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EXHIBIT 10.3
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HOUSEHOLD CONSUMER LOAN CORPORATION,
Seller,
HOUSEHOLD FINANCE CORPORATION,
Servicer,
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
Deposit Trustee
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FORM OF
SUPPLEMENT FOR SERIES 1997-1
Dated as of March 1, 1997
to the
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1995
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HOUSEHOLD CONSUMER LOAN DEPOSIT TRUST I
Series 1997-1
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TABLE OF CONTENTS
Page
SECTION 1. Designation and Covenant to Exclude
Participation Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Designation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Covenant to Exclude Participation Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. Servicing Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4. Article IV of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.07. Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.08. Determination of Monthly Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.09. Determination of Monthly Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.10. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.11. Application of Investor Finance Charge and
Administrative Collections on Deposit in
Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.12. Investor Charge-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.13. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5. Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6. Statements to Series 1997-1 Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7. Additional Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8. Optional Repurchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 9. Sale of Series 1997-1 Participants' Interest
pursuant to Section 2.06 or 10.01 of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 10. Distributions pursuant to Section 8 or 9 of
this Series Supplement and Section 2.06,
10.01 or 12.02(c) of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 11. Distribution of Proceeds of Sale, Disposition
or Liquidation of Receivables pursuant to
Section 9.02 of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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SECTION 12. Rating Agency Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 13. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 14. [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 15. Delivery of Series 1997-1 Participation Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 16. Ratification of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 17. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 18. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 19. Forms of Certificates and Monthly Servicer's
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 20. Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
EXHIBITS
Exhibit A-1 Series 1997-1 Participation Interest
Exhibit B Monthly Servicing Report
Exhibit C Investment Letter
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SERIES 1997-1 SUPPLEMENT, dated as of March 1, 1997 (this "Series
Supplement"), by and among Household Consumer Loan Corporation, a Nevada
corporation, as seller (the "Seller"), Household Finance Corporation, a
Delaware corporation, as servicer (the "Servicer"), and Texas Commerce Bank
National Association, a national banking association, as successor trustee to
The Chase Manhattan Bank, N.A. (together with successors in trust thereunder as
provided in the Pooling and Servicing Agreement referred to below, the "Deposit
Trustee"), under the Pooling and Servicing Agreement, by and among the Seller,
the Servicer and the Deposit Trustee dated as of September 1, 1995.
RECITALS
Section 6.03 of the Agreement provides, among other things, that the
Seller and the Deposit Trustee may at any time and from time to time enter into
a supplement to the Agreement for the purpose of authorizing the issuance by
the Deposit Trustee to the Seller for execution and redelivery to the Deposit
Trustee for authentication one or more Series of Series Participation
Interests. The Seller has tendered the notice of issuance required by Section
6.03(b)(i) of the Agreement and hereby enters into this Series Supplement with
the Servicer and the Deposit Trustee as required by such Section 6.03 to
provide for the issuance, authentication and delivery of the Series
Participation Interest, Series 1997-1 (the "Series 1997-1 Participation
Interest") and to specify the Principal Terms thereof.
In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
SECTION 1. Designation and Covenant to Exclude Participation Interests.
Section 1.01 Designation. The Series 1997-1 Participation
Interest shall be deemed to be a "Series Participation Interest" for
all purposes under the Agreement and this Series Supplement.
Notwithstanding any provision to the contrary in the Agreement or in
this Series Supplement, the first Distribution Date with respect to
Series 1997-1 shall be April 14, 1997.
Section 1.02 Covenant to Exclude Participation Interests.
Notwithstanding any provisions to the contrary in the Agreement, for
so long as the Series 1997-1 Participation Interest is outstanding,
each of the Seller and the Servicer covenants and agrees not to enter
into a Participation Interest Agreement, and the Trust shall not
acquire or hold any interest in a Participation Interest. The
entering into of any such Participation Interest
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Agreement in violation of this Section 1.02 will be deemed to have an
"Adverse Effect".
SECTION 2. Definitions.
(a) Whenever used in this Series Supplement and when used in the
Agreement with respect to the Series 1997-1 Participation Interest, 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.
"Accelerated Amortization Date" shall mean February 28, 2002.
"Additional Balances" shall mean, with respect to any Credit
Line, amounts drawn under such Credit Line subsequent to the date such
Credit Line is designated to the Deposit Trust.
"Additional Interest" shall have the meaning set forth in
Section 4.08(a) hereof.
"Adverse Effect" shall have the meaning assigned to such term
in the Pooling and Servicing Agreement as supplemented by the Section
1.02 hereof.
"Agreement" shall mean, for purposes of this Series
Supplement, the Pooling and Servicing Agreement, dated as of September
1, 1995, as such agreement may be amended from time to time, by and
among the Seller, the Servicer and the Deposit Trustee (without regard
to this Series Supplement or supplements for other Series).
"Amortization Event" shall mean any of the events enumerated
in Section 9.01 of the Agreement or in Section 7 of this Series
Supplement.
"Available Investor Principal Collections" shall mean, with
respect to any Distribution Date, the sum of (a) Investor Principal
Collections, (b) the Series 1997-1 Participation Interest Net Default
Payment Amount, and (c) the portion paid by the Seller pursuant to
Section 9 hereof that is included in clause (i) of the definition of
Reassignment Amount.
"Calculation Date" shall mean the first day of the Interest
Period.
"Closing Date" shall mean March ___, 1997.
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"Distribution Date" shall mean, with respect to Series 1997-1,
the 14th day of each calendar month, or if such day is not a Business
Day, the next preceding Business Day, provided that the first
Distribution Date shall be April 14, 1997.
"Due Period" shall mean, with respect to the first Due Period,
the period from March 1, 1997 through March 31, 1997, and thereinafter
the meaning specified in the Agreement.
"Early Amortization Period" shall mean the period commencing
with an Amortization Event pursuant to Section 7 hereof (after giving
effect to any grace periods) and terminating upon termination of the
Trust pursuant to Section 12.01 of the Agreement.
