EXHIBIT 4.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
HOUSEHOLD FINANCE CORPORATION,
as the Master Servicer,
together with
HOUSEHOLD AUTOMOTIVE TRUST ___,
as Issuer,
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
as Seller,
[Name of Indenture Trustee],
as Indenture Trustee
and
[Name of Owner Trustee],
as Owner Trustee
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SERIES ____ SUPPLEMENT
Dated as of ______
to the
INDENTURE
Dated as of _______
MASTER SALE AND SERVICING AGREEMENT
Dated as of ______
and to the
TRUST AGREEMENT
Dated as of June ______
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I CREATION OF THE SERIES ______ NOTES...............................................1
SECTION 1.01. DESIGNATION................................................................1
SECTION 1.02. PLEDGE OF SERIES ______ TRUST ESTATE.......................................1
SECTION 1.03. PAYMENTS AND COMPUTATIONS..................................................3
SECTION 1.04. DENOMINATIONS..............................................................3
ARTICLE II DEFINITIONS......................................................................3
SECTION 2.01. DEFINITIONS................................................................3
ARTICLE III DISTRIBUTIONS AND STATEMENTS TO SERIES _____ NOTEHOLDERS;
SERIES SPECIFIC COVENANTS....................................................11
SECTION 3.01. SERIES _____ TRUST ACCOUNTS...............................................11
SECTION 3.02. RESERVE ACCOUNT...........................................................12
SECTION 3.03. DISTRIBUTIONS.............................................................12
SECTION 3.04. STATEMENTS TO NOTEHOLDERS.................................................14
SECTION 3.05. REPORTING REQUIREMENTS....................................................14
SECTION 3.06. COMPLIANCE WITH WITHHOLDING REQUIREMENTS..................................15
SECTION 3.07. SPECIAL COVENANTS AND ACKNOWLEDGEMENTS....................................15
SECTION 3.08. TAX CHARACTERIZATION......................................................15
ARTICLE IV EVENTS OF DEFAULT; REMEDIES.....................................................15
SECTION 4.01. EVENTS OF DEFAULT.........................................................15
SECTION 4.02. RIGHTS UPON EVENT OF DEFAULT..............................................17
SECTION 4.03. REMEDIES..................................................................17
SECTION 4.04. PRIORITIES................................................................18
ARTICLE V PREPAYMENT AND REDEMPTION........................................................19
SECTION 5.01. OPTIONAL "CLEAN-UP" REDEMPTION............................................19
ARTICLE VI MISCELLANEOUS...................................................................20
SECTION 6.01. RATIFICATION OF BASIC DOCUMENTS...........................................20
SECTION 6.02. COUNTERPARTS..............................................................20
SECTION 6.03. GOVERNING LAW.............................................................20
SECTION 6.04. AMENDMENTS WITHOUT CONSENT OF NOTEHOLDERS.................................20
SECTION 6.05. AMENDMENTS WITH CONSENT OF THE SERIES _____ NOTEHOLDERS...................21
SECTION 6.06. AUTHORITY TO REGISTER NOTES AND FILE REPORTS..............................23
SECTION 6.07. AUTHORITY TO PERFORM DUTIES OF THE ISSUER.................................23
Schedule I Schedule of Eligibility Criteria
Schedule II Schedule of Receivables
Exhibit A Form of Master Servicer's Certificate
1
This Series ______ Supplement, dated as of ________, is by and among
Household Finance Corporation, a Delaware corporation, as master servicer (the
"MASTER SERVICER"), Household Automotive Trust ___, a Delaware business trust,
as Issuer (the "ISSUER"), Household Auto Receivables Corporation, a Nevada
corporation, as Seller ("SELLER"), ______________, a [New York] banking
corporation, as trustee for the Noteholders (the "INDENTURE TRUSTEE") and
______________, a Delaware banking corporation, as owner trustee (the "OWNER
TRUSTEE") for the Certificateholders.
RECITALS
This Series _____ Supplement, is executed and delivered by the parties
hereto pursuant to Section 9.3 of the Indenture dated as of __________ (the
"INDENTURE") among the Issuer, the Master Servicer and the Indenture Trustee and
pursuant to Section 3.2 of the Trust Agreement (the "TRUST AGREEMENT") dated as
of ________ between the Seller and the Owner Trustee. In the event that any term
or provision contained herein shall conflict with or be inconsistent with any
term or provision contained in the Indenture or the Trust Agreement, the terms
and provisions of this Series ______ Supplement shall govern with respect to
Series ______.
Article I
CREATION OF THE SERIES ______ NOTES
.1. DESIGNATION.
(a) There is hereby created a Series of Notes to be issued pursuant to
the Indenture and this Series _____ Supplement to be known as "Household
Automotive Trust ___, Series _____ Notes" (as used herein, the "SERIES _____
NOTES"). The Series _____ Notes shall be issued in [four] classes (each, a
"CLASS"). [The Class A-1 Notes in an aggregate initial principal amount of
$_____________ (the "CLASS A-1 NOTES"), the Class A-2 Notes in an aggregate
initial principal amount of $_____________ (the "CLASS A-2 NOTES"), the Class
A-3 Notes in an aggregate initial principal amount of $_____________ (the "CLASS
A-3 NOTES"), the Class A-4 Notes in an aggregate initial principal amount of
$_____________ (the "CLASS A-4 NOTES" and together with Class A-1 Notes, the
Class A-2 Notes and the Class A-3 Notes, the "CLASS A NOTES").]
(b) There is hereby created a Series of Certificates to be issued
pursuant to the Trust Agreement and this Series _____ Supplement to be known as
the "Household Automotive Trust ___, Series _____ Certificates."
.2. PLEDGE OF SERIES _____ TRUST ESTATE.
The Issuer hereby Grants to the Indenture Trustee, for the benefit of
the Holders of the Notes all of the Issuer's right, title and interest (but none
of its obligations) in and to (a) each and every Receivable listed as a Series
_____ Receivable on the Schedule of Receivables
attached hereto as Schedule II and all monies paid or payable thereon or in
respect thereof after the Cutoff Date (including amounts due on or before the
Cutoff Date but received by HAFC, the Seller, the Master Servicer or the
Issuer after the Cutoff Date); (b) an assignment of the security interests in
the related Financed Vehicles granted by Obligors pursuant to such Series
_____ Receivables and any other interest of the Issuer in the related
Financed Vehicles; (c) all rights of HAFC against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Series _____ Receivables;
(d) any proceeds and the right to receive proceeds with respect to such
Series _____ Receivables repurchased by a Dealer, pursuant to a Dealer
Agreement as a result of a breach of representation or warranty in the
related Dealer Agreement; (e) all rights under any Service Contracts on the
related Financed Vehicles; (f) any proceeds and the right to receive proceeds
with respect to such Series _____ Receivables from claims on any physical
damage, loss, credit life or disability insurance policies covering the
related Financed Vehicles or Obligors including rebates of insurance premiums
relating to such Series _____ Receivables; (g) all funds on deposit from time
to time in the Series _____ Trust Accounts (including all investments and
proceeds thereof from time to time allocable to the Series _____ Reserve
Account, but excluding all investments and proceeds thereof allocable to the
other Series _____ Trust Accounts or allocable to the Master Collection
Account); (h) all rights of the Seller in and to the Master Receivables
Purchase Agreement and the Receivables Purchase Agreement Supplements,
including the delivery requirements, representations and warranties and the
cure and repurchase obligations of HAFC under the Master Receivables Purchase
Agreement and such Receivables Purchase Agreement Supplements; (i) all
property (including the right to receive future Net Liquidation Proceeds)
that secures such Series _____ Receivables and that has been acquired by or
on behalf of the Issuer pursuant to liquidation of such Series _____
Receivables; (j) all items contained in the Receivable Files with respect to
such Series _____ Receivables and any and all other documents that the Master
Servicer or HAFC keeps on file in accordance with its customary procedures
relating to such Series _____ Receivables, or the related Financed Vehicles
or Obligors; (k) all rights of the Seller in and to the Master Sale and
Servicing Agreement and the Transfer Agreement or Transfer Agreements related
to Series _____ (including all rights of the Seller under the Master
Receivables Purchase Agreement and the related Receivables Purchase Agreement
Supplements, assigned to the Issuer pursuant to the Master Sale and Servicing
Agreement and the related Transfer Agreement or Transfer Agreements); (l) one
share of the Class SV Preferred Stock of the Seller; and (m) all present and
future claims, demands, causes and choses in action in respect of any or all
of the foregoing and all payments on or under and all proceeds of every kind
and nature whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds
of any of the foregoing (collectively, the "Series _____ Trust Estate").
