EXHIBIT 4.2
EXECUTION COPY
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
U.S. BANK NATIONAL ASSOCIATION
Owner Trustee
and
(For certain limited purposes only)
U.S. BANK TRUST NATIONAL ASSOCIATION
Delaware Trustee
Dated as of May 15, 2002
TABLE OF CONTENTS
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ARTICLE I Definitions.........................................................................1
Section 1.1. Capitalized Terms........................................................1
Section 1.2. Other Definitional Provisions............................................3
Section 1.3. Action by or Consent of Noteholders and Certificateholders...............3
Section 1.4. Material Adverse Effect..................................................4
ARTICLE II Organization.......................................................................4
Section 2.1. Name.....................................................................4
Section 2.2. Office...................................................................4
Section 2.3. Purposes and Powers......................................................4
Section 2.4. Appointment of Owner Trustee and Delaware Trustee........................5
Section 2.5. Initial Capital Contribution of Owner Trust Estate.......................5
Section 2.6. Declaration of Trust.....................................................6
Section 2.7. Liability................................................................6
Section 2.8. Title to Trust Property..................................................6
Section 2.9. Situs of Trust...........................................................6
Section 2.10. Representations and Warranties of the Depositor..........................7
Section 2.11. Federal Income Tax Allocations...........................................8
Section 2.12. Covenants of the Depositor...............................................8
Section 2.13. Covenants of the Certificateholders......................................9
ARTICLE III Certificates and Transfer of Interests...........................................10
Section 3.1. Initial Ownership.......................................................10
Section 3.2. The Certificates........................................................10
Section 3.3. Authentication of Certificates..........................................11
Section 3.4. Registration of Transfer and Exchange of Certificates...................11
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.......................12
Section 3.6. Persons Deemed Certificateholders.......................................13
Section 3.7. Access to List of Certificateholders' Names and Addresses...............13
Section 3.8. Maintenance of Office or Agency.........................................13
Section 3.9. ERISA Restrictions......................................................13
Section 3.10. Securities Matters......................................................14
Section 3.11. Distributions...........................................................14
Section 3.12. Paying Agent............................................................14
ARTICLE IV Voting Rights and Other Actions...................................................14
Section 4.1. Prior Notice to Holders with Respect to Certain Matters.................14
Section 4.2. Action by Certificateholders with Respect to Certain Matters............15
Section 4.3. Action by Certificateholders with Respect to Bankruptcy.................15
Section 4.4. Restrictions on Certificateholders' Power...............................15
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Section 4.5. Majority Control........................................................16
Section 4.6. Certain Litigation Matters..............................................16
ARTICLE V Certain Duties.....................................................................17
Section 5.1. Accounting and Records to the Noteholders, Certificateholders, the
Internal Revenue Service and Others.....................................17
Section 5.2. Signature on Returns; Tax Matters Partner...............................17
ARTICLE VI Authority and Duties of Owner Trustee.............................................18
Section 6.1. General Authority.......................................................18
Section 6.2. General Duties..........................................................18
Section 6.3. Action upon Instruction.................................................18
Section 6.4. No Duties Except as Specified in this Agreement or in Instructions......19
Section 6.5. No Action Except under Specified Documents or Instructions..............19
Section 6.6. Restrictions............................................................20
ARTICLE VII Concerning the Owner Trustee.....................................................20
Section 7.1. Acceptance of Trust and Duties..........................................20
Section 7.2. Furnishing of Documents.................................................21
Section 7.3. Representations and Warranties..........................................21
Section 7.4. Reliance; Advice of Counsel.............................................22
Section 7.5. Not Acting in Individual Capacity.......................................22
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables................23
Section 7.7. Owner Trustee May Own Certificates and Notes............................23
Section 7.8. Payments from Owner Trust Estate........................................23
Section 7.9. Doing Business in Other Jurisdictions...................................23
ARTICLE VIII Compensation of Owner Trustee and Delaware Trustee..............................25
Section 8.1. Owner Trustee's and Delaware Trustee's Fees and Expenses................25
Section 8.2. Indemnification.........................................................25
Section 8.3. Payments to the Owner Trustee and Delaware Trustee......................25
Section 8.4. Non-recourse Obligations................................................26
ARTICLE IX Termination of Agreement..........................................................26
Section 9.1. Termination of Agreement................................................26
ARTICLE X Successor Owner Trustees and Delaware Trustees Additional Owner Trustees...........27
Section 10.1. Eligibility Requirements for Owner Trustee and Delaware Trustee.........27
Section 10.2. Resignation or Removal of Owner Trustee or Delaware Trustee.............28
Section 10.3. Successor Owner Trustee or Delaware Trustee.............................29
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Section 10.4. Merger or Consolidation of Owner Trustee or Delaware Trustee............29
Section 10.5. Appointment of Co-Trustee or Separate Trustee...........................30
ARTICLE X-A Authority and Duties of Delaware Trustee........................................31
Section 10A.1 Acceptance of Trust.....................................................31
Section 10A.2 Duties of Delaware Trustee..............................................31
Section 10A.3 Representations and Warranties..........................................33
Section 10A.4 Not Acting in Individual Capacity.......................................33
ARTICLE XI Miscellaneous.....................................................................34
Section 11.1. Supplements and Amendments..............................................34
Section 11.2. No Legal Title to Owner Trust Estate in Certificateholders..............35
Section 11.3. Limitations on Rights of Others.........................................35
Section 11.4. Notices.................................................................35
Section 11.5. Severability............................................................35
Section 11.6. Separate Counterparts...................................................36
Section 11.7. Assignments; Support Provider...........................................36
Section 11.8. Covenants of the Depositor..............................................36
Section 11.9. No Petition.............................................................36
Section 11.10. No Recourse.............................................................36
Section 11.11. Headings................................................................36
Section 11.12. GOVERNING LAW...........................................................37
Section 11.13. Master Servicer.........................................................37
Section 11.14. Third-Party Beneficiary.................................................37
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
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THIS AMENDED AND RESTATED
TRUST AGREEMENT, dated as of May 15, 2002,
among
HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada corporation (the
"Depositor"), 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"), amends and restates in its
entirety that certain
Trust Agreement, dated as of May 15, 2002, among the
Depositor, the Owner Trustee and the Delaware Trustee.
ARTICLE I
DEFINITIONS
Section 1.1. CAPITALIZED TERMS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Amended and Restated Agreement, as the
same may be amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE Section 3801 et seq. as the same may be amended from
time to time.
"Certificates" means, if the Depositor elects (i) to evidence its
interest in certificated form pursuant to Section 3.2, the certificate
substantially in the form of Exhibit A or (ii) to have its interest be
uncertified pursuant to Section 3.2, such uncertificated interest.
"Certificate Majority" shall have the meaning assigned to such term in
Section 4.1.
"Certificate Paying Agent" means Xxxxx Fargo Bank Minnesota, National
Association, a national banking association.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Certificate of Trust" shall mean the Certificate of Trust in the form
of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000, Attention: Corporate
Trust Administration, and, with respect to the Delaware Trustee, the principal
corporate trust office of the Delaware Trustee located at 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000,
or, in each case, at such other address as the Owner Trustee or Delaware
Trustee, as the case may be, may designate by notice to the Certificateholders
and the Depositor, or the principal corporate trust office of any successor
Owner Trustee or Delaware Trustee (the address of which the successor owner
trustee or Delaware Trustee will notify the Certificateholders, the Insurer and
the Depositor).
"Delaware Trustee" shall mean U.S. Bank Trust National Association, a
national banking association with its principal place of business in Delaware,
not in its individual capacity but solely as Delaware trustee under this
Agreement, and any successor Delaware Trustee hereunder.
"Depositor" shall mean
Household Auto Receivables Corporation in its
capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Holder" or "Certificateholder" shall mean a Person in whose name a
Certificate is registered on the Certificate Register.
"Household" shall mean Household Finance Corporation.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Master Sale and Servicing Agreement, all funds on deposit from
time to time in the Trust Accounts and all other property of the Trust from time
to time, including any rights of the Owner Trustee and the Trust pursuant to the
Master Sale and Servicing Agreement and each Related Document.