"Eligible Investments" shall mean, with respect to funds
allocable to the Series 1997-1 Participation Interest in the
Collection Account, "Eligible Investments" as defined in the
Agreement, except that all references in such definition to "rating
satisfactory to the Rating Agency" shall mean ratings of not less than
A-1+ by Standard & Poor's, P-1 by Moody's, F-1 by Fitch (if rated by
Fitch) and D-1 by Duff & Xxxxxx (if rated by Duff & Xxxxxx).
"Eligible Institution" shall mean any "Eligible Institution"
as defined in the Agreement, except that all references in such
definition to "rating satisfactory to the Rating Agency" shall mean
long-term ratings of not less than AAA by Standard and Poor's or Aaa
by Moody's, respectively, or short-term unsecured debt ratings of at
least A-1+ by Standard and Poor's and P-1 by Moody's, respectively,
except that no such rating shall be required of an institution which
maintains such Account or such funds as a fully segregated trust
account or subaccount with the corporate trust department of such
institution as long as such institution maintains the credit rating of
each Rating Agency in one of its generic credit rating categories
which signifies investment grade.
"Final Scheduled Payment Date" shall mean the Payment Date in
__________ 20___.
"Fixed Allocation Percentage" shall mean, with respect to any
Distribution Date, the percentage equivalent of a fraction, the
numerator of which is the Series 1997-1 Participation Interest
Invested Amount as of the last day immediately preceding the
commencement of an Early Amortization Period that is continuing or
preceding the Accelerated Amortization Date, as applicable and the
denominator of which is the greater of (x) the aggregate Principal
Receivables as of the first day of the related Due Period
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and the then outstanding amount of any Participation Interests in the
Deposit Trust as of the first day of the related Due Period and (y) the
sum of the numerators used to calculate the Allocation Percentage for
allocations with respect to Principal Receivables or Finance Charge and
Administrative Receivables, as applicable, for all outstanding Series
for such Distribution Date; provided, however, that, with
respect to the first Due Period, the Fixed Allocation Percentage shall
mean the percentage equivalent of a fraction, the numerator of which is
the Series 1997-1 Participation Interest Initial Invested Amount and
the denominator of which is the total amount of Principal Receivables
in the Deposit Trust as of the Closing Date; provided, further , that,
with respect to any Due Period in which Aggregate Additional Credit
Lines or Participation Interest are added to the Trust or a removal of
Credit Lines pursuant to Section 2.10 of the Agreement occurs, the
amount of Principal Receivables and Participation Interests referred to
in clause (x) above shall be the average amount of Principal
Receivables and Participation Interests in the Deposit Trust on each
Business Day during such Due Period based upon the assumptions that (1)
the aggregate amount of Principal Receivables in the Deposit Trust at
the end of the day on the last day of the prior Due Period is the
aggregate amount of Principal Receivables and Participation Interests
in the Deposit Trust on each Business Day of the period from and
including the first day of such Due Period to but excluding the related
Addition Date or Removal Date and (2) the aggregate amount of Principal
Receivables in the Deposit Trust at the end of the day on the related
Addition Date or Removal Date is the aggregate amount of Principal
Receivables and Participation Interests in the Deposit Trust on each
Business Day of the period from and including the related Addition Date
or Removal Date to and including the last day of such Due Period.
"Floating Allocation Percentage" shall mean with respect to
any Distribution Date the percentage equivalent of a fraction, the
numerator of which is the Series 1997-1 Participation Interest
Invested Amount as of the last day of the related Due Period and the
denominator of which is the greater of (x) the aggregate Principal
Receivables as of the first day of the related Due Period and the then
outstanding amount of any Participation Interests in the Deposit Trust
as of the first day of the related Due Period and (y) the sum of the
numerators used to calculate the Allocation Percentage for allocations
with respect to Principal Receivables, Default Amounts, or Finance
Charge and Administrative Receivables, as applicable, for all
outstanding Series for such Distribution Date; provided, however,
that, with respect to the first Due Period, the Floating Allocation
Percentage shall mean the percentage
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equivalent of a fraction, the numerator of which is the Series 1997-1
Participation Interest Initial Invested Amount and the denominator of
which is the total amount of Principal Receivables in the Deposit
Trust as of the Closing Date; provided, further, that, with respect
to any Due Period in which Aggregate Additional Credit Lines or
Participation Interest are added to the Trust or a removal of Credit
Lines pursuant to Section 2.10 of the Agreement occurs, the amount of
Principal Receivables and Participation Interests referred to in clause
(x) above shall be the average amount of Principal Receivables and
Participation Interests in the Deposit Trust on each Business Day
during such Due Period based upon the assumptions that (1) the
aggregate amount of Principal Receivables in the Deposit Trust at the
end of the day on the last day of the prior Due Period is the aggregate
amount of Principal Receivables and Participation Interests in the
Deposit Trust on each Business Day of the period from and including the
first day of such Due Period to but excluding the related Addition Date
or Removal Date and (2) the aggregate amount of Principal Receivables
in the Deposit Trust at the end of the day on the related Addition Date
or Removal Date is the aggregate amount of Principal Receivables and
Participation Interests in the Deposit Trust on each Business Day of
the period from and including the related Addition Date or Removal Date
to and including the last day of such Due Period.
"HCLC" shall mean Household Consumer Loan Corporation, a
Nevada corporation.
"Indenture" shall mean the indenture dated as of March 1, 1997
between the Issuer, as debtor, and The Bank of New York, as Indenture
Trustee, as may be amended from time to time.
"Interest Period" shall mean, with respect to any Distribution
Date, the period from and including the Distribution Date immediately
preceding such Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing Date) to but
excluding such Distribution Date.
"Invested Amount" as defined in the Agreement shall mean the
Series 1997-1 Participation Interest Invested Amount as defined
herein.
"Investor Finance Charge and Administrative Collections" shall
mean with respect to any Distribution Date an amount equal to the sum
of (a) (i) if such Distribution Date is not during an Early
Amortization Period, the product of (x) the Floating Allocation
Percentage for the related Due Period and (y) Finance Charge
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and Administrative Collections during the related Due Period and (ii)
if such Distribution Date is during an Early Amortization Period the
product of (x) the Fixed Allocation Percentage for the related Due
Period and (y) Finance Charge and Administrative Collections during
the related Due Period and (b) the portion paid by the Seller pursuant
to Section 9 hereof that is included in clauses (ii) and (iii) of the
definition of Reassignment Amount.
