Exhibit 1.1
EXECUTION COPY
HOUSEHOLD AUTOMOTIVE TRUST 2002-2
$255,000,000 1.77% Class A-1 Notes
$345,000,000 2.15% Class A-2 Notes
$313,000,000 2.85% Class A-3 Notes
$287,000,000 1-Month LIBOR + 0.30% Class A-4 Notes
UNDERWRITING AGREEMENT
Deutsche Bank Securities Inc.,
As Representative of the Underwriters
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
August 21, 2002
Dear Sirs:
Household Finance Corporation, a corporation organized and existing
under the laws of Delaware, individually ("HFC") and as Master Servicer (the
"MASTER SERVICER"), Household Auto Receivables Corporation, a corporation
organized and existing under the laws of Nevada and a wholly owned subsidiary of
HFC, individually ("HARC") and as Seller (the "SELLER"), Household Automotive
Finance Corporation, a corporation organized and existing under the laws of
Delaware and a wholly owned subsidiary of HFC ("HAFC"), Household Automotive
Credit Corporation, a corporation organized and existing under the laws of
Delaware and a wholly owned subsidiary of HAFC ("HACC"), and Household Bank
f.s.b., a federal savings bank ("HOUSEHOLD BANK"), agree with you as follows:
Section 1. ISSUANCE AND SALE OF SERIES 2002-2 NOTES. The Seller has
authorized the issuance and sale of $255,000,000 1.77% Class A-1 Notes,
$345,000,000 2.15% Class A-2 Notes, $313,000,000 2.85% Class A-3 Notes and
$287,000,000 1-Month LIBOR + 0.30% Floating Rate Class A-4 Notes (collectively,
the "SERIES 2002-2 NOTES"). The Series 2002-2 Notes are to be issued by
Household Automotive Trust 2002-2 (the "TRUST") pursuant to an Indenture (the
"INDENTURE"), dated as of August 8, 2002, between the Trust and JPMorgan Chase
Bank, a New York banking corporation, as indenture trustee (the "INDENTURE
TRUSTEE"), as supplemented by a Series Supplement (the "SERIES SUPPLEMENT"),
dated as of August 8, 2002, by and among the Master Servicer, the Trust, the
Seller, the Indenture Trustee, U.S. Bank National Association, a national
banking association, as Owner Trustee (the "OWNER TRUSTEE") and U.S. Bank Trust
National Association, a national banking association with its principal place of
business in Delaware, as Delaware Trustee (the "DELAWARE TRUSTEE"). In addition
to the Series 2002-2 Notes, the Trust will also issue the Series 2002-2
Certificates (the "SERIES 2002-2 CERTIFICATES") pursuant to a Trust Agreement,
dated as of August 8, 2002, among the Seller, the Owner Trustee and the Delaware
Trustee, as amended and restated by an Amended and Restated
Trust Agreement (the "TRUST AGREEMENT"), dated as of August 8, 2002, and as
supplemented by the Series Supplement. The Series 2002-2 Notes and the Series
2002-2 Certificates are referred to herein collectively as the "SECURITIES."
The assets of the Trust will include a pool of non-prime retail installment
sales contracts secured by new or used automobiles, light duty trucks and
vans (the "RECEIVABLES") and certain monies due thereunder after the close of
business on July 31, 2002 (the "CUT-OFF DATE").
The Series 2002-2 Notes will have the benefit of a note guaranty
insurance policy (the "NOTE INSURANCE POLICY"), issued by Ambac Assurance
Corporation, a Wisconsin-domiciled stock insurance corporation (the "NOTE
INSURER").
In connection with the issuance of the Note Insurance Policy, (i)
the Note Insurer, the Trust, HFC, HAFC, HACC, Household Bank and the Seller will
execute and deliver an Insurance and Indemnity Agreement dated as of August 28,
2002 (the "INSURANCE AGREEMENT"), and (ii) the Note Insurer and the
Representative will execute and deliver an Indemnification Agreement dated as of
August 28, 2002 (the "INDEMNIFICATION AGREEMENT").
As used herein, the term "SELLER AGREEMENTS" means the Master Sale
and Servicing Agreement dated as of August 8, 2002 among the Trust, the Seller,
the Master Servicer and the Indenture Trustee (the "MASTER SALE AND SERVICING
AGREEMENT"), the Insurance Agreement, the Master Receivables Purchase Agreement
dated as of December 18, 2001, between the Seller and HAFC (the "HAFC
RECEIVABLES PURCHASE AGREEMENT"), the Master Receivables Purchase Agreement
dated as of June 24, 2002, between the Seller and HACC and the Master
Receivables Purchase Agreement dated as of August 8, 2002, between the Seller
and HACC (the "HACC RECEIVABLES PURCHASE AGREEMENTS") and the Master Receivables
Purchase Agreement dated as of December 18, 2001, as amended and restated as of
March 15, 2002, among the Master Servicer, the Seller and Household Bank (the
"Household Bank Receivables Purchase Agreement", and together with the HAFC
Receivables Purchase Agreement and the HACC Receivables Purchase Agreement, the
"MASTER RECEIVABLES PURCHASE AGREEMENTS"), the Trust Agreement and this
Underwriting Agreement (this "AGREEMENT"); the term "HAFC AGREEMENTS" means the
HAFC Receivables Purchase Agreement and this Agreement; the term "HACC
AGREEMENTS" means the HACC Receivables Purchase Agreement and this Agreement;
the term "HFC AGREEMENTS" means the Master Sale and Servicing Agreement, the
Insurance Agreement, the Indenture and this Agreement.
HFC, the Seller, HAFC, HACC and Household Bank are direct or
indirect subsidiaries of Household International, Inc. ("HOUSEHOLD"). HFC, the
Seller, HAFC, HACC and Household Bank are collectively referred to herein as the
"HOUSEHOLD ENTITIES").
The Series 2002-2 Notes are being purchased by the Underwriters
named in Schedule 1 hereto, and the Underwriters are purchasing, severally, only
the Series 2002-2 Notes set forth opposite their names in Schedule 1, except
that the amounts purchased by the Underwriters may change in accordance with
Section 10 of this Agreement. Deutsche Bank Securities Inc. is acting as
representative of the Underwriters and, in such capacity, is hereinafter
referred to as the "REPRESENTATIVE."
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The offering of the Series 2002-2 Notes will be made by the
Underwriters, and the Household Entities understand that the Underwriters
propose to make a public offering of the Series 2002-2 Notes for settlement on
August 28, 2002.
None of the Series 2002-2 Certificates are being purchased by the
Underwriters hereby.
Defined terms used herein and not otherwise defined shall have their
respective meanings as set forth in Section 2.01 of the Series Supplement.
Section 2. REPRESENTATIONS AND WARRANTIES.
A. HAFC, HACC, Household Bank, where applicable, and the Seller,
individually, represent and warrant to, and agree with, the Underwriters as set
forth in this Section 2(A). Certain terms used in this Section 2(A) are defined
in the second paragraph of subsection 2(A)(i) below.
(i) A Registration Statement on Form S-3 (No. 333-58404)
has (a) been prepared by the Seller on such form in conformity with
the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and the rules and regulations (the "RULES AND
REGULATIONS") of the United States Securities and Exchange
Commission (the "COMMISSION") thereunder, (b) been filed with the
Commission and (c) been declared effective by the Commission, and no
stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has
been initiated or threatened, by the Commission. Copies of such
Registration Statement have been delivered by the Seller to the
Underwriters. There are no contracts or documents of the Seller
which are required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and
Regulations which have not been so filed or incorporated by
reference therein on or prior to the Effective Date of the
Registration Statement. The conditions for use of Form S-3, as set
forth in the General Instructions thereto, have been satisfied.
As used herein, the term "EFFECTIVE DATE" means the date on and time
at which the Registration Statement became effective, or the date on
and the time at which the most recent post-effective amendment to
such Registration Statement, if any, was declared effective by the
Commission. The term "REGISTRATION STATEMENT" means (i) the
registration statement referred to in the preceding paragraph,
including the exhibits thereto, (ii) all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 and (iii) any
post-effective amendment filed and declared effective prior to the
date of issuance of the Series 2002-2 Notes. The term "BASE
PROSPECTUS" means the prospectus included in the Registration
Statement. The term "PROSPECTUS SUPPLEMENT" means the prospectus
supplement dated the date hereof, specifically relating to the
Series 2002-2 Notes, as filed with the Commission pursuant to Rule
424 of the Rules and Regulations. The term "PROSPECTUS" means,
together, the Base Prospectus and the Prospectus Supplement.