"Owner Trustee" shall mean U.S. Bank National Association, a national
banking association, not in its individual capacity but solely as Owner Trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Percentage Interest" shall mean, with respect to a Certificate, the
portion of the interests in the Trust represented by a Certificate, as reflected
in the Certificate Register.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securities Act" shall have the meaning assigned to such term in
Section 3.4.
"Series Trust Estate" shall mean the property granted to the Owner
Trustee on behalf of the Trust pursuant to Section 1.02 of the Series
Supplement.
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"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
Section 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized
terms used herein and not otherwise defined have the meanings assigned to them
in the Master Sale and Servicing Agreement or, if not defined therein, in the
Indenture, PROVIDED THAT, as used herein, Series means only the Series of Notes
and Series of Certificates with respect to which the Trust is the Issuer and
only such Series Trust Estates included in the Owner Trust Estate.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any Certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any Certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
Section 1.3. ACTION BY OR CONSENT OF NOTEHOLDERS AND
CERTIFICATEHOLDERS. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or Certificateholders, such provision
shall be deemed to refer to the Certificateholder or Noteholder, as the case may
be, of record as of the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders or Certificateholders.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders, any Note registered in the name of the Depositor or any Affiliate
thereof shall be deemed not to be outstanding; PROVIDED, HOWEVER, that, solely
for the purpose of determining whether the Indenture Trustee is
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entitled to rely upon any such action or consent, only Notes which the Owner
Trustee or the Indenture Trustee knows to be so owned shall be so disregarded.
Section 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination is
to be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Noteholders or Certificateholders (or any similar or analogous
determination), such determination shall be made without taking into account the
funds available from claims under any policy or other Series Support.
ARTICLE II
ORGANIZATION
Section 2.1. NAME. There is hereby formed a trust to be known as
"Household Automotive Trust 2002-1", in which name the Owner Trustee may conduct
the business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and xxx and be sued.
Section 2.2. OFFICE. The principal place of business of the Trust
for purposes of Delaware law shall be in care of the Delaware Trustee at the
Corporate Trust Office of the Delaware Trustee or at such other address as the
Delaware Trustee may designate by written notice to the Certificateholders, the
Insurer and the Depositor. The Trust may establish additional offices located at
such place or places inside or outside the State of Delaware as the Owner
Trustee may designate from time to time by written notice to the
Certificateholders and the Depositor. Initially, the Trust shall establish one
such additional office at the Corporate Trust Office of the Owner Trustee.
Section 2.3. PURPOSES AND POWERS. (a) The purpose of the Trust
is, and the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and the Series
Supplement and the Certificates pursuant to this Agreement and the Series
Supplement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to fund the
expense of obtaining any Series Support and to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance to
the Depositor pursuant to the Master Sale and Servicing Agreement;
(iii) with respect to the Series Trust Estate, to assign, grant,
transfer, pledge, mortgage and convey the Series Trust Estate to the
Indenture Trustee pursuant to the Indenture and the Series Supplement for
the benefit of the Secured Parties;
(iv) to enter into and perform its obligations under the Basic
Documents and the Related Documents, in each case, to which it is a party;
(v) to acquire, hold and manage the Owner Trust Estate;
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(vi) to make distributions on the Certificates in accordance with
their respective terms;
(vii) to own Class SV Preferred Stock of the Depositor;
(viii) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(ix) subject to compliance with the Basic Documents and the Related
Documents, to engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and the making of
distributions to the Certificateholders and the Noteholders.
(b) The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement, the Basic Documents or any Related Documents.
Section 2.4. APPOINTMENT OF OWNER TRUSTEE AND DELAWARE TRUSTEE. The
Depositor hereby appoints the Owner Trustee and the Delaware Trustee as trustees
of the Trust effective as of the date hereof, to have all the respective rights,
powers and duties set forth herein.
Section 2.5. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, on behalf of the Trust, as of the date hereof, the sum of $1,000
and one share of Class SV Preferred Stock of the Depositor. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the initial Owner Trust
Estate. The Depositor shall pay organizational expenses of the Trust as they may
arise.
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Section 2.6. DECLARATION OF TRUST. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein, on behalf of the Trust, for the use and benefit
of the Certificateholders, subject to the obligations of the Trust under the
Basic Documents. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a branch; PROVIDED, HOWEVER, that in the
event Certificates are owned by more than one Certificateholder, it is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall then be treated as a partnership and that, unless
otherwise required by appropriate tax authorities, only after such time the
Trust will file or cause to be filed annual or other necessary returns, reports
and other forms consistent with the characterization of the Trust as a
partnership for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth herein and to the
extent not inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State.
Section 2.7. LIABILITY. (a) The Depositor shall pay organizational
expenses of the Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.
(b) No Holder, other than to the extent set forth in clause (a),
shall have any personal liability for any liability or obligation of the Trust.
Section 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all of
the Owner Trust Estate shall be vested at all times in the Trust as a separate
legal entity except where applicable law in any jurisdiction requires title to
any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The holders of the Certificates shall not have legal title to
any part of the Series Trust Estate. The Holders of the Certificates shall be
entitled to receive distributions with respect to their undivided ownership
interest therein in accordance with the terms hereof and the Series Supplement.
No transfer, by operation of law or otherwise, of any right, title or interest
by any Certificateholder of its ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Series Trust Estate.
Section 2.9. SITUS OF TRUST. The Trust will be located in the State
of Delaware and administered in the State of Illinois. All bank accounts
maintained by the Owner Trustee on behalf of the Trust shall be located with the
Certificate Paying Agent in the State of Illinois. Payments will be received by
the Certificate Paying Agent on behalf of the Trust in Illinois and payments
will be made by the Trust from Illinois. The Trust shall not have any employees
in any state other than Delaware; PROVIDED, HOWEVER,
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that nothing herein shall restrict or prohibit the Owner Trustee, the Master
Servicer or any agent of the Trust from having employees within or without the
State of Delaware. The principal office of the Trust will be at the Corporate
Trust Office in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and executing the
Certificates and Notes and upon which any Support Provider relies in providing
any Series Support. Each of the following representations and warranties shall
be deemed to be made on each date on which a Series Trust Estate is pledged
under the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a Nevada corporation with power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted and is proposed to be
conducted pursuant to this Agreement and the Basic Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification and in
which the failure to so qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Depositor.
(c) POWER AND AUTHORITY. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust; the Depositor has duly
authorized such sale, assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.
(d) BINDING OBLIGATIONS. This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Depositor enforceable against the Depositor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
by equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e) NO CONSENT REQUIRED. To the best knowledge of the Depositor,
no consent, license, approval or authorization or registration or declaration
with, any Person or with any governmental authority, bureau or agency is
required in connection with the execution, delivery or performance of this
Agreement and the Related Documents, except for such as have been obtained,
effected or made or as to which a failure to obtain, effect or make would not
have a material adverse effect on the business, properties, assets or condition
(financial or other) of the Depositor.
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(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party or by
which it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents or any applicable
Related Documents); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties, PROVIDED, HOWEVER, that the Receivables will not satisfy the
Eligibility Criteria set forth in Schedule I to the Series Supplement until the
Closing Date.
(g) NO PROCEEDINGS. To the best of the Depositor's knowledge,
there are no proceedings or investigations pending or, to its knowledge
threatened against it before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality having jurisdiction over it or
its properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the Certificates or the
Notes or the consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, (C) seeking any determination or ruling
that might materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any Related
Documents, or (D) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of any of the Notes or Certificates.
Section 2.11. FEDERAL INCOME TAX ALLOCATIONS. (a) For so long as the
Trust has a single owner for federal income tax purposes, it will, pursuant
to Treasury Regulations promulgated under section 7701 of the Code, be
disregarded as an entity distinct from the Certificateholder for all federal
income tax purposes. Accordingly, for federal income tax purposes, the
Certificateholder will be treated as (i) owning all assets owned by the Trust,
(ii) having incurred all liabilities incurred by the Trust, and (iii) all
transactions between the Trust and the Certificateholder will be disregarded.
(b) Neither the Owner Trustee nor any Certificateholder will,
under any circumstances, and at any time, make an election on IRS Form 8832 or
otherwise, to classify the Trust as an association taxable as a corporation for
federal, state or any other applicable tax purpose.
