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EXHIBIT 1.1
HOUSEHOLD PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST I
Series 2001-2
$550,000,000 Fixed Rate Asset Backed Notes, Series 2001-2
$74,050,000 Floating Rate Asset Backed Notes, Series 2001-2
UNDERWRITING AGREEMENT
August 8, 2001
Credit Suisse First Boston Corporation as Representative of the
Underwriters set forth herein (the "Representative")
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Household Bank (SB), N.A. (the "Bank") has conveyed and
proposes to further convey, from time to time, the receivables (the
"Receivables") that are generated in a portfolio of certain consumer revolving
credit card accounts and other rights and property to HRSI Funding, Inc. II (the
"Transferor"), which has conveyed and will convey the Receivables to the
Household Private Label Credit Card Master Note Trust I, acting through
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee therefor (the "Issuer"), and the Transferor proposes to cause the Issuer
to sell to you and to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you are acting as representative (the
"Representative"), $550,000,000 Class A Fixed Rate Asset Backed Notes, Series
2001-2 (the "Class A Notes") and $74,050,000 Class B Floating Rate Asset Backed
Notes, Series 2001-2 (the "Class B Notes" and, together with the Class A Notes,
the "Notes") in the Trust. The Receivables have been, and will from time to time
be, conveyed to the Transferor by Household Receivables Acquisition Company
("HRAC") pursuant to a Receivables Purchase Agreement, dated as of June 12, 2001
(the "Transferor Receivables Purchase Agreement"), between HRAC and the
Transferor. The Receivables have been, and will from time to time be, conveyed
to HRAC by (i) the Bank pursuant to a Receivables Purchase Agreement, dated as
of June 12, 2001 (the "Bank Receivables Purchase Agreement"), between the Bank
and HRAC, and (ii) HRSI Funding Inc. ("HRSIFI") pursuant to a Receivables
Purchase Agreement, dated as of June 12, 2001 (the "Tri-Party Receivables
Purchase Agreement"), among the Bank, HRSIFI and HRAC. Collectively, the
Transferor Receivables Purchase Agreement, the Bank Receivables Purchase
Agreement, and the Tri-Party Receivables Purchase Agreement are referred to
herein as the Receivables Purchase Agreement. The Receivables have been, and
will from time to time be, conveyed by the Transferor to the Issuer pursuant to
a Transfer and Servicing Agreement, dated as of June 12, 2001 (the "Transfer and
Servicing Agreement"), among the Transferor, Household Finance Corporation
("HFC"), as servicer (the "Servicer"), and the Issuer. The Bank, the Transferor
and HFC are direct or indirect subsidiaries of Household International, Inc.
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("Household"). HFC, the Bank and the Transferor are referred to collectively
herein as the "Household Entities".
The Issuer is a Delaware common law trust formed pursuant to a
Trust Agreement, dated as of June 12, 2001 (the "Trust Agreement"), between the
Transferor and Wilmington Trust Company ("Wilmington"), as owner trustee (the
"Owner Trustee").
The Notes will be issued pursuant to a Master Indenture, dated
as of June 12, 2001 (the "Master Indenture"), between the Issuer and U.S. Bank
National Association, as indenture trustee (the "Indenture Trustee"), as
supplemented by the Series 2001-2 Indenture Supplement with respect to the Notes
to be dated as of August 16, 2001 (the "Indenture Supplement," and together with
the Master Indenture, the "Indenture").
HFC has agreed to provide notices and perform on behalf of the
Issuer certain other administrative obligations required of the Issuer by the
Transfer and Servicing Agreement, the Master Indenture and each indenture
supplement for each series of Notes issued by the Issuer, pursuant to an
Administration Agreement, dated as of June 12, 2001 (the "Administration
Agreement"), between HFC, as administrator (in such capacity, the
"Administrator"), and the Issuer. The Transfer and Servicing Agreement, the
Receivables Purchase Agreement, the Indenture, the Trust Agreement and the
Administration Agreement are referred to herein, collectively, as the
"Transaction Documents."
The Notes will be sold pursuant to this Underwriting Agreement
(this "Agreement") and will represent undivided interests in certain assets of
the Trust (as hereinafter described).
Capitalized terms used herein without definition shall have
the meanings set forth in the Transaction Documents.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
TRANSFEROR.
(a) Each of the Bank and the Transferor, each as to itself,
represents and warrants to, and agrees with, each Underwriter as set forth in
this Section 1(a). Certain terms used in this Section 1(a) are defined in the
second paragraph of subsection 1(a)(i) below.
(i) A registration statement on Form S-3 (No. 333-58400),
including a form of prospectus and prospectus supplement and
such amendments thereto as may have been filed prior to the
date hereof, relating to the Notes and the offering thereof in
accordance with Rule 415 under the Securities Act of 1933, as
amended (the "Act"), has been filed by the Transferor with,
and has been declared effective by, the Commission. If any
post-effective amendment to such registration statement has
been filed with the Commission prior to the execution and
delivery of this
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Agreement, the most recent such amendment has been declared
effective by the Commission.
The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall
mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or
become effective under the Act. "Execution Time" shall mean
the date and time that this Agreement is executed and
delivered by the parties hereto. "Registration Statement"
shall mean the registration statement referred to in the
preceding paragraph and any registration statement required to
be filed under the Act or rules thereunder, including
amendments, incorporated documents, exhibits and financial
statements, in the form in which it has or shall become
effective and, in the event that any post-effective amendment
thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration
statement as so amended. "Rule 424" refers to such rule under
the Act. The Transferor proposes to file with the Commission
pursuant to Rule 424(b) ("Rule 424(b)") under the Act a
supplement (the "Prospectus Supplement") to the prospectus
included in the Registration Statement (such prospectus, in
the form it appears in the Registration Statement or in the
form most recently revised and filed with the Commission
pursuant to Rule 424(b), is hereinafter referred to as the
"Base Prospectus") relating to the Notes and the method of
distribution thereof. The Base Prospectus and the Prospectus
Supplement, together with any amendment thereof or supplement
thereto, are hereinafter referred to as the "Prospectus."
(ii) On the Effective Date, the Registration Statement
conformed in all respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and the
TIA and the rules and regulations thereunder and did not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
on the date of this Agreement, the Registration Statement and
the Prospectus conform, and at the time of filing of the
Prospectus pursuant to Rule 424(b) the Registration Statement
and the Prospectus will conform, in all respects with the
requirements of the Act and the Rules and Regulations and the
TIA and the rules and regulations thereunder and neither of
such documents includes, or will include, any untrue statement
of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however,
that neither the Bank nor the Transferor makes any
representations or warranties as to (a) the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplements thereto) in reliance upon and
in conformity with information furnished in writing to the
Bank or the Transferor by or on behalf of any Underwriter
through the Representative specifically for use in connection
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with the preparation of the Registration Statement or the
Prospectus (or any supplements thereto) or (b) information in
any Derived Information provided by the Underwriters (other
than information resulting from the Transferor Provided
Information).