"Investor Principal Collections" shall mean, with respect to
any Due Period prior to the Accelerated Amortization Date and not
during an Early Amortization Period, the Floating Allocation
Percentage of Net Principal Collections for the related Due Period (or
any partial Due Period which occurs as the first Due Period during the
Early Amortization Period); provided that if Net Principal Collections
for such Due Period is less than the Minimum Principal Amount, then
Investor Principal Collections shall mean the Minimum Principal
Amount. On and after the Accelerated Amortization Date and during an
Early Amortization Period, Investor Principal Collections shall mean
the Fixed Allocation Percentage of Collections in respect of Principal
Receivables for the related Due Period.
"Issuer" shall mean the Household Consumer Loan Trust 1997-1,
a Delaware business trust, or its successor in interest.
"Minimum Principal Amount" shall mean, with respect to any
Distribution Date, the lesser of (a) the Floating Allocation
Percentage of Principal Collections for such Distribution Date and (b)
the amount by which _____% of the Series 1997-1 Participation Interest
Invested Amount exceeds the Series 1997-1 Participation Interest Net
Default Payment Amount for such Distribution Date to the extent of the
amount of Investor Finance Charge and Administrative Collections
treated as principal pursuant to Section 4.11(a)(iii) for such
Distribution Date.
"Net Principal Collections" shall mean, with respect to any
Due Period prior to the Accelerated Amortization Date and not during
an Early Amortization Period, Collections in respect of Principal
Receivables during the related Due Period reduced by Additional
Balances created during such Due Period.
"Optional Repurchase Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date, the sum
of (i) the unpaid principal balance of the Series 1997-1 Participation
Interest, plus (ii) accrued and unpaid interest on the unpaid
principal balance of the Series 1997-1 Series Participation Interest
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through the day preceding such Distribution Date, plus (iii) the
amount of Additional Interest, if any, for such Distribution Date and
any Additional Interest previously due but not distributed to the
Series 1997-1 Participants, as applicable, on a prior Distribution
Date.
"Overcollateralization Amount" shall have the meaning set
forth in the Indenture.
"Performance Amortization Event" shall mean any of an
Additional Amortization Event pursuant to Section 7(a), (b) or (d)
hereof.
"Prime" shall mean the rate set forth in H.15(519) opposite
the caption "Bank Prime Loan" for such day; provided, however, that
the Prime Rate with respect to any day which in the period beginning
on the Calculation Date through and including the calendar day first
preceding a Distribution Date, shall be the rate as described above in
effect on such Calculation Date. The Prime Rate is also available on
Telerate, currently at page 125. If any discrepancy arises between
Telerate and the printed version of H.15 (519), the printed version of
H.15 (519) will take precedence.
If, by the Calculation Date, the Prime Rate is not yet published in
H.15 (519), then the Prime Rate will be determined by calculating the
arithmetic mean of the rates of interest publicly announced by each
bank named on Telerate under the heading "Prime Rate Top 30 U.S.
Banks," currently at page 38, as such bank's U.S. dollar prime rate or
base lending rate as in effect on such day at 3:30 p.m. (New York
City time). If fewer than four such rates appear on Telerate for such
Reset Date, then the Prime Rate shall be the arithmetic mean of the
rate of interest publicly announced by three major banks in New York
City, selected by the Servicer, as their U.S. dollar prime rate or base
lending rate as in effect for such day.
"Rating Agency" shall mean Duff & Phelps, Fitch, Moody's, and
Standard & Poor's.
"Reassignment Amount" shall mean, with respect to any
Distribution Date, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date, the sum
of (i) the unpaid principal balance of the Series 1997-1 Participation
Interest on such Distribution Date, plus (ii) amounts accrued and
unpaid at the Series 1997-1 Participation Interest Pass-Through Rate on
the unpaid principal balance of the Series 1997-1 Participation
Interest through the day preceding such Distribution Date, plus (iii)
the amount of Additional Interest, if any, for
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such Distribution Date and any Additional Interest previously due but
not distributed to the Series 1997-1 Participants on a prior
Distribution Date.
"Required Seller Amount" shall mean an amount equal to 1.01%
of the Series 1997-1 Participation Interest Invested Amount.
"Securities" shall have the meaning assigned to such term in
the Indenture.
"Security Balance" shall have the meaning assigned to such
term in the Indenture.
"Series Cut-Off Date" shall mean the close of business on
February 28, 1997.
"Series 1997-1 Participant" shall mean the Issuer.
"Series 1997-1 Participants' Interest" shall mean 100% of the
interest evidenced by the Series 1997-1 Participation Interest.
"Series 1997-1 Participation Interest" shall be a Series
Participation Interest for the purposes of the Agreement and shall
mean the Series Participation Interest executed by the Seller and
authenticated by or on behalf of the Deposit Trustee, substantially
in the form of Exhibit A-1.
"Series 1997-1 Participation Interest Charge-Offs" shall have
the meaning specified in Section 4.12(a) hereof.
"Series 1997-1 Participation Interest Default Amount" shall
mean, with respect to each Distribution Date, an amount equal to the
product of the Defaulted Amount for the related Due Period and the
Floating Allocation Percentage for such Distribution Date.
"Series 1997-1 Participation Interest Initial Invested Amount"
shall mean the initial principal amount represented by the Series
1997-1 Participation Interest on the Issuance Date, which amount is
$________________.
"Series 1997-1 Participation Interest Interest Shortfall"
shall have the meaning specified in Section 4.08(a) hereof.
"Series 1997-1 Participation Interest Invested Amount" shall
mean, when used with respect to any date, an amount equal to (a) the
Series 1997-1 Participation Interest Initial Invested Amount, minus
(b) the amount of principal payments made to the Series 1997-1 Series
Participants prior
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to and including such date, minus (c) the excess, if any, of the
aggregate amount of Series 1997-1 Participation Interest Charge-Offs
over Series 1997-1 Participation Interest Charge-Offs reimbursed
pursuant to Section 4.12(a) hereof prior to and including such date.