(c) In the event that the Trust has two equity owners for federal
income tax purposes, the Trust will be treated as a partnership. At any such
time that the Trust has two equity owners, this Agreement will be amended, in
accordance with Section 11.1 herein, and appropriate provisions will be added so
as to provide for treatment of the Trust as a partnership.
Section 2.12. COVENANTS OF THE DEPOSITOR. The Depositor agrees and
covenants for the benefit of the Owner Trustee and the Indenture Trustee for the
benefit
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of the Secured Parties, during the term of this Agreement, and to the
fullest extent permitted by applicable law, that:
(a) (i) it shall not create, incur or suffer to exist any
indebtedness or (ii) engage in any business, except (x) as permitted by its
certificate of incorporation and the Related Documents or (y) in connection with
a securitization transaction and the related documents in which the related
indebtedness is issued pursuant to an indenture having a provision substantially
similar to Section 11.18 of the Indenture; PROVIDED, HOWEVER, that no other
Series shall be issued under the Basic Documents so long as the Notes are
outstanding;
(b) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document
to which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
Section 2.13. COVENANTS OF THE CERTIFICATEHOLDERS. Each
Certificateholder agrees:
(a) to be bound by the terms and conditions of the related
Certificates, of this Agreement and, with respect to the holders of
Certificates, of the Series Supplement, including any supplements or amendments
hereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were
9
a signatory hereto. This undertaking is made for the benefit of the Trust, the
Owner Trustee and the Secured Parties;
(b) to hereby appoint the Depositor as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if any, and agree that, if requested by the Trust,
it will sign such federal income tax information return in its capacity as
holder of an interest in the Trust. Each Certificateholder also hereby agrees
that in its tax returns it will not take any position inconsistent with those
taken in any tax returns that may be filed by the Trust;
(c) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee of any transfer by it of a Certificate
in a taxable sale or exchange, within 30 days of the date of the transfer;
(d) until the completion of the events specified in
Section 9.1(e), not to, for any reason, institute proceedings for the Trust or
the Depositor to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(e) that there shall not be more than 98 other holders of
Certificates.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5, the Trust shall issue
an uncertificated ownership interest in the Trust (the "Uncertificated
Certificate") to the Depositor. Unless and until the Depositor transfers all or
a portion of the Percentage Interest represented by such Uncertificated
Certificate, such Uncertificated Certificate shall represent one hundred percent
(100%) of the Percentage Interest.
Section 3.2. THE CERTIFICATES. (a) The Certificates shall be in
uncertificated form with records of interest ownership maintained by the
Certificate Registrar in the Certificate Register. If, on or after the Closing
Date, the holder of any Uncertificated Certificate delivers to the Owner Trustee
a written request that the Uncertificated Certificate specified in such request
be issued in certificated form (a related "Certification Request"), the Owner
Trustee shall promptly issue such Certificate to the holder thereof in
certificated form. If a Certification Request has been delivered, the
Certificate will be issued in registered form, substantially in the form of
Exhibit A, and shall upon issue, be executed and delivered by the Depositor to
the Owner Trustee for authentication and redelivery as provided in Section 3.3.
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(b) If the Certificates are in certificated form, they shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates.
(c) A transferee of a Certificate (whether in certificated or
uncertificated form) shall become a Certificateholder, and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder, upon
due registration of such Certificate in such transferee's name pursuant to
Section 3.4.
(d) No Certificates shall be issued under this Agreement unless
such Certificates have been authorized pursuant to the Series Supplement and all
conditions precedent to the issuance thereof, as specified in the Series
Supplement shall have been satisfied. All Certificates issued under this
Agreement shall be in all respects entitled to the benefits hereof and of the
Owner Trust Estate.
Section 3.3. AUTHENTICATION OF CERTIFICATES. If the Certificates
are in certificated form, the Owner Trustee shall cause the related Certificates
to be executed on behalf of the Trust, authenticated and delivered to or upon
the written order of the Depositor, signed by its chairman of the board, its
president or any vice president, its treasurer or any assistant treasurer
without further corporate action by the Depositor, in authorized denominations.
No Certificate shall entitle its holder to any benefit under this Agreement or,
with respect to a Series, the Series Supplement, or shall be valid for any
purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or its authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
Section 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Certificates (whether in certificated or
uncertificated form) and of transfers and exchanges of Certificates (whether in
certificated or uncertificated form) as herein provided. The Owner Trustee shall
be the initial Certificate Registrar.
(b) The Certificate Registrar shall provide the Indenture Trustee
with a list of the names and addresses of the Certificateholders on the Closing
Date in the form which such information is provided to the Certificate Registrar
by the Depositor. Upon any transfers of Certificates, the Certificate Registrar
shall notify the Indenture Trustee of the name and address of the transferee in
writing, by facsimile, on the day of such transfer.
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(c) If a Certificate is in certificated form, upon surrender for
registration of transfer of any Certificate to the Certificate Registrar at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Series in the aggregate
Percentage Interest to be transferred, dated the date of authentication by the
Owner Trustee or any authenticating agent. If a Certificate is in uncertificated
form, upon representation of such Certificate in accordance with Section 3.2,
the Certificate Registrar shall reflect in the Certificate Register the transfer
of the relevant Percentage Interest. If a Certificate is in certificated form,
at the option of the Holder thereof, such Certificate may be exchanged for one
or more other Certificates of the same Series in authorized denominations of a
like Percentage Interest upon surrender of the Certificates of the same Series,
to be exchanged at the office or agency maintained pursuant to Section 3.8.
Certificates may be issued in any Percentage Interest not to exceed 100%.
(d) Every Certificate presented or, in the case of certificated
Certificates, surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each certificated Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Owner Trustee in accordance with its customary practice.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
Section 3.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar,
or if the Certificate Registrar shall receive evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Owner Trustee, such security or
indemnity as may be required by them to hold each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee or its authenticating agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Series principal balance. In connection with the
issuance of any new Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this section shall constitute
conclusive evidence of an ownership interest in the Trust, as if
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originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
Section 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by
virtue of becoming a Certificateholder in accordance with this Agreement and the
rules and regulations of the Certificate Registrar shall be deemed to be bound
by the terms of this Agreement. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee and the Certificate Registrar and
any agent of the Owner Trustee and the Certificate Registrar may treat the
Person in whose name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions pursuant hereto, the Indenture or the Series Supplement (in the
case of a Certificate) and for all other purposes whatsoever, and none of the
Owner Trustee, the Certificate Registrar nor any agent of the Owner Trustee or
the Certificate Registrar shall be bound by any notice to the contrary.
Section 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee or the Certificate Registrar shall furnish or cause
to be furnished to the Master Servicer, the Depositor, the Insurer or the
Indenture Trustee within 15 days after receipt by the Owner Trustee or the
Certificate Registrar of a request therefor from such Person in writing, a list,
of the names and addresses of the Certificateholders as of the most recent
Record Date. If three or more Holders of Certificates or one or more Holders of
Certificates evidencing not less than 25% of the Percentage Interest apply in
writing to the Owner Trustee or the Certificate Registrar, and such application
states that the applicants desire to communicate with other Certificateholders
with respect to their rights under this Agreement, under the Certificates of
such Series or under the Series Supplement and such application is accompanied
by a copy of the communication that such applicants propose to transmit, then
the Owner Trustee or the Certificate Registrar shall, within five Business Days
after the receipt of such application, afford such applicants access during
normal business hours to the current list of Certificateholders of such Series.
Each Holder, by receiving and holding a Certificate, shall be deemed to have
agreed not to hold any of the Depositor, the Master Servicer, the Owner Trustee
or any agent thereof accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 3.8. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee or
the Certificate Registrar shall maintain in Chicago, Illinois, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee initially designates its Corporate Trust Office for
such purposes. The Owner Trustee shall give prompt written notice to the
Depositor, the Certificateholders and any Support Provider of any change in the
location of the Certificate Register or any such office or agency.