(iii) The Bank is duly organized, validly existing and in good
standing as a national banking association under the laws of
the United States and the Transferor is a corporation duly
organized and validly existing and in good standing under the
laws of its jurisdiction of incorporation. Each of the Bank
and the Transferor has all requisite power and authority to
own its properties and conduct its business as presently
conducted and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
which requires such qualification, except where failure to
have such requisite power and authority or to be so qualified
would not have a material adverse effect on the business or
consolidated financial condition of the Bank or the
Transferor.
(iv) Neither the Transferor nor the Bank is in violation of
its charter or certificate of incorporation or in default in
the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it may be bound,
or to which any of the property or assets of the Transferor or
the Bank, as the case may be, is subject, except where any
such violation or default would not have a material adverse
effect on the transactions contemplated by this Agreement.
(v) The execution, delivery and performance by the Transferor
of each of this Agreement, the Transferor Receivables Purchase
Agreement, the Transfer and Servicing Agreement and the Trust
Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Transferor
pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Transferor is a party or by which it may be bound, or to which
any of the property or assets of the Transferor is subject,
nor will such action result in any violation of the provisions
of the charter or by-laws of the Bank or any applicable law,
administrative regulation or administrative or court decree,
except where any such conflict, breach, default, encumbrance
or violation would not have a material adverse effect on the
transactions contemplated by this Agreement.
(vi) The execution, delivery and performance by the Bank of
this Agreement, Bank Receivables Purchase Agreement and the
Tri-Party Receivables Purchase Agreement, and the consummation
of the
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transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary action or proceedings
and will not conflict with or constitute a breach of, or
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the
Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Bank
is a party or by which it may be bound, or to which any of the
property or assets of the Bank is subject, nor will such
action result in any violation of the provisions of the
charter or by laws of the Bank or any applicable law,
administrative regulation or administrative or court decree,
except where any such conflict, breach, default, encumbrance
or violation would not have a material adverse effect on the
transactions contemplated by this Agreement.
(vii) This Agreement, the Transferor Receivables Purchase
Agreement, the Transfer and Servicing Agreement and the Trust
Agreement have been duly executed and delivered by the
Transferor; and this Agreement, the Transferor Receivables
Purchase Agreement, the Transfer and Servicing Agreement and
the Trust Agreement constitute legal, valid and binding
instruments enforceable against the Transferor in accordance
with their respective terms, subject as to enforceability (A)
to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights
generally and the rights and remedies of creditors of thrifts,
savings institutions or national banking associations, (B) to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law) and
(C) with respect to rights of indemnity under this Agreement,
to limitations of public policy under applicable securities
laws.
(viii) This Agreement and the Bank Receivables Purchase
Agreement and the Tri-Party Receivables Purchase Agreement
have been duly executed and delivered by the Bank; and this
Agreement and the Bank Receivables Purchase Agreement and the
Tri-Party Receivables Purchase Agreement constitute legal,
valid and binding instruments enforceable against the Bank in
accordance with their respective terms, subject as to the
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting
creditors' rights generally and the rights and remedies of
creditors of thrifts, savings institutions or national banking
associations, (B) to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or
at law) and (C) with respect to rights of indemnity under this
Agreement, to limitations of public policy under applicable
securities law.
(ix) The Bank has authorized the conveyance of the Receivables
to the Transferor; the Transferor has authorized the
conveyance of the Receivables to the Issuer; and the
Transferor has directed the Issuer to issue and sell the
Notes.
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(x) The Bank will, upon request by the Representatives,
provide to the Representatives complete and correct copies of
publicly available portions of the Consolidated Reports of
Condition and Income of the Bank for the year ended December
31, 2000, as submitted to the Comptroller of the Currency.
Except as set forth or contemplated in the Registration
Statement and the Prospectus, there has been no material
adverse change in the consolidated condition (financial or
otherwise) of the Bank and its subsidiaries taken as a whole
since December 31, 2000.
(xi) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of
this Agreement, each of the Transaction Documents and the
Notes shall have been paid or will be paid by the Transferor
at or prior to the Closing Date.
(xii) The Notes have been duly and validly authorized, and,
when validly executed, authenticated, issued and delivered in
accordance with the Indenture and as provided herein will
conform in all material respects to the description thereof
contained in the Prospectus and will be validly issued and
outstanding and entitled to the benefits of the Indenture.
(xiii) There are no legal or governmental proceedings pending,
or to the knowledge of the Bank or the Transferor threatened,
to which the Bank or the Transferor is a party or of which any
property of any of them is the subject, other than actions,
suits or proceedings which are not reasonably expected,
individually or in the aggregate, to have a material adverse
effect on the shareholder's equity or consolidated financial
position of such person and its subsidiaries taken as a whole,
or which would have a material adverse effect upon the
consummation of this Agreement.
(xiv) Xxxxxx Xxxxxxxx LLP is an independent public accountant
with respect to the Bank and Transferor.
(xv) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court
or governmental agency or body of the United States is
required for the issue and sale of the Notes, or the
consummation by the Bank or the Transferor of the other
transactions contemplated by this Agreement or any Transaction
Document to which it is a party, except for (A) the
registration under the Act of the Notes, (B) such consents,
approvals, authorizations, orders, registrations,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the
failure to obtain such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
business or consolidated financial condition of the Bank and
its
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subsidiaries taken as a whole or the Transferor or the
transactions contemplated by such agreements.
(xvi) Neither the Bank nor the Transferor will conduct their
operations while any of the Notes are outstanding in a manner
that would require the Transferor or the Issuer to be
registered as an "investment company" under the Investment
Company Act of 1940, as amended (the "1940 Act") as in effect
on the date hereof.
(b) HFC represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 1(b).
(i) HFC is a corporation duly organized and validly existing
and in good standing under the laws of its jurisdiction of
incorporation. HFC has all requisite power and authority to
own its properties and conduct its business as presently
conducted and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
which requires such qualification, except where the failure to
have such power and authority or to be so qualified would not
have a material adverse effect on the business or consolidated
financial condition of HFC and its subsidiaries taken as a
whole.
(ii) HFC is not in violation of its restated articles of
incorporation or in default in the performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which HFC is a
party or by which it may be bound, or to which any of the
property or assets of HFC is subject except where any such
violation or default would not have a material adverse effect
on the transactions contemplated by this Agreement.