"Series 1997-1 Participation Interest Monthly Interest" shall
mean the monthly interest distributable in respect of the Series
1997-1 Participation Interest as calculated in accordance with Section
4.08(a) hereof.
"Series 1997-1 Participation Interest Monthly Principal" shall
mean the monthly principal distributable in respect of the Series
1997-1 Participation Interest as calculated in accordance with Section
4.09(a) hereof.
"Series 1997-1 Participation Interest Net Default Payment
Amount" shall mean with respect to any Distribution Date the Series
1997-1 Participation Interest Default Amount for such Distribution
Date to the extent of the amount of Investor Finance Charge and
Administrative Collections treated as principal pursuant to clauses
(iii) and (iv) of Section 4.11(a) for such Distribution Date.
"Series 1997-1 Participation Interest Pass-Through Rate" shall
mean as to each Interest Period the Prime Rate minus 1.50%; provided
that the Series 1997-1 Participation Interest Pass-Through Rate for any
Interest Period shall not be less than the sum of (i) a per annum rate
which will result in an amount of Series 1997-1 Monthly Interest for
such Interest Period which will be sufficient to pay the amount of
interest due on the Notes and to make a full distribution on the Trust
Certificates in respect of the Certificate Rate on the related Payment
Date and (ii) ____% per annum of the Series 1997-1 Participation
Interest Invested Amount for Distribution Dates occurring prior to
April 1998 and ____% per annum of the Series 1997-1 Participation
Interest Invested Amount for Distribution Dates occurring in April 1998
and thereafter.
"Series 1997-1 Participation Interest Pool Factor" shall mean,
with respect to any Record Date, a number carried out to eight
decimals representing the ratio of the Series 1997-1 Participation
Interest Invested Amount as of such Record Date (determined after
taking into account any increases or decreases in the Series 1997-1
Participation Interest Invested Amount which will occur on the
following Distribution Date) to the Series 1997-1 Participation
Interest Initial Invested Amount.
"Series 1997-1 Servicing Fee" shall have the meaning specified
in Section 3 hereof.
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"Series 1997-1 Termination Date" shall mean the earlier of the
date the Securities are paid in full and the date the Deposit Trust is
terminated pursuant to Section 12.01 of the Agreement.
"Servicing Fee Rate" shall mean 2% per annum.
"Telerate Page 3750" shall mean the display page so designated
on the Dow Xxxxx Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable
rates or prices).
"Termination Proceeds" shall mean any Termination Proceeds
arising out of a sale of Receivables (or interests therein) pursuant
to Section 12.02(c) of the Agreement with respect to Series 1997-1.
"Trust Agreement" shall mean the trust agreement dated as of
March 1, 1997 between HCLC, as Seller and holder of the Designated
Certificate, and Chase Manhattan Bank Delaware, as Owner Trustee.
"Trust Certificates" shall mean the certificates, issued
pursuant to the Trust Agreement.
(b) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provision of this Series
Supplement; references herein to any Article, Section or Exhibit are references
to Articles, Sections and Exhibits in or to this Series Supplement unless
otherwise specified; and the term "including" means "including without
limitation".
(d) The following defined terms used herein are used with the
meanings assigned thereto in the Trust Agreement or the Indenture, as
applicable: "Notes", "Note Rate", "Security Balance", "Owner Trustee",
"Overcollateralization Amount", "Initial Overcollateralization Percentage",
"Indenture Trustee".
SECTION 3. Servicing Compensation.
The monthly servicing fee (the "Series 1997-1 Servicing Fee") shall be
payable to the Servicer, in arrears, on each Distribution Date in respect of
any Due Period (or portion thereof) occurring prior to the first Distribution
Date on which the Series 1997-1 Series Participation Interest Invested Amount
is zero, in an amount equal to 1/12th of, or with respect to the first Due
Period, 4/360th of the product of (i) the Servicing Fee
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Rate and (ii) the Series 1997-1 Invested Amount on the last day of the related
Due Period or with respect to the first Due Period, the Closing Date.
SECTION 4. Article IV of Agreement.
Sections 4.01 through 4.06 of the Agreement shall be read in their
entirety as provided in the Agreement. Article IV of the Agreement (except for
Sections 4.01 through 4.06 thereof) shall, with respect to the Series 1997-1
Participation Interest, be read in its entirety as follows:
ARTICLE IV
RIGHTS OF SERIES 1997-1 PARTICIPANTS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.07. Allocations. Collections of Finance Charge and
Administrative Receivables, Principal Receivables and Defaulted
Receivables allocated to the Series 1997-1 Participation Interest
pursuant to Article IV of the Agreement shall be allocated and
distributed as set forth in this Article.
Section 4.08. Determination of Monthly Interest.
(a) The amount of collections of Finance Charge and
Administrative Receivables distributable from the Collection Account
with respect to the Series 1997-1 Participation Interest on any
Distribution Date shall be an amount equal to the product of (i) the
Series 1997- 1 Participation Interest Pass-Through Rate and (ii) the
unpaid principal balance of the Series 1997-1 Participation Interest on
the first day of the related Interest Period determined on the basis of
the actual number of days in such Interest Period and a 360-day year
("Series 1997-1 Participation Interest Monthly Interest").
On the Determination Date preceding each Distribution Date,
the Servicer shall determine an amount (the "Series 1997-1
Participation Interest Interest Shortfall") equal to the sum of (a)
(x) the Series 1997-1 Participation Interest Monthly Interest for the
Interest Period applicable to such Distribution Date minus (y) the
amount of collections of Finance Charge and Administrative Receivables
which will be on deposit in the Collection Account and allocable to
the Series 1997-1 Participation Interest on such Distribution Date and
(b) the sum of the amounts calculated pursuant to clause (a) on each
preceding Distribution Date. If the Series 1997-1 Participation
Interest Interest Shortfall with respect to any Distribution Date is
greater than zero, on each subsequent Distribution Date until such
Series 1997-1 Participation Interest Interest Shortfall is fully paid,
pursuant to Section 4.11(a), an additional amount
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("Additional Interest") shall be payable as provided herein with
respect to the Series 1997-1 Participation Interest Monthly Interest
on each Distribution Date following such Distribution Date, excluding
the Distribution Date on which the Series 1997-1 Participation
Interest Interest Shortfall is paid to the Series 1997-1 Participants
equal to the product of (i) the Series 1997-1 Participation Interest
Pass-Through Rate and (ii) such Series 1997-1 Participation Interest
Interest Shortfall (or the portion thereof which has not been paid to
the Series 1997-1 Participants) determined on the basis of the actual
number of days in the related Interest Period and a 360-day year.