The foregoing Grant is made in trust to the Indenture Trustee for the
benefit of the Holders of the Notes. The Indenture Trustee hereby acknowledges
such Grant, accepts the trusts under the Indenture and this Series _____
Supplement in accordance with the provisions of the Indenture and this Series
_____ Supplement and agrees to perform its duties required in the
2
Indenture and in this Series _____ Supplement in accordance with the
provisions hereof and of the Indenture to the best of its ability to the end
that the interests of such parties, recognizing the priorities of their
respective interests may be adequately and effectively protected.
.3. PAYMENTS AND COMPUTATIONS.
All amounts to be paid or deposited by any Person hereunder shall be
paid or deposited in accordance with the terms hereof no later than 12:00 noon
(New York City time) on the day when due in immediately available funds.
.4. DENOMINATIONS.
The Notes of each Class will be issued in denominations of $100,000
and integral multiples of $1,000 in excess thereof, except for one Note of each
Class which may be issued in a denomination other than an integral multiple of
$1,000.
Article II
DEFINITIONS
.1. DEFINITIONS.
(a) Whenever used in this Series _____ Supplement and when used in the
Series _____ Related Documents with respect to the Series _____ Notes or the
Series _____ Certificates, the following words and phrases shall have the
following meanings, and the definitions of such terms 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. Unless otherwise defined in
this Series _____ Supplement, terms defined in the Basic Documents are used
herein as therein defined. A term used herein preceded by the designation
"Series _____" but not defined herein, shall have the meaning specified for such
term in the Basic Documents as such term relates to Series _____.
"Additional Class A Principal Distributable Amount" means with respect
to any Distribution Date, the excess of (i) the aggregate of the Principal
Balance of all Receivables which became Liquidated Receivables during the
immediately preceding Collection Period over (ii) the sum of (x) the aggregate
amount of Net Liquidation Proceeds received by the Indenture Trustee during the
immediately preceding Collection Period and (y) Excess Interest with respect to
such Distribution Date. The "Additional Class A Principal Distributable Amount"
shall in no event be less than zero.
"Aggregate Note Principal Balance" means, as of any date, the
aggregate outstanding principal amount of all the Notes on such date.
"Aggregate Optimal Note Principal Balance" means, with respect to any
Distribution Date, the excess, if any, of (x) the Pool Balance as of the close
of business on the
3
last day of the prior Collection Period over (y) the Targeted
Overcollateralization Amount for such Distribution Date.
"Available Funds" means, with respect to any Collection Period, and
the related Distribution Date, the sum of (i) the Collected Funds for such
Collection Period, (ii) investment earnings realized on the Series _____ Trust
Accounts during the related Collection Period, (iii) all Repurchase Amounts
deposited in the Collection Account during such Collection Period, (iv) any
proceeds of any liquidation, in whole or in part, of the assets of the Trust and
(v) the lesser of (a) the excess, if any, of the aggregate amount distributable
pursuant to Section 3.03(a)(i) - (iv) on such Distribution Date, over the
aggregate of the amounts specified in clauses (i), (ii) and (iii) hereof with
respect to such Collection Period and (b) the Reserve Account Balance; provided
that with respect to any Distribution Date on which amounts are payable with
respect to the Class A-1 Notes pursuant to clause (ii) of the definition of
Class A Principal Distributable Amount (or clause (iii) of such definition to
the extent such amount represents amounts not paid pursuant to clause (ii) on a
prior Distribution Date), Available Funds shall not include amounts withdrawn
from the Reserve Account necessary to make such payment to the extent such
withdrawal would result in the Reserve Account Balance being less than
$___________.
"Base Servicing Fee" means, with respect to any Collection Period, the
fee payable to the Master Servicer for services rendered during such Collection
Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied
by the Aggregate Principal Balances of the Series _____ Receivables, as of the
Accounting Date immediately preceding such Collection Period.
"Basic Documents" means the Master Sale and Servicing Agreement, the
Indenture, the Trust Agreement, the Master Receivables Purchase Agreement, and
other documents and certificates delivered therewith or pursuant thereto in
connection with Series _____.
"Book Entry Notes" means any beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10 of the Indenture.
"Certificateholders" means the holders of Series _____ Certificates.
"Certificateholders' Distributable Amount" means, with respect to any
Distribution Date, the amount payable pursuant to Section 3.03 (a)(vii) hereof.
"Class A Distributable Amount" means, with respect to any Distribution
Date and each class of Class A Notes, the sum of (i) the Class A Interest
Distributable Amount for such Distribution Date and (ii) the Class A Principal
Distributable Amount for such Distribution Date.
"Class A Interest Carryover Shortfall" means, with respect to any
Distribution Date and each Class of Class A Notes, the sum of: (i) excess of (a)
the related Class A Interest Distributable Amount for the preceding Distribution
Date, over (b) the amount actually paid as interest to the Class A Noteholders
on such preceding Distribution Date, PLUS (ii) interest on such
4
excess, to the extent permitted by law, at a rate per annum equal to the
related Note Rate with respect to the Class A Notes from such preceding
Distribution Date to but excluding the current Distribution Date.
"Class A Interest Distributable Amount" means, with respect to any
Distribution Date and each class of Class A Notes, an amount equal to the sum
of: (i) the aggregate amount of interest accrued on the Class A Notes at the
related Note Rate from and including the preceding Distribution Date (or, in the
case of the initial Distribution Date, from and including the Closing Date) to
but excluding the current Distribution Date PLUS (ii) the related Class A
Interest Carryover Shortfall for the current Distribution Date.
"Class A Monthly Principal Distributable Amount" means (i) with
respect to any Distribution Date, prior to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 100% of the
Principal Distributable Amount, (ii) with respect to the Distribution Date on
which the principal balance of the Class A-1 Notes is reduced to zero, the sum
of (x) 100% of the Principal Distributable Amount with respect to that portion
of the Principal Distributable Amount required to reduce the principal balance
of the Class A-1 Notes to zero, plus (y) the excess of the amount described in
clause (iii) of this definition for such Distribution Date over the amount
described in clause (ii)(x) (taking into account payment of the principal
balance of the Class A-1 Notes on such Distribution Date), (iii) with respect to
any Distribution Date after the Distribution Date on which the Principal Balance
of the Class A-1 Notes is reduced to zero until the Distribution Date on which
the Principal Balance of the Class A Notes is reduced to zero, the excess of (x)
the aggregate outstanding principal balance of the Class A Notes over (y) (A)
the outstanding Pool Balance as of the end of the related Collection Period
minus (B) the Targeted Overcollateralization Amount for such Distribution Date.
"Class A Noteholders" means the Holders of the Class A Notes.
"Class A Principal Carryover Shortfall" means, with respect to any
Distribution Date after the Distribution Date on which the principal balance
of the Class A-1 Notes is reduced to zero, the excess of the Class A
Principal Distributable Amount for the preceding Distribution Date over the
amount that was actually distributed in respect of principal of the Class A
Notes on such preceding Distribution Date.