(iii) The execution, delivery and performance by HFC of this
Agreement, the Transfer and Servicing Agreement, the
Indenture, the Indenture Supplement and the Administration
Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of HFC pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which HFC is a party or by which it may
be bound, or to which any of the property or assets of HFC is
subject, nor will such action result in any violation of the
provisions of the restated articles of incorporation or by
laws of HFC or any applicable law, administrative regulation
or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not
have a material adverse effect on the transactions
contemplated by this Agreement.
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(iv) This Agreement, the Transfer and Servicing Agreement and
the Administration Agreement have been duly executed and
delivered by HFC; and this Agreement, the Transfer and
Servicing Agreement and the Administration Agreement
constitute legal, valid and binding instruments enforceable
against HFC in accordance with their respective terms, subject
as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally, (B) to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (C) with
respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities laws.
(v) HFC will, upon request by the Representative, provide to
the Representative complete and correct copies of all reports
filed by it with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), during
2001. Except as set forth in or contemplated in such reports,
there has been no material adverse change in the consolidated
financial condition of HFC and its subsidiaries taken as a
whole since the respective dates as of which information is
given in the Prospectus.
(vi) There are no legal or governmental actions, suits or
proceedings pending, or to the knowledge of HFC threatened, to
which HFC is a party or of which any of its property is the
subject, other than proceedings which are not reasonably
expected, individually or in the aggregate, to have a material
adverse effect on the shareholder's equity or consolidated
financial position of HFC and its subsidiaries taken as a
whole or which would have a material adverse effect upon the
consummation of this Agreement.
(vii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body of the United
States is required for the consummation by HFC of the
transactions contemplated by this Agreement, the Transfer and
Servicing Agreement, the Indenture, the Indenture Supplement
and the Administration Agreement, except for (A) the
registration under the Act of the Notes, (B) such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the
failure to obtain such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole or the transactions contemplated
by such agreements.
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(viii) Xxxxxx Xxxxxxxx LLP is an independent public accountant
with respect to HFC.
(c) Any certificate signed by an officer on behalf of any of
the Household Entities and delivered to the Underwriters or counsel for the
Underwriters in connection with an offering of the Notes shall be deemed, and
shall state that it is, a representation and warranty as to the matters covered
thereby to each person to whom the representations and warranties in this
Section 1 are made.
Section 2. PURCHASE AND SALE. Subject to the terms and
conditions and in reliance upon the covenants, representations and warranties
herein set forth, the Transferor agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Transferor the principal amount of Class A Notes set forth opposite such
Underwriter's name in Schedule I pursuant to the terms of this Agreement at a
purchase price equal to 99.820475% of the aggregate principal amount represented
by the Class A Notes.
(a) Subject to the terms and conditions and in reliance upon
the covenants, representations and warranties herein set forth, the Transferor
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Transferor the principal amount
of Class B Notes set forth opposite such Underwriter's name in Schedule I
pursuant to the terms of this Agreement at a purchase price equal to 99.825% of
the aggregate principal amount represented by the Class B Notes.
Section 3. DELIVERY AND PAYMENT. Delivery of and payment for
the Notes to be purchased by the Underwriters in accordance with this Agreement
shall be made at 9:00 A.M. at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on August 16, 2001, which date, time
or place may be postponed or changed by agreement between the Representatives
and the Transferor (such date and time of delivery and payment for the Notes
being herein referred to as the "Closing Date"). Delivery of one or more global
notes representing the Notes shall be made to the accounts of the several
Underwriters against payment by the several Underwriters of the purchase price
therefor, to or upon the order of the Transferor by one or more wire transfers
in immediately available funds. The global notes to be so delivered shall be
registered in the name of Cede & Co., as nominee for The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes representing the Notes will be available only under
limited circumstances as described in the Indenture.
The Transferor agrees to have copies of the global notes or
the Definitive Notes available for inspection, checking and packaging by the
Underwriters in New York, New York, not later than 1:00 p.m., New York City
time, on the business day prior to the Closing Date.
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Section 4. OFFERING BY UNDERWRITERS.
(a) It is understood that the Underwriters propose to offer
the Notes for sale to the public as set forth in the Prospectus. The Household
Entities agree that the Underwriters may, but are not obligated to, make a
market in the Notes and that any such market making by the Underwriters may be
discontinued at any time in the respective sole discretion of the Underwriters
(b) Each Underwriter severally agrees that if it is a foreign
broker dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it will not effect any transaction in the
Notes within the United States or induce or attempt to induce the purchase of or
sale of the Notes within the United States, except that it shall be permitted to
make sales to the other Underwriters or to its United States affiliates provided
that such sales are made in compliance with an exemption of certain foreign
brokers or dealers under Rule 15a-6 under the Exchange Act and in conformity
with the NASD's Conduct Rules as such Rules apply to non-NASD brokers or
dealers.
(c) Each Underwriter severally represents and agrees that (i)
it has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom; (ii) it has only issued or
passed on and will only issue or pass on to any person in the United Kingdom any
document received by it in connection with the issue of the Notes if that person
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom that
document may otherwise lawfully be issued or passed on; (iii) if it is an
authorized person under Chapter III of the Financial Services Act 1986, it has
only promoted and will only promote (as that term is defined in Regulation
1.02(2) of the Financial Services (Promotion of Unregulated Schemes) Regulations
1991) to any person in the United Kingdom the scheme described in the Prospectus
if that person is of a kind described either in Section 76(2) of the Financial
Services Act 1986 or in Regulation 1.04 of the Financial Services (Promotion of
Unregulated Schemes) Regulations 1991; and (iv) it is a person of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996; and (v) it has not offered or sold and,
prior to the expiry of six months from the Closing Date, will not offer or sell
any Series 2001-2 Notes to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995.