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All references in this Agreement to financial statements and
schedules and other information which is "contained," included" or
"stated" in the Registration Statement or the Prospectus (and all
other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and
all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and
include the filing of any document under the Exchange Act which is
or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
(ii) On the Effective Date and on the Closing Date,
assuming compliance by each Underwriter with Sections 3(a), 3(b) and
3(c) hereof on the Closing Date, the Registration Statement,
including documents incorporated or deemed to be incorporated by
reference in the Registration Statement, did or will comply in all
material respects with the applicable requirements of the Act and
the Rules and Regulations thereunder, and did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading. Neither the Prospectus
or any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement is filed pursuant to Rule 424(b)
or on the Closing Date, will include any untrue statement of
material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that HAFC,
HACC, Household Bank and the Seller make no representations or
warranties as to (a) the information contained in or omitted from
the Registration Statement or the Prospectus in reliance upon and in
conformity with information furnished in writing to HAFC, HACC,
Household Bank or the Seller by the Representative specifically for
use in connection with the preparation of the Registration Statement
or the Prospectus, (b) information in any Derived Information (as
defined in Section 3(e)) provided by the Underwriters except to the
extent that the information set forth therein is "Seller-Provided
Information" (as defined in Section 3(e)) and (c) the information
under the captions "Summary-The Insurer", "Summary-Insurance
Policy", and "Description of the Notes - The Note Guaranty Insurance
Policy and the Insurer" in the Prospectus Supplement (the "INSURER
INFORMATION").
(iii) Each of HAFC, HACC and the Seller is a
corporation duly organized and validly existing and in good
standing under the laws of its jurisdiction of incorporation.
Household Bank is a federal savings bank duly organized and
existing under the federal laws of the United States and is duly
qualified to do business and is in good standing as a federal
savings bank. Each of HAFC, HACC, Household Bank and the Seller has
all requisite power and authority to own its properties and
conduct its business as presently conducted and is duly qualified
as a foreign corporation or federal savings bank, as applicable,
to transact business and is in good standing in each jurisdiction
which requires such qualification, except where failure to have such
requisite power and
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authority or to be so qualified would not have a material adverse
effect on the business or consolidated financial condition of HAFC,
HACC, Household Bank or the Seller.
(iv) Neither HAFC, HACC, Household Bank nor the Seller
is in violation of its certificate of incorporation or charter, as
applicable, or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it may be bound,
or to which any of the property or assets of HAFC, HACC, Household
Bank or the Seller, as the case may be, is subject, except where any
such violation or default would not have a material adverse effect
on the transactions contemplated by this Agreement.
(v) The execution, delivery and performance by the
Seller of each Seller Agreement, the issuance of the Securities and
the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of, or
default under, or, other than as contemplated in the Registration
Statement, result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Seller pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which the Seller is a party or by which it
may be bound, or to which any of the property or assets of the
Seller is subject, nor will such action result in any violation of
the provisions of the certificate of incorporation or by-laws of the
Seller or any applicable law, administrative regulation or
administrative or court decree, except where any such conflict,
breach, default, encumbrance or violation would not have a material
adverse effect on the transactions contemplated by this Agreement.
(vi) The execution, delivery and performance by HAFC of
each HAFC Agreement, the issuance of the Securities and the
consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or, other than as
contemplated by the Registration Statement, assets of HAFC pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which HAFC is a party or by which it may be
bound, or to which any of the property or assets of HAFC is subject,
nor will such action result in any violation of the provisions of
the charter or by-laws of HAFC or any applicable law, administrative
regulation or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not have a
material adverse effect on the transactions contemplated by this
Agreement.
(vii) The execution, delivery and performance by HACC of
each HACC Agreement has been duly and validly authorized by all
necessary action or
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proceedings and will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or, other than as
contemplated by the Registration Statement, assets of HACC
pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which HACC is a party or by
which it may be bound, or to which any of the property or assets
of HACC is subject, nor will such action result in any violation
of the provisions of the charter or by-laws of HACC or any
applicable law, administrative regulation or administrative or court
decree, except where any such conflict, breach, default, encumbrance
or violation would not have a material adverse effect on the
transactions contemplated by this Agreement.
(viii) The execution, delivery and performance by
Household Bank of the Household Bank Receivables Purchase Agreement
has been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or, other than as
contemplated by the Registration Statement, assets of Household Bank
pursuant to, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which Household Bank is a party
or by which it may be bound, or to which any of the property or
assets of Household Bank is subject, nor will such action result in
any violation of the provisions of the charter or by-laws of
Household Bank or any applicable law, administrative regulation or
administrative or court decree, except where any such conflict,
breach, default, encumbrance or violation would not have a material
adverse effect on the transactions contemplated by this Agreement.
(ix) Each Seller Agreement has been, or when executed
and delivered, will have been, duly executed and delivered by the
Seller; and each Seller Agreement constitutes, or, when executed and
delivered, will constitute, legal, valid and binding instruments
enforceable against the Seller in accordance with their respective
terms, subject as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally, (B) to general principles of
equity (regardless of whether enforcement is sought in a proceeding
in equity or at law) and (C) with respect to rights of indemnity
under this Agreement, to limitations of public policy under
applicable securities laws.
(x) Each HAFC Agreement has been, or, when executed and
delivered, will have been duly executed and delivered by HAFC; and
each HAFC Agreement constitutes, or, when executed and delivered,
will constitute, legal, valid and binding instruments enforceable
against HAFC in accordance with their respective terms, subject as
to the enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (B) to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and (C) with respect to
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rights of indemnity under this Agreement, to limitations of public
policy under applicable securities law.
(xi) Each HACC Agreement has been, or, when executed and
delivered, will have been duly executed and delivered by HACC; and
each HACC Agreement constitutes, or, when executed and delivered,
will constitute, a legal, valid and binding instrument enforceable
against HACC in accordance with their respective terms, subject as
to enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (B) to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and (C) with respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities law.
(xii) The Household Bank Receivables Purchase Agreement
has been, or, when executed and delivered, will have been duly
executed and delivered by Household Bank; and the Household Bank
Receivables Purchase Agreement constitutes, or, when executed and
delivered, will constitute, a legal, valid and binding instrument
enforceable against Household Bank in accordance with its terms,
subject as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and the rights and remedies of
creditors of thrifts, savings institutions or national banking
associations from time to time in effect, or as limited by the
powers of the Federal Deposit Insurance Corporation in its capacity
as receiver or conservator under the Federal Deposit Insurance
Company Act of 1950, (B) to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at
law) and (C) with respect to rights of indemnity under this
Agreement, to limitations of public policy under applicable
securities law.
(xiii) HAFC, HACC and Household Bank have each
authorized the conveyance of the respective Receivables to be
conveyed by such Person to the Seller; the Seller has authorized the
conveyance of the Receivables to the Trust; and the Seller has
directed the Trust to issue and sell the Securities.
(xiv) Each of HAFC, HACC, Household Bank and the Seller
is solvent and will not become insolvent after giving effect to the
transactions contemplated by this Agreement and the other Related
Documents. The Seller has no indebtedness to any Person other than
pursuant to this Agreement and other than pursuant to transactions
in which the Seller transfers assets to a trust which issues
securities. Each of the Issuer, HAFC, HACC, Household Bank and the
Seller, after giving effect to the transactions contemplated by this
Agreement and the other Related Documents, will have an adequate
amount of capital to conduct its business in the foreseeable future.
(xv) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of any
Seller
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Agreement, the Indenture and the Securities shall have been paid or
will be paid by the Seller at or prior to the Closing Date.
(xvi) The Series 2002-2 Notes have been duly and validly
authorized, and, when validly executed, authenticated, issued and
delivered in accordance with the Indenture and as provided herein
will conform in all material respects to the description thereof
contained in the Prospectus and will be validly issued and
outstanding and entitled to the benefits of the Indenture.