"Class A Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of: (i) the Class A Monthly Principal Distributable
Amount for such Distribution Date, (ii) the Additional Class A Principal
Distributable Amount, if any, for such Distribution Date and (iii) the Class A
Principal Carryover Shortfall for such Distribution Date; PROVIDED, HOWEVER,
that (x) the sum of clauses (i), (ii) and (iii) shall not exceed the outstanding
principal amount of the Class A Notes, and (y) on the Final Scheduled
Distribution Date, the Class A Principal Distributable Amount will include the
amount, to the extent of the remaining Available Funds, necessary (after giving
effect to other amounts having a higher payment priority on such Distribution
Date) to reduce the outstanding principal amount of the Class A Notes to zero.
"Class A-1 Noteholders" means the Holders of the Class A-1 Notes.
5
"Class A-1 Scheduled Maturity Date" means with respect to the Class
A-1 Notes, _________________.
"Class A-2 Noteholders" means the Holders of the Class A-2 Notes.
"Class A-2 Scheduled Maturity Date" means with respect to the Class
A-2 Notes, _________________.
"Class A-3 Noteholders" means the Holders of the Class A-3 Notes.
"Class A-3 Scheduled Maturity Date" means with respect to the Class
A-3 Notes, _________________.
"Class A-4 Noteholders" means the Holders of the Class A-4 Notes.
"Class A-4 Scheduled Maturity Date" means with respect to the Class
A-4 Notes, _________________.
"Collected Funds" means, with respect to any Collection Period, the
amount of funds in the Collection Account representing collections on the
Receivables during such Collection Period, including all Net Liquidation
Proceeds collected during such Collection Period (but excluding any Purchase
Amounts).
"Cutoff Date" means __________.
"Definitive Notes" means the Notes that have been certificated and
fully registered in accordance with Section 2.12 of the Indenture.
"Distribution Date" means, with respect to each Collection Period, the
____________ day of the following calendar month, or if such day is not a
Business Day, the immediately following Business Day, commencing on
____________.
"Eligibility Criteria" means the criteria for eligibility for Eligible
Receivables set forth on Schedule I hereto.
"Eligible Receivable" or "Series _______ Eligible Receivable" means a
Series ______ Receivable that satisfies the Eligibility Criteria set forth in
Schedule I hereto.
"Event of Default" shall have the meaning assigned to such term in
Section 4.01.
"Excess Interest" means with respect to a Distribution Date the excess
of (i) interest collections on the Receivables during the preceding Collection
Period over (ii) amounts payable on such Distribution Date pursuant to Section
3.03(a)(i)-(iii).
"Final Scheduled Distribution Date" means ____________.
"HAFC " means Household Automotive Finance Corporation.
6
"HFC" means Household Finance Corporation.
"Indenture" means the indenture dated as of ___________ between the
Issuer and ______________, as indenture trustee, as supplemented by the Series
______ Supplement.
"Initial Reserve Account Deposit" means 1% of the Pool Balance as of
the Cutoff Date.
"Interest Period" means, with respect to any Distribution Date, the
period from and including the prior Distribution Date (or, in the case of the
first Distribution Date, from and including the Series ______ Closing Date)
through (and including) the day preceding such Distribution Date.
"Master Servicer's Certificate" means, with respect to Series _____, a
report in substantially the form of EXHIBIT A hereto (appropriately completed),
furnished by the Master Servicer to the Indenture Trustee and the Owner Trustee
pursuant to the Master Sale and Servicing Agreement.
"Maximum Reserve Account Deposit Amount" for any Distribution Date is
equal to that portion of Collected Funds representing interest collections on
the Receivables (including amounts representing Net Liquidation Proceeds for
such Collection Period) for the related Collection Period less the sum of: the
Base Servicing Fee paid to any Master Servicer other than HFC, the fees due to
the Indenture Trustee and Owner Trustee, to the extent not paid by the Master
Servicer, plus, the Class A Interest Distributable Amounts for such Distribution
Date, plus the aggregate Principal Balances of all Receivables which became
Liquidated Receivables during the related Collection Period, plus the aggregate
amount of Cram Down Losses during such Collection Period.
"Note Rate" means the per annum rate of interest due with respect to
each Class of Notes as set forth below for the respective Class of Note:
Class A-1 Notes: __%
Class A-2 Notes: __%
Class A-3 Notes: __%
Class A-4 Notes: __%
Interest on the Class A-1 and Class A-2 Notes will be calculated on
the basis of a 360-day year and the actual number of days elapsed in an
applicable Interest Period. Interest on the Class A-3 and Class A-4 Notes will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.
The amount of interest payable on the Class A-3 and Class A-4 Notes for the
initial Interest Period will be computed on the basis of the actual number of
days elapsed in the 30-day months.
"Notes" means the Class A Notes.
7
"Original Pool Balance" means the aggregate of the Principal Balance
of the Receivables as of the Cutoff Date.
"Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.
"Owner Trustee" means ____________________, not in its individual
capacity but solely as trustee under the Trust Agreement.
"Pledge" means the Grant by the Issuer hereunder to the Indenture
Trustee for the benefit of the Holders of Notes in accordance with Section 1.02
hereof in and to specified Pledged Property related thereto.
"Pledged Property" means, with respect to the Series _____ Trust
Estate, each Series _____ Receivable, together with all associated property and
rights with respect thereto described in the definition of Series _____ Trust
Estate.
"Pool Balance" means, as of any date of determination, the aggregate
of the outstanding Principal Balances of the Receivables, unless otherwise
specified, as of the close of business on the preceding Business Day.
"Principal Amount Available" means, with respect to any Distribution
Date, the amount remaining in the Series _____ Collection Account on such
Distribution Date after the payment of the amounts required to be paid pursuant
to clause (i) through (iii) of Section 3.03(a) on such Distribution Date MINUS
the Reserve Account Deposit Amount for such Distribution Date.
"Principal Distributable Amount" means, with respect to any
Distribution Date, the lesser of (A) the Principal Amount Available for such
Distribution Date and (B) the excess, if any, of (i) the Aggregate Note
Principal Balance immediately prior to such Distribution Date over (ii) the
Aggregate Optimal Note Balance for such Distribution Date.
"Rating Agencies" means Standard & Poor's and Moody's. If such
organization or a successor does not maintain a rating on the Notes, "Rating
Agency" shall be a nationally recognized statistical rating organization or
other comparable Person designated by the Seller, notice of which designation
shall be given to the Indenture Trustee, the Owner Trustee and the Master
Servicer.
"Redemption Price" has the meaning specified in Section 5.01 hereof.
"Reserve Account" means the Series _____ Reserve Account which shall
be an Eligible Deposit Account created pursuant to Section 3.01 hereof, which
initially shall be account no. __________ for further credit, account no.
_______, reference Household Automotive Trust ___, Series _____, at the
Indenture Trustee, ABA No. ________.
8
"Reserve Account Balance" means, with respect to a Distribution Date,
the amount on deposit in the Reserve Account as of the opening of business on
such Distribution Date.
"Reserve Account Deposit Amount" means, with respect to any
Distribution Date, the lesser of: (x) the Maximum Reserve Account Deposit Amount
for such Distribution Date and (y) the Reserve Account Shortfall Amount for such
Distribution Date.
"Reserve Account Shortfall Amount" means, with respect to any
Distribution Date, the excess of: (x) the Targeted Reserve Account Balance for
such Distribution Date over (y) the Reserve Account Balance for such
Distribution Date.
"Schedule of Receivables" means the schedule of all retail installment
sales contracts and promissory notes held as part of the Series _____ Trust
Estate attached hereto as Schedule II.
"Series _____ Certificates" means the Certificates (as defined in the
Trust Agreement).
"Series _____ Closing Date" means ___________.