(d) Each Underwriter severally, and not jointly, represents
and warrants to, and agrees with the other Underwriters, the Bank, the
Transferor and HFC that:
(i) it has not used, and will not use, any Derived Information
in connection with the offering of the Notes as such term is defined
below;
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(ii) as of the date hereof and as of the Closing Date that
such Underwriter has complied and will comply with all of its
obligations arising hereunder and, has complied with the Act, the
Exchange Act, and the Rules and Regulations, with respect to the
Derived Information provided by such Underwriter, if any is provided in
breach of violation of the representation and warranty stated in clause
(i) above, and such Derived Information is accurate in all material
respects (taking into account the assumptions explicitly set forth in
the Derived Information, except for any errors therein attributable to
errors or mistakes in the Transferor-Provided Information). Any Derived
Information provided by such Underwriter to the Transferor constitutes
a complete set of all Derived Information required to be filed with the
Commission pursuant to the No-Action Letters;
(iii) such Underwriter shall provide the Transferor no later
than one Business Day after any Collateral Term Sheet is delivered to a
prospective investor, if any is provided in violation of the
representation and warranty stated in clause (i) above, or in the case
of any Structural Term Sheets and Computational Materials no later than
one Business Day before the date on which the Prospectus is required to
be filed pursuant to Rule 424, all such Derived Information delivered
to a prospective investor by it during the period commencing on the
Effective Date and ending on the date the Prospectus is filed with the
Commission. Such Underwriter shall deliver to the Transferor a hard
copy and, in a mutually agreed upon format, a disk or electronic
transmission of such Derived Information;
(iv) assuming the accuracy of the Transferor-Provider
Information used in the preparation of Derived Information, the Derived
Information, delivered by such Underwriter, if any is provided in
violation of the representation and warranty stated in clause (i)
above, as of the date thereof, is accurate in all material respects,
taking into account the assumptions set forth in such Derived
Information, but without making any representations as to the
appropriateness of such assumptions; and
(v) each Underwriter acknowledges that none of the Bank, the
Transferor or HFC will be deemed to have breached any representation
and warranty or to have failed to satisfy any other agreement contained
herein, to the extent any such breach or failure on the part of such
party resulted solely from an Underwriter's breach of the
representation and warranty set forth in subsection (d) (ii), (iii) or
(iv) above.
For purposes of this Agreement, "Derived Information" means the type of
information defined as Collateral Term Sheets, Structural Term Sheets or
Computational Materials (as such terms are interpreted in the No-Action
Letters). The terms "Collateral Term Sheet" and "Structural Term Sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of Xxxxxx, Xxxxxxxx, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the Commission staff's response
thereto, were publicly available February 17, 1995), and with respect to
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"Collateral Term Sheet" includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Xxxxxx Letter" and together with the PSA Letter, the "No-Action
Letters") of Brown & Xxxx on behalf of Xxxxxx, Xxxxxxx & Co., Inc. (which
letter, and the Commission staff's response thereto, were publicly available May
20, 1994). "Transferor-Provided Information" means the information contained on
any computer tape or microfiche list furnished to the Underwriters by the
Transferor or other Household Entities concerning the assets comprising the
Issuer.
Section 5. AGREEMENTS. Each of the Household Entities, each as
to itself, covenants and agrees with the several Underwriters that:
(a) Immediately following the execution of this Agreement, the
Transferor will prepare a Prospectus Supplement setting forth the amount of
Notes covered thereby and the terms thereof not otherwise specified in the Base
Prospectus, the price at which such Notes are to be purchased by the
Underwriters, the initial public offering price, the selling concessions and
allowances, and such other information as the Transferor deems appropriate. The
Transferor will transmit the Prospectus, including such Prospectus Supplement,
to the Commission pursuant to Rule 424(b) by a means reasonably calculated to
result in filing with the Commission pursuant to Rule 424(b). The Transferor
will promptly advise the Representative (i) when the Registration Statement
shall have become effective, (ii) when any amendment thereof shall have become
effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration Statement or the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (v) of the receipt by the
Transferor of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Transferor will not file any
amendment of the Registration Statement or supplement to the Prospectus to which
the Representative reasonably objects. The Transferor will use its best efforts
to prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a Prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to supplement such Prospectus to
comply with the Act or the rules thereunder, the Transferor shall be required to
notify the Representative and upon the Representative's request to prepare and
furnish without charge to each Underwriter as many copies as such Underwriter
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which shall correct such statement or omission or
effect such compliance.
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(c) As soon as practicable, the Transferor will make generally
available to Noteholders and to the Representative an earnings statement or
statements of the Issuer which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(d) The Transferor will furnish to the Representative and
counsel for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Act, as many copies of the
Prospectus and any supplement thereto as the Underwriters may reasonably
request.
(e) The Household Entities, jointly and severally, agree to
pay all expenses incidental to the performance of their obligations under this
Agreement, including without limitation (i) expenses of preparing, printing and
reproducing the Registration Statement, the Prospectus, this Agreement, the
Transaction Documents and the Notes, (ii) any fees charged by any rating agency
for the rating of the Notes, (iii) any expenses (including reasonable fees and
disbursements of counsel not to exceed $10,000) incurred by the Underwriters in
connection with qualification of the Notes for sale under the laws of such
jurisdictions as the Representative designates, (iv) the fees and expenses of
Xxxxxx Xxxxxxxx LLP, (v) the fees and expenses of the Indenture Trustee and any
agent of the Indenture Trustee and the fees and disbursements of counsel for the
Indenture Trustee in connection with the Indenture and the Notes, and (vi) the
cost of delivering the Notes to the offices of the Underwriters, insured to the
satisfaction of the Underwriters (it being understood that, except as provided
in this paragraph (e) and in Sections 7 and 8 hereof, the Underwriters will pay
their own expenses, including the expense of preparing, printing and reproducing
this Agreement, any agreement among underwriters, the fees and expenses of
counsel for the Underwriters, any transfer taxes on resale of any of the Notes
by them and advertising expenses connected with any offers that the Underwriters
may make).
(f) The Transferor will take all reasonable actions requested
by the Underwriters to arrange for the qualification of the Notes for sale under
the laws of such jurisdictions within the United States or as necessary to
qualify for the Euroclear System or Clearstream Banking, societe anonyme and as
the Representative may designate, will maintain such qualifications in effect so
long as required for the distribution of the Notes.
(g) For so long as the Notes are outstanding, the Transferor
shall deliver to the Representative by first-class mail and as soon as
practicable a copy of all reports and notices related to Series 2001-2 Notes and
delivered to the Owner Trustee, the Indenture Trustee or the Noteholders under
the Indenture.
(h) For so long as the Notes are outstanding, the Household
Entities will furnish to the Representative as soon as practicable after filing,
any other information concerning the Household Entities filed with any
government or regulatory authority which is otherwise publicly available, as the
Representative may reasonably request.
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(i) To the extent, if any, that any rating provided with
respect to the Notes set forth in Sections 6(j), (k) and (l) hereof is
conditional upon the furnishing of documents reasonably available to the
Household Entities, the Household Entities shall furnish such documents.
(j) To the extent that Derived Information is utilized by an
Underwriter in violation of its representation and warranty set forth in Section
4(d)(i) the Transferor will, at the expense of the Underwriters, file the
Derived Information provided to it by the Underwriters under Section 4(d)(iii)
with the Commission pursuant to a Current Report on Form 8-K not later than 5:00
p.m. on the day the Prospectus is delivered to the Underwriters; provided,
however, that as a condition to the filing of the Derived Information by the
Transferor, the Transferor must receive a letter from a firm of independent
certified public accountants reasonably acceptable to the Transferor, which
letter shall be satisfactory in form and substance to the Transferor, HFC and
their counsel, to the effect that such accountants have performed certain
specified procedures, all of which have been agreed to by the Transferor, as a
result of which they have determined the accuracy in all material respects of
the numerical and financial information included in the Derived Information
provided by the Underwriters to the Transferor for filing with the Commission.