Section 3.9. ERISA RESTRICTIONS. The Certificates may not be
acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title I of ERISA, (ii) a plan
(as defined in Section 4975(e)(1) of the Code) that is subject to Section 4975
of the Code or (iii) any entity whose underlying
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assets include assets of a plan described in (i) or (ii) by reason of such
plan's investment in the entity (each, a "Benefit Plan"). The Certificate
Registrar shall not register the transfer of a Certificate unless the transferee
has delivered to the Owner Trustee a representation letter in form and substance
satisfactory to the Owner Trustee to the effect that the transferee is not, and
is not acquiring the Certificate for the account of, a Benefit Plan.
Section 3.10. SECURITIES MATTERS. Notwithstanding anything contained
herein to the contrary, the Owner Trustee shall not be responsible for
ascertaining whether any transfer complies with the registration provisions or
exemptions from the Securities Act, the Exchange Act, applicable state
securities law or the Investment Company Act; PROVIDED, HOWEVER, that if a
certificate is specifically required to be delivered to the Owner Trustee by a
purchaser or transferee of a Certificate, the Owner Trustee shall be under a
duty to examine the same to determine whether it conforms to the requirements of
this Agreement and shall promptly notify the party delivering the same if such
certificate does not so conform.
Section 3.11. DISTRIBUTIONS. Distributions shall be made from time
to time by the Owner Trustee or the Certificate Paying Agent in accordance with
the Percentage Interests of the Certificateholders.
Section 3.12. PAYING AGENT. Distributions to be made in respect of
the Certificates pursuant to this Agreement, or the Series Supplement shall be
made by the Certificate Paying Agent, by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of the Certificate or the making of any notation thereon, except as
provided in Section 9.1(c) with respect to the final distribution on a
Certificates.
ARTICLE IV
VOTING RIGHTS AND OTHER ACTIONS
Section 4.1. PRIOR NOTICE TO HOLDERS WITH RESPECT TO CERTAIN
MATTERS. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and Certificateholders holding, in the aggregate, greater than 50% of the
Percentage Interests (a "Certificate Majority") shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust, which amendment shall have satisfied the Rating Agency
Condition (unless such amendment is required to be filed under the Business
Trust Statute or unless such amendment would not materially and adversely affect
the interests of the Holders);
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(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
(d) except pursuant to Section 13.1(b) of the Master Sale and
Servicing Agreement, the amendment, change or modification of the Master Sale
and Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially adversely affect
the interests of the Certificateholders; or
(e) the Depositor shall not, without the unanimous consent of the
holders of the Class SV Preferred Stock of the Depositor, institute proceedings
to be adjudicated insolvent, or consent to the institution of any bankruptcy or
insolvency case or proceedings against it, or file or consent to a petition
under any applicable federal or state law relating to bankruptcy, seeking the
Depositor's liquidation or reorganization or any other relief for the
Corporation as debtor, or consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian or sequestrator (or other similar official) of the
Corporation or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any corporate action in furtherance of
such action.
The Owner Trustee shall notify the Certificateholders in writing of
any appointment of a successor Note Registrar or Certificate Registrar within
five Business Days thereof.
Section 4.2. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power (a) to remove the Master
Servicer under the Master Sale and Servicing Agreement or (b) except as
expressly provided in the Indenture and the Series Supplement and at the written
direction of the Certificateholders, sell the Receivables after the termination
of the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the
Certificateholders, with the prior written consent of the Insurer (for so long
as it is the Controlling Party) and the furnishing of indemnification
satisfactory to the Owner Trustee by the Certificateholders.
Section 4.3. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO
BANKRUPTCY. Until one year and one day following the date of payment in full of
the Notes, the Owner Trustee shall not have the power to, and shall not,
commence any proceeding or other actions contemplated by Section 2.13(d) hereof
relating to the Trust without the prior written consent of the Insurer (for so
long as it is the Controlling Party) and all the Certificateholders and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
Section 4.4. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any
15
action if such action or inaction would be contrary to any obligation of the
Trust or the Owner Trustee under this Agreement or any of the Basic Documents or
would be contrary to Section 2.3 or otherwise contrary to law nor shall the
Owner Trustee be obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless there are no outstanding Notes and
unless the Certificate Majority previously shall have given to the Owner Trustee
a written notice of default and of the continuance thereof, as provided in this
Agreement, and also unless the Certificate Majority shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under this Agreement and shall have offered to the
Owner Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Owner
Trustee, for 30 days after its receipt of such notice, request, and offer of
indemnity, shall have neglected or refused to institute any such action, suit,
or proceeding, and during such 30-day period no request or waiver inconsistent
with such written request has been given to the Owner Trustee pursuant to and in
compliance with this section or Section 6.3; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 4.5. MAJORITY CONTROL. No Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management of
the Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Certificate Majority. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Agreement shall be effective if signed by the Certificate Majority at
the time of the delivery of such notice.
Section 4.6. CERTAIN LITIGATION MATTERS (a) The Owner Trustee and
the Delaware Trustee shall provide prompt written notice to the Insurer of any
action, proceeding or investigation of which a Responsible Officer of the Owner
Trustee or the Delaware Trustee as applicable, has actual knowledge that could
adversely affect the Trust or the Trust Property or the rights or obligations of
the Insurer under any of the Basic Documents, the Note Policy or any other
document delivered with respect thereto.
(b) Neither the Owner Trustee or the Delaware Trustee shall, without
the Insurer's prior written consent (for so long as it is the Controlling Party)
or unless directed by the Insurer, undertake or join any litigation or agree to
any settlement of any action,
16
proceeding or investigation that could adversely affect the Trust or the rights
or obligations of the Insurer under any of the Basic Documents, the Note Policy
or any other document delivered with respect thereto.
ARTICLE V
CERTAIN DUTIES
Section 5.1. ACCOUNTING AND RECORDS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to Sections
12.1(b)(iii) and 12.1(c) of the Master Sale and Servicing Agreement, the Master
Servicer shall (a) maintain (or cause to be maintained) the books of the Trust
on a calendar year basis on the accrual method of accounting, including, without
limitation, the allocations of net income under Section 2.11, (b) deliver (or
cause to be delivered) to each Certificateholder, as may be required by the Code
and applicable Treasury Regulations, such information as may be required
(including Schedule K-1, if applicable) to enable each Certificateholder to
prepare its Federal and state income tax returns, (c) file or cause to be filed,
if necessary, such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee or the Master
Servicer, as the case may be, to make such elections as may from time to time be
required or appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
branch, or if applicable, as a partnership, for Federal income tax purposes and
(d) collect or cause to be collected any withholding tax as described in and in
accordance with the Master Sale and Serving Agreement or the Series Supplement
with respect to income or distributions to Certificateholders and the
appropriate forms relating thereto. The Owner Trustee or the Master Servicer, as
the case may be, shall make all elections pursuant to this Section 5.1 as
directed in writing by the Depositor. The Owner Trustee shall sign all tax
information returns, if any, filed pursuant to this Section 5.1 and any other
returns as may be required by law, and in doing so shall rely entirely upon, and
shall have no liability for information provided by, or calculations provided
by, the Depositor or the Master Servicer. The Owner Trustee shall elect under
Section 1278 of the Code to include in income currently any market discount that
accrues with respect to the Receivables. The Owner Trustee shall not make the
election provided under Section 754 of the Code.
Section 5.2. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.1 and in the event that the Trust is
characterized as a partnership, the Owner Trustee shall sign on behalf of the
Trust the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be
signed by the Depositor.
(b) In the event that the Trust is characterized as a partnership,
the Depositor shall be the "tax matters partner" of the Trust pursuant to the
Code.
17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver on behalf of the Trust the Basic Documents to
which the Trust is named as a party and each certificate or other document
attached as an exhibit to or contemplated by the Basic Documents to which the
Trust is named as a party and any amendment thereto, in each case, in such form
as the Depositor shall approve as evidenced conclusively by the Owner Trustee's
execution thereof, and on behalf of the Trust, to direct the Indenture Trustee
to authenticate and deliver the Notes. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Basic Documents. The Owner Trustee is further
authorized from time to time to take such action as the Certificate Majority
recommends with respect to the Basic Documents so long as such activities are
consistent with the terms of the Basic Documents.
