Exhibit 1
HOUSEHOLD AUTOMOBILE REVOLVING TRUST I
SERIES 1998-1
$______ ___% Class A-1 Notes
$______ ___% Class A-2 Notes
$______ ___% Class A-3 Notes
$______ ___% Class A-4 Notes
$______ ___% Class B-1 Notes
$______ ___% Class B-2 Notes
UNDERWRITING AGREEMENT
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representative of the Underwriters
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 October __, 1998
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"), and Household
Automotive Finance Corporation, a corporation organized and existing under the
laws of Delaware and wholly owned subsidiary of HFC ("HAFC"), agree with you as
follows:
Section 1. Issuance and Sale of Series 1998-1 Notes. The Seller has
authorized the issuance and sale of $______ ___% Class A-1 Notes, $______
___% Class A-2 Notes, $______ ___% Class A-3 Notes, $______ ___% Class A-4
Notes, $______ ___% Class B-1 Notes and $______ ___% Class B-2 Notes
(collectively, the "Series 1998-1 Notes"). The Series 1998-1 Notes are to be
issued by Household Automobile Revolving Trust I (the "Trust") pursuant to an
Indenture, dated as of October 1, 1998, as supplemented by a Series 1998-1
Supplement (the "Indenture") by and among HFC, the Master Servicer, the Trust
and The Chase Manhattan Bank, a New York Banking Corporation, as indenture
trustee (the "Indenture Trustee"). In addition to the Series 1998-1 Notes,
the Trust will also issue the $______ ___% Class C Notes (the "Class C
Notes") pursuant to the Indenture and Series 1998-1 Certificates (the "Series
1998-1 Certificates") (the Series 1998-1 Notes, the Class C Notes and the
Series 1998-1 Certificates, collectively, the "Series 1998-1 Securities")
pursuant to a Trust Agreement, dated as of March 1, 1998, between the Seller
and the Owner Trustee as supplemented by a Series 1998-1 Supplement (the
"Trust Agreement"). 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 on or after _________, 1998 (the "Cut-Off Date").
As used herein, the term "Seller Agreements" means the Master Sale and
Servicing Agreement dated as of March 1, 1998 among the Trust, the Seller, the
Master Servicer and Norwest Bank Minnesota, National Association, as trustee
(the "Master Sale and Servicing Agreement"), the Master Receivables Purchase
Agreement dated as of March 1, 1998 between the Seller and HAFC (the "Master
Receivables Purchase Agreement"), the Trust Agreement and this Underwriting
Agreement (this "Agreement"); the term "HAFC Agreements" means the Master
Receivables Purchase Agreement and this Agreement; the term "HFC Agreements"
means the Master Sale and Servicing Agreement, the Indenture and this Agreement.
HFC, the Seller and HAFC are direct or indirect subsidiaries of
Household International, Inc. ("Household"). HFC, the Seller and HAFC are
collectively referred to herein as the "Household Entities").
The Series 1998-1 Notes are being purchased by the Underwriters named
in Schedule 1 hereto, and the Underwriters are purchasing, severally, only the
Series 1998-1 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. Credit Suisse First Boston Corporation is acting as
representative of the Underwriters and in such capacity, is hereinafter referred
to as the "Representative."
The offering of the Series 1998-1 Notes will be made by the
Underwriters and the Household Entities understand that the Underwriters propose
to make a public offering of the Series 1998-1 Notes for settlement on
___________, 1998, as the Underwriters deem advisable.
Neither the Class C Notes nor the Series 1998-1 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 1998-1 Supplement
dated as of September 1, 1998 among the Master Servicer, the Trust, the Seller,
the Indenture Trustee and Wilmington Trust Company, as Owner Trustee (the
"Series 1998-1 Supplement").
Section 2. Representations and Warranties.