(xvii) There are no legal or governmental proceedings
pending, or to the knowledge of HAFC, HACC, Household Bank or the
Seller threatened, to which HAFC, HACC, Household Bank or the Seller
is a party or of which any property of any of them is the subject,
other than proceedings which are not reasonably expected,
individually or in the aggregate, to have a material adverse effect
on the shareholder's equity or consolidated financial position of
such person and its subsidiaries taken as a whole, or which would
have a material adverse effect upon the consummation of this
Agreement.
(xviii) KPMG LLP is an independent public accountant
with respect to HAFC, HACC and the Seller as required by the Act and
the Rules and Regulations.
(xix) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with
any court or governmental agency or body of the United States is
required for the issue and sale of the Series 2002-2 Notes, or the
consummation by HAFC, HACC, Household Bank or the Seller of the
other transactions contemplated by this Agreement, the Master
Receivables Purchase Agreements, the Master Sale and Servicing
Agreement, the Trust Agreement or the Indenture, except for (A) the
registration under the Act of the Series 2002-2 Notes, (B) such
consents, approvals, authorizations, orders, registrations,
qualifications, licenses or permits as have been obtained or as may
be required under state securities or Blue Sky laws in connection
with the purchase of the Series 2002-2 Notes and the subsequent
distribution of the Series 2002-2 Notes by the Underwriters or (C)
where the failure to obtain such consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits would not have a material adverse effect on the
business or consolidated financial condition of HAFC and its
subsidiaries taken as a whole or the Seller or the transactions
contemplated by such agreements.
(xx) (a) Seller has the power and authority to sell the
Receivables to the Trust, and (b) following the conveyance of the
Receivables to the Trust pursuant to the Master Sale and Servicing
Agreement, the Trust will own the Receivables free and clear of any
lien, mortgage, pledge, charge, encumbrance, adverse claim or other
security interest (collectively, "LIENS") other than Liens created
by the Master Sale and Servicing Agreement.
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(xxi) As of the Cut-Off Date, each of the Receivables
will meet the eligibility criteria described in the Prospectus.
(xxii) None of HAFC, HACC, Household Bank or the Seller
will conduct their operations while any of the Securities are
outstanding in a manner that would require the Seller or the Trust
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.
(xxiii) Each of HAFC, HACC, Household Bank 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 HAFC,
HACC, Household Bank or the Seller has received notice of any
proceedings relating to the revocation or modification of such
license, certificate, authority or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, is likely to materially and adversely affect the conduct of
its business, operations, financial condition or income.
(xxiv) At the Closing Date, each of the representations
and warranties of HAFC set forth in the HAFC Agreements, of HACC set
forth in the HACC Agreements, of Household Bank set forth in the
Household Bank Receivables Purchase Agreement or of the Seller set
forth in the Seller Agreements will be true and correct in all
material respects.
(xxv) Since the respective dates as of which information
is given in the Prospectus, (x) there has not been any material
adverse change in or affecting the general affairs, business,
management, financial condition, stockholder's equity, results of
operations, regulatory situation or business prospects of HAFC and
(y) HAFC has not entered into any transaction or agreement (whether
or not in the ordinary course of business) material to HAFC that, in
either case, would reasonably be expected to materially adversely
affect the interests of the holders of the Series 2002-2 Notes,
otherwise than as set forth or contemplated in the Prospectus.
B. HFC represents, warrants and agrees with the Underwriters, that:
(i) HFC is a corporation duly organized and validly
existing and in good standing under the laws of its jurisdiction of
incorporation. HFC has all requisite power and authority to own its
properties and conduct its business as presently conducted and is
duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction which requires such
qualification, except where the failure to have such power and
authority or to be so qualified would not have a material adverse
effect on the business or consolidated financial condition of HFC
and its subsidiaries taken as a whole.
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(ii) HFC is not in violation of its certificate of
incorporation or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which HFC is a party or by which it may be
bound, or to which any of the property or assets of HFC is subject
except where any such violation or default would not have a material
adverse effect on the transactions contemplated by this Agreement.
(iii) The execution, delivery and performance by HFC of
the HFC Agreements, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of HFC pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which HFC is a party or by which it may be bound, or to which any
of the property or assets of HFC is subject, nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of HFC or any applicable law,
administrative regulation or administrative or court decree, except
where any such conflict, breach, default, encumbrance or violation
would not have a material adverse effect on the transactions
contemplated by this Agreement.
(iv) Each HFC Agreement has been, or, when executed and
delivered, will have been, duly executed and delivered by HFC; and
each HFC Agreement constitutes, or, when executed and delivered,
will constitute, legal, valid and binding instruments enforceable
against HFC in accordance with their respective terms, subject as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally, (B) to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law)
and (C) with respect to rights of indemnity under this Agreement to
limitations of public policy under applicable securities laws.
(v) HFC will, upon request by any Underwriter, provide
to such Underwriter complete and correct copies of all reports filed
by it with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), during 1998, 1999, 2000, 2001
and 2002. Except as set forth in or contemplated in such reports,
there has been no material adverse change in the consolidated
financial condition of HFC and its subsidiaries taken as a whole.
(vi) There are no legal or governmental proceedings
pending, or to the knowledge of HFC threatened, to which HFC is a
party or of which any of its property is the subject, other than
proceedings which are not reasonably expected, individually or in
the aggregate, to have a material adverse effect on the
shareholder's equity or consolidated financial position of HFC and
its subsidiaries taken as a whole or which would have a material
adverse effect upon the consummation of this Agreement.
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(vii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with
any court or governmental agency or body of the United States is
required for the consummation by HFC of the transactions
contemplated by the HFC Agreements, except for (A) the registration
under the Act of the Series 2002-2 Notes, (B) such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been obtained or as may
be required under State securities or Blue Sky laws in connection
with the purchase of the Series 2002-2 Notes and the subsequent
distribution of the Series 2002-2 Notes by the Underwriters or (C)
where the failure to obtain such consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits would not have a material adverse effect on the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole or the transactions contemplated by
such agreements.
(viii) KPMG LLP is an independent public accountant with
respect to HFC as required by the Act and the Rules and Regulations.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. Each
Underwriter severally, and not jointly, represents and warrants to, and agrees
with the other Underwriters, HAFC, HACC, Household Bank, the Seller and HFC
that:
(a) As of the date hereof and as of the Closing Date that such
Underwriter has complied and will comply with all of its obligations arising
hereunder and in accordance with the Act, the Exchange Act, and the Rules and
Regulations and, with respect to the Derived Information provided by such
Underwriter, such Derived Information is accurate in all material respects
(taking into account the assumptions explicitly set forth in the Derived
Information, except for any errors therein attributable to errors or mistakes in
the Seller-Provided Information). The Derived Information provided by such
Underwriter to the Seller constitutes a complete set of all Derived Information
required to be filed with the Commission pursuant to the No-Action Letters.
(b) Such Underwriter shall provide the Seller no later than one
Business Day after any Collateral Term Sheet is delivered to a prospective
investor, or in the case of any Structural Term Sheets and Computational
Materials no later than one Business Day before the date on which the Prospectus
is required to be filed pursuant to Rule 424, all such Derived Information
delivered to a prospective investor by it during the period commencing on the
Effective Date and ending on the date the Prospectus is filed with the
Commission. Such Underwriter shall deliver to the Seller a hard copy and, in a
mutually agreed upon format, a disk or electronic transmission of such Derived
Information.
(c) Assuming the accuracy of the Seller-Provider Information used in
the preparation of Derived Information, the Derived Information delivered by
such Underwriter, as of the date thereof, is accurate in all material respects,
taking into account the assumptions set forth in such Derived Information, but
without making any representations as to the appropriateness of such
assumptions.
11
(d) Each Underwriter acknowledges that none of HAFC, HACC, Household
Bank, the Seller or HFC will 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), (b) or (c) above.
(e) 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). 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 Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the Commission staff's response
thereto, were publicly available February 17, 1995), and with respect to
"Collateral Term Sheet" 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 Brown & Wood on behalf of Xxxxxx, Xxxxxxx & Co., Inc. (which
letter, and the Commission staff's response thereto, were publicly available May
20, 1994). "SELLER-PROVIDED INFORMATION" means the information contained on any
computer tape furnished to the Underwriters by the Seller concerning the assets
comprising the Issuer.