Notwithstanding anything to the contrary herein, Additional Interest
shall be payable or distributed to the Series 1997-1 Participants.
Section 4.09. Determination of Monthly Principal. (a) The
amount of monthly principal ("Series 1997-1 Participation Interest
Monthly Principal") distributable from the Collection Account with
respect to the Series 1997-1 Participation Interest shall be an amount
equal to the Available Investor Principal Collections on deposit in
the Collection Account with respect to such Distribution Date.
Section 4.10. [RESERVED]
Section 4.11. Application of Investor Finance Charge and
Administrative Collections on Deposit in Collection Account. With
respect to the Series 1997-1 Participation Interest, prior to 12:00
noon, New York City time, on each Distribution Date, the Servicer
shall provide written directions to the Deposit Trustee to apply
Investor Finance Charge and Administrative Collections on deposit in
the Collection Account with respect to such Distribution Date in the
following manner:
(a) An amount equal to Investor Finance Charge and
Administrative Collections with respect to such Distribution Date plus
any other funds available to the Deposit Trust for application
pursuant to this clause will be distributed in the following priority:
(i) if HFC is not the Servicer under this
Agreement, an amount equal to the Series 1997-1 Servicing Fee
for such date (to the extent such amount has not been netted
from deposits made in the related Due Period) plus any unpaid
Series 1997-1 Servicing Fee (but only with respect to the then
current Servicer) shall be paid to the Servicer.
(ii) an amount equal to the Series 1997-1
Participation Interest Monthly Interest for such Distribution
Date, plus the amount of any Series 1997-1
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Participation Interest Interest Shortfall, plus the amount of
any Additional Interest for such Distribution Date;
(iii) an amount equal to the Series 1997-1 Participation
Interest Default Amount for such Distribution Date shall be
treated as a portion of Available Investor Principal
Collections for such Distribution Date;
(iv) an amount equal to the aggregate amount of
the Series 1997-1 Participation Interest Charge-Offs which
have not been previously reimbursed shall be treated as a
portion of Available Investor Principal Collections with
respect to such Distribution Date.
(v) so long as HFC is the Servicer under the
Agreement, an amount equal to the Series 1997-1 Servicing Fee
for such date (to the extent such amount has not been netted
from deposits to cover losses in the related Due Period) plus
any previously unpaid Series 1997-1 Servicing Fee (but only
with respect to the then current Servicer) shall be paid to
the Servicer; and
(vi) the balance, if any, shall be paid to the Seller
with respect to the HCLC Seller Participation Interest and the
Designated HCLC Seller Participation Interest, pro rata.
Section 4.12. Investor Charge-Offs. (a) If on any
Distribution Date, the amount to be distributed on the Series 1997-1
Participation Interest pursuant to Section 4.11(a)(iii) exceeds the
amount of Investor Finance Charge and Administrative Collections for
the related Due Period (net of any portion thereof to be paid pursuant
to Section 4.11(a)(i) and (ii)), then the Series 1997-1 Participation
Interest Invested Amount shall be reduced by the amount of such excess
("Series 1997-1 Participation Interest Charge-Offs"), but not more
than the Series 1997-1 Participation Interest Default Amount for such
Distribution Date.
(b) Notwithstanding any other provision of this Series
Supplement, the Series 1997-1 Participation Interest Invested Amount
shall never be reduced below zero.
Section 4.13. [RESERVED]
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SECTION 5. Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute
to each Series 1997-1 Participant of record on the Record Date for such
Distribution Date (other than as provided in Section 12.02 of the Agreement
respecting a final distribution) such Series 1997-1 Participant's pro rata
share (based on the aggregate fractional undivided interests represented by the
Series 1997-1 Participation Interest held by such Series 1997-1 Participant) of
the amounts on deposit in the Collection Account pursuant to Section
4.11(a)(ii).
(b) On each Distribution Date, the Paying Agent shall distribute
to each Series 1997-1 Participant of record on the Record Date for such
Distribution Date (other than as provided in Section 12.02 of the Agreement
respecting a final distribution) such Series 1997-1 Participant's pro rata
share (based on the aggregate fractional undivided interests represented by the
Series 1997-1 Participation Interest held by such Series 1997-1 Participant) of
the amounts on deposit in the Collection Account with respect to Available
Investor Principal Collections.
(c) Except as provided in Section 12.02 of the Agreement with
respect to a final distribution, distributions to each Series 1997-1
Participant hereunder shall be made in immediately available funds by wire
transfer to the account designated by such Series 1997-1 Participant.
SECTION 6. Statements to Series 1997-1 Participants.
(a) On each Distribution Date, the Paying Agent, on behalf of the
Deposit Trustee, shall forward to each Series 1997-1 Participant a statement
substantially in the form of Exhibit B prepared by the Servicer setting forth
certain information relating to the Deposit Trust and the Series 1997-1
Participation Interest.
(b) On or before January 31 of each calendar year, beginning
January 31, 1997, the Paying Agent, on behalf of the Deposit Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 1997-1 Participant, a statement prepared
by the Servicer containing the information which is required to be contained in
the statement to the Series 1997-1 Participants, as set forth in subsection (a)
above, aggregated for such preceding calendar year or the applicable portion
thereof (the initial statement shall cover the period beginning on the Closing
Date and ending on December 31, 1997) during which such Person was a Series
1997-1 Participant, together with such other customary information as is
necessary to enable the Series 1997-1 Participants to prepare their tax
returns. Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Paying Agent
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pursuant to any requirements of the Internal Revenue Code, as from time to time
in effect.