X. XXXX 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) The Seller meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the "Act"), and has filed with
the United States Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. 333-59837),
relating to the Series 1998-1 Notes, on such Form S-3 for the
registration under the Act of the Series 1998-1 Notes. The Seller may
have filed one or more amendments thereto, each of which has
previously been
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furnished to you. The Seller will next file with the Commission
either, (A) prior to the effectiveness of such registration statement,
a further amendment thereto (including the form of final prospectus)
or, (B) after effectiveness of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b)(1) or (4). In the
case of clause (B), the Seller has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in the prospectuses with respect to the
Series 1998-1 Notes and the offering thereof. As filed, such amendment
and form of final prospectus, or such final prospectus, shall include
all Rule 430A Information and, except to the extent the Underwriters
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes as the Seller
has advised you, prior to the Execution Time, will be included or made
therein.
The terms which follow, when used in this Agreement, shall have the meanings
indicated. The term "Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments thereto became or
become effective under the Act. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties hereto.
"Prospectus" shall mean the prospectus relating to the Series 1998-1 Notes that
is first filed with the Commission pursuant to Rule 424(b) and any prospectuses
subsequently filed pursuant to Rule 424 or, if no filing pursuant to Rule 424(b)
is required, shall mean the form of final prospectus included in the
Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in the preceding paragraph and any
registration statement required to be filed under the Act or rules thereunder,
including amendments, all documents incorporated or deemed to be incorporated by
reference therein, exhibits and financial statements, in the form in which it
has or shall become effective and, in the event that any post-effective
amendment thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as amended or supplemented
pursuant to the Act or rules thereunder or the Exchange Act or rules thereunder.
Such term shall include Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Act. "Rule 430A Information" means information with respect
to the Series 1998-1 Notes and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule 430A. The
"Rules and Regulations" shall mean the rules and regulations of the commission.
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, the Registration Statement did or
will comply in all material respects with
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the applicable requirements of the Act and the Rules and Regulations
thereunder; assuming compliance by each Underwriter with Sections
3(a), 3(b) and 3(c) hereof on the Effective Date and when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date, the Prospectus will comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; on the Effective Date, the Registration Statement 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; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b),
did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the Statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that HAFC and
the Seller make no representations or warranties as to 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 or the Seller by the Representative
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus. The documents incorporated
or deemed to be incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the
Exchange Act and the Rules and Regulations of the Commission under the
Exchange Act, and, when read together with the other information in
the Prospectus, at the time the Registration Statement and any
amendments thereto become effective and at the Closing Date, will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(iii) Each of HAFC and the Seller is a corporation duly organized
and validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of HAFC 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 to transact business and is in good standing in each
jurisdiction which requires such qualification, except where failure
to have such requisite power and authority or to be so qualified would
not have a material adverse effect on the business or consolidated
financial condition of HAFC or the Seller.
(iv) Neither HAFC nor the Seller is 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 it is a party or
by which it may be bound, or to which any of the property or assets of
the Seller or HAFC, 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 Series 1998-1 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
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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 Series 1998-1 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) 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.
(viii) Each HAFC Agreement has been, or, when executed and
delivered, will have been duly executed and delivered by HAFC; and
each Seller 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 rights of indemnity under this Agreement, to
limitations of public policy under applicable securities law.
(ix) HAFC has authorized the conveyance of the Receivables 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
Series 1998-1 Securities.
(x) Each of HAFC and the Seller is solvent and will not become
insolvent after giving effect to the transactions contemplated by this
Agreement and the other
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Series 1998-1 Related Documents. The Seller has no indebtedness to any
Person other than pursuant to this Agreement, the other Series 1998-1
Related Documents, the Series 1998-A Related Documents and, in the
case of the Seller, the Revolving Credit Agreement. Each of the
Issuer, HAFC and the Seller, after giving effect to the transactions
contemplated by this Agreement and the other Series 1998-1 Related
Documents, will have an adequate amount of capital to conduct its
business in the foreseeable future.
(xi) Any taxes, fees and other governmental charges in connection
with the execution, delivery and performance of any Seller Agreement,
the Indenture and the Securities shall have been paid or will be paid
by the Seller at or prior to the Closing Date.