Section 4. PURCHASE AND SALE. The Underwriters' commitment to
purchase the Series 2002-2 Notes pursuant to this Agreement shall be deemed to
have been made on the basis of the representations and warranties of the
Household Entities herein contained and shall be subject to the terms and
conditions herein set forth. The Seller agrees to instruct the Trust to issue
the Series 2002-2 Notes to the Underwriters, and the Underwriters agree to
purchase the Series 2002-2 Notes on the date of issuance thereof. The purchase
prices for the Series 2002-2 Notes shall be as set forth on Schedule 1 hereto.
Section 5. DELIVERY AND PAYMENT. Payment of the purchase price for,
and delivery of, any Series 2002-2 Notes to be purchased by the Underwriters
shall be made at the office of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other place as shall be agreed upon by
the Representative and the Household Entities, at 10:00 a.m. New York City time
on August 28, 2002 (the "CLOSING DATE"), or at such other time or date as shall
be agreed upon in writing by the Representative and the Household Entities.
Payment shall be made by wire transfer of same day funds payable to the account
designated by HARC. Each of the Series 2002-2 Notes so to be delivered shall be
represented by one or more global Series 2002-2 Notes registered in the name of
Cede & Co., as nominee for The Depository Trust Company.
The Household Entities agree to have the Series 2002-2 Notes
available for inspection, checking and packaging by the Representative in New
York, New York, not later than 12:00 P.M. New York City time on the business day
prior to the Closing Date.
12
Section 6. OFFERING BY UNDERWRITERS.
(a) It is understood that the Underwriters propose to offer the
Series 2002-2 Notes for sale to the public as set forth in the Prospectus.
(b) Each Underwriter represents and agrees that (i) it has not
offered or sold and, prior to the expiry of six months from the Closing Date,
will not offer or sell any Series 2002-2 Notes to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purpose of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the Series 2002-2 Notes in, from
or otherwise involving the United Kingdom; and (iii) it has only issued or
passed on, and will only issue or pass on, in the United Kingdom any document
received by it in connection with the issue of the Series 2002-2 Notes, to a
person who is of a kind described in the Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1995 or to a person to
whom such document may otherwise lawfully be issued, distributed or passed on.
Section 7. COVENANTS OF THE HOUSEHOLD ENTITIES. Each of
HFC, HAFC, HACC and the Seller covenants with the Underwriters as follows:
A. To cause to be prepared a Prospectus in a form approved by the
Underwriters, to file such Prospectus pursuant to Rule 424(b) under the
Securities Act within the time period prescribed by Rule 424(b) and to provide
the Underwriters with evidence satisfactory to the Underwriters of such timely
filing; to cause to be made no further amendment or any supplement to the
Registration Statement or to the Prospectus during the period in which the
Underwriters are required to deliver any such amendment or supplement to those
persons to whom the Underwriters have offered the 2002-2 Notes pursuant to
Section 4(3) of the Securities Act (the "DELIVERY PERIOD") except as permitted
herein; to give prior notice to the Underwriters of the filing of any amendment
to the Registration Statement which is filed or becomes effective during the
Delivery Period or any supplement to the Prospectus or any amended Prospectus
which is filed during the Delivery Period and to furnish the Underwriters with
copies thereof; to file promptly all reports and any global proxy or information
statements required to be filed by the Seller with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus, and until the expiration of the Delivery Period; and to promptly
advise the Underwriters of its receipt of notice of the issuance by the
Commission of any stop order or of: (i) any order preventing or suspending the
use of the Prospectus; (ii) the suspension of the qualification of the Series
2002-2 Notes for offering or sale in any jurisdiction; (iii) the initiation of
or threat of any proceeding for any such purpose; (iv) any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or for additional information. In the event of the issuance of
any stop order or of any order preventing or suspending the use of the
Prospectus or suspending any such qualification, the Seller promptly shall use
its best efforts to obtain the withdrawal of such order by the Commission.
13
B. If, at any time when a Prospectus relating to the Series 2002-2
Notes is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to supplement such Prospectus to
comply with the Act or the rules thereunder, the Seller shall be required to
notify the Underwriters and upon the Underwriters' request to prepare and
furnish without charge to the Underwriters as many copies as the Underwriters
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which shall correct such statement or omission or
effect such compliance.
C. As soon as practicable, but in any event within 120 days of the
close of the period covered thereby, the Seller will make generally available to
Noteholders and to the Underwriters an earnings statement or statements of the
Trust which will satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
D. The Seller will furnish to the Underwriters and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by the
Underwriters or dealer may be required by the Act, as many copies of the
Prospectus and any supplement thereto as the Underwriters may reasonably
request.
E. The Household Entities, jointly and severally, agree to pay all
expenses incidental to the performance of their obligations under this
Agreement, including without limitation (i) expenses of preparing, printing and
reproducing the Registration Statement, the Prospectus, and any document
incorporated by reference in the Prospectus (including exhibits thereto), (ii)
any fees charged by any rating agency for the rating of the Series 2002-2 Notes,
(iii) any expenses (including reasonable fees and disbursements of counsel not
to exceed $10,000) incurred by the Underwriters in connection with qualification
of the Series 2002-2 Notes for sale under the laws of such jurisdictions as the
Underwriters designate, (iv) the fees and expenses of (A) Xxxxx Xxxxxxxxxx LLP
as special counsel for the Household Entities and (B) KPMG LLP, (v) the fees and
expenses of the Indenture Trustee and any agent of the Indenture Trustee and the
fees and disbursements of counsel for the Indenture Trustee in connection with
the Indenture, the Trust Agreement and the Series 2002-2 Notes, (vi) certain
fees and expenses of the Note Insurer and its counsel and (vii) the fees and
expenses of the Owner Trustee and the Delaware Trustee and any agent of the
Owner Trustee and the Delaware Trustee and the fees and disbursements of counsel
for the Owner Trustee and the Delaware Trustee in connection with the Indenture,
the Trust Agreement and the Series 2002-2 Notes (it being understood that,
except as provided in this paragraph (E) and in Sections 9 and 10 hereof, each
Underwriter will pay its own expenses, including the expense of preparing and
reproducing this Agreement, the fees and expenses of counsel for the
Underwriters, any transfer taxes on resale of any of the Series 2002-2 Notes by
it and advertising expenses connected with any offers that the Underwriters may
make).
F. The Seller will take all reasonable actions requested by the
Underwriters to arrange for the qualification of the Series 2002-2 Notes for
sale under the laws of such jurisdictions within the United States or as
necessary to qualify for the Euroclear System or
14
Clearstream Banking, societe anonyme and as the Underwriters may designate,
will maintain such qualifications in effect so long as required for the
distribution of the Series 2002-2 Notes and will arrange for the
determination of the legality of the Series 2002-2 Notes for purchase by
institutional investors.
G. For so long as the Series 2002-2 Notes are outstanding, HFC, the
Seller, HAFC and HACC will furnish to the Underwriters (i) as soon as
practicable after the end of each fiscal year of the Trust, all documents
required to be distributed to Noteholders under the Master Sale and Servicing
Agreement or the Indenture and (ii) as soon as practicable after filing, any
other information concerning the Household Entities filed with any government or
regulatory authority which is otherwise publicly available, as the Underwriters
may reasonably request.
H. To apply the net proceeds from the sale of the Series 2002-2
Notes in the manner set forth in the Prospectus.
I. If, between the date hereof or, if earlier, the dates as of which
information is given in the Prospectus and the Closing Date, to the knowledge of
the Seller, there shall have been any material change, or any development
involving a prospective material change in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
any of the Household Entities, the Seller will give prompt written notice
thereof to the Underwriters.
J. The Seller, during the period when the Prospectus is required to
be delivered under the Act or the Exchange Act, will file all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act within the time periods required by the Act and the Rules and Regulations
thereunder.
K. To the extent, if any, that the ratings provided with respect to
the Series 2002-2 Notes by the Rating Agency that initially rate the Series
2002-2 Notes are conditional upon the furnishing of documents or the taking of
any other actions by the Seller, HAFC or HACC, the Seller shall use its best
efforts to furnish or cause to be furnished such documents and take any such
other actions.