Section 6.2. GENERAL DUTIES. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and to administer the Trust in
accordance with the provisions of this Agreement and in the interest of the
Holders, subject to the Basic Documents. Notwithstanding the foregoing, the
Owner Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent the Master Servicer has
agreed in the Master Sale and Servicing Agreement to perform any act or to
discharge any duty of the Trust or the Owner Trustee hereunder or under any
Basic Document and the Owner Trustee shall not be liable for the default or
failure of the Master Servicer to carry out its obligations under the Master
Sale and Servicing Agreement.
Section 6.3. ACTION UPON INSTRUCTION
(a) Subject to Article IV, the Certificate Majority shall have the
exclusive right to direct the actions of the Owner Trustee in the management of
the Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Basic Document. The Certificate Majority shall
not instruct the Owner Trustee in a manner inconsistent with this Agreement or
the Basic Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Certificate Majority and the Insurer requesting instruction as to the course of
action to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the
18
Certificate Majority, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received appropriate
instruction within ten days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the Basic Documents
or as it shall deem to be in the best interests of the Certificateholders, and
shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Certificate
Majority requesting instruction and, to the extent that the Owner Trustee acts
or refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
Section 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
Section 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
or any Related Document and
19
(iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
Section 6.6. RESTRICTIONS. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation or a publicly traded
partnership for Federal income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1. ACCEPTANCE OF TRUST AND DUTIES. The Owner Trustee
accepts the trust hereby created and agrees to perform its duties hereunder with
respect to such trust but only upon the terms of this Agreement. The Owner
Trustee and the Certificate Paying Agent also agree to disburse all monies
actually received by it constituting part of the Owner Trust Estate upon the
terms of this Agreement or the Basic Documents. The Owner Trustee shall not be
answerable or accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith or
negligence, (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee in its individual
capacity, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Certificate Majority, the Depositor, the Master Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents or any
Related Document, including the principal of and interest on the Notes;
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(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents or any Related Document, other than the
certificate of authentication on the Certificates, and the Owner Trustee shall
in no event assume or incur any liability, duty or obligation to the Depositor,
any Support Provider, the Indenture Trustee, the Certificate Paying Agent, any
Noteholder or to any Certificateholder, other than as expressly provided for
herein or in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Depositor, any Support Provider, the Indenture Trustee or the
Master Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations under
this Agreement or the Basic Documents that are required to be performed by the
Depositor or the Certificate Paying Agent under this Agreement, by the Indenture
Trustee under the Indenture, the Series Supplement or any Related Document or
the Master Servicer under the Master Sale and Servicing Agreement or the Series
Supplement; and
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Basic Document at the request, order or direction of the
Certificate Majority or any of the Certificateholders, unless such Certificate
Majority or Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its negligence, bad faith or willful misconduct in
the performance of any such act.
Section 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee or the Delaware Trustee under the Basic Documents.
Section 7.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee
hereby represents and warrants, in its individual capacity, to the Depositor,
the Holders and any Support Provider (which shall have relied on such
representations and warranties in issuing any policy relating to Series
Support), that:
(a) It is a national banking association, duly organized and
validly existing under the laws of the United States. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and
21
delivered by one of its officers who is duly authorized to execute and deliver
this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any Federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of it or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Owner Trustee, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
Section 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any Basic Document.
Section 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
in this Article VII, in accepting the trusts hereby created the Owner Trustee
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this
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Agreement or any Basic Document shall look only to the Owner Trust Estate for
payment or satisfaction thereof.
Section 7.6. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR
RECEIVABLES. The recitals contained herein and in certificated Certificates
(other than the signature and countersignature of the Owner Trustee on such
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on certificated Certificates) or the
Notes, or of any Receivable or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority of
any security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments to
be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Depositor,
the Master Servicer or any other Person with any warranty or representation made
under any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee or the Master
Servicer or any subservicer taken in the name of the Owner Trustee.
Section 7.7. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Depositor, the Indenture
Trustee and the Master Servicer in banking transactions with the same rights as
it would have if it were not Owner Trustee.
Section 7.8. PAYMENTS FROM OWNER TRUST ESTATE All payments to be
made by the Owner Trustee or any Certificate Paying Agent under this Agreement
or any of the Basic Documents shall be made only from the income and proceeds of
the Owner Trust Estate and only to the extent that the Owner Trustee shall have
received income or proceeds from the Owner Trust Estate to make such payments in
accordance with the terms hereof. The Owner Trustee, or any successor thereto,
in its individual capacity, shall not be liable for any amounts payable under
this Agreement or any of the Basic Documents.
Section 7.9. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained herein to the contrary, the Owner Trustee (in its individual
and trustee capacities) shall not be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the
23
registration with or the taking of any other action in respect of, any state or
other governmental authority or agency of any jurisdiction other than the State
of Delaware; (ii) result in any fee, tax or other governmental charge under the
laws of the State of Delaware becoming payable by the Owner Trustee (in its
individual capacity); or (iii) subject the Owner Trustee (in its individual
capacity) to personal jurisdiction in any jurisdiction other than the State of
Delaware for causes of action arising from acts unrelated to the consummation of
the transactions by the Owner Trustee (in its individual and trustee capacities)
contemplated hereby.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE AND DELAWARE TRUSTEE
Section 8.1. OWNER TRUSTEE'S AND DELAWARE TRUSTEE'S FEES AND
EXPENSES. The Owner Trustee and the Delaware Trustee shall receive as
compensation for their respective services hereunder such fees as have been
separately agreed upon before the date hereof between Household and the Owner
Trustee and the Delaware Trustee, respectively, and each of the Owner Trustee
and the Delaware Trustee shall be entitled to be reimbursed by the Depositor for
its other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee or the Delaware Trustee, as the case may be, may employ in
connection with the exercise and performance of its respective rights and duties
hereunder or under the Basic Documents.
Section 8.2. INDEMNIFICATION. The Depositor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and Delaware Trustee
(in their respective individual and trustee capacities) and their respective
officers, directors, successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or the
Delaware Trustee (in their trust or individual capacities) or any Indemnified
Party in any way relating to or arising out of this Agreement or the Basic
Documents, the Owner Trust Estate, the administration of the Owner Trust Estate
or the action or inaction of the Owner Trustee or the Delaware Trustee
hereunder, except only that the Depositor shall not be liable for or required to
indemnify the Owner Trustee or the Delaware Trustee from and against Expenses
arising or resulting from any of the matters described in the third sentence of
Section 7.1 with respect to the Owner Trustee and Section 10A.2(c) with respect
to the Delaware Trustee. The indemnities contained in this Section 8.2 and the
rights under Section 8.1 shall survive the resignation or termination of the
Owner Trustee or the Delaware Trustee or the termination of this Agreement. In
any event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's and Delaware Trustee's choice of
legal counsel shall be subject to the approval of the Depositor which approval
shall not be unreasonably withheld.
Section 8.3. PAYMENTS TO THE OWNER TRUSTEE AND DELAWARE TRUSTEE.
Any amounts paid to the Owner Trustee or the Delaware Trustee, as applicable, in
their respective trustee capacities pursuant to this Article VIII shall be
deemed not to be a part of the Owner Trust Estate immediately after such payment
and any amounts so paid to the Owner Trustee or the Delaware Trustee, as
applicable, in its individual capacity shall not be so paid out of the Owner
Trust Estate but shall be the property of the Owner Trustee in its individual
capacity or the Delaware Trustee in its individual capacity, as applicable.
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Section 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Basic Document, (i) the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that all
obligations of the Trust to the Owner Trustee individually or as Owner Trustee
for the Trust shall be recourse to the Owner Trust Estate only and specifically
shall not be recourse to the assets of any Certificateholder and (ii) the
Delaware Trustee agrees in its individual capacity and in its capacity as
Delaware Trustee for the Trust that all obligations of the Trust to the Delaware
Trustee individually or as Delaware Trustee for the Trust shall be recourse to
the Owner Trust Estate only and specifically shall not be recourse to the assets
of any Certificateholder.