(xii) The Series 1998-1 Notes have been duly and validly
authorized, and, when validly executed, authenticated, issued and
delivered in accordance with the Indenture and as provided herein will
conform in all material respects to the description thereof contained
in the Prospectus and will be validly issued and outstanding and
entitled to the benefits of the Indenture.
(xiii) There are no legal or governmental proceedings pending, or
to the knowledge of HAFC or the Seller threatened, to which HAFC 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.
(xiv) Xxxxxx Xxxxxxxx LLP is an independent public accountant
with respect to HAFC and Seller as required by the Act and the Rules
and Regulations.
(xv) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or
governmental agency or body of the United States is required for the
issue and sale of the Series 1998-1 Notes, or the consummation by HAFC
or the Seller of the other transactions contemplated by this
Agreement, the Master Receivables Purchase Agreement, the Master Sale
and Servicing Agreement, the Trust Agreement or the Indenture, except
for (A) the registration under the Act of the Series 1998-1 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 1998-1 Notes and the subsequent
distribution of the Series 1998-1 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.
(xvi) (a) HAFC 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.
(xvii) As of the Cut-Off Date, each of the Receivables will meet
the eligibility criteria described in the
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Prospectus.
(xviii) Neither HAFC nor 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.
(xix) Each of the Seller and HAFC 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
on The Prospectus and neither the Seller nor HAFC 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.
(xx) At the Closing Date, each of the representations and
warranties of HAFC set forth in the HAFC Agreements or of the Seller
set forth in the Seller Agreements will be true and correct in all
material respects.
(xxi) 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 1998-1 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.
(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
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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 1996, 1997 and 1998. 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.
(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 1998-1 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 1998-1
Notes and the subsequent distribution of the Series 1998-1 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) Xxxxxx Xxxxxxxx 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
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jointly, represents and warrants to, and agrees with the other Underwriters,
HAFC, the Seller and HFC that:
(a) Prior to the Effective Date, such Underwriter has not furnished
and will not furnish, in writing or by electronic transmission, any Derived
Information relating to the Series 1998-1 Notes to any prospective investor.
(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.
(d) Each Underwriter acknowledges that none of HAFC, 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, provided, however, that the rights and obligations
otherwise available to an Underwriter pursuant to Section 10 and 11 hereof are
not limited solely as a result of an Underwriter's breach of the representation
and warranty set forth in subsection (a) 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 Cleary, 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 & Xxxx 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 1998-1 Notes
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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 1998-1 Notes to the Underwriters, and
the Underwriters agree to purchase the Series 1998-1 Notes on the date of
issuance thereof. The purchase prices for the Series 1998-1 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 1998-1 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 ___________, 1998 (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 HAFC. Each of the Series 1998-1 Notes so to be
delivered shall be represented by one or more global Series 1998-1 Notes
registered in the name of Cede & Co., as nominee for The Depository Trust
Company.
The Household Entities agree to have the Series 1998-1 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.
Section 6. Offering by Underwriters.
(a) It is understood that the Underwriters propose to offer the Series
1998-1 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 1998-1 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 1998-1 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 1998-1 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. The Household
Entities, covenant with the Underwriters as follows:
A. The Seller will use its best efforts to cause the Registration
Statement and any amendment thereto, if not effective at the Execution Time, to
become effective. If the Registration Statement
10
has become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Seller will file the
Prospectus properly completed, pursuant to Rule 424(b) within the time period
prescribed and will promptly evidence satisfactory to the Underwriters of such
timely filing. The Seller will promptly advise the Underwriters (i) when the
Registration Statement shall have become effective, (ii) when any amendment
thereof shall have become effective, (iii) of any request by the Commission for
any amendment or supplement of the Registration Statement or the Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, and (v) of the
receipt by the Seller of any modification with respect to the suspension of the
qualification of the Series 1998-1 Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The Seller will
not file any amendment of the Registration Statement or supplement to the
Prospectus to which the Underwriters reasonably object. The Seller will use its
best efforts to prevent the issuance of any such stop order and if issued, to
obtain as soon as possible the withdrawal thereof.