L. Other than any warehouse financings, neither HAFC, HACC nor the
Seller will, without the prior written consent of the Representative, contract
to sell any automobile receivable-backed certificates or notes or other similar
securities either directly or indirectly for a period of five (5) business days
after the later of the termination of the underwriting syndicate or the Closing
Date.
M. So long as any of the Series 2002-2 Notes are outstanding, if so
requested, HFC, the Seller, HAFC and HACC, as applicable, shall furnish to the
Underwriters as soon as such statements are furnished to the Trustee: (i) the
annual statement as to compliance of the Master Servicer delivered to the
Trustee pursuant to Section 4.10(a) of the Master Sale and Servicing Agreement,
and (ii) the annual statement of a firm of independent public accountants
furnished to the Trustee pursuant to Section 4.11(a) of the Master Sale and
Servicing Agreement with respect to the Master Servicer.
15
N. The Seller will, at the expense of the Underwriters, file the
Derived Information provided to it by the Underwriters under Section 3 with the
Commission pursuant to a Current Report on Form 8-K not later than 5:00 p.m. on
the day the Prospectus is delivered to the Underwriters; provided, HOWEVER, that
as a condition to the filing of the Derived Information by the Seller, the
Seller must receive a letter from a firm of independent certified public
accountants reasonably acceptable to the Seller, which letter shall be
satisfactory in form and substance to the Seller, HFC and their counsel, to the
effect that such accountants have performed certain specified procedures, all of
which have been agreed to by the Seller, as a result of which they have
determined the accuracy in all material respects of the numerical and financial
information included in the Derived Information provided by the Underwriters to
the Seller for filing with the Commission.
The Seller shall not be obligated to file any Derived Information
that has been determined to contain any material errors or omission; provided,
HOWEVER, that, at the request of an Underwriter the Seller shall file Derived
Information containing material errors or omissions if clearly marked
"superseded by materials dated ________" and accompanied by corrected Derived
Information that is marked "these materials supersede and correct the materials
dated ________."
Section 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Series 2002-2 Notes on the
Closing Date pursuant to this Agreement are subject to (i) the material accuracy
of the representations and warranties on the part of the Household Entities
herein contained as of the date and time that this Agreement is executed and
delivered by the parties hereto (the "EXECUTION TIME"), (ii) the material
accuracy of the statements of officers of the Household Entities made pursuant
hereto, (iii) the performance by the Household Entities of all of their
respective obligations hereunder, and the performance by the Household Entities
of all of their respective obligations under the HAFC Agreements, HACC
Agreements, Household Bank Receivables Purchase Agreement, Seller Agreements and
HFC Agreements and (iv) the following conditions as of the Closing Date:
A. 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 by the Commission.
B. Each of the Household Entities shall have delivered a
certificate, dated the Closing Date signed by its President or any Vice
President and its principal financial or principal accounting officer or its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant Secretary
to the effect that the signers of such certificate, on behalf of the named
Household Entity, have carefully examined the Related Documents, the Prospectus
and the Registration Statement, stating that:
(i) the representations and warranties of such Household
Entity in this Agreement are true and correct in all material
respects at and as of the date of such certificate as if made on and
as of such date (except to the extent they expressly relate to an
earlier date);
16
(ii) such Household Entity has complied, in all material
respects, with all the agreements and satisfied, in all material
respects, all the conditions on its part to be performed or
satisfied at or prior to the date of such certificate;
(iii) nothing has come to the attention of such
Household Entity that would lead it to believe that the Registration
Statement contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and
(iv) the Registration Statement is effective under the
Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted, or, to the knowledge of the xxxxxx,
threatened.
X. Xxxx Xxxxxx, Vice President - Corporate Law and Assistant
Secretary of Household International, Inc., shall have delivered a favorable
opinion with respect to clauses (i) through (xi) of this paragraph (c), and
Xxxxx Xxxxxxxxxx LLP, special counsel to the Household Entities, shall have
delivered a favorable opinion with respect to clauses (xii) through (xiv) of
this paragraph (c); each opinion shall be dated the Closing Date and shall be
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, to the effect that:
(i) each of HFC, HAFC, HACC and the Seller is duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with
corporate power and authority to own its properties, to conduct its
business and to enter into and perform its obligations under the HFC
Agreements, HAFC Agreements, the HACC Agreements or Seller
Agreements, as applicable, except where failure to have such power
and authority or to be so qualified will not have a material adverse
effect, as applicable, on the business or consolidated financial
condition of HFC and its subsidiaries, taken as a whole;
(ii) Household Bank has been duly organized as a federal
savings bank and is in good standing under the federal laws of the
United States of America, with full power and authority to own its
properties, to conduct its business and to enter into and perform
its obligations under the Household Bank Receivables Purchase
Agreement, except where the failure to have such power and authority
or to be so qualified will not have a material adverse effect on the
business or consolidated financial condition of Household Bank and
its subsidiaries, taken as a whole;
(iii) each of the HFC Agreements, HAFC Agreements, HACC
Agreements, Seller Agreements and the Household Bank Receivables
Purchase Agreement has been duly authorized, executed and delivered
by HFC, HAFC, HACC, the Seller or Household Bank, as applicable, and
each such agreement constitutes the valid and binding obligation of
HFC, HAFC, HACC, the Seller or
17
Household Bank, as applicable, enforceable against HFC, HAFC, HACC,
the Seller or Household Bank, as applicable, in accordance with its
respective terms, except, in each case, that 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 and the rights
and remedies of creditors of thrifts, savings institutions or
national banking associations from time to time in effect, or as
limited by the powers of the Federal Deposit Insurance Corporation
in its capacity as receiver or conservator under the Federal
Deposit Insurance Act of 1950, (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 each of the
HFC Agreements, HAFC Agreements, HACC Agreements, Seller Agreements,
the Household Bank Receivables Purchase Agreement and any other
agreements calling for indemnification may be subject to limitations
of public policy under applicable securities laws;
(iv) the issuance and sale of the Series 2002-2 Notes
have been duly authorized and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, will be validly
issued and outstanding, entitled to the benefits of the Indenture,
enforceable in accordance with their terms subject, as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors'
rights generally and the rights and remedies of creditors of
thrifts, savings institutions or national banking associations and
(B) to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(v) neither the execution nor the delivery of the
Underwriting Agreement, the Master Receivables Purchase Agreements,
the Trust Agreement, the Indenture, the Master Sale and Servicing
Agreement or the Series Supplement nor the issuance or delivery of
the Series 2002-2 Notes, nor the consummation of any of the
transactions contemplated herein or therein, nor the fulfillment of
the terms of the Series 2002-2 Notes, the Underwriting Agreement,
the Master Receivables Purchase Agreements, the Trust Agreement, the
Indenture, the Master Sale and Servicing Agreement or the Series
Supplement will conflict with or violate any term or provision of
the charter or by-laws of the Household Entities, or result in a
breach or violation of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property
or assets of any of the Household Entities (except the lien of the
Indenture) pursuant to, any material statute currently applicable to
any of them or any order or regulation known to such counsel to be
currently applicable to any of them of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Household Entities, or the terms of any indenture or other
agreement or instrument known to such counsel to which the Household
Entities is a party or by which any of them or any of their
properties are bound, except where any such conflict, breach,
violation, default or encumbrance would not
18
have a material adverse effect on the transactions contemplated by
this Agreement.