The Transferor shall not be obligated to file any Derived Information that has
been determined to contain any material errors or omission; provided, however,
that, at the request of an Underwriter the Transferor shall file Derived
Information containing material errors or omissions if clearly marked
"superseded by materials dated ________" and accompanied by corrected Derived
Information that is marked "these materials supersede and correct the materials
dated ________."
Section 6. CONDITIONS OF CLOSING; TERMINATION OF RIGHTS UNDER
SECTION 2. The obligations of the Underwriters to purchase and pay for the Notes
on the Closing Date shall be subject to the material accuracy of the
representations and warranties of the Household Entities contained herein as of
the Execution Time and as of the Closing Date, to the material accuracy of the
statements of the Household Entities made in any certificates delivered pursuant
to the provisions hereof, to the performance by the Household Entities of their
obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 5(a) of this Agreement;
and, prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened by the Commission.
(b) Each of the Household Entities shall have delivered a
certificate, dated the Closing Date, signed by its President or any Vice
President and its principal financial or principal accounting officer or its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant Secretary
to the effect that the signers of such certificate, on behalf of the named
Household Entity, have carefully examined this Agreement, each of
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the Transaction Documents, the Prospectus (and any supplements thereto) and the
Registration Statement, stating that:
(i) the representations and warranties of such Household
Entity in this Agreement are true and correct in all material
respects at and as of the date of such certificate as if made
on and as of such date (except to the extent they expressly
relate to an earlier date);
(ii) such Household Entity has complied, in all material
respects, with all the agreements and satisfied, in all
material respects, all the conditions on its part to be
performed or satisfied at or prior to the date of such
certificate;
(iii) nothing has come to the attention of such Household
Entity that would lead it to believe that the Registration
Statement contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the knowledge of the
xxxxxx, threatened.
(c) Xxxx X. Xxxxxx, Vice President-Corporate Law and Assistant
Secretary of Household, as counsel for the Household Entities, shall have
delivered a favorable opinion with respect to clauses (i) through (x) of this
paragraph (c), Xxxxx Xxxxxxxxxx LLP shall have delivered a favorable opinion
with respect to clauses (xi) through (xvii) of this paragraph (c) each opinion
shall be dated the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Bank has been duly chartered as a national banking
association and is validly existing and in good standing under
the laws of the United States, is duly qualified to do
business under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material
properties or conducts material business, and has full power
and authority to own its properties, and to enter into and
perform its obligations under the Bank Receivables Purchase
Agreement and the Tri-Party Receivables Purchase Agreement,
except where failure to have such power and authority or to be
so qualified will not have a material adverse effect on the
business or consolidated financial condition of the Bank and
its subsidiaries taken as a whole;
(ii) each of HFC and the Transferor is duly incorporated and
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation with corporate power
and authority to own its properties and to conduct its
business, except where failure to have such power and
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authority do not have a material adverse effect, as the case
may be, on the business or consolidated financial condition of
HFC and its subsidiaries, taken as a whole, or the Transferor,
to enter into and perform its obligations under this Agreement
and the Transaction Documents which it is a party thereto and
to consummate the transactions contemplated hereby and
thereby;
(iii) this Agreement and each of the Transaction Documents to
which it is a party have been duly authorized, executed and
delivered by HFC, the Bank or the Transferor, as the case may
be, and, when executed by the Indenture Trustee and the
Representative, constitute the legal, valid and binding
agreement of HFC, the Bank or the Transferor, as the case may
be, enforceable in accordance with its terms subject, as to
enforceability (A) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting
creditors' rights generally and the rights and remedies of
creditors of thrifts, savings institutions or national banking
associations, (B) to general principles of equity (regardless
of whether enforcement is sought in a proceedings in equity or
at law) and (C) with respect to rights of indemnity under this
Agreement, to limitations of public policy under applicable
securities laws;
(iv) the Notes have been duly authorized and, when executed
and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued and
outstanding, enforceable in accordance with their terms
subject, as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or
national banking associations and (B) to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(v) neither the execution nor the delivery of this Agreement
or any Transaction Document nor the issuance or delivery of
the Notes, nor the consummation of any of the transactions
contemplated herein or therein, nor the fulfillment of the
terms of the Notes, this Agreement or any Transaction Document
will conflict with or violate any term or provision of the
charter, by-laws or organizational documents of any of the
applicable Household Entities, as the case may be, or result
in a breach or violation of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of any of the applicable Household
Entities (except the lien of the Indenture) pursuant to, any
material law, statute or regulation currently applicable to
any of them or any order or regulation known to such counsel
to be currently applicable to any of them of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over the Bank or the Transferor, as the
case may be, or the terms of any indenture or other
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agreement or instrument known to such counsel to which any of
the applicable Household Entities is a party or by which any
of them or any of their properties are bound, except where any
such conflict, breach, violation, default or encumbrance would
not have a material adverse effect on the transactions
contemplated by this Agreement;
(vi) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator with respect to this Agreement, the Notes or the
Transaction Documents or any of the transactions contemplated
herein or therein or with respect to the Household Entities
which, in the case of any such action, suit or proceeding with
respect to any of them, would have a material adverse effect
on the Noteholders or upon the ability of any of them to
perform their obligations under any of such agreements; and
the statements included in the Registration Statement and
Prospectus describing statutes (other than those relating to
tax and ERISA matters), legal proceedings, contracts and other
documents (other than financial statements and other financial
and statistical information contained therein as to which such
counsel need express no opinion) fairly summarize the matters
therein described;
(vii) the Registration Statement has become effective under
the Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 424 has been made in the
manner and within the time period required by Rule 424; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened; the Registration Statement and the Prospectus (and
any supplements thereto) (other than for Derived Information
and for financial and statistical information contained
therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(viii) such counsel has no reason to believe that at any
Effective Date the Registration Statement (excluding any
exhibits filed therewith) contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or the Prospectus, as of its date,
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading (other than financial and statistical
information contained therein as to which such counsel need
express no opinion);
(ix) to the best of knowledge of such counsel, no consent,
approval, authorization, order, registration, filing,
qualification, license or permit of or with any court, federal
or state governmental agency or regulatory body
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is required for any Household Entity to consummate the
transactions contemplated in this Agreement or the Transaction
Documents, except (A) such consents, approvals,
authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been made or
obtained or as may be required under the State securities or
blue sky laws of any jurisdiction in connection with the
purchase of the Notes by the Underwriters and the subsequent
distribution of the Notes by the Underwriters or (B) where the
failure to have such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
Issuer's interests in the Receivables or the transactions
contemplated by such agreements;
(x) the Notes, this Agreement and the Transaction Documents
conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus;
(xi) the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and complies as
to form with the TIA and the rules and regulations of the
Commission thereunder;
(xii) the Issuer is not required to be registered as an
"investment company" under the 1940 Act;
(xiii) to the extent that the transfer of the Receivables by
the Bank to the Transferor does not constitute an absolute
assignment of such Receivables, the Receivables Purchase
Agreement creates in favor of the Transferor a security
interest in the rights of the Bank in such Receivables, and to
the extent that the transfer of the Receivables by the
Transferor to the Issuer does not constitute an absolute
assignment of such Receivables, the Transfer and Servicing
Agreement creates in favor of the Issuer a security interest
in the rights of the Transferor in such Receivables;
(xiv) the Indenture creates in favor of the Indenture Trustee
a security interest in the rights of the Issuer in the
Receivables;
(xv) the statements in the Registration Statement and
Prospectus under the headings "Prospectus Summary--Tax Status"
and "Material Federal Income Tax Consequences", to the extent
that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or
reviewed by such counsel and accurately describe the material
Federal income tax consequences to holders of the Notes and
the statements under the heading "ERISA Considerations", to
the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared
or reviewed by such counsel and accurately describe the
material consequences to holders of the Notes under XXXXX;
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(xvi) If the FDIC is appointed as conservator or receiver for
the Bank and if a court were to determine that the Indenture
Trustee has a security interest in the Receivables and the
proceeds thereof, the court would hold that the security
interest of the Indenture Trustee would be enforceable against
the Bank with respect to the Receivables and such proceeds;
and
(xvii) No other filings or other actions, with respect to the
Indenture Trustee's interest in the Receivables, are necessary
to perfect the interest of the Indenture Trustee in the
Receivables, and proceeds thereof, against third parties,
except that appropriate continuation statements must be filed
in accordance with the applicable state's requirements, which
is presently at least every five years.