"Series _____ Collected Funds" means, with respect to a date of
determination, the amount of Collected Funds with respect to the Collection
Period immediately preceding such date of determination, including all Net
Liquidation Proceeds collected during the related Collection Period (but
excluding any Purchase Amounts).
"Series _____ Collection Account" means the Eligible Deposit Account
created pursuant to Section 3.01 hereof which initially shall be account no.
__________, for further credit, account no. ________, reference Household
Automotive Trust ___, Series ______, at the Indenture Trustee, ABA No.
__________.
"Series _____ Eligible Investments" means, with respect to funds in
the Series ______ Collection Account and Reserve Account, "Eligible Investments"
as defined in the Master Sale and Servicing Agreement, except that (i) all
references in such definition to "rating satisfactory to the Rating Agency" or
words of similar import shall mean ratings of not less than "A-1+" by Standard &
Poor's and "P-1" by Moody's (whichever is applicable)(except if such investment
is in commercial paper issued by HFC, the required rating shall mean not less
than "A-1"), and (ii) all such investments shall have maturities at the time of
the acquisition thereof occurring no later than the Business Day immediately
preceding the Distribution Date following such date of acquisition.
"Series _____ Receivables" means each Receivable listed on the
Schedule of Receivables, which (a) has not been released from the Series _____
Trust Estate as provided herein or in the Indenture and (b) is not a Liquidated
Receivable.
9
"Series _____ Related Documents" means the Basic Documents, this
Series _____ Supplement, each Receivables Purchase Agreement Supplement related
to the Series _____ Trust Estate, each Transfer Agreement related to the Series
_____ Trust Estate, the Series _____ Notes, the Series _____ Certificates and
other documents and certificates delivered in connection therewith.
"Series _____ Reserve Account" means the Reserve Account.
"Series _____ Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to the Holders of the Series _____ Notes.
"Series _____ Securities" means the Series _____ Notes and the Series
_____ Certificates.
"Series _____ Supplement" means this Series _____ Supplement to the
Indenture and the Trust Agreement.
"Series _____ Support" means, with respect to the Series _____ Notes,
the Series ______ Certificates.
"Series _____ Trust Accounts" means the Series _____ Collection
Account and the Series _____ Reserve Account.
"Series _____ Trust Estate" means the property Granted to the
Indenture Trustee pursuant to Section 1.02.
"Servicing Fee Rate" means [3]% per annum.
"Supplemental Servicing Fee" means, with respect to any Collection
Period, (i) all administrative fees, expenses and charges actually paid by or on
behalf of Obligors, including late fees, prepayment fees and liquidation fees
collected on the Series _____ Receivables during such Collection Period, and
(ii) the net realized investment earnings of funds on deposit in the Series
_____ Collection Account or on deposit in the Master Collection Account and
allocable to the investment of Available Funds with respect to Series _____.
"Targeted Credit Enhancement Amount" means, with respect to any
Distribution Date, _____% of the Pool Balance as of the of last day of the
related Collection Period.
"Targeted Overcollateralization Amount" means, with respect to any
Distribution Date, the excess (but not less than zero), if any, of: (i) the
Targeted Credit Enhancement Amount over (ii) the Targeted Reserve Account
Balance.
"Targeted Reserve Account Balance" means, with respect to any
Distribution Date, the lesser of: (i) the greater of (a) __% of the outstanding
Pool Balance as of the end of the related Collection Period, and (b)
$___________ (__% of the Pool Balance as of the Cutoff Date) and (ii) the
Aggregate Note Principal Balance.
10
"Trust" means the Issuer.
"Trust Agreement" means the Trust Agreement, dated as of ________,
between the Seller and the Owner Trustee, as supplemented by the Series _____
Supplement.
Article III
DISTRIBUTIONS AND STATEMENTS TO
SERIES _____ NOTEHOLDERS; SERIES SPECIFIC COVENANTS
.1. SERIES _____ TRUST ACCOUNTS.
(a) The Indenture Trustee, for the benefit of the Holders of the
Series _____ Securities, shall establish and maintain an account (the "SERIES
_____ COLLECTION ACCOUNT") as a segregated trust account in the Indenture
Trustee's corporate trust department, identified as the "Collection Account for
Household Automotive Trust ___, in trust for the registered Holders of the
Series _____ Securities." The Indenture Trustee shall make or permit withdrawals
from the Series _____ Collection Account only as provided in this Series _____
Supplement. Notwithstanding anything in the Series _____ Related Documents to
the contrary, at least one Business Day prior to each Distribution Date the
Master Servicer and the Issuer shall deposit Collected Funds (which shall be
immediately available) directly into the Series _____ Collection Account without
any prior deposit into the Master Collection Account.
(b) The Indenture Trustee for the benefit of the Holders of the Series
_____ Notes shall establish and maintain an account (the "SERIES _____ RESERVE
ACCOUNT") as a segregated trust account in the Indenture Trustee's corporate
trust department, identified as the "Series _____ Reserve Account for Household
Automotive Trust ___, in trust for the registered Holders of the Series _____
Notes." The Indenture Trustee shall make or permit withdrawals from the Reserve
Account only as provided in this Series _____ Supplement. On the Series _____
Closing Date, the Series _____ Reserve Account will be funded with the Initial
Reserve Account Deposit.
(c) In the event that any Series _____ Trust Account ceases to be an
Eligible Deposit Account, the Indenture Trustee, as applicable, within five
Business Days, shall establish a new Eligible Deposit Account. No withdrawals
may be made of funds in any Series _____ Trust Account except as provided in
this Series _____ Supplement. Except as specifically provided in this Series
_____ Supplement, funds in the Series _____ Trust Accounts shall not be
commingled with any other moneys. All moneys deposited from time to time in each
of the Series _____ Trust Accounts shall be invested and reinvested by the
Indenture Trustee in Series ______ Eligible Investments selected in writing by
the Master Servicer (pursuant to standing instructions or otherwise) which,
absent any instruction shall be the investments specified in clause (d) of the
definition of Eligible Investment. The provisions of Section 5.1 of the Master
Sale and Servicing Agreement shall apply to the investment of funds in the
Series _____ Trust Accounts to the same extent as they apply to the Master
Collection Account.
11
.2. RESERVE ACCOUNT.
On the earlier of (x) the maturity date of the Series ______ Notes
(whether by acceleration or otherwise) or (y) the Final Scheduled Distribution
Date, the amount on deposit in the Reserve Account shall be withdrawn from the
Reserve Account and distributed in accordance with Section 4.04.
.3. DISTRIBUTIONS.
(a) On each Distribution Date, the Indenture Trustee shall (based
solely on the information contained in the Master Servicer's Certificate
delivered with respect to such Distribution Date) distribute the following
amounts from Available Funds with respect to such Distribution Date, and in the
following order of priority:
(i) to the Master Servicer, any Supplemental Servicing Fees for
the related Collection Period and, if HFC is no longer acting as
Master Servicer, the Base Servicing Fee for the related Collection
Period;
(ii) to the Indenture Trustee and the Owner Trustee, any accrued
and unpaid trustees' fees and any unreimbursed costs and expenses (in
each case, to the extent such fees have not been previously paid by
the Master Servicer);
(iii) to the Class A Noteholders, the Class A Interest
Distributable Amount;
(iv) (i) to the Class A-1 Noteholders, 100% of the Class A
Principal Distributable Amount until the outstanding principal amount
of the Class A-1 Notes has been reduced to zero; and (ii) on and after
the Distribution Date on which the outstanding principal amount of the
Class A-1 Notes has been reduced to zero, the Class A Principal
Distributable Amount will be allocated to payment of the Class A-2,
Class A-3 and Class A-4 Notes, in "sequential pay" fashion, beginning
with the Class A-2 Notes, in each case, until the respective
outstanding principal amount of the Class A-2, Class A-3 and Class A-4
Notes are paid in full;
(v) to the Reserve Account, the Reserve Account Deposit Amount,
if any, required to increase the amount therein to the Targeted
Reserve Account Balance;
(vi) if HFC is acting as the Master Servicer, the Base Servicing
Fee for the related Collection period; and
(vii) to the holders of the Series _____ Certificates, any
remaining Available Funds.