(vi) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator with
respect to the Underwriting Agreement, the Trust, the Series 2002-2
Notes, the Master Receivables Purchase Agreements, the Trust
Agreement, the Indenture, the Master Sale and Servicing Agreement or
the Series Supplement or any of the transactions contemplated herein
or therein or with respect to the Household Entities which, in the
case of any such action, suit or proceeding with respect to any of
them, would have a material adverse effect on the Noteholders or the
Trust or upon the ability of any of the Household Entities to
perform their obligations under any of such agreements, and there is
no material contract, franchise or document relating to the Trust or
property conveyed to the Trust which is not disclosed in the
Registration Statement or Prospectus; and the statements included in
the Registration Statement and Prospectus describing statutes (other
than those relating to tax and ERISA matters), legal proceedings,
contracts and other documents fairly summarize the matters therein
described;
(vii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 424 has been made in the manner
and within the time period required by Rule 424; to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened; the
Registration Statement and the Prospectus (other than information
included in Derived Information and the financial and statistical
information contained therein as to which such counsel need express
no opinion) comply as to form in all material respects with the
applicable requirements of the Act and the rules thereunder;
(viii) such counsel has no reason to believe that at the
Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date,
includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (other
than financial and statistical information contained therein as to
which such counsel need express no opinion);
(ix) to the best knowledge of such counsel, no consent,
approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or governmental agency or
regulatory body under the federal law of the United States or the
laws of the State of New York is required in connection with the
consummation of the transactions contemplated in the Underwriting
Agreement, the Trust Agreement, the Indenture, the Master
Receivables Purchase Agreements, the Master Sale and Servicing
Agreement or
19
the Series Supplement, except (A) such consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits as have been made or obtained or as may be
required under the State securities or blue sky laws of any
jurisdiction in connection with the purchase of the Series 2002-2
Notes by the Underwriters and the subsequent distribution of the
Series 2002-2 Notes by the Underwriters or (B) where the failure
to have such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses or permits would
not have a material adverse effect on the Trust's interests in the
Receivables or the transactions contemplated by such agreements;
(x) the Series 2002-2 Notes, the Underwriting Agreement,
the Master Receivables Purchase Agreements, the Trust Agreement, the
Master Sale and Servicing Agreement and the Indenture conform in all
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus;
(xi) the Indenture has been duly qualified under the
Trust Indenture Act of 1939 and the Issuer is not required to be
registered under the Investment Company Act of 1940;
(xii) the statements (a) in the Base Prospectus under
the captions "Summary of Terms - Material Federal Income Tax
Consequences," "Summary of Terms - ERISA Considerations," "Material
Federal Income Tax Consequences," "ERISA Considerations" and
"Material Legal Aspects of the Auto Loans" and (b) in the Prospectus
Supplement under the captions "Summary - Federal Income Tax
Consequences," "Summary - ERISA Considerations," "Material Federal
Income Tax Consequences" and "ERISA Considerations" to the extent
that they constitute matters of law or legal conclusions with
respect thereto, have been reviewed by counsel and represent a fair
and accurate summary of the matters addressed therein, under
existing law and the assumptions stated therein.
(xiii) no other filings or other actions, with respect
to the Indenture Trustee's interest in the Receivables, are
necessary to perfect the interest of the Indenture Trustee in the
Receivables, and proceeds thereof, against third parties, except
that appropriate continuation statements must be filed in accordance
with the applicable state's requirements, which is presently at
least every five years; and
(xiv) the conditions to the use of a registration
statement on Form S-3 under the Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus. There are no contracts or
documents 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 filed.
In rendering such opinion, counsel may rely (A) as to matters
involving the application of the law of any jurisdiction other than, in the case
of Xxxx X. Xxxxxx, the laws of the State of Illinois and United States Federal
laws, and in the case of Xxxxx Xxxxxxxxxx LLP, the
20
laws of the State of New York, the laws of the State of California, the
corporate law of the State of Delaware and the United States Federal laws, to
the extent deemed proper and stated in such opinion, upon the opinion of
other counsel of good standing believed by such counsel to be reliable and
acceptable to you and your counsel, and (B) as to matters of fact, to the
extent deemed proper and as stated therein, on the certificates of
responsible officers of the Trust, Household Entities and public officials.
References to the Prospectus in this paragraph C include any supplements
thereto.
X. Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, shall have
delivered a favorable opinion dated the Closing Date with respect to the
validity of the Series 2002-2 Notes, the Underwriting Agreement, the Series
Supplement, the Registration Statement, the Prospectus and such other related
matters as the Underwriters may reasonably require and the Household Entities
shall have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass on such matters. In giving their
opinion, Xxxxx Xxxxxxxxxx LLP may rely (i) as to matters of Illinois and
Delaware law (other than Delaware corporation law) upon the opinions of counsel
delivered pursuant to subsection (c) above, (ii) as to matters involving the
application of laws of any jurisdiction other than the State of New York and the
State of California, the United States Federal laws or the corporation law of
the State of Delaware, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable, and (iii) as to matters of fact, to the extent deemed proper and as
stated therein on certificates of responsible officers of the Trust, Household
Entities and public officials.
X. Xxxxxxx to the Indenture Trustee shall have delivered a favorable
opinion, dated the Closing Date, and satisfactory in form and substance to the
Underwriters and counsel for the Underwriters, the Household Entities and their
counsel, to the effect that:
(i) The Indenture Trustee has been duly incorporated and is validly
existing as a national banking association in good standing under the laws
of the United States of America.
(ii) The Indenture Trustee has full corporate trust power and
authority to enter into and perform its obligations under the Indenture,
including, but not limited to, its obligation to serve in the capacity of
the Indenture Trustee and to execute, issue, countersign and deliver the
Series 2002-2 Notes.
(iii) The Indenture has been duly authorized, executed and delivered
by the Indenture Trustee and constitutes a legal, valid and binding
obligation of the Indenture Trustee enforceable against the Indenture
Trustee, in accordance with its terms, except that as to enforceability
such enforcement may (A) be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and (B) be limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(iv) The Series 2002-2 Notes have been duly authorized, executed and
authenticated by the Indenture Trustee on the date hereof on behalf of the
Trust in accordance with the Indenture.
21
(v) The execution, delivery and performance of the Indenture and the
Series 2002-2 Notes by the Indenture Trustee will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of the Indenture Trustee
pursuant to the terms of the articles of association or the by-laws of the
Indenture Trustee or any statute, rule, regulation or order of any
governmental agency or body, or any court having jurisdiction over the
Indenture Trustee or its property or assets or any agreement or instrument
known to such counsel, to which the Indenture Trustee is a party or by
which the Indenture Trustee or any of its respective property or assets is
bound.
(vi) No authorization, approval, consent or order of, or filing
with, any state or federal court or governmental agency or authority is
necessary in connection with the execution, delivery and performance by
the Indenture Trustee of the Indenture and the Series 2002-2 Notes.
F. Counsel to the Owner Trustee and the Delaware Trustee shall have
delivered a favorable opinion, dated the Closing Date and satisfactory in form
and substance to the Underwriters and counsel for the Underwriters, the
Household Entities and their counsel, to the effect that:
(i) Each of the Owner Trustee and the Delaware Trustee have been
duly incorporated and is validly existing as national banking association
in good standing under the laws of the United States of America.
(ii) The Owner Trustee and the Delaware Trustee each have full
corporate trust power and authority to enter into and perform their
respective obligations under the Trust Agreement, including, but not
limited to, in the case of the Owner Trustee, its obligation to serve in
the capacity of Owner Trustee and to execute, issue, countersign and
deliver the Series 2002-2 Notes on behalf of the Trust and, in the case of
the Delaware Trustee, its obligation to serve in the capacity of Delaware
Trustee.
(iii) The Trust Agreement has been duly authorized, executed and
delivered by each of the Owner Trustee and the Delaware Trustee and
constitutes a legal, valid and binding obligation of each of the Owner
Trustee and the Delaware Trustee, enforceable against each of the Owner
Trustee and the Delaware Trustee in accordance with its terms, except that
as to enforceability such enforcement may (A) be subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally; (B) be limited by general
principles of equity, including applicable law relating to fiduciary
duties (whether considered in a proceeding at law or in equity); and (C)
public policy limitations on the enforceability of provisions relating to
indemnification and contribution.
(iv) The execution, delivery and performance of the Trust Agreement
by the Owner Trustee and the Delaware Trustee will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the property or assets of the
22
Owner Trustee or the Delaware Trustee, as the case may be, pursuant to
the terms of the certificate of incorporation or the by-laws of the
Owner Trustee or the Delaware Trustee or any statute, rule, regulation
or order of any governmental agency or body, or any court having
jurisdiction over the Owner Trustee or the Delaware Trustee or their
respective property or assets or any agreement or instrument known to
such counsel, to which the Owner Trustee or the Delaware Trustee is a
party or by which the Owner Trustee or the Delaware Trustee or any of
their respective property or assets is bound.
(v) No authorization, approval, consent or order of, or filing with,
any state or federal court or governmental agency or authority is
necessary in connection with the execution, delivery and performance by
the Owner Trustee or the Delaware Trustee of the Trust Agreement or the
execution and delivery by the Owner Trustee of the Note on behalf of the
Trust, other than the filing of the certificate of trust with the Delaware
Secretary of State.