B. If, at any time when a Prospectus relating to the Series 1998-1
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 1998-1 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 1998-1 Notes for sale under the laws of such jurisdictions as the
Underwriters designate, (iv) the fees and expenses of (A) Xxxxx
11
Ballantine LLP as special counsel for the Household Entities and (B) Xxxxxx
Xxxxxxxx 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 1998-1 Notes, (vi) the fees and expenses of the Owner Trustee and any
agent of the Owner Trustee and the fees and disbursements of counsel for the
Owner Trustee in connection with the Indenture, the Trust Agreement and the
Series 1998-1 Notes, and (vii) the cost of delivering the Series 1998-1 Notes to
the offices of the Underwriters, insured to the satisfaction of the Underwriters
(it being understood that, except as provided in this paragraph (E) and in
Sections 9 and 10 hereof, each Underwriter will pay its own expenses, including
the expense of preparing, printing and reproducing this Agreement, the fees and
expenses of counsel for the Underwriters, any transfer taxes on resale of any of
the Series 1998-1 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 1998-1 Notes for
sale under the laws of such jurisdictions within the United States or as
necessary to qualify for the Euroclear System or Cedel Bank, societe anonyme and
as the Underwriters may designate, will maintain such qualifications in effect
so long as required for the distribution of the Series 1998-1 Notes and will
arrange for the determination of the legality of the Series 1998-1 Notes for
purchase by institutional investors.
G. For so long as the Series 1998-1 Notes are outstanding, the
Household Entities 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 1998-1 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 1998-1 Notes by the Rating Agency that initially rate the Series
1998-1 Notes are conditional upon the furnishing of documents or the taking of
any other actions by the Seller or HAFC, the Seller shall use its best efforts
to furnish or cause to be furnished such documents and take any such other
actions.
12
X. Xxxxxxx HAFC nor the Seller will, with 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 (15) business days after the later of the termination of
the underwriting syndicate or the Closing Date.
M. So long as any of the Series 1998-1 Notes are outstanding, the
Household Entities 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.
Section 8. Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Series 1998-1 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 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 Seller Agreements, HAFC Agreements and the HFC
Agreements and (iv) the following conditions as of the Closing Date:
A. If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement shall have become effective not later than 12:00 Noon New
York City time on the business day following the day on which the public
offering price was determined; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus shall have been
filed in the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
threatened.
B. 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 Series 1998-1 Related Documents, the Prospectus (and any
supplements thereto) 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);
(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
13
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted. or, to the knowledge of the xxxxxx,
threatened.
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 (x) of this paragraph (C), and Xxxxx Xxxxxxxxxx
LLP, special counsel to the Household Entities, shall have delivered a favorable
opinion with respect to clauses (xi) through (xiii) 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 and the Seller is duly incorporated and
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation with corporate power and authority
to own its properties and to conduct its business, except where
failure to have such power and authority do not have a material
adverse effect, as applicable, on the business or consolidated
financial condition of HFC and its subsidiaries, taken as a whole, or
HFC, HAFC, or the Seller, to enter into and perform its obligation
under the HFC Agreements, the HAFC Agreements or the Seller
Agreements, as applicable, and to consummate the transactions
contemplated hereby and thereby;
(ii) each of the HFC Agreements, the HAFC Agreements or the
Seller Agreements has been duly authorized, executed and delivered by
HFC, HAFC or the Seller, as applicable, and constitute the legal,
valid and binding agreement of HFC, HAFC or the Seller, as applicable,
enforceable in accordance with its terms subject, as to enforceability
(A) to applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting creditors' rights generally and the
rights, (B) to general principles of equity (regardless of whether
enforcement is sought in a proceedings in equity or at law) and (C)
with respect to rights of indemnity to limitations of public policy
under applicable securities laws;
(iii) the issuance and sale of the Series 1998-1 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);
(iv) neither the execution nor the delivery of the Underwriting
Agreement, the Master Receivables Purchase Agreement, the Trust
Agreement, the Indenture, the Master Sale and Servicing Agreement or
the Series 1998-1 Supplement nor the issuance or delivery of the
Series 1998-1 Notes, nor the consummation of any of the transactions
contemplated herein or therein, nor the fulfillment of the terms of
the Series 1998-1 Notes, the Underwriting Agreement, the Master
Receivables Purchase Agreement, the Trust Agreement, the Indenture,
the Master Sale and Servicing
14
Agreement or the Series 1998-1 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 pursuant to, any material statute currently applicable to any
of them or the Trust or any order or regulation known to such counsel
to be currently applicable to any of them or the Trust of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Household Entities or the Trust, as the case may
be, or the terms of any indenture or other agreement or instrument
known to such counsel to which the Household Entities or the Trust is
a party or by which any of them or any of their properties are bound,
except where any such conflict, breach, violation, default or
encumbrance would not have a material adverse effect on the
transactions contemplated by this Agreement.
