finance Consumer
Discount Company, Household Industrial Finance Company, and
Mortgage One Corporation (collectively, the "Credit Line Owners"
and each individually, a "Credit Line Owner") and the underwriters
referred to therein (together, the "Underwriters"). The Seller has
entered into a Trust Agreement dated as of November 1, 1997 (the
"Trust Agreement") with Chase Manhattan Bank Delaware (the "Owner
Trustee"), creating Household Consumer Loan Trust 1997-2 (the
"Issuer"), a statutory business trust established under the laws of
the State of Delaware. The Seller proposes to direct the Owner
Trustee pursuant to the Trust Agreement to cause the Issuer to
issue Household Consumer Loan Asset Backed Notes, Series 1997-2,
Class A and Class B (the "Notes") and Household Consumer Loan Asset
Backed Certificates, Series 1997-2 (the "Certificates" and,
together with the Notes, the "Securities"). Only the Class A Notes
are being purchased by the Underwriters.
The Notes will be issued pursuant to an Indenture dated as of
November 1, 1997 (the "Indenture") between the Issuer and The Bank
of New York (the "Indenture Trustee") and will represent
indebtedness of the Issuer. The Certificates will be issued
pursuant to the Trust Agreement. The Notes will be secured by (i)
a participation interest (the "Series 1997-2 Participation
Interest") in (a) receivables held in Household Consumer Loan
Deposit Trust I (the "Deposit Trust") arising under certain fixed
and variable rate revolving secured and unsecured consumer credit
lines (the "Credit Lines") and the proceeds thereof and (b) the
preferred stock of the Seller held by the Deposit Trustee (as
defined herein), (ii) amounts on deposit in certain accounts of the
Issuer held for the benefit of the holders of the Securities and
(iii) an assignment of the Issuer's rights under the Series 1997-2
Supplement (as defined below) (collectively, the "Trust Assets").
The Deposit Trust was formed pursuant to a Pooling and Servicing
Agreement dated as of September 1, 1995 (the "Base Pooling and
Servicing Agreement") among the Seller, the Company, as Servicer
(the "Servicer") and Texas Commerce Bank National Association as
successor trustee to The Chase Manhattan Bank, N.A., as Deposit
Trustee (the "Deposit Trustee"). The Series 1997-2 Participation
Interest was issued pursuant to the Supplement for Series 1997-2
dated as of November 1, 1997 among the Seller, the Servicer and the
Deposit Trustee (the "Supplement" and together with the Base
Pooling and Servicing Agreement, the "Pooling and Servicing
Agreement"). The Pooling and Servicing Agreement, together with
the Trust Agreement, the Certificate of Trust thereto, the
Indenture, the Receivables Purchase Agreement, the Administration
Agreement and the Underwriting Agreement constitute the "Basic
Documents" herein. Capitalized terms used herein shall have the
meanings ascribed to them in the Underwriting Agreement unless
herein otherwise defined.
As Vice President--Corporate Law and the Secretary of
Household International, Inc., a Delaware corporation, the ultimate
parent corporation of the Company, the Seller and each of the
Credit Line Owners, I, or the attorneys under my supervision have,
among other things (i) participated in the preparation of the
Pooling and Servicing Agreement and (ii) cooperated with officers
of the Seller and the Company, representatives of the Underwriters
and independent accountants in the preparation of the Registration
Statement on Form S-1 and S-3 (Registration Nos. 333-36405, 333-
36405-01 and 333-36405-02) filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), and the Prospectus dated November ___, 1997 in
the form in which it was transmitted for filing with the Commission
pursuant to Rule 424(b) of the Rules and Regulations under the Act
(the "Final Prospectus").
I advise you that in my opinion:
(i) The Pooling and Servicing Agreement is not required
to be qualified and the Indenture has been duly qualified under the
Trust Indenture Act;
(ii) None of the Seller, the Deposit Trust or the Owner
Trust is an "investment company" or under the "control" of an
"investment company" as such terms are defined in the Investment
Company Act of 1940; and
(iii) The Notes and the Basic Documents that are described
in the Final Prospectus conform in all material respects to the
respective descriptions thereof in the Final Prospectus.
The opinions set forth herein are subject to the following
qualifications:
No opinion is expressed as to the effect of the compliance or
noncompliance of the Seller, Credit Line Owners, Servicer, Deposit
Trustee, Owner Trustee or Indenture Trustee with any state or
federal laws or regulations applicable to them because of their
legal or regulatory status or the nature of their respective
businesses and to the extent that the opinions set forth herein
relate to the due authorization, execution and delivery of the
Pooling and Servicing Agreement and the Certificates.
I, or the attorneys under my supervision, have examined
originals, or copies of originals certified to my satisfaction, of
such agreements, documents, certificates and other statements of
public officials and responsible officers of each of the Seller,
Company, Deposit Trustee, Owner Trustee and Indenture Trustee and
other papers and matters of fact and law as I have deemed relevant
and necessary as a basis for the opinions I expressed herein. I
have relied, with respect to factual matters, on representations
and warranties made by, and on certificates and other documents
furnished by responsible officers of each of the Deposit Trustee,
Owner Trustee, Indenture Trustee, the Seller and the Servicer. In
expressing the foregoing opinions, I have assumed, with the
Underwriters' permission, (i) the authenticity of all documents
submitted to me as originals and the conformity with the original
documents of any copies of such documents submitted to me for my
examination, (ii) that each of the Seller, Deposit Trustee, Owner
Trustee and Indenture Trustee has been duly organized and is
validly existing and in good standing under the laws of its
jurisdiction of incorporation and (iii) the due execution and
delivery, pursuant to due authorization, of the agreements and
documents referred to above by each of the Deposit Trustee, Owner
Trustee and Indenture Trustee.
The opinions expressed herein are only with respect to federal
laws of the United States and the laws of the State of Illinois.
I consent to the reliance on this opinion by Standard & Poor's
Ratings Services, a Division of The XxXxxx-Xxxx Companies, Inc.,
and Xxxxx'x Investors Service, Inc. Subject to the foregoing
sentence, this opinion is solely for the Underwriters' benefit and
may not be relied upon by, nor copies be delivered to, any other
person without my prior written consent.
Very truly yours,