(c) The form of the Monthly Servicer's Report set forth as
Exhibit B hereto may be modified as the Servicer may determine to be necessary
or desirable; provided, however, that no such modification shall serve to
exclude information required by this Section 6. The Servicer shall, upon
making such determination, deliver to the Deposit Trustee an Officer's
Certificate to which shall be annexed the form of Exhibit B, as so changed.
Upon the delivery of such Officer's Certificate to the Deposit Trustee, Exhibit
B, as so changed, shall for all purposes of this Agreement constitute Exhibit
B. The Deposit Trustee may conclusively rely upon such Officer's Certificate
as to such change conforming to the requirements of this Agreement.
SECTION 7. Additional Amortization Events. If any one of the following shall
occur:
(a) failure on the part of the Seller (i) to make any payment or
deposit required under the Agreement within five Business Days after the date
such payment or deposit is required to be made or (ii) to observe or perform in
any material respect any other covenants or agreements of the Seller set forth
in the Agreement, which failure has a material adverse effect on the Series
1997-1 Participation Interest and which continues unremedied for a period of 60
days after written notice;
(b) any representation or warranty made by the Seller in the
Agreement proves to have been incorrect in any material respect when made, as a
result of which the interests of holders of interest in the Deposit Trust are
materially and adversely affected, and which continues to be incorrect in any
material respect and continues to materially and adversely affect the interests
of holders of interest in the Deposit Trust for a period of 60 days after
written notice; provided, however, that an Amortization Event shall not be
deemed to occur if the Seller has repurchased the related Receivables, during
such period (or within an additional 60 days with the consent of the Deposit
Trustee) in accordance with the provisions of the Agreement;
(c) the Deposit Trust or the Issuer becomes subject to regulation
by the Commission as an investment company within the meaning of the Investment
Company Act of 1940, as amended;
(d) a Servicer Default shall occur which has a material adverse
effect on the Series 1997-1 Participants;
(e) the average, for any three consecutive Payment Dates (after
making all distributions on such Payment Dates), of the percentage equivalent
of (i) the Overcollateralization Amount divided by (ii) the unpaid principal
balance of the Series 1997-1 Participation Interest, is less than _____%; and
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(f) the Seller's Trust Amount owned by HCLC is reduced below the
Aggregate Required Seller Amount,
then, in the case of any event described in (a), (b) or (d), an
Amortization Event will be deemed to have occurred only if, after any
applicable grace period described in such clauses, either the Deposit Trustee
or holders of Series Participation Interests evidencing more than 50% of the
unpaid principal balance of the Series 1997-1 Participation Interest, by
written notice to the Seller and the Servicer (and to the Deposit Trustee, if
given by the Series 1997-1 Participants) declare that an Amortization Event has
occurred as of the date of such notice. In the case of any event described in
clauses (c), (e) or (f), an Amortization Event will be deemed to have occurred
and an Early Amortization Period will occur without any notice or other action
on the part of the Deposit Trustee or the Series 1997-1 Participants
immediately upon the occurrence of such event.
SECTION 8. Optional Repurchase.
On the Distribution Date occurring on or after the date on which the
aggregate of the Security Balances is reduced to $_______________ (10% of the
aggregate of the Security Balances on the Closing Date) or less, the Seller
shall have the option to purchase the Series 1997-1 Participants' Interest at a
purchase price equal to the Optional Repurchase Amount. The Seller shall give
the Servicer, the Rating Agency and the Deposit Trustee at least 10 days prior
written notice of the date on which the Seller intends to exercise such option
to purchase. Not later than 10:00 A.M., New York City time, on such
Distribution Date, the Seller shall deposit the Optional Repurchase Amount into
the Collection Account in immediately available funds. Such purchase option is
subject to payment in full of the Optional Repurchase Amount. The Optional
Repurchase Amount shall be distributed as set forth in Section 10 hereof.
SECTION 9. Sale of Series 1997-1 Participants' Interest pursuant to Section
2.06 or 10.01 of Agreement.
(a) The amount to be paid by the Seller with respect to the Series
1997-1 Participants' Interest in connection with a repurchase of the Series
1997-1 Participants' Interest pursuant to Section 2.06 of the Agreement shall
equal the Reassignment Amount for the first Distribution Date following the Due
Period in which the reassignment obligation arises under the Agreement.
(b) The amount to be paid by the Seller with respect to Series
1997-1 Participants' Interest in connection with a repurchase of the Series
1997-1 Participant's Interest pursuant to Section 10.01 of the Agreement shall
equal the sum of (x) the Reassignment Amount for the Distribution Date of such
repurchase and (y) the excess, if any, of (I) a price equivalent to the average
of bids quoted on the Record Date preceding the date of
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repurchase or, if not a Business Day, on the next succeeding Business Day by at
least two recognized dealers selected by the Deposit Trustee (which may be
selected from the list attached as Schedule 1), for the purchase by such
dealers of a security which is similar to the Series 1997-1 Participation
Interest with a remaining maturity approximately equal to the remaining
maturity of the Series 1997-1 Participation Interest over (II) the portion of
the Reassignment Amount attributable to the Series 1997-1 Participation
Interest.
SECTION 10. Distributions pursuant to Section 8 or 9 of this Series Supplement
and Section 2.06, 10.01 or 12.02(c) of Agreement.
(a) With respect to the Optional Repurchase Amount deposited into
the Collection Account pursuant to Section 8, the Reassignment Amount deposited
into the Collection Account pursuant to Section 9 or any Termination Proceeds
deposited into the Collection Account pursuant to Section 12.02(c) of the
Agreement, the Deposit Trustee shall, not later than 1:00 P.M., New York City
time, on the date of deposit, make deposits of the following amounts (in the
priority set forth below and, in each case, after giving effect to any deposits
and distributions otherwise to be made on such date) in immediately available
funds as follows: the Series 1997-1 Participation Interest Invested Amount on
such date and the amount of accrued and unpaid interest on the unpaid balance
of the Series 1997-1 Participation Interest, plus the amount of the Series
1997-1 Participation Interest Additional Interest previously due but not paid
on any prior Distribution Date, for distribution to the Series 1997-1
Participants.