(v) 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 1998-1 Notes, the Master
Receivables Purchase Agreement, the Trust Agreement, the Indenture,
the Master Sale and Servicing Agreement or the Series 1998-1
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;
(vi) 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
his been issued, no proceedings for that purpose have been instituted
or threatened; the Registration Statement and the Prospectus (and any
supplements thereto) (other than financial and statistical information
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(vii) 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);
(viii) to the best knowledge of such counsel, no consent,
approval, authorization, order, registration,
15
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 Agreement, the Master Sale and Servicing
Agreement or the Series 1998-1 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 1998-1
Notes by the Underwriters and the subsequent distribution of the
Series 1998-1 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;
(ix) the Series 1998-1 Notes, the Underwriting Agreement, the
Master Receivables Purchase Agreement, 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;
(x) 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;
(xi) the statements in the Prospectus under the captions "Summary
of Terms -- Tax Status," "Summary of Terms -- ERISA Considerations,"
"ERISA Considerations" and "Material Federal Income Tax Consequences,"
"Certain Legal Aspects of the Receivables" 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.
(xii) 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
(xiii) 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 in the case of Xxxxx
Xxxxxxxxxx L.L.P., the laws of the State of New York, 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
16
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 1998-1 Notes, the Underwriting Agreement, the Series
1998-1 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 California,
Illinois, Nevada 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, 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 banking corporation 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 1998-1 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 1998-1 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.
(v) The execution, delivery and performance of the Indenture and
the Series 1998-1 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
17
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
1998-1 Notes.
F. Counsel to the Owner 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 Owner Trustee has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
the United States of America.
(ii) The Owner Trustee has full corporate trust power and
authority to enter into and perform its obligations under the Trust
Agreement, as the case may be, including, but not limited to, its
obligation to serve in the capacity of Owner Trustee and to execute,
issue, countersign and deliver the Note.
(iii) The Trust Agreement has been duly authorized, executed and
delivered by the Owner Trustee and constitutes a legal, valid and
binding obligation of the Owner Trustee enforceable against the Owner
Trustee, in accordance with its terms, 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 execution, delivery and performance of the Trust
Agreement by the Owner 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 Owner Trustee
pursuant to the terms of the articles of association or the by-laws of
the Owner Trustee or any statute, rule, regulation or order of any
governmental agency or body, or any court having jurisdiction over the
Owner Trustee or its property or assets or any agreement or instrument
known to such counsel, to which the Owner Trustee is a party or by
which the Owner Trustee or any of its 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 of the Trust Agreement and the Note,
as applicable.
G. Wilmington Trust Company ("WLT") shall have furnished to the
Underwriters and the Household Entities a certificate of WLT, signed by one or
more duly authorized officers of WLT, dated the Closing Date, as to the due
authorization, execution and delivery of the Trust Agreement by WLT and the
acceptance by the Owner Trustee of the trusts created thereby and the due
execution and such other matters as the Underwriters and the Household Entities
shall reasonably request.