(b) If on a Distribution Date, the Master Servicer's Certificate
delivered with respect to such Distribution Date indicates that the amount
specified in clauses (i) through (iv) of
12
the definition of Available Funds with respect to such Distribution Date is
less than the sum of the amounts required to be distributed pursuant to
clauses (i) through (iv) of paragraph (a) above on such Distribution Date,
the Indenture Trustee shall withdraw from the Series _____ Reserve Account an
amount up to the amount of such deficiency and distribute such amount as a
component of Available Funds.
(c) Each Series _____ Certificateholder by its acceptance of its
Certificate will be deemed to have consented to the provisions of paragraph (a)
above relating to the priority of distributions, and will be further deemed to
have acknowledged that no property rights in any amount or the proceeds of any
such amount shall vest in such Certificateholder until such amounts have been
distributed to such Certificateholder pursuant to such provisions; PROVIDED,
THAT the foregoing shall not restrict the right of any Certificateholder, upon
compliance with the provisions hereof, from seeking to compel the performance of
the provisions hereof by the parties hereto. Each Series _____
Certificateholder, by acceptance of its Certificate, further specifically
acknowledges that it has no right to or interest in any monies at any time held
in the Series _____ Reserve Account, such monies being held in trust for the
benefit of the Series _____ Noteholders.
(d) Amounts on deposit in the Reserve Account on any Distribution Date
(after giving effect to all distributions made on such Distribution Date and the
related Distribution Date) in excess of the Targeted Reserve Account Balance for
such Distribution Date shall be released first, to the Master Servicer for any
Servicing Fees and Supplemental Servicing Fees then due, and any remainder to
the Seller.
(e) In the event that the Series _____ Collection Account is
maintained with an institution other than the Indenture Trustee, the Master
Servicer shall instruct and cause such institution to transfer the amounts to be
withdrawn therefrom in accordance with Section 3.03(b) to the Indenture Trustee
for distribution pursuant to Section 3.03(a) one Business Day Prior to the
related Distribution Date.
(f) Unless Definitive Notes are issued pursuant to Section 2.12 of the
Indenture, with respect to Notes registered on the related Record Date in the
name of a nominee of the Clearing Agency, payment will be made by wire transfer
to an account designated by such nominee, without presentation or surrender of
the Series _____ Notes or the making of any notation thereon.
(g) If not theretofore paid in full, all amounts outstanding with
respect to the Class A-1 Notes shall be due and payable on the Class A-1
Scheduled Maturity Date, if not theretofore paid in full, all amounts
outstanding with respect to the Class A-2 Notes shall be due and payable on the
Class A-2 Scheduled Maturity Date, if not theretofore paid in full, all amounts
outstanding with respect to the Class A-3 Notes shall be due and payable on the
Class A-3 Scheduled Maturity Date, and if not theretofore paid in full, all
amounts outstanding with respect to the Class A-4 Notes shall be due and payable
on the Class A-4 Scheduled Maturity Date.
13
.4. STATEMENTS TO NOTEHOLDERS.
On or prior to each Determination Date, the Master Servicer shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward to each Noteholder of record, and to each
Certificateholder of record, a statement setting forth at least the following
information as to the Notes to the extent applicable:
(i) the amount of such distribution allocable to principal of
each Class of Notes;
(ii) the amount of such distribution allocable to interest on or
with respect to each Class of Notes;
(iii) the aggregate outstanding principal amount of each Class of
the Notes after giving effect to payments allocated to principal
reported under (i) above;
(iv) the Class A Interest Carryover Shortfall, the Class A
Principal Carryover Shortfall, if any, and the change in such amounts
from the preceding statement.
(v) the amount of the Base Servicing Fee paid to the Master
Servicer with respect to such Collection Period; and
(vi) the Targeted Reserve Account Balance and the amount on
deposit in the Reserve Account at the end of such Distribution Date.
Each amount set forth pursuant to paragraph (i)through (iv) above shall be
expressed as a dollar amount per $1,000 of the initial principal balance of the
applicable Class of Notes.
.5. REPORTING REQUIREMENTS.
(a) The Master Servicer's Certificate shall be in the form attached as
EXHIBIT A hereto.
(b) By January 31 of each calendar year, commencing January 31, ____,
the Master Servicer on behalf of the Issuer shall prepare and distribute to the
Indenture Trustee a statement containing such information as is required to be
provided by an issuer of indebtedness under the Code and such other customary
information as is necessary to enable the Noteholders to prepare their tax
returns.
(c) If an Event of Default occurs and is continuing and if it is
either known by, or written notice of the existence thereof has been delivered
to, a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall
mail to each Noteholder notice of the Default within 30 days after such
knowledge or notice occurs.
14
.6. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provisions of this Series _____ Supplement
or the Indenture to the contrary, the Indenture Trustee, shall comply with all
Federal withholding requirements respecting payments (or advances thereof) to
the Noteholders as may be applicable to instruments constituting indebtedness
for Federal income tax purposes. Any amounts so withheld shall be treated as
having been paid to the applicable Noteholders for all purposes of the
Indenture. In no event shall the consent of any Noteholder be required for any
such withholding.
.7. SPECIAL COVENANTS AND ACKNOWLEDGEMENTS.
With respect to the Series _____ Notes, the Issuer hereby represents
and warrants, as of the Series _____ Closing Date:
(i) VALID PLEDGE. It is the intention of the Issuer that each
pledge herein contemplated constitutes the Grant of a perfected, first
priority security interest in all Pledged Property to the Indenture
Trustee for the benefit of the Series _____ Noteholders.
(ii) GOVERNMENTAL AUTHORIZATION. Other than the filing of the
financing statements required hereunder, no authorization or approval
or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution,
delivery and performance by the Issuer of this Series _____
Supplement, the Indenture, and each Series _____ Related Document to
which it is a party.
.8. TAX CHARACTERIZATION.
It is the intent of the parties hereto that, for all Federal, state,
local and foreign taxes, the Series _____ Notes will be evidence of
indebtedness. To the extent permitted by law, the parties hereto, and each owner
of a beneficial interest in the Series _____ Notes by acceptance of such
interest, agrees to treat the Series _____ Notes for purposes of all Federal,
state, local and foreign taxes as indebtedness secured by the Series _____ Trust
Estate.
Article IV
EVENTS OF DEFAULT; REMEDIES
.1. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
15
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five calendar days; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable, and such default shall continue for a period of five calendar
days; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in the Series _____ Related Documents
(other than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt
with), or any representation or warranty of the Issuer made in the
Series _____ Related Documents or in any certificate or other writing
delivered pursuant thereto or in connection therewith proving to have
been incorrect in any material respect as of the time when the same
shall have been made and has a material adverse effect on the
Noteholders, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation
or warranty was incorrect shall not have been eliminated or otherwise
cured, for a period of 60 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee
or to the Issuer and the Indenture Trustee by the Holders of at least
25% of the Outstanding Amount of the Notes, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Trust Property in an involuntary case under
any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust
Property, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Trust Property, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.
16
.2. RIGHTS UPON EVENT OF DEFAULT.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee in its discretion may, or if so requested in writing by
Holders holding Notes representing at least 66 2/3% of the Outstanding Amount of
the Notes shall, declare by written notice to the Issuer that the Notes have
become due and payable, whereupon they shall become, immediately due and payable
at 100% of the outstanding principal balance of the Notes, and accrued interest
thereon (together with interest accrued at the relevant Note Rate on such
overdue interest).