(b) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the Collection
Account pursuant to Section 8 or Sections 9(a) or (b) and 10(a) hereof and all
other amounts on deposit therein for distribution to the Series 1997-1
Participants shall be distributed in full to the Series 1997-1 Participants on
such date and shall be deemed to be a final distribution pursuant to Section
12.02 of the Agreement.
SECTION 11. Distribution of Proceeds of Sale, Disposition or Liquidation of
Receivables pursuant to Section 9.02 of Agreement.
(a) Not later than 1:00 P.M., New York City time, on the
Distribution Date following the date on which the Insolvency Proceeds are
received, such proceeds shall be deposited into the Collection Account pursuant
to Section 9.02(b) of the Agreement.
(b) [RESERVED]
(c) Notwithstanding anything to the contrary in this Series
Supplement or the Agreement, the entire amount deposited in the
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Collection Account pursuant to this Section 11 and all other amounts on deposit
therein for distribution for the Series 1997-1 Participants shall be
distributed in full to the Series 1997-1 Participants on the Distribution Date
on which funds are deposited pursuant to this Section (or, if not so deposited
on a Distribution Date, on the immediately following Distribution Date) and
shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement.
SECTION 12. Rating Agency Notice.
In the event a Tax Opinion is delivered pursuant to Section
2.09(e)(vi) of the Agreement and the Series 1997-1 Participation Interest is
outstanding, such opinion shall be also delivered to Xxxxx'x.
SECTION 13. [RESERVED]
SECTION 14. [RESERVED]
SECTION 15. Delivery of Series 1997-1 Participation Interest.
The Deposit Trustee shall deliver the Series 1997-1 Participation
Interest to the Seller when authenticated in accordance with Section 6.02 of
the Agreement.
SECTION 16. Ratification of Agreement.
As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement, as so supplemented by this
Series Supplement shall be read, taken and construed as one and the same
instrument.
SECTION 17. Counterparts.
This Series Supplement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but all of
which shall together constitute but one and the same instrument.
SECTION 18. Governing Law.
THIS SERIES SUPPLEMENT SHALL BE CONSTRUED AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT PREFERENCE TO ITS CONFLICT OF LAW
PROVISIONS.
SECTION 19. Forms of Certificates and Monthly Servicer's Certificate.
The Series 1997-1 Participation Interest and Monthly Servicer's
Certificate with respect to Series 1997-1 shall be in
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substantially the respective forms attached hereto as Exhibits A-1 and B,
respectively.
SECTION 20. Transfer Restrictions.
Registration of transfer of any Series 1997-1 Participation Interest
containing the legend set forth on the Series 1997-1 Participation Interest
attached hereto as Exhibit A-1 shall be effected only if such transfer is made
to a Person that certifies to the Transfer Agent in writing that it is not an
employee benefit plan, trust or account, including an individual retirement
account, that is subject to ERISA or that is described in Section 4975(e)(1) of
the Code or an entity whose underlying assets include plan assets by reason of
a plan's investment in such entity (each a "Benefit Plan"). By accepting and
holding a Series 1997-1 Participation Interest, a Series 1997-1 Participant
shall be deemed to have represented and warranted that it is not a Benefit Plan
and is not purchasing a Series 1997-1 Participation Interest on behalf of a
Benefit Plan. By acquiring any interest in a Book-Entry Certificate
representing a Series 1997-1 Participation Interest, a Certificate Owner shall
be deemed to have represented and warranted that it is not a Benefit Plan and
is not purchasing a Series 1997-1 Participation Interest on behalf of a Benefit
Plan.
No transfer of a Series 1997-1 Participation Interest shall be made
unless a Tax Opinion is delivered and such transfer is exempt from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event of any such transfer, (i) unless such transfer is made in
reliance upon Rule 144A under the 1933 Act, the Deposit Trustee or the Seller
may require a written Opinion of Counsel (which may be in-house counsel)
acceptable to and in form and substance reasonably satisfactory to the Deposit
Trustee and the Seller that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from said Act and
laws or is being made pursuant to said Act and laws, which Opinion of Counsel
shall not be an expense of the Deposit Trustee or the Seller and (ii) the
Deposit Trustee shall require the transferee to execute an investment letter
(in substantially the form attached hereto as Exhibit C) acceptable to and in
form and substance reasonably satisfactory to the Seller and the Deposit
Trustee certifying to the Seller and the Deposit Trustee the facts surrounding
such transfer, which investment letter shall not be an expense of the Deposit
Trustee or the Seller. A Series 1997-1 Participant desiring to effect such
transfer shall, and does hereby agree to indemnify the Deposit Trustee and the
Seller against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.
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IN WITNESS WHEREOF, the Seller, the Servicer and the Deposit
Trustee have caused this Series Supplement to be fully executed by their
respective officers as of the day and year first above written.
HOUSEHOLD CONSUMER LOAN
CORPORATION, as Seller
By:_____________________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION,
as Servicer
By:_____________________________________
Name:
Title:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Deposit Trustee
By:_____________________________________
Name:
Title:
24
EXHIBIT A-1
FORM OF SERIES 1997-1 PARTICIPATION INTEREST
THIS SERIES 1997-1 PARTICIPATION INTEREST HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS SERIES 1997-1
PARTICIPATION INTEREST NOR ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
THIS SERIES 1997-1 PARTICIPATION INTEREST IS NOT PERMITTED TO BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN
COMPLIANCE WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT AND THE SERIES
1997-1 SUPPLEMENT THERETO, BOTH REFERRED TO HEREIN.
No. R-__ One Unit
HOUSEHOLD CONSUMER LOAN DEPOSIT TRUST I
SERIES 1997-1 PARTICIPATION INTEREST
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF
HOUSEHOLD CONSUMER LOAN DEPOSIT TRUST I
Evidencing an interest in a trust, the corpus of which consists primarily of
participation interests and receivables generated from time to time in the
ordinary course of business in a portfolio of credit lines provided by
Household Consumer Loan Corporation.