G. The Owner Trustee shall have furnished to the Underwriters and
the Household Entities a certificate of the Owner Trustee, signed by one or more
duly authorized officers of the Owner Trustee, dated the Closing Date, 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 thereby
and such other matters as the Underwriters and the Household Entities shall
reasonably request.
H. The Delaware Trustee shall have furnished to the Underwriters and
the Household Entities a certificate of the Delaware Trustee, signed by one or
more duly authorized officers of the Delaware Trustee, dated the Closing Date,
as to the due authorization, execution and delivery of the Trust Agreement by
the Delaware Trustee and the acceptance by the Delaware Trustee of the trusts
created thereby and such other matters as the Underwriters and the Household
Entities shall reasonably request.
I. The Indenture Trustee shall have furnished to the Underwriters
and the Household Entities a certificate of the Indenture Trustee, signed by one
or more duly authorized officers of the Indenture Trustee, dated the Closing
Date, as to the due authorization, execution and delivery of the Indenture and
the Master Sale and Servicing Agreement by the Indenture Trustee and the
acceptance by the Indenture Trustee of the trusts created thereby and the due
execution and delivery of the Series 2002-2 Notes by the Indenture Trustee under
the Indenture and such other matters as the Underwriters shall reasonably
request.
J. The Class A-1 Notes shall have been rated "A-1" or its
equivalent, and the Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes
shall have been rated "AAA" or its equivalent, in each case, by at least two
nationally recognized Ratings Agencies.
K. The Underwriters shall have received copies of letters dated as
of the Closing Date, from the Ratings Agencies stating the current ratings of
the Series 2002-2 Notes as set forth in Section I above.
L. The Underwriters shall have received from Xxxxx Xxxxxxxxxx LLP,
counsel to the Household Entities, a favorable opinion, dated the Closing Date
and satisfactory in form and
23
substance to the Underwriters and counsel for the Underwriters, as to true
sale matters relating to the transaction, and the Underwriters shall be
addressees of any opinions of counsel supplied to the rating organizations
relating to the Series 2002-2 Notes.
M. The Underwriters shall have received from special counsel to the
Note Insurer, reasonably acceptable to the Underwriters, a favorable opinion
dated the Closing Date as to such matters and satisfactory in form and substance
to the Underwriters and counsel for the Underwriters.
N. The Indemnification Agreement shall have been executed and
delivered, in which the Note Insurer shall represent, among other
representations, that (i) the Insurer Information was approved by the Note
Insurer and does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and (ii) there has
been no change in the financial condition of the Note Insurer since June 30,
2002, which would have a material adverse effect on the Note Insurer's ability
to meet its obligations under the Note Insurance Policy.
O. The Note Insurance Policy shall have been issued by the Note
Insurer and shall have been duly countersigned by an authorized agent of the
Note Insurer, if so required under applicable state law or regulation.
P. The ISDA Master Agreement between the Trust and Deutsche Bank AG,
including the Schedule thereto and the Confirmation relating thereto, each in
form and substance satisfactory to the Underwriters and counsel for the
Underwriters, shall have been executed and delivered.
Q. All proceedings in connection with the transactions contemplated
by this Agreement, and all documents incident hereto, shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters, and the Underwriters and counsel for the Underwriters shall have
received such other information, opinions, certificates and documents as they
may reasonably request in writing.
R. The Prospectus and any supplements thereto shall have been filed
(if required) with the Commission in accordance with the rules and regulations
under the Act and Section 2 hereof, and prior to the Closing Date, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be contemplated by the Commission or by any authority administering any state
securities or Blue Sky law.
S. At the Closing Date, KPMG LLP shall have furnished to the
Underwriters a letter, dated as of the Closing Date, in form and substance
satisfactory to the Underwriters and counsel for the Underwriters.
If any condition specified in this Section 8 shall not have been
fulfilled when and as required to be fulfilled, (i) this Agreement may be
terminated by the Representative by notice to each of the Household Entities at
any time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except as provided in
24
Section 9 and (ii) the provisions of Section 9, the indemnity set forth in
Section 10, the contribution provisions set forth in Section 10 and the
provisions of Sections 13 and 16 shall remain in effect.
Section 9. REIMBURSEMENT OF EXPENSES. If the sale of the Series
2002-2 Notes provided for herein is not consummated because any condition to the
Underwriter's obligations set forth in Section 8 hereof is not satisfied,
because of any termination pursuant to Section 12 hereof or because of any
refusal, inability or failure on the part of the Indenture Trustee or the
Household Entities to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Underwriters, the Household
Entities, jointly and severally, will reimburse the Underwriters upon demand for
all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by it in connection with the proposed
purchase and sale of the Series 2002-2 Notes.
Section 10. INDEMNIFICATION.
A. The Household Entities jointly and severally agree to
indemnify and hold harmless the Underwriters and each person, if any, who
controls the Underwriters within the meaning of the Act or the Exchange Act,
from and against any and all loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
the Series 2002-2 Notes), to which the Underwriters or any such controlling
person may become subject, under the Act or the Exchange Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
or (iii) the omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements therein, in the
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 Household Entities, or information, if any, electronically
transmitted to the Household Entities by the Underwriters expressly for use
in the Registration Statement (or any amendment thereof) or (b) such untrue
statement or omission or alleged untrue statement or omission relates to
information in any Derived Information provided by the Underwriters to a
prospective investor (except to the extent that such untrue statements
contained therein are Seller-Provided Information); and shall reimburse the
Underwriters and each such controlling person promptly upon demand for any
documented legal or documented other expenses reasonably incurred by the
Underwriters or such controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; PROVIDED, HOWEVER, that
the foregoing indemnity with respect to any untrue statement contained in or
omission from the Prospectus shall not inure to the benefit of the
Underwriters if a Household Entity shall sustain the burden of proving that
the person asserting against the Underwriters the loss, liability, claim,
damage or expense purchased any of the Series 2002-2 Notes which are the
subject thereof and was not sent or given a copy of the appropriate
Prospectus (or the appropriate Prospectus as amended or supplemented) (the
term Prospectus as used in this clause shall not include documents
incorporated by reference thereto), if required by law, at or prior to the
written confirmation of the sale of such Series 2002-2 Notes
25
(unless such Prospectus is amended or supplemented after the Prospectus has
been delivered pursuant to Rule 424(b)) to such person and the untrue
statement contained in or omission from such Prospectus was corrected in the
appropriate Prospectus (or the appropriate Prospectus as amended or
supplemented).
The foregoing indemnity agreement is in addition to any liability
which a Household Entity may otherwise have to the Underwriters or any
controlling person of any of the Underwriters.
B. Each of the Underwriters agrees to severally and not jointly
indemnify and hold harmless the Household Entities, the directors and the
officers of the Household Entities who signed the Registration Statement, and
each person, if any, who controls any Household Entity within the meaning of the
Act or the Exchange Act against any and all loss, claim, damage or liability, or
any action in respect thereof, to which a Household Entity or any such director,
officer or controlling person thereof may become subject, under the Act or the
Exchange Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Underwriter Information (as
defined below) or (ii) information in any Derived Information provided by such
Underwriter (except to the extent that such untrue statements or errors
contained therein are Seller-Provided Information), and shall reimburse the
applicable Household Entity, promptly on demand, and any such director, officer
or controlling person for any documented legal or other documented expenses
reasonably incurred by such Household Entity, or any director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. Underwriter Information means the information set forth
under the caption "Underwriting" in the Prospectus.
The foregoing indemnity agreement is in addition to any liability
which the Underwriters may otherwise have to any Household Entity or any such
director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section 10 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 10, promptly notify the indemnifying party
in writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 10 except to the extent it has
been materially prejudiced by such failure; and PROVIDED, FURTHER, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 10.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party, unless such indemnified party reasonably objects to such assumption on
the ground that there may be legal defenses available to it which are different
from or in addition to those
26
available to such indemnifying party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
claim or action, except to the extent provided in the next following
paragraph, the indemnifying party shall not be liable to the indemnified
party under this Section 10 for any fees and expenses of counsel subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Representative, if the indemnified
parties under this Section 10 consist of the Underwriters or any of their
controlling persons, or by the Household Entities, if the indemnified parties
under this Section 10 consist of any of the Household Entities or any of the
Household Entities' directors, officers or controlling persons, but in either
case reasonably satisfactory to the indemnified party.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 10A and B, shall use its best efforts to cooperate with
the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which such indemnified party is
or could have been a party and indemnity could have been sought hereunder by
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action.