18
H. The Chase Manhattan Bank ("Chase") shall have furnished to the
Underwriters and the Household Entities a certificate of Chase, signed by one or
more duly authorized officers of Chase, dated the Closing Date, as to the due
authorization, execution and delivery of the Indenture and the Master Sale and
Servicing Agreement by Chase and the acceptance by the Indenture Trustee of the
trusts created thereby and the due execution and delivery of the Series 1998-1
Notes by the Indenture Trustee under the Indenture and such other matters as the
Underwriters shall reasonably request.
I. 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 Class A-4 Notes shall have been
rated "AAA" or its equivalent, in each case, by at least two nationally
recognized Ratings Agencies, the Class B-1 Notes have been rated "AA" or its
equivalent by at least two nationally recognized Ratings Agencies and the Class
B-2 Notes shall have been rated "A" or its equivalent by at least two nationally
recognized Rating Agencies.
J. 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 1998-1 Notes as set forth in Section I above.
K. 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 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 1998-1 Notes.
L. 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.
M. 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.
N. At the Execution Time and at the Closing Date, Xxxxxx Xxxxxxxx LLP
shall have furnished to the Underwriters a letter or letters, dated respectively
as of the date of this Agreement and the date of the Closing Date, in form and
substance satisfactory to the 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 both 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
19
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 1998-1
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 1998-1 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 1998-1 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 Seller, or information, if any,
electronically transmitted to the Seller by the Underwriters expressly for use
in the Registration Statement (or any amendment thereof) or (b) such loss,
liability, claim, damage or expense is incurred by an Underwriter solely as a
result of the dissemination by it of Derived Information in violation of Section
3(a) hereof; 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 1998-1 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
20
written confirmation of the sale of such Series 1998-1 Notes (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 preliminary 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) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, 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
22
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 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 9 consist of the Underwriters or any of their
controlling persons, or by the Household Entities, if the indemnified parties
under this Section 9 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.
Notwithstanding the foregoing, if (x) the indemnified party has made a
proper
23
request to the indemnifying party for the payment of the indemnified party's
legal fees and expenses, as permitted hereby, and (y) such request for payment
has not been honored within thirty days, then, for so long as such request
thereafter remains unhonored, the indemnifying party shall be liable for any
settlement entered into by the indemnified party whether or not the indemnifying
party consents thereto.
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
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 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
23
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 1998-1 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 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 Registration Statement and 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 1998-1
Notes shall fail at the Closing Date to purchase the Series 1998-1 Notes which
it is obligated to purchase hereunder (the "Defaulted Securities"), then the
non-defaulting Underwriter 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 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
1998-1 Notes to be purchased pursuant to this Agreement, the
non-defaulting Underwriter shall be obligated to purchase the full
amount thereof, or
(ii) if the aggregate principal amount of Defaulted Securities
exceeds 10% of the aggregate principal amount of the Series 1998-1
Notes to be purchased pursuant to this Agreement, this Agreement shall
terminate, without any liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve the defaulting
Underwriter from the liability with respect to any default of such Underwriter
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 1998-1 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
24
exchange or market system; a banking moratorium shall have been declared by
either Federal, New York State authorities or the State of California; or (ii)
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 1998-1 Notes. Upon
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
Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention: Asset Finance Department, Fax: (000) 000-0000; if sent to
any Household Entity to 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
attention of 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 9 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 1998-1 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
25
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.
26
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 and HFC in
accordance with its terms.
Very truly yours,
HOUSEHOLD FINANCE CORPORATION
By:
-------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES CORPORATION
By:
-------------------------------------
Name:
Title:
HOUSEHOLD AUTOMOTIVE FINANCE
CORPORATION
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on its own behalf and as Representative of the
Underwriters referred to in the foregoing Agreement
By:
---------------------------------------
Name:
Title: Authorized Signatory
27
[Underwriting Agreement]
28
Schedule 1