In rendering such opinion, counsel may rely (A) as to matters
involving the application of the law of any jurisdiction other than (i) with
respect to the opinion delivered by Xxxx X. Xxxxxx, Vice President-Corporate Law
and Assistant Secretary of Household, the State of Illinois, the United States
Federal laws and the corporation law of the State of Delaware and (ii) with
respect to the opinion delivered by Xxxxx Xxxxxxxxxx LLP, the State of New York,
the United States Federal Laws and the corporation law of the State of Delaware,
to the extent deemed proper and stated in each such opinion, upon the opinion of
other counsel of good standing believed by each such counsel to be reliable and
acceptable to you and your counsel, and (B) as to matters of fact on
certificates of responsible officers of the Issuer, Household Entities and
public officials. References to the Prospectus in this paragraph (c) include any
supplements thereto.
(d) Xxxxx Xxxxxxxxxx LLP, as counsel for the Underwriters,
shall have delivered a favorable opinion dated the Closing Date with respect to
the validity of the Notes, this Agreement, the Transfer and Servicing Agreement,
the Indenture, the Indenture Supplement, the Registration Statement, the
Prospectus and such other related matters as the Representatives may reasonably
require and the Household Entities shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass on
such matters. In giving their opinion, Xxxxx Xxxxxxxxxx LLP may rely (i) as to
matters of Illinois law upon the opinions of counsel delivered pursuant to
subsection (c) above, (ii) as to matters involving the application of laws of
any jurisdiction other than the State of New York, the United States Federal
laws or the corporation law of the State of Delaware, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable, and (iii) as to matters of fact, to the extent
deemed proper and as stated therein on certificates of responsible officers of
the Issuer, Household Entities and public officials.
(e) At the Execution Time and at the Closing Date, Xxxxxx
Xxxxxxxx LLP shall have furnished to the Representatives a letter or letters,
dated respectively as of the date of this Agreement and the date of the Closing
Date, in form and substance satisfactory to the Representative and counsel for
the Underwriters, confirming that they are certified independent public
accountants within the meaning of the Act, the Exchange Act and the rules and
regulations promulgated thereunder and stating in effect that they
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have performed certain specified procedures as a result of which they determined
that certain information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical information derived
from the general accounting records of the Issuer, the Bank and the Transferor)
set forth in the Registration Statement and the Prospectus (and any supplements
thereto), agrees with the accounting records of the Issuer, and the Household
Entities, excluding any questions of legal interpretation, and (ii) they have
performed certain specified procedures with respect to the computer programs
used to select the Eligible Accounts and to generate information with respect to
the Accounts set forth in the Registration Statement and the Prospectus (and any
supplements thereto).
(f) The Representative shall receive evidence satisfactory to
the Representative that, on or before the Closing Date, UCC-1 financing
statements are being or have been filed in the offices of the Secretaries of
State of its incorporation (and such other states as may be necessary or
desirable pursuant to applicable state law) reflecting the interest of the
Indenture Trustee in the Receivables and the proceeds thereof.
(g) Counsel to the Indenture Trustee shall have delivered a
favorable opinion, dated the Closing Date, and satisfactory in form and
substance to the Representative and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that:
(i) the Indenture Trustee has been duly incorporated and is
validly existing and in good standing as a banking corporation
under the laws of the State of Minnesota, is duly qualified to
do business in all jurisdictions where the nature of its
operations as contemplated by the Indenture requires such
qualifications, and has the power and authority (corporate and
other) to issue, and to take all action required of it under,
Indenture;
(ii) the execution, delivery and performance by the Indenture
Trustee of the Indenture and the issuance of the Notes by the
Indenture Trustee have been duly authorized by all necessary
corporate action on the part of the Indenture Trustee, and
under present laws do not and will not contravene any law or
governmental regulation or order presently binding on the
Indenture Trustee or the charter, the by-laws or
organizational documents of the Indenture Trustee or
contravene any provision of or constitute a default under any
indenture, contract, agreement or other instrument to which
the Indenture Trustee is a party or by which the Indenture
Trustee is bound;
(iii) the execution, delivery and performance by the Indenture
Trustee of the Indenture and the issuance of the Notes by the
Indenture Trustee do not require the consent or approval of,
the giving of notice to, the registration with, or the taking
of any other action in respect of any Federal, state or other
governmental agency or authority which has not previously been
effected;
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(iv) each of the Notes has been duly authenticated and
delivered by the Indenture Trustee and each of the Notes and
the Indenture constitute legal, valid and binding agreements
of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its terms (subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally); and
(v) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of
America or the State of Minnesota having jurisdiction over the
banking or trust powers of the Indenture Trustee is required
in connection with its execution and delivery of the Indenture
or the performance by the Indenture Trustee of the terms of
the Indenture.