D. If the indemnification provided for in this Section 10 shall
for any reason be unavailable to hold harmless an indemnified party under
Section 10A or B in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or
27
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Household
Entities on the one hand and the Underwriters on the other from the offering
of the Series 2002-2 Notes or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Household Entities on the one
hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action
in respect thereof, as well as any other relevant equitable considerations.
The relative benefits of the Underwriters and the Household Entities
shall be deemed to be in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the public
offering price appearing on the cover page of the Prospectus.
The relative fault of the Underwriters and the Household Entities
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Household Entities or by one of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission and
other equitable considerations.
The Household Entities and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 10D were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 10D shall be deemed to include, for purposes of this Section 10D, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Each person, if any, who controls each Underwriter within the
meaning of the Act or the Exchange Act shall have the same rights to
contribution as each of the Underwriters and each director of a Household
Entity, each officer of a Household Entity who signed the Registration
Statement, and each person, if any, who controls a Household Entity within the
meaning of the Act or the Exchange Act shall have the same rights to
contribution as the applicable Household Entity.
Except in the case of any loss, claim, damage, liability or expense
resulting solely from a breach of the Underwriter's representation and warranty
set forth in Section 3(a), (b) or (c) hereof, in no case shall any Underwriter
be responsible for any amount in excess of the underwriting discount applicable
to the Series 2002-2 Notes purchased by such Underwriter hereunder. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
E. The Underwriters severally confirm that the information set forth
(i) in the Prospectus relating to market making and (ii) under the caption
"Underwriting" in the Prospectus
28
Supplement is correct and constitutes the only information furnished in
writing to a Household Entity by or on behalf of the Underwriters
specifically for inclusion in the Prospectus.
Section 11. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters participating in the public offering of the Series
2002-2 Notes shall fail at the Closing Date to purchase the Series 2002-2 Notes
which it is obligated to purchase hereunder (the "DEFAULTED SECURITIES"), then
the non-defaulting Underwriter(s) shall have the right, within 24 hours
thereafter, to make arrangements to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth. If, however, the Underwriter(s) have not completed such
arrangements within such 24-hour period, then:
(i) if the aggregate principal amount of Defaulted
Securities does not exceed 10% of the aggregate principal amount of
the Series 2002-2 Notes to be purchased pursuant to this Agreement,
the non-defaulting Underwriter(s) shall be obligated to purchase the
full amount thereof, severally in the same proportions as the
principal amount of Series 2002-2 Notes set forth opposite their
respective names in Schedule 1 hereto, or
(ii) if the aggregate principal amount of Defaulted
Securities exceeds 10% of the aggregate principal amount of the
Series 2002-2 Notes to be purchased pursuant to this Agreement, this
Agreement shall terminate, without any liability on the part of any
non-defaulting Underwriter(s).
No action taken pursuant to this Section shall relieve the
defaulting Underwriter(s) from the liability with respect to any default of such
Underwriter(s) under this Agreement.
In the event of a default by an Underwriter as set forth in this
Section, each of the Underwriters and the Seller shall have the right to
postpone the Closing Date 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 12. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Seller and HAFC prior to delivery of and payment for the Series 2002-2 Notes
if prior to such time (i) trading in securities generally on the New York Stock
Exchange or the National Association of Securities Dealers National Market
System shall have been suspended or limited, or minimum prices shall have been
established on such exchange or market system; (ii) a banking moratorium shall
have been declared by either Federal, New York State authorities or the State of
California; (iii) there shall have occurred any outbreak or material escalation
of hostilities involving the United States of America where armed conflict or
the declaration of war appears imminent, if, the effect of such event makes it,
in the reasonable judgment of the Representative, impractical or inadvisable to
proceed with the completion of the sale and payment for the Series 2002-2 Notes;
or (iv) any other calamity or crisis having an effect on the U.S. financial
markets that, in the reasonable judgment of the Representative, makes it
impractical or inadvisable to proceed with the public offering or the delivery
of the Securities as contemplated by the Registration Statement. Upon
29
such notice being given, the parties to this Agreement shall (except for any
liability arising before or in relation to such termination) be released and
discharged from their respective obligations under this Agreement.
Section 13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Household Entities
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Representative or
controlling person of the Representative, or by or on behalf of the Household
Entities or any officers, directors or controlling persons and shall survive
delivery of any certificates to the Representative or any controlling person.
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 to the
Underwriters at Deutsche Bank Securities Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Asset Securitization Group, Fax: (000) 000-0000;
if sent to any Household Entity to 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000, Attention: General Counsel, Fax: (000) 000-0000.
Section 15. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Representative and the Household Entities, and their
respective successors or assigns. 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
Section 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 Series 2002-2 Notes from the
Representative 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 LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 17. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but
together they shall constitute but one instrument.
Section 18. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of or affect
the meaning or interpretation of, this Agreement.
30
If the foregoing is in accordance with the Representative's
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 between the Representative, the Seller, HAFC, HACC and HFC in
accordance with its terms.
Very truly yours,
HOUSEHOLD FINANCE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Treasurer
HOUSEHOLD AUTO RECEIVABLES CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President & Assistant Treasurer
HOUSEHOLD AUTOMOTIVE FINANCE
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President & Chief
Financial Officer
HOUSEHOLD AUTOMOTIVE CREDIT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President & Chief
Financial Officer
[Underwriting Agreement]
31
HOUSEHOLD BANK, F.S.B.
By: /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President, Controller & Treasurer
CONFIRMED AND ACCEPTED, as of
the date first above written:
DEUTSCHE BANK SECURITIES INC.
Acting on its own behalf and as Representative of the
Underwriters referred to in the foregoing Agreement
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
By: /s/ Xxx Xxxxxxx
---------------------------------------
Name: Xxx Xxxxxxx
Title: Authorized Signatory
[Underwriting Agreement]
32
Schedule 1
Purchase Price (excluding accrued interest)
Class A-1 Class A-2 Class A-3 Class A-4
Barclays Capital Inc. 99.885000% 99.808719% 99.762763% 99.745000%
Deutsche Bank Securities Inc. 99.885000% 99.808719% 99.762763% 99.745000%
Banc of America Securities LLC 99.885000% 99.808719% 99.762763% 99.745000%
X.X. Xxxxxx Securities Inc. 99.885000% 99.808719% 99.762763% 99.745000%
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & 99.885000% 99.808719% 99.762763% 99.745000%
Xxxxx Incorporated
Notional Principal Amount
Class A-1 Class A-2 Class A-3 Class A-4
Barclays Capital Inc. $51,000,000 $69,000,000 $62,600,000 $57,400,000
Deutsche Bank Securities Inc. $51,000,000 $69,000,000 $62,600,000 $57,400,000
Banc of America Securities LLC $51,000,000 $69,000,000 $62,600,000 $57,400,000
X.X. Xxxxxx Securities Inc. $51,000,000 $69,000,000 $62,600,000 $57,400,000
Xxxxxxx Lynch, Pierce, Xxxxxx & $51,000,000 $69,000,000 $62,600,000 $57,400,000
Xxxxx Incorporated
--------------------------------------------------------------
Total $255,000,000 $345,000,000 $313,000,000 $287,000,000
Proceeds (excluding accrued interest)
Class A-1 Class A-2 Class A-3 Class A-4
Barclays Capital Inc. $50,941,350 $68,868,016 $62,451,490 $57,253,630
Deutsche Bank Securities Inc. $50,941,350 $68,868,016 $62,451,490 $57,253,630
Banc of America Securities LLC $50,941,350 $68,868,016 $62,451,490 $57,253,630
X.X. Xxxxxx Securities Inc. $50,941,350 $68,868,016 $62,451,490 $57,253,630
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & $50,941,350 $68,868,016 $62,451,490 $57,253,630
Xxxxx Incorporated
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Total $254,706,750 $344,340,081 $312,257,448 $286,268,150