ARTICLE IX
TERMINATION OF AGREEMENT
Section 9.1. TERMINATION OF AGREEMENT. (a) This Agreement shall
terminate and the Trust shall wind up, dissolve and be of no further force or
effect upon the latest to occur of (i) the maturity or other liquidation of the
last Receivable (including the optional purchase by the Depositor or the Master
Servicer of the corpus of the Trust as described in Section 11.1 of the Master
Sale and Servicing Agreement) and the subsequent distribution of amounts in
respect of such Receivables as provided in the Basic Documents and, with respect
to amounts released from the Lien of the Indenture, distribution thereof to the
Certificateholders, or (ii) the payment to Noteholders and Certificateholders of
all amounts required to be paid to them pursuant to the Indenture and this
Agreement, including, with respect to amounts released from the Lien of the
Indenture, distribution thereof to the Certificateholders, the payment to any
Support Provider of all amounts payable or reimbursable to it pursuant to the
Series Supplement; PROVIDED, HOWEVER, that the rights to indemnification under
Section 8.2 and the rights under Section 8.1 shall survive the termination of
the Trust. The Master Servicer shall promptly notify the Owner Trustee of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Depositor, the
Insurer nor any other Certificateholder shall be entitled to revoke or terminate
the Trust.
(c) If any Certificates are in certificated form, notice of any
termination of a Series Trust Estate, specifying the Distribution Date upon
which the Certificateholders of such Series shall surrender their Certificates
to the Certificate Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders of such Series mailed within five Business Days of receipt of
notice of such termination given pursuant to Section 9.1(a) hereof, stating (i)
the Distribution Date upon or with respect to which final payment of the
Certificates of such Series shall be made upon presentation and surrender of the
26
Certificates of such Series at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final payment, (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates of
such Series at the office of the Certificate Paying Agent therein specified and
(iv) interest will cease to accrue on the Certificates of such Series. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than the
Owner Trustee) and the Certificate Paying Agent at the time such notice is given
to Certificateholders. Upon presentation and surrender of the Certificates of
such Series, the Certificate Paying Agent shall cause to be distributed to
Certificateholders of such Series amounts distributable pursuant to the Series
Supplement.
(d) If any Certificates are in certificated form, in the event
that all of the Certificateholders holding certificated Certificates of such
Series shall not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Certificate
Paying Agent shall give a second written notice to the remaining
Certificateholders holding certificated Certificates of such Series to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the certificated
Certificates of such Series shall not have been surrendered for cancellation,
the Certificate Paying Agent may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders holding
certificated Certificates concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other Series Trust Estate assets
that shall remain subject to this Agreement. Any funds remaining in the Trust
after exhaustion of such remedies shall be distributed, subject to applicable
escheat laws, by the Certificate Paying Agent to the Depositor and Holders shall
look solely to the Depositor for payment.
(e) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Certificate Paying Agent to the Depositor.
(f) Upon the winding up of the Trust and its dissolution, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND DELAWARE TRUSTEES ADDITIONAL OWNER TRUSTEES
Section 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE AND
DELAWARE TRUSTEE. The Delaware Trustee shall at all times be a corporation or
national banking association satisfying the provisions of Section 3807(a) of the
Business Trust Statute. The Owner Trustee shall at all times be a corporation or
national banking association (i) authorized to exercise corporate trust powers;
(ii) having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or State authorities; (iii) having (or
having a parent which has) a rating of at least Baa3 by
27
Moody's or A-1 by Standard & Poors; and (iv) acceptable to the
Certificateholders. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 10.2.
Section 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE OR DELAWARE
TRUSTEE. The Owner Trustee or the Delaware Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor (or in the event that the Depositor is not the sole
Certificateholder, the Certificate Majority), any Support Provider and the
Master Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee or Delaware Trustee, as applicable,
in each case, meeting the qualifications set forth in Section 10.1 herein, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee or Delaware Trustee and one copy to the
successor Owner Trustee or Delaware Trustee, PROVIDED THAT the Depositor and the
Insurer shall have received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to any Support Provider by either of the Rating Agencies. If no successor
Owner Trustee or Delaware Trustee, as applicable, shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or Delaware Trustee, as applicable, any
Support Provider may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee or Delaware Trustee.
If at any time the Owner Trustee or the Delaware Trustee shall cease
to be eligible in accordance with the provisions of Section 10.1 and shall fail
to resign after written request therefor by the Depositor or the Insurer (for so
long as it is the Controlling Party), or if at any time the Owner Trustee or the
Delaware Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver of the Owner Trustee or the Delaware Trustee or of
its respective property shall be appointed, or any public officer shall take
charge or control of the Owner Trustee or the Delaware Trustee or of its
respective property or affairs for the purpose of rehabilitation, conservation
or liquidation, then the Depositor or the Insurer (for so long as it is the
Controlling Party) may remove the Owner Trustee or the Delaware Trustee, as
applicable. If the Depositor or the Insurer shall remove the Owner Trustee or
the Delaware Trustee under the authority of the immediately preceding sentence,
the Depositor shall promptly appoint a successor Owner Trustee or Delaware
Trustee, as applicable, meeting the qualifications set forth in Section 10.1
herein and acceptable to the Insurer (for so long as it is the Controlling
Party), by written instrument, in triplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee or Delaware Trustee so removed, one
copy to any Support Provider and one copy to the successor Owner Trustee or
Delaware Trustee.
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Any resignation or removal of the Owner Trustee or the Delaware
Trustee and appointment of a successor Owner Trustee or Delaware Trustee
pursuant to any of the provisions of this Section 10.2 shall not become
effective until acceptance of appointment by the successor Owner Trustee or
Delaware Trustee pursuant to Section 10.3 and payment of all fees and expenses
owed to the outgoing Owner Trustee or Delaware Trustee, as applicable. The
Depositor shall provide notice of such resignation or removal of the Owner
Trustee or the Delaware Trustee, as applicable, to each of the Rating Agencies.
Section 10.3. SUCCESSOR OWNER TRUSTEE OR DELAWARE TRUSTEE. Any
successor Owner Trustee or Delaware Trustee appointed pursuant to Section 10.2
shall execute, acknowledge and deliver to the Depositor, the Master Servicer,
any Support Provider and to its predecessor Owner Trustee or Delaware Trustee,
as applicable, an instrument accepting such appointment under this Agreement,
and thereupon the resignation or removal of its predecessor shall become
effective and the successor Owner Trustee or Delaware Trustee, as applicable,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Owner Trustee or Delaware
Trustee, as applicable. The predecessor Owner Trustee or Delaware Trustee, as
applicable, shall upon payment of its fees and expenses deliver to the successor
Owner Trustee or Delaware Trustee, as applicable, all documents and statements
and monies held by it under this Agreement; and the Depositor and the
predecessor Owner Trustee or Delaware Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee or Delaware
Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee or Delaware Trustee shall accept
appointment as provided in this Section 10.3 unless at the time of such
acceptance such successor Owner Trustee or Delaware Trustee, as applicable,
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Master Servicer shall mail notice of the successor of such
Owner Trustee or Delaware Trustee, as applicable, to all Certificateholders, the
Insurer, the Indenture Trustee, the Noteholders and the Rating Agencies. If the
Master Servicer shall fail to mail such notice within 10 days after acceptance
of appointment by the successor Owner Trustee or Delaware Trustee, as
applicable, the successor Owner Trustee or Delaware Trustee, as applicable,
shall cause such notice to be mailed at the expense of the Master Servicer.
Any successor Delaware Trustee appointed pursuant to this Section 10.3
shall promptly file an amendment to the Certificate of Trust with the Secretary
of State identifying the name and principal place of business of such successor
Delaware Trustee in the State of Delaware.
Section 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE OR DELAWARE
TRUSTEE. Any corporation into which the Owner Trustee or the Delaware Trustee
may be
29
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Owner
Trustee or the Delaware Trustee shall be a party, or any corporation succeeding
to all or substantially all of the corporate trust business of the Owner Trustee
or the Delaware Trustee, shall be the successor of the Owner Trustee or the
Delaware Trustee hereunder, provided such corporation shall be eligible pursuant
to Section 10.1, without the execution or filing of any instrument or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided further that the Owner Trustee or the
Delaware Trustee, as applicable, shall mail notice of such merger or
consolidation to the Rating Agencies, the Depositor and the Master Servicer.