(h) Counsel to the Owner Trustee shall have delivered a
favorable opinion, dated the Closing Date, and satisfactory in form and
substance to the Representative and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that:
(i) the Owner Trustee is duly incorporated and validly
existing as a banking corporation in good standing under the
laws of the State of Delaware and has the power and authority
to execute, deliver and perform the Trust Agreement and to
consummate the transactions contemplated thereby;
(ii) the Trust Agreement has been duly authorized, executed
and delivered by the Owner Trustee and constitutes a legal,
valid and binding obligation of the Owner Trustee, enforceable
against the Owner Trustee in accordance with its terms;
(iii) each of the Indenture, the Trust Agreement and the
Transfer and Servicing Agreement (collectively referred to in
this subsection (h) as the "Trust Documents") has been duly
executed and delivered by the Owner Trustee, as Owner Trustee
on behalf of the Issuer;
(iv) neither the execution, delivery or performance by the
Owner Trustee, in its individual capacity or as Owner Trustee,
as the case may be, of the Trust Documents or the Notes, nor
the consummation of the transactions by the Owner Trustee, in
its individual capacity or as Owner Trustee, as the case may
be, contemplated thereby, requires the consent or approval of,
the withholding of objection on the part of, the giving of
notice to, the filing, registration or qualification with, or
the taking of any other action in respect of, any governmental
authority or agency of the State of Delaware or the United
States of America governing the banking or trust powers of the
Owner Trustee;
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(v) neither the execution, delivery and performance by the
Owner Trustee, in its individual capacity or as Owner Trustee,
as the case may be, of the Trust Documents, nor the
consummation of the transactions by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
contemplated thereby, is in violation of the charter, bylaws
or organizational documents of the Owner Trustee or of any
law, governmental rule or regulation of the State of Delaware
or of the United States of America governing the banking or
trust powers of the Owner Trustee or, to such counsel's
knowledge, without independent investigation, any indenture,
mortgage, bank credit agreement, note or bond purchase
agreement, long-term lease, license or other agreement or
instrument to which it is a party or by which it is bound or,
to such counsel's knowledge, without independent
investigation, of any judgment or order applicable to the
Owner Trustee;
(vi) no consent, approval or other authorization of, or
registration, declaration or filing with, any court or
governmental agency or commission of the State of Delaware is
required by or with respect to the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
for the valid execution and delivery of the Trust Documents,
or for the validity or enforceability thereof (other than the
filing of the certificate of trust, which certificate of trust
has been duly filed); and
(vii) to such counsel's knowledge, without independent
investigation, there are no pending or threatened actions,
suits or proceedings affecting the Owner Trustee before any
court or other governmental authority which, if adversely
determined, would materially and adversely affect the ability
of the Owner Trustee to carry out the transactions
contemplated by the Trust Agreement.
(i) Special Delaware counsel to the Issuer shall have
delivered a favorable opinion, dated the Closing Date, and satisfactory in form
and substance to the Representatives and counsel for the Underwriters, the
Household Entities and their counsel, to the effect that;
(i) the Issuer has been duly formed and is validly existing in
good standing as a common law trust under Delaware law.
(ii) the Trust Agreement constitutes a legal, valid and
binding obligation of the Owner Trustee and the Transferor,
enforceable against the Owner Trustee and the Transferor, in
accordance with its terms;
(iii) under the Trust Agreement, the execution and delivery of
the Transfer and Servicing Agreement and the Indenture, the
issuance of the Notes, the Transferor Certificate and the
Ownership Interest Certificate and the granting of the
Collateral to the Indenture Trustee as security for
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the Notes has been duly authorized by all necessary trust
action on the part of the Issuer;
(iv) under the Trust Agreement, the Issuer has (i) the trust
power and authority to execute, deliver and perform its
obligations under the Administration Agreement, the Indenture
and the Transfer and Servicing Agreement (collectively
referred to in this subsection (i) as the "Trust Documents"),
the Notes, the Transferor Certificate and the Owner Interest
Certificate and (ii) duly authorized, executed and delivered
such agreements and obligations;
(v) when the Transferor Certificate and Ownership Interest
Certificate have been duly executed and issued by the Issuer
and duly authenticated by the Owner Trustee in accordance with
the Trust Agreement, the Transferor Certificate and Ownership
Interest Certificate will be validly issued and entitled to
the benefits of the Trust Agreement;
(vi) neither the execution, delivery and performance by the
Issuer of the Trust Documents, the Notes, the Transferor
Certificate or the Ownership Interest Certificate, nor the
consummation by the Issuer of any of the transactions by the
Issuer contemplated thereby, requires the consent or approval
of, the withholding of objection on the part of, the giving of
notice to, the filing, registration or qualification with, or
the taking of any other action in respect of, any governmental
authority or agency of the State of Delaware and the filing of
any financing statements with the Delaware Secretary of State
in connection with the Indenture;
(vii) neither the execution, delivery and performance by the
Issuer of the Trust Documents, nor the consummation by the
Issuer of the transactions contemplated thereby, is in
violation of the Trust Agreement or of any law, rule or
regulation of the State of Delaware applicable to the Issuer;
(viii) with respect to the Issuer and the Receivables: (a)
there is no document, stamp, exercise or other similar tax
imposed by the State of Delaware upon the perfection of a
security interest in the Receivables, in the transfer of the
Receivables to or from the Issuer, or upon the issuance of the
Notes; (b) there is no personal property tax imposed by the
State of Delaware upon or measured by the corpus of the
Issuer; (c) the characterization of the Issuer for federal
income tax purposes will be determinative of the
characterization of the Issuer for Delaware income tax
purposes and assuming that the Issuer will be taxed as a
partnership for federal income tax purposes, the Issuer will
not be subject to Delaware income tax and Noteholders who are
not otherwise subject to Delaware income tax will not be
subject to tax by reason of their ownership of the Notes and
the receipt of income therefrom; and (d) any income tax
imposed by the State of Delaware that might be applicable to
the Issuer
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would be based upon "federal taxable income," and for the
purposes of determining such income, the characterization of
such income for federal income tax purposes will be
determinative, whether the characterization of the transaction
is that of a sale or a loan; and
(ix) the Transferor is the sole beneficial owner of the
Issuer.
(j) The Class A Notes shall be given the highest investment
grade rating by each of Xxxxx'x Investors Service, Inc. ("Xxxxx'x"), Xxxxx, Inc.
("Fitch") and Standard & Poor's Ratings Services ("S&P") and none of Xxxxx'x,
S&P or Fitch shall have placed the Class A Notes under review with possible
negative implications.
(k) The Class B Notes shall be rated at least "A" or its
equivalent by each of Xxxxx'x, Fitch and S&P and none of Xxxxx'x, S&P or Fitch
shall have placed the Class B Notes under review with possible negative
implications.