(b) At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee, the Holders of Notes representing a majority
of the Outstanding Amount of the Notes, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.9 of
the Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
.3. REMEDIES.
If an Event of Default shall have occurred and be continuing, the
Indenture Trustee, subject to Section 11.17 of the Indenture, may exercise any
of the remedies specified in Article V of the Indenture and, in addition, may do
one or more of the following.
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under the Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged
due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of the Indenture with respect to the Trust
Property;
17
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Holders of the Notes;
and
(iv) sell the Trust Property or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Indenture Trustee may not sell or otherwise liquidate the Trust
Property following an Event of Default unless:
(x) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge
in full all amounts then due and unpaid upon such Notes for
principal and interest, or
(y) the Indenture Trustee determines that the Trust
Property will not continue to provide sufficient funds for the
payment of principal of and interest on the Notes as they
would have become due if the Notes had not been declared due
and payable, and the Indenture Trustee obtains the consent of
Holders of 66-2/3% of the Outstanding Amount of the Notes, or
(z) the Indenture Trustee has not determined that the
Trust Property will not continue to provide sufficient funds
for the principal of and interest on the Notes and the
proceeds of such sale or liquidation distributable to the
Noteholders are not sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal and
interest, and the Indenture Trustee obtains the consent of
Holders of 100% of the Outstanding Amount of the Notes.
In determining such sufficiency or insufficiency with respect to
clause (y) and (z), the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Property for such purpose.
.4. PRIORITIES.
(a) On and after the maturity date of the Series _____ Notes (by
acceleration or otherwise) all Available Funds, all amounts on deposit in the
Reserve Account withdrawn in accordance with Section 3.02 and any proceeds of
the liquidation of all or any portion of the Series _____ Trust Estate pursuant
to Section 4.03(iv), shall be applied by the Indenture Trustee on the related
Distribution Date in the following order of priority:
First: amounts due and owing and required to be distributed to
the Master Servicer, the Owner Trustee and the Indenture Trustee,
respectively, pursuant to priorities (i) and (ii) of Section 3.03
hereof and not previously distributed, in the order of such priorities
and without preference or priority of any kind within such priorities;
18
Second: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A
Notes for interest;
Third: to the Class A Noteholders for amounts due and unpaid on
the Class A Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A Notes for principal;
Fourth: to the Servicer for any Servicing Fees and Supplemental
Servicing Fees then due;
Fifth: to the Series _____ Certificateholders, any remaining
Available Funds.
(b) The Indenture Trustee may fix a record date and distribution date
for any payment to Series _____ Noteholders pursuant to this Section 4.04. At
least 15 days before such record date, the Indenture Trustee shall mail to the
Noteholders a notice that states the record date, the Distribution Date and the
amount to be paid.
Article V
PREPAYMENT AND REDEMPTION
.1. OPTIONAL "CLEAN-UP" REDEMPTION.
On any Distribution Date occurring on or after the date upon which the
aggregate outstanding principal balance of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes shall have been reduced to an
amount which is less than or equal to 10% of the aggregate outstanding principal
balance of such Classes of Notes as of the Series _____ Closing Date, the Master
Servicer and the Seller on behalf of the Issuer, shall each have the option to
redeem the outstanding Series _____ Notes at a redemption price (the "REDEMPTION
PRICE") which is not less than the then Aggregate Note Principal Balance, plus
all accrued and unpaid interest thereon and all fees and other amounts owing to
the Indenture Trustee, the Owner Trustee and the Master Servicer (if other than
HFC) under the Series _____ Related Documents. The Master Servicer and the
Seller, on behalf of the Issuer, shall give the Master Servicer (if other than
HFC), the Indenture Trustee, and the Owner Trustee at least 10 days' irrevocable
prior written notice of the date on which the Master Servicer or the Seller, as
applicable intends to exercise such option to purchase. Not later than 12:00
P.M., New York City time, on such Distribution Date, the Master Servicer or the
Seller, as applicable, shall deposit such amount in the Collection Account in
immediately available funds for distribution pursuant to Section 3.03 against
the presentment of the Notes for cancellation. Such purchase option is subject
to payment in full of the Redemption Price.
19
Article VI
MISCELLANEOUS
.1. RATIFICATION OF BASIC DOCUMENTS.
Each of the Basic Documents, and to the extent appropriate, as
supplemented by this Series _____ Supplement, is in all respects ratified and
confirmed and each of the Basic Documents, as so supplemented by this Series
_____ Supplement shall be read, taken and construed as one and the same
instrument.
.2. COUNTERPARTS.
This Series _____ Supplement may be executed in one or more
counterparts, each of which so executed shall be deemed to be an original, but
all of which shall together constitute but one and the same instrument.
.3. GOVERNING LAW.
THIS SERIES _____ SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
.4. AMENDMENTS WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Noteholders but with prior written
notice to the Rating Agencies, as evidenced to the Indenture Trustee and the
Issuer, when authorized by an Issuer Order, at any time and from time to time,
the parties hereto may enter into one or more amendments hereto, in form
satisfactory to the Indenture Trustee and the Owner Trustee, for any of the
following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of the Indenture as supplemented by this
Series _____ Supplement, or better to assure, convey and confirm unto
the Indenture Trustee, if any, any property subject or required to be
subjected to the lien of the Indenture as supplemented by this Series
_____ Supplement, or to subject to the lien of the Indenture as
supplemented by this Series _____ Supplement additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Noteholders, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee, if any;
20
(v) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or to make any other provisions with respect to matters or
questions arising under the Indenture, the Trust Agreement or in
this Series _____ Supplement; provided that such action shall not
adversely affect the interests of the Series _____ Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder and under the Indenture by a successor indenture
trustee with respect to the Notes and to add to or change any of the
provisions of the Indenture or of this Series _____ Supplement as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one indenture trustee, pursuant to the
requirements of Article VI of the Indenture; or
(vii) to modify, eliminate or add to the provisions of the
Indenture or of this Series _____ Supplement to such extent as shall
be necessary to effect the qualification of the Indenture under the
TIA or under any similar federal statute hereafter enacted and to add
to the Indenture such other provisions as may be expressly required by
the TIA.
Each of the Indenture Trustee and the Owner Trustee is hereby
authorized to join in the execution of any amendment and to make any further
appropriate agreements and stipulations that may be therein contained.
(b) Except as otherwise provided herein, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, may, also without the consent of
any of the Series _____ Noteholders but with prior written notice to the Rating
Agencies by the Issuer, as evidenced to the Indenture Trustee, enter into an
amendment hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, the Indenture or of this Series
_____ Supplement of modifying in any manner the rights of the Series _____
Noteholders under the Indenture or under this Series _____ Supplement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Series _____
Noteholder.
.5. AMENDMENTS WITH CONSENT OF THE SERIES _____ NOTEHOLDERS.