Section 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Master Servicer and the Owner Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee and any Support Provider to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust, or any part thereof, and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Master Servicer and the Owner Trustee may consider necessary or
desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Owner Trustee
and the Insurer (for so long as it is the Controlling Party) and, if the Insurer
is not the Controlling Party, subject to the approval of the Certificate
Majority (which approval shall not be unreasonably withheld), shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to
the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
30
(iii) the Master Servicer, the Insurer (for so long as it is the
Controlling Party) and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Master Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE X-A
AUTHORITY AND DUTIES OF DELAWARE TRUSTEE
Section 10A.1 ACCEPTANCE OF TRUST. The Delaware Trustee accepts the
trust hereby created and agrees to perform its duties hereunder with respect to
such trust but only upon the terms of this Agreement.
Section 10A.2 DUTIES OF DELAWARE TRUSTEE
(a) It is understood and agreed that the duties and
responsibilities of the Delaware Trustee shall be limited to (i) accepting legal
process served on the Trust in the State of Delaware and (ii) the execution and
delivery of all documents, and the maintenance of all records, necessary to form
and maintain the existence of the Trust under the Business Trust Statute.
(b) Except as otherwise expressly required by Section 10A.2(a)
above, the Delaware Trustee shall not have any duty or liability with respect to
the administration of the Trust, the investment of the Owner Trust Estate or the
Series Trust Estate or the payment of dividends or other distributions of income
or principal to the Certificateholder or any of the Trust's beneficiaries.
(c) The Delaware Trustee shall not be answerable or accountable
hereunder or under any Basic Document under any circumstances, except (i) for
its own willful misconduct, bad faith or negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 10A.3
expressly made by the Delaware Trustee in its individual capacity, (iii) for any
investments issued by the Delaware
31
Trustee or any branch or affiliate thereof in its commercial capacity or (iv)
for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Delaware Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(A) the Delaware Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Delaware Trustee;
(B) the Delaware Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Certificate Majority, the Depositor, the Master
Servicer or any Certificateholder;
(C) no provision of this Agreement or any Basic Document shall
require the Delaware Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its rights
or powers hereunder or under any Basic Document if the Delaware
Trustee shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
(D) under no circumstances shall the Delaware Trustee be liable
for indebtedness evidenced by or arising under any of the Basic
Documents or any Related Document, including the principal of and
interest on the Notes;
(E) the Delaware Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the
Basic Documents or any Related Document, and the Delaware Trustee
shall in no event assume or incur any liability, duty or obligation to
the Depositor, any Support Provider, the Indenture Trustee, the
Certificate Paying Agent, any Noteholder or to any Certificateholder,
other than as expressly provided for herein or in the Basic Documents;
(F) the Delaware Trustee shall not be liable for the default or
misconduct of the Depositor, any Support Provider, the Indenture
Trustee or the Master Servicer under any of the Basic Documents or
otherwise and the Delaware Trustee shall have no obligation or
liability to perform the obligations under this Agreement or the Basic
Documents that are required to be performed by the Depositor or the
Certificate Paying Agent under this Agreement, by the Indenture
Trustee under the Indenture, the Series Supplement or any Related
Document or the Master Servicer under the Master Sale and Servicing
Agreement or the Series Supplement;
(G) the Delaware Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to
32
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Basic Document at
the request, order or direction of the Certificate Majority or any of
the Certificateholders, unless such Certificate Majority or
Certificateholders have offered to the Delaware Trustee security or
indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Delaware Trustee therein or
thereby. The right of the Delaware Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Delaware Trustee
shall not be answerable for other than its negligence, bad faith or
willful misconduct in the performance of any such act; and
(H) the Delaware Trustee shall be entitled to any other rights,
benefits and protection provided to the Owner Trustee in this
Agreement.
Section 10A.3 REPRESENTATIONS AND WARRANTIES. The Delaware Trustee
hereby represents and warrants, in its individual capacity, to the Depositor,
the Holders, any Support Provider (which shall have relied on such
representations and warranties in issuing any policy related to the Series
Supplement), that:
(a) It is a national banking association, duly organized and
validly existing under the laws of the United States. It has requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any Federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of it or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
(e) It is authorized to exercise trust powers in the State of
Delaware as and to the extent contemplated herein and it has a principal place
of business in the State of Delaware.
Section 10A.4 NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
in this Article XA, in accepting the trusts hereby created the Delaware Trustee
acts solely
33
as Delaware Trustee hereunder and not in its individual capacity and all Persons
having any claim against the Delaware Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document shall look only to the
Owner Trust Estate for payment or satisfaction thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1. SUPPLEMENTS AND AMENDMENTS This Agreement may be
amended from time to time by the parties hereto with the consent of the Insurer
(for so long as it is the Controlling Party), by a written instrument signed by
each of them, without the consent of any of the Securityholders; PROVIDED that
an Opinion of Counsel for the Depositor (which Opinion of Counsel may, as to
factual matters, rely upon Officer's Certificates of the Depositor) is addressed
and delivered to the Owner Trustee and the Delaware Trustee, dated the date of
any such amendment, to the effect that the conditions precedent to any such
amendment have been satisfied and the Depositor shall have delivered to the
Owner Trustee and the Delaware Trustee an Officer's Certificate dated the date
of any such Amendment, stating that the Depositor reasonably believes that such
Amendment will not have a material adverse effect on the Securityholders.
(b) This Agreement may also be amended from time to time with the
consent of the Insurer (for so long as it is the Controlling Party), the consent
of the Noteholders evidencing not less than a majority of the Outstanding Amount
of the Notes, and the consent of the Certificateholders representing at least a
50% Percentage Interest, for which the Seller has not delivered an Officer's
Certificate stating that there is no material adverse effect, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Securityholders; PROVIDED, HOWEVER, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments received that are
required to be distributed on any Security without the consent of the related
Securityholder, or (ii) reduce the aforesaid percentage of Securities the Holder
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then outstanding or cause any material
adverse tax consequences to any Certificateholders or Noteholders.
Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee, the Insurer and each
of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee
34
may prescribe. Promptly after the execution of any amendment to the Certificate
of Trust, including, without limitation, amendments pursuant this Section and
pursuant to Section 10A.4, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(c) The Owner Trustee and Delaware Trustee shall not be required
to enter into any amendment to this Agreement which adversely affects their
respective rights, duties or immunities under this Agreement.
Section 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Series Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Series Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Series
Trust Estate.
Section 11.3. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the Depositor,
the Certificateholders, the Master Servicer and any Support Provider, the
Indenture Trustee and the Noteholders, and nothing in this Agreement, whether
express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.
Section 11.4. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee or the Delaware Trustee, addressed to its respective Corporate
Trust Office; if to the Depositor, addressed to
Household Auto Receivables
Corporation, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, with a copy to
Household Finance Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx
00000, Attn: Treasurer; if to the Insurer, to MBIA Insurance Corporation, 000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx, 00000, Attention: Insured Portfolio Management -
Structured Finance (IPM-SF), if to any Support Provider, at the address of such
Support Provider as set forth in the Series Supplement; or, as to each party, at
such other address as shall be designated by such party in a written notice to
each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining
35
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 11.6. SEPARATE COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11.7. ASSIGNMENTS; SUPPORT PROVIDER. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. This Agreement shall also inure to
the benefit of any Support Provider. Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement which confer rights
upon any Support Provider shall be for the benefit of and run directly to any
Support Provider, and any Support Provider shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Support Provider, if
any, may disclaim any of its rights and powers under this Agreement (but not its
duties and obligations under any Series Support) upon delivery of a written
notice to the Owner Trustee.
Section 11.8. COVENANTS OF THE DEPOSITOR. The Depositor will not at
any time institute against the Trust any bankruptcy proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, this Agreement or any of
the Basic Documents.
Section 11.9. NO PETITION. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee) and the Delaware Trustee (not in its
individual capacity but solely as Delaware Trustee), by entering into this
Agreement, each Certificateholder, by accepting a Certificate, and the Indenture
Trustee and each Noteholder by accepting the benefits of this Agreement, hereby
covenants and agrees that they will not at any time institute against the
Depositor, or join in any institution against the Depositor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes, this
Agreement, any of the Basic Documents, the Series Supplement or any Related
Documents.
Section 11.10. NO RECOURSE. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Series Trust Estate only and do not represent
interests in or obligations of the Master Servicer, the Depositor, the Owner
Trustee, the Delaware Trustee, the Indenture Trustee, any Support Provider or
any Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificates, the Basic Documents, the Series Supplement or any Related
Documents.