(l) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not have
been any change, or any development involving a prospective change, in or
affecting the business or properties of the Issuer or any of the Household
Entities other than as set forth or contemplated in the Registration Statement
or Prospectus, the effect of which, in any case referred to above, is, in the
reasonable judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the delivery of the
Notes as contemplated by the Registration Statement and the Prospectus.
(m) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to the Representative and counsel
for the Underwriters, and the Representative and counsel for the Underwriters
shall have received such information, certificates and documents as the
Representative or counsel for the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Underwriters, this Agreement and all obligations of the Representative and the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representative. Notice of such cancellation shall be given to the
Indenture Trustee and the Transferor in writing or by telephone or telegraph
confirmed in writing.
Section 7. REIMBURSEMENT OF EXPENSES. If the sale of the Notes
provided for herein is not consummated because any condition to the
Representative's obligations set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Indenture Trustee or the
Household Entities to perform any agreement herein or
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comply with any provision hereof other than by reason of a default by the
Representative or the Underwriters, the Household Entities, jointly and
severally, will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including but not limited to reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Notes.
Section 8. INDEMNIFICATION AND CONTRIBUTION.
(a) As an inducement to the Underwriters to participate in the
public offering of the Notes, the Transferor and HFC, jointly and severally (and
the Bank with respect to any information that it has provided in connection with
the preparation of the Prospectus and, with respect to the breach of any of its
representations and warranties under Section 1 hereunder), agree to indemnify
and hold harmless each Underwriter each of their directors and officers and each
person who controls any Underwriter within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or in the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or (ii) any error,
misstatement, or incorrect or incomplete information contained in any Derived
Information resulting from any Transferor-Provided Information, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (x) the Household Entities will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon (A) any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Household Entities by or on behalf of any
Underwriter through the Representative specifically for use in connection with
the preparation thereof, (B) or relates to any Derived Information provided by
the Underwriters to a prospective investor (except to the extent such
statements, errors, or incorrect or incomplete information contained therein
result from Transferor-Provided Information), and (y) such indemnity with
respect to any such untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the Notes which
are the subject thereof if such person was not sent a copy of the Prospectus (or
the Prospectus as supplemented) at or prior to the confirmation of the sale of
such Notes to such person in any case where such delivery is required by the
Act. This indemnity agreement will be in addition to any liability which the
Household Entities may otherwise have.
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(b) Each Underwriter, severally, agrees to indemnify and hold
harmless each of the Household Entities, each of their directors, each of the
officers who signs the Registration Statement, and each person who controls any
Household Entity within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnities from the
Household Entities to each Underwriter, but only with reference to (i) losses,
claims, damages or liabilities which arise from written information relating to
such Underwriter furnished to the Household Entities by or on behalf of such
Underwriter specifically for use in the preparation of the documents referred to
in the foregoing indemnity or (ii) information in any Derived Information
provided by such Underwriter (except to the extent that such untrue statements
or errors contained therein resulting from any error, misstatement, or incorrect
or incomplete information contained in any Transferor-Provided Information).
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Household Entities acknowledge that the
statements relating to the Underwriters set forth in the third and fourth
paragraphs and the last four paragraphs under the heading "Underwriting" in the
Prospectus constitute the only information furnished in writing by the
Underwriters or on behalf of the Underwriters for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnified
party similarly notified, to assume the defense thereof and to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the
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indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Household Entities on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Household Entities on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Household Entities on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Household Entities bears to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Household Entities or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Household Entities and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
8(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Section 9. DEFAULT BY AN UNDERWRITER. If any one or more
Underwriters shall fail to purchase and pay for any of the Notes agreed to be
purchased
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by such Underwriter or Underwriters hereunder on the Closing Date and such
failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Notes set forth opposite their names in Schedule I with respect to
the Closing Date hereto bears to the aggregate amount of Notes set forth
opposite the names of all the remaining Underwriters) the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Notes set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Notes, and if such nondefaulting
Underwriters do not purchase all the Notes, the obligations will terminate
without liability of any nondefaulting Underwriter, the Issuer, or any Household
Entity. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Transferor, HFC, the Bank and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
Section 10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Transferor if after the Execution Time and prior to delivery of and payment
for the Notes on the Closing Date, (i) trading in the Common Stock of Household
International, Inc. shall have been suspended by the Commission or the New York
Stock Exchange or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
by Federal or State of New York authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities involving the United States of
America, declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the reasonable judgment
of the Representative, impractical or inadvisable to proceed with the offering
or delivery of the Notes as contemplated by the Prospectus.
Section 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Household Entities or the officers of each of them and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriters, the Household Entities or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Notes. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
Section 12. NOTICES. All communications hereunder shall be in
writing and effective only on receipt, and, if sent to the Underwriters, will be
mailed, delivered or
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telegraphed and confirmed to the Representative at Xxxxxx Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Asset Finance Group; if sent to any Household
Entity, will be mailed, delivered or telegraphed and confirmed to them at 0000
Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, attention of General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 8 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
Section 13. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
The Bank, Transferor and HFC hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
Section 14. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
Section 15. COUNTERPARTS. This Agreement may be executed by
one or more parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 16. MISCELLANEOUS. This agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
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If you are in agreement with the foregoing, please sign two
counterparts hereof and return one to each of the Bank and the Transferor
whereupon this letter and your acceptance shall become a binding agreement among
the Household Entities and the several Underwriters.
Very truly yours,
HOUSEHOLD BANK (SB), N.A.
By: /s/ X. X. XXXX
-------------------------------------------
Name: X. X. Xxxx
Title: Vice President
HRSI FUNDING, INC. II
By: /s/ X. X. XXXXX
-------------------------------------------
Name: X. X. Xxxxx
Title: Vice President and Treasurer
HOUSEHOLD FINANCE CORPORATION
By: /s/ X. X. XXXX, XX.
-------------------------------------------
Name: X. X. Xxxx, Xx.
Title: Vice President and Treasurer
The foregoing Agreement
is hereby confirmed and
accepted as of the date hereof.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ XXXXXXX XXXXXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Director
For themselves and the other
several Underwriters named
in Schedule I to the
foregoing Agreement.
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SCHEDULE I
CLASS A NOTES
Principal
Amount
-----------
Credit Suisse First Boston Corporation 137,500,000
Bank One Capital Markets, Inc. 137,500,000
Deutsche Banc Xxxx. Xxxxx Inc. 137,500,000
Xxxxxxx Xxxxx Xxxxxx Inc. 137,500,000
CLASS B NOTES
Principal
Amount
-----------
Credit Suisse First Boston Corporation 37,025,000
Bank One Capital Markets, Inc. 18,512,500
Deutsche Banc Xxxx. Xxxxx Inc. 18,512,500
31