Except as otherwise provided herein, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order provided by the Master Servicer,
also may, upon satisfaction of the Rating Agency Condition and with the consent
of the Holders of not less than a majority of the Outstanding Amount of each
Class of affected Series _____ Notes, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an amendment hereto for the purpose
of adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Series _____ Supplement or of modifying in any manner the
rights of the Series _____ Noteholders under the Indenture or under this Series
_____ Supplement; provided, however, that no such amendment shall, without the
consent of the Holder of each Outstanding Series _____ Note affected thereby:
21
(i) change the date of payment of any installment of
principal of or interest on any Series _____ Note, or reduce the
principal amount thereof, the interest rate thereon, change the
provision of the Indenture relating to the application of
collections on, or the proceeds of the sale of, all or any portion
of any Series _____ Trust Estate to payment of principal of or
interest on the Series _____ Notes, or change any place of payment
where, or the coin or currency in which, any Series _____ Note or
the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of
the provisions of the Indenture requiring the application of funds
available therefor, as provided in Article V of the Indenture, to the
payment of any such amount due on the Series _____ Notes on or after
the respective due dates thereof;
(iii) reduce the percentage of the Outstanding Amount of the
Series _____ Notes, the consent of the Holders of which is required
for this Series _____ Supplement, or the consent of the Holders of
which is required for any waiver of compliance with certain provisions
of the Indenture or certain defaults hereunder and their consequences
provided for in the Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to direct the Issuer to sell
or liquidate the Series _____ Trust Estate pursuant to Section 5.4
of the Indenture;
(vi) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain
additional provisions of the Indenture or the Basic Documents
cannot be modified or waived without the consent of the Holder of
each Outstanding Series _____ Note affected thereby;
(vii) modify any of the provisions of the Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Series _____ Note on any Distribution
Date (including the calculation of any of the individual components of
such calculation) or to affect the rights of the Holders of Series
_____ Notes to the benefit of any provisions for the mandatory
redemption of the Series _____ Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any part of the
a Series _____ Trust Estate or, except as otherwise permitted or
contemplated herein or the Series _____ Related Documents, terminate
the lien of the Indenture on any property at any time subject hereto
or deprive the Holder of any Series _____ Note of the security
provided by the lien of the Indenture.
22
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of an amendment to this Series _____
Supplement, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of an amendment to this Series _____ Supplement, the Indenture Trustee shall
mail to the Series _____ Noteholders a notice setting forth in general terms the
substance hereof. Any failure of the Indenture Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any amendment to the Series _____ Supplement.
Prior to the execution of any amendment to this Supplement, the
Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Supplement. The Indenture Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Indenture Trustee's own rights,
duties or immunities under this Supplement.
By its acceptance of its interest in the Series _____ Notes, each
owner of a beneficial interest in a Note shall be deemed to have agreed that
prior to the date which is one year and one day after the termination of the
Indenture, such Person shall not acquiesce, petition or otherwise invoke or
cause the Issuer or the Seller to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case against the Seller
or Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of or for the Issuer or the Seller or any substantial
part of its property or ordering the winding-up or liquidation of the affairs of
the Issuer or the Seller.
.6. AUTHORITY TO REGISTER NOTES AND FILE REPORTS.
The Issuer hereby authorizes the Seller to prepare and execute on
behalf of the Issuer, filings with the Securities and Exchange Commission and
any applicable state agencies of documents required to register or qualify the
Notes for public distribution and to file on a periodic basis, such documents as
may be required by rules and regulations prescribed by such authorities.
.7. AUTHORITY TO PERFORM DUTIES OF THE ISSUER.
(a) The Issuer hereby designates the Master Servicer its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Trustee pursuant to Section 3.5 of the
Indenture, PROVIDED that, such designation shall not be deemed to create a duty
in the Trustee to monitor the compliance of the Master Servicer with respect to
its duties under Section 3.5 of the Indenture or the adequacy of any financing
statement, continuation statement or other instrument prepared by the Master
Servicer.
(b) The Issuer hereby appoints the Master Servicer to assist the
Issuer in performing its duties under the Series _____ Related Documents,
including, but not limited to, Sections 2.13 and 3.9 of the Indenture, and the
Master Servicer hereby accepts such appointment.
23
(c)
24
IN WITNESS WHEREOF, the parties hereto have caused this Series _____
Supplement to be fully executed by their respective officers as of the day and
year first above written.
HOUSEHOLD FINANCE CORPORATION,
as Master Servicer
By
----------------------------------------
Name:
Title:
HOUSEHOLD AUTOMOTIVE TRUST ___,
as Issuer
By [Name of Owner Trustee]
Not in its individual capacity but solely as
Owner Trustee
By
----------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
By
----------------------------------------
Name:
Title:
[Name of Indenture Trustee],
as Indenture Trustee
By
----------------------------------------
Name:
Title:
[Name of Owner Trustee],
as Owner Trustee
By
----------------------------------------
Name:
Title:
Schedule I
Eligibility Criteria
"ELIGIBLE RECEIVABLE" means a Series _____ Receivable with respect to which each
of the following is true as of the Cutoff Date:
(a) that (i) was originated directly by HAFC (or any predecessor or
Affiliate of HAFC) with the consumer or was originated by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such Dealer's
business and (A) in the case of a Dealer originated receivable, such Dealer had
all necessary licenses and permits to originate receivables in the state where
such Dealer was located, and such receivable was purchased by HAFC (or any
predecessor or Affiliate of HAFC) from such Dealer under an existing Dealer
Agreement with HAFC (or any predecessor or Affiliate of HAFC), and (B) in the
case of a Dealer originated receivable or a receivable originated by HAFC (or
any predecessor or Affiliate of HAFC) such receivable was purchased (x) by HARC
pursuant to the terms of the Master Receivables Purchase Agreement or by a
master receivables purchase agreement between HARC and HAFC, dated as of
______________, that is substantially the same as the Master Receivables
Purchase Agreement (the "Trust __ Receivables Purchase Agreement"), (y) by the
Issuer pursuant to the Master Sale and Servicing Agreement; and each Series
_____ Receivable was validly assigned (1) if Dealer originated, by such Dealer
to HAFC (or any predecessor or Affiliate of HAFC), (2) by HAFC to HARC pursuant
to the terms of the Master Receivables Purchase Agreement or the Trust __
Receivables Purchase Agreement, (3) by HARC to the Issuer pursuant to the Master
Sale and Servicing Agreement and (4) by the Issuer to the Trustee pursuant to
the Indenture, (ii) was fully and properly executed by the parties thereto,
(iii) contains customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for realization against the
collateral security, and (iv) is fully amortizing and provides for level monthly
payments (PROVIDED that the first and final payment of the Series _____
Receivable may be minimally different from the level payment) which, if made
when due, shall fully amortize the Amount Financed over the original term;
(b) that if originated by a Dealer, was sold by the Dealer to HAFC (or
any predecessor or Affiliate of HAFC) without any fraud or material
misrepresentation on the part of such Dealer in either case or on the part of
the Obligor;
(c) with respect to which all requirements of applicable federal,
state and local laws, and regulations thereunder (including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
Collection Practices Act, the Federal Trade Commission Act, the Xxxxxxxx-Xxxx
Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers'
and Sailors' Civil Relief Act of 1940 and state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code and other consumer credit
laws and equal credit opportunity and disclosure laws) in respect of all of the
Series _____ Receivables, each and every sale of Financed Vehicles and the sale
of any physical damage, loss, credit life and credit
SCH-I-1
accident and health insurance and any extended service contracts, have been
complied with in all material respects, and each Series _____ Receivable and
the sale of the Financed Vehicle evidenced by each Series _____ Receivable
and the sale of any physical damage, loss, credit life and credit accident
and health insurance and any extended service contracts complied at the time
it was originated or made and now complies in all material respects with all
applicable legal requirements;
(d) that was originated in the United States of America and, at the
time of origination materially conformed to all requirements of the Dealer
Underwriting Guides (or such similar guidelines of any predecessor or affiliate
of HAFC) applicable thereto;