Section 11.11. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
36
Section 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. MASTER SERVICER. The Master Servicer is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust, the Delaware Trustee or Owner Trustee to
prepare, file or deliver pursuant to the Basic Documents, the Series Supplement
or any Related Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Master Servicer a limited power of attorney appointing the
Master Servicer the Trust's agent and attorney-in-fact to prepare, or cause to
be prepared, execute and deliver all such documents, reports, filings,
instruments, certificates and opinions.
Section 11.14. THIRD-PARTY BENEFICIARY The parties hereto agree that
the Insurer is a third-party beneficiary hereof.
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
By: /s/ Xxxxxxxx X. Child
----------------------------------
Name: Xxxxxxxx X. Child
Title: Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Delaware Trustee
By: /s/ Xxxxxxxx X. Child
----------------------------------
Name: Xxxxxxxx X. Child
Title: Vice President
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
Depositor
By: /s/ X. X. Xxxxx
----------------------------------
Name: X. X. Xxxxx
Title: Vice President and Assistant
Treasurer
Acknowledged and Agreed:
HOUSEHOLD FINANCE CORPORATION
Master Servicer
By: /s/ X. X. Xxxx, Xx.
---------------------------------------
Name: X. X. Xxxx, Xx.
Title: Vice President and Treasurer
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
not in its individual capacity
but solely as Certificate Paying Agent
By: /s/ Xxx Xxxxxx
---------------------------------------
Name: Xxx Xxxxxx
Title: Assistant Vice President
[Signature Page for Amended and Restated
Trust Agreement]
EXHIBIT A
[FORM OF CERTIFICATE]
NUMBER
HOUSEHOLD AUTOMOTIVE TRUST 2002-1
CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE
AMENDED AND RESTATED
TRUST AGREEMENT PERTAINING TO THE HOUSEHOLD AUTOMOTIVE
TRUST 2002-1 (THE "AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF
CERTAIN OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE DEPOSITOR,
THE MASTER SERVICER, THE TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER
THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.
---------------------------------
CERTIFICATE
evidencing a beneficial ownership interest in the assets of the Trust relating
to the Series Trust Estate, which includes a pool of motor vehicle retail
installment sale contracts sold to the Trust by
Household Auto Receivables
Corporation.
(This Certificate does not represent an interest in or obligation of
Household
Auto Receivables Corporation or any of its Affiliates, except to the extent
described below.)
THIS CERTIFIES THAT
Household Auto Receivables Corporation is the
registered owner of a nonassessable, fully-paid, beneficial ownership interest
representing a 100% Percentage Interest in the assets of Household Automotive
Trust 2002-1 (the "Trust") formed by
Household Auto Receivables Corporation, a
Nevada corporation (the "Depositor") and the Series Trust Estate.
A-1
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
U.S. BANK NATIONAL ASSOCIATION
not in its individual
capacity but solely as
Owner Trustee
by__________________________________________________________Authenticating Agent
by______________________________________________________________________________
Household Automotive Trust 2002-1 (the "Trust"), was created pursuant
to a
Trust Agreement, dated as of May 15, 2002 (the "Agreement"), between the
Depositor and U.S. Bank National Association, as owner trustee (the "Owner
Trustee") and U.S. Bank Trust National Association with its principal place of
business in Delaware, as Delaware Trustee, as amended and restated as of May 15,
2002 and as supplemented by a Series Supplement dated as of May 15, 2002 (the
"Series Supplement"). A summary of certain of the pertinent provisions of the
Agreement and Series Supplement is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement and the Series Supplement.
This certificate is one of the duly authorized certificates of Trust
of Household Automotive Trust 2002-1 designated as Certificates.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. The property of the Trust consists of
the Series Trust Estate which includes a pool of motor vehicle retail
installment sale contracts (the "Receivables"), all monies due thereunder on or
after specified Cutoff Dates, security interests in the vehicles financed
thereby, certain bank accounts and the proceeds thereof, proceeds from claims on
certain insurance policies and certain other rights under the Agreement and the
Master Sale and Servicing Agreement and each related Transfer Agreement, all
right, to and interest of, the Depositor in and to (i) the Master Receivables
Purchase Agreement dated as of December 18, 2001 between Household Automotive
Finance Corporation and the Depositor, as such agreement may be amended and
supplemented from time to time and (ii) the Amended and Restated Master
Receivables Purchase Agreement dated as of December 18, 2001 among Household
Finance Corporation, Household Bank and the Depositor, as such agreement may be
amended and supplemented from time to time, and each Receivables Purchase
Agreement Supplement and all proceeds of the foregoing.
The Notes have been issued pursuant to an Indenture dated as of May
15, 2002 (the "Indenture"), among the Trust, Household Finance Corporation, as
Master Servicer and Xxxxx Fargo Bank Minnesota, National Association, as
Indenture Trustee and the Series Supplement.
A-2
Under the Series Supplement, there will be distributed on the 17th day
of each month or, if such 17th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on June 17, 2002, to the Person in whose
name this Certificate is registered at the close of business on the Business Day
preceding such Distribution Date (the "Record Date") such Certificateholder's
fractional undivided interest in any amount to be distributed to
Certificateholders on such Distribution Date.
The holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Master Sale and Servicing
Agreement, the Indenture, the Agreement and the Series Supplement, as
applicable.
Distributions on this Certificate will be made as provided in the
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Owner
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for the purpose
by the Owner Trustee in the Corporate Trust Office.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Agreement or the Master Sale and Servicing Agreement or be valid for any
purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
HOUSEHOLD AUTOMOTIVE TRUST
2002-1
By: U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as
Owner Trustee
Dated: By:
-----------------------------
By:
-----------------------------
Name:
Title:
A-4
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Master Servicer, the Owner Trustee or any Affiliates of any
of them and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated herein or in the Agreement, the
Indenture, the Basic Documents or any Related Documents. In addition, this
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain collections with respect to the
Receivables, as more specifically set forth herein and in the Master Sale and
Servicing Agreement. A copy of each of the Master Sale and Servicing Agreement,
the Agreement and the Series Supplement may be examined during normal business
hours at the principal office of the Depositor, and at such other places, if
any, designated by the Depositor, by any Certificateholder upon written request.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Agreement is the Owner Trustee.
The Certificates are issuable as registered Certificates in any
Percentage Interest not to exceed 100%. As provided in the Agreement and subject
to certain limitations therein set forth, Certificates are exchangeable for new
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the holder surrendering the same. No
service charge will be made for any such registration of transfer or exchange,
but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee and the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Owner Trustee, the Certificate Registrar nor any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or for the account of (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan (as defined in Section 4975(e)
(1) of the Code) that is subject to Section 4975 of the Code or (c) any entIty
whose underlying assets include plan assets by reason of such plan's investment
in the entity (each, a "Benefit Plan"). The Certificate Registrar shall not
register the transfer of a Certificate unless the transferee has delivered to
the Owner Trustee a representation letter in form and substance satisfactory to
the Owner Trustee to the effect that the transferee is not, and is not acquiring
the Certificate for the account of, a Benefit Plan.
A-5
The recitals contained herein shall be taken as the statements of the
Depositor or the Master Servicer, as the case may be, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Certificate or of
any Receivable or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or the Master Sale and Servicing Agreement or be valid for
any purpose.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________ Attorney to transfer said Certificate on the books of the
Certificate Registrar, with full power of substitution in the premises.
Dated:
*
------------------------------
Signature Guaranteed:
*
------------------------------
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
A-7
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST
OF
HOUSEHOLD AUTOMOTIVE TRUST 2002-1
THIS Certificate of Trust of Household Automotive Trust 2002-1 (the
"Trust") is being duly executed and filed on behalf of the Trust by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 DEL. C. Section 3801 ET SEQ.) (the "Act").
1. NAME. The name of the business trust formed by this Certificate
of Trust is Household Automotive Trust 2002-1.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust in the State of Delaware are U.S. Bank Trust National Association,
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee
By:
-----------------------------------------------
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity but solely as Delaware Trustee
By:
-----------------------------------------------
Name:
Title:
B-1