(e) which represents the genuine, legal, valid and binding payment
obligation of the Obligor thereon, enforceable by the holder thereof in
accordance with its terms, except (A) as enforceability may be limited by
bankruptcy, insolvency, reorganization or 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 and (B) as such Receivable may be modified by
the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended; and all parties thereto had full legal capacity to execute and deliver
such Receivable and all other documents related thereto and to grant the
security interest purported to be granted thereby;
(f) which is not due from the United States of America or any state or
from any agency, department, subdivision or instrumentality thereof;
(g) which (i) had an original maturity of at least __ months but not
more than __ months, (ii) had an original Amount Financed of at least $____ and
not more than $____, (iii) had an Annual Percentage Rate of at least ___% and
not more than __%, (iv) was not more than __ days past due, (v) no funds have
been advanced by the Issuer, the Master Servicer, HAFC, any predecessor or
Affiliate of HAFC, any Dealer, or anyone acting on behalf of any of them in
order to cause such Series _____ Receivable to qualify under SUBCLAUSE (iv) of
this CLAUSE (g) and (vi) had no provision thereof waived, altered or modified in
any respect since its origination;
(h) with respect to which the information pertaining to such Series
_____ Receivable set forth in each Schedule of Receivables is true and correct
in all material respects;
(i) with respect to which HAFC will have caused the portions of HAFC's
and the Master Servicer's servicing records relating to such Series _____
Receivable to be clearly and unambiguously marked to show that such Series _____
Receivable has been transferred by HAFC to HARC in accordance with the terms of
the Master Receivables Purchase Agreement and by HARC to the Issuer pursuant to
the Master Sale and Servicing Agreement or the Trust __ Receivables Purchase
Agreement, and by the Issuer to the Indenture Trustee pursuant to the Indenture;
(j) with respect to which the computer tape or listing to be made
available by HAFC to HARC, the Master Servicer or the Trustee is complete and
accurate and includes a
SCH-I-2
description of the same Series _____ Receivables that are, or will be,
described in the related Schedule of Receivables;
(k) which constitutes chattel paper within the meaning of the UCC;
(l) of which there is only one original executed copy;
(m) with respect to which there exists a Receivable File and such
Receivable File contains, without limitation, (a) a fully executed original of
such Receivable, (b) a certificate of insurance, application form for insurance
signed by the Obligor, or a signed representation letter from the relevant
Obligor named pursuant to which the Obligor has agreed to obtain physical damage
insurance for the related Financed Vehicle, (c) the original Lien Certificate or
application therefor showing HAFC (or any predecessor or Affiliate of HAFC) as
first lienholder and by HAFC (or any predecessor or Affiliate of HAFC) to HARC
and by HARC to the Issuer and by the Issuer to the Trustee) and (d) an original
credit application signed by the Obligor; and (x) each of the documents relating
thereto which is required to be signed by the Obligor has been signed by the
Obligor in the appropriate spaces and (y) all blanks on any form relating
thereto by HAFC (or any predecessor or Affiliate of HAFC) to be completed have
been properly filled in and each form has otherwise been correctly prepared;
and, notwithstanding the above, with respect to which, a copy of the complete
Receivable File for such Series _____ Receivable, which fulfills the
documentation requirements of the Dealer Underwriting Guides as in effect at the
time of purchase is in the possession of the Master Servicer or Sub-Servicer;
(n) which has not been satisfied, subordinated or rescinded, and the
Financed Vehicle securing such Series _____ Receivable has not been released
from the lien of such Series _____ Receivable in whole or in part;
(o) which was not originated in, and is not subject to the laws of,
any jurisdiction the laws of which would make unlawful, void or voidable the
sale, transfer and assignment of such Series _____ Receivable and with respect
to which neither HAFC (nor any predecessor or affiliate of HAFC) nor the Issuer
has entered into any agreement with any account debtor that prohibits, restricts
or conditions the assignment of any portion of such Series _____ Receivable;
(p) which has not been sold, transferred, assigned or pledged to any
Person other than to (i) HAFC (or any predecessor or Affiliate of HAFC) by a
Dealer, (ii) HARC by HAFC pursuant to the terms of the Master Receivables
Purchase Agreement or the Trust __ Receivables Purchase Agreement, (iii) the
Issuer by HARC pursuant to the terms of the Master Sale and Servicing Agreement
and (iv) the Trustee by the Issuer pursuant to the terms of the Indenture. No
Dealer has a participation in, or other right to receive, proceeds of any Series
_____ Receivable and with respect to which neither HAFC (nor any predecessor or
Affiliate of HAFC), HARC nor the Issuer has taken any action to convey any right
to any Person that would result in such Person having a right to payments
received under the related Insurance Policy or the related Dealer Agreement or
Dealer Assignment or to payments due under such Series _____ Receivable;
SCH-I-3
(q) which creates or shall create a valid, binding and enforceable
first priority security interest in favor of HAFC in the Financed Vehicle;
(r) which is secured by an enforceable and perfected first priority
security interest in the Financed Vehicle in favor of HAFC as secured party,
which security interest is prior to all other Liens upon and security interests
in such Financed Vehicle which now exist or may hereafter arise or be created
(except, as to priority, for any Lien for taxes, labor or materials affecting a
Financed Vehicle); and, with respect to which there are no Liens or claims for
taxes, work, labor or materials affecting the related Financed Vehicle which are
or may be Liens prior or equal to the lien of such Receivable;
(s) as to which all filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trustee a first priority
perfected lien on, or ownership interest in, the Series _____ Receivables and
the proceeds thereof have been made, taken or performed;
(t) as to which HAFC (or any predecessor or Affiliate of HAFC), HARC
or the Issuer has not done anything to convey any right to any Person that would
result in such Person having a right to payments due under such Series _____
Receivable or otherwise to impair the rights of the Trustee, the Noteholders or
the Certificateholders in such Series _____ Receivable or the proceeds thereof;
(u) which is not assumable by another Person in a manner which would
release the Obligor thereof from such Obligor's obligations with respect to such
Receivable;
(v) which is not subject to any right of rescission, setoff,
counterclaim or defense and no such right has been asserted or threatened with
respect thereto;
(w) as to which there has been no default, breach, violation or event
permitting acceleration under the terms of such Series _____ Receivable (other
than payment delinquencies of not more than 30 days) and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or both
would constitute a default, breach, violation or event permitting acceleration
under the terms of such Series _____ Receivable, and there has been no waiver of
any of the foregoing, and with respect to which the related Financed Vehicle had
not been repossessed;
(x) at the time of the origination of which, the related Financed
Vehicle was covered by a comprehensive and collision insurance policy (i) in an
amount at least equal to the lesser of (a) its maximum insurable value and (b)
the principal amount due from the Obligor thereunder, (ii) naming HAFC (or any
predecessor or Affiliate of HAFC) and its successors and assigns as loss payee
and (iii) insuring against loss and damage due to fire, theft, transportation,
collision and other risks generally covered by comprehensive and collision
coverage and with respect to which the Obligor is required to maintain physical
loss and damage insurance, naming HAFC (or any predecessor or Affiliate of HAFC)
and its successors and assigns as additional insured parties, and such
Receivable permits the holder thereof to obtain physical loss and damage
insurance at the expense of the Obligor if the Obligor fails to do so;
SCH-I-4
(y) with respect to which the following is true:
The Lien Certificate for the related Financed Vehicle shows, or if a
new or replacement Lien Certificate is being applied for with respect to such
Financed Vehicle the Lien Certificate will be received within 180 days of the
Series _____ Closing Date and will show, HAFC (or any predecessor or Affiliate
of HAFC) named as the original secured party under such Series _____ Receivable
and, accordingly, HAFC will be the holder of a first priority security interest
in such Financed Vehicle. With respect to each Series _____ Receivable for which
the Lien Certificate has not yet been returned from the Registrar of Titles,
HAFC has received written evidence from the related Dealer or the Obligor that
such Lien Certificate showing HAFC as first lienholder has been applied for. If
the Series _____ Receivable was originated in a state in which a filing or
recording is required of the secured party to perfect a security interest in
motor vehicles, such filings or recordings have been duly made to show HAFC
named as the original secured party under the related Series _____ Receivable;
and
(z) as to which no selection procedures adverse to the Noteholders or
the Certificateholder have been utilized in selecting such Series _____
Receivable from all other similar Receivables purchased by HAFC or any
predecessor or Affiliate of HAFC.
SCH-I-5
Schedule II
Schedule of Receivables
Exhibit A
Form of Master Servicer's Certificate