(Not an interest in or obligation of Household Consumer Loan
Corporation or any affiliate thereof)
This certifies that _______________, is the registered owner of a
fractional interest in the assets of a trust (the "Trust") pursuant to the
Pooling and Servicing Agreement dated as of September 1, 1995 (the
"Agreement"), by and among Household Consumer Loan Corporation, as seller (the
"Seller"), Household Finance Corporation, as servicer (the "Servicer"), and
Texas Commerce Bank National Association, the successor to The Chase Manhattan
Bank, N.A., as deposit trustee (the "Trustee"), as supplemented by the
Supplement for Series 1997-1 dated as of March 1, 1997 (the "Supplement"), by
and among the Seller, the Servicer and the Trustee. The corpus of the Trust
consists of (a) receivables originated under certain fixed and variable rate
revolving unsecured consumer credit lines (the "Credit Lines")
25
and (b) certain other participation interests, certain amounts payable with
respect thereto, and certain monies constituting Recoveries allocated to the
Trust pursuant to the Agreement and any Supplement. Although a summary of
certain provisions of the Agreement and the Supplement is set forth below, this
Series 1997-1 Participation Interest does not purport to summarize the
Agreement or the Supplement and reference is made to the Agreement and the
Supplement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee. A copy of the Agreement and the Supplement may be
requested from the Trustee by writing to the Trustee at the Corporate Trust
Office. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to them in the Agreement or the Supplement, as
applicable.
This Series 1997-1 Participation Interest is issued under and is
subject to the terms, provisions and conditions of the Agreement and the
Supplement, to which the holder of this Series 1997-1 Participation Interest by
virtue of the acceptance hereof assents and is bound.
The Receivables consist of amounts payable by obligors on the Credit
Lines from time to time, including amounts payable for Principal Receivables
and Finance Charge and Administrative Receivables.
This Certificate is the Series 1997-1 Participation Interest which
represents an interest in certain assets of the Trust, which includes the right
to receive a portion of the Collections and other amounts at the times and in
the amounts specified in the Agreement and Supplement. The aggregate interest
represented by the Series 1997-1 Participation Interest at any time in the
Receivables in the Trust shall not exceed the Series 1997-1 Participation
Interest Invested Amount at such time. In addition to the Series 1997-1
Participation Interest, (i) Investor Certificates and additional Series
Participation Interests may be issued to investors pursuant to the Agreement,
which will represent the Certificateholders' Interest and (ii) Supplemental
Seller Participation Interests may be issued pursuant to the Agreement, which
will represent that portion of the Seller's Interest not allocated to the
Seller.
In general, this Series 1997-1 Participation Interest is entitled to
receive distributions in respect of the collections of the Trust in accordance
with the terms of the Agreement and Supplement on the 14th day of each calendar
month or if such day is not a business day then on the next preceding business
day, commencing in April 1997.
A-1-2
26
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual or facsimile signature, this Series
1997-1 Participation Interest shall not be entitled to any benefit under the
Agreement or the Supplement, or be valid for any purpose.
IN WITNESS WHEREOF, the Seller has caused this Series 1997-1
Participation Interest to be duly executed.
HOUSEHOLD CONSUMER LOAN CORPORATION
By:______________________________
Name:
Title:
Dated: March ___, 1997
TRUSTEE'S CERTIFICATE OF AUTHORIZATION
This is one of the Series 1997-1 Participation Interests
described in the within-mentioned
Pooling and Servicing Agreement and Supplement.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
By:______________________________
Authorized Signatory
A-1-3
27
HOUSEHOLD CONSUMER LOAN DEPOSIT TRUST I
SERIES 1997-1 PARTICIPATION INTEREST
Summary of Terms and Conditions
The Series 1997-1 Participation Interest constitutes an undivided
beneficial interest in the Receivables held in the Trust. The holder of the
Series 1997-1 Participation Interest shares on the basis of a specified
percentage of the principal balance of the Receivables and the principal
portion of any Participation Interest held as assets of the Trust. The Series
1997-1 Participation Interest initially represents a principal balance of
$_______________. Thereafter, the Series 1997-1 Participation Interest
Invested Amount with respect to any date will be an amount equal to the Series
1997-1 Participation Interest Initial Invested Amount minus the sum of the
Series 1997-1 Participation Interest Principal Distribution Amount paid for all
Distribution Dates and the Defaulted Amounts allocated to the Series 1997-1
Participation Interest during the related and all prior Due Periods that have
not been included in the Series 1997-1 Participation Interest Principal
Distribution Amount on the current or any prior Distribution Date.
On each Distribution Date, the Paying Agent shall distribute to each
Series 1997-1 Participant of record on the Record Date for such Distribution
Date (other than as provided in Section 12.02 of the Agreement respecting a
final distribution) such Series 1997-1 Participant's pro rata share (based on
the aggregate fractional undivided interests represented by Series 1997-1
Participation Interests held by such Series 1997-1 Participant) of the amounts
on deposit in the Collection Account pursuant to the Agreement and the
Supplement.
Except as provided in the Agreement with respect to a final
distribution, distributions to Series Participants shall be made in immediately
available funds by wire transfer to the account designated by such Series
1997-1 Participant.
The Seller shall have the option to purchase the Series 1997-1
Participation Interest at a purchase price equal to the Optional Repurchase
Amount in accordance with the provisions of Section 8 of the Supplement. Such
purchase option is subject to payment in full of the Optional Repurchase
Amount. The Optional Repurchase Amount shall be distributed as set forth in
the Agreement and Supplement.
This Series 1997-1 Participation Interest does not represent an
obligation of, or an interest in, the Seller, the Servicer or any affiliate of
any of them and is not insured or guaranteed by any other governmental agency
or instrumentality. This Series 1997-1 Participation Interest is limited in
right of payment to certain collections representing the Receivables and any
A-1-4
28
Participation Interests (and certain other amounts) all as more specifically
set forth herein above and in the Agreement and the Supplement.
The Agreement and the Supplement may be amended by the Seller, the
Servicer and the Trustee, without the consent of the Series 1997-1
Participants. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's rights, duties or immunities under
the Agreement or otherwise.
The Agreement and the Supplement may be amended by the Seller, the
Servicer and the Trustee with the consent of the Holders of Investor
Certificates evidencing not less than 66-2/3% of the aggregate unpaid principal
amount of the Investor Certificates and the Series Participants of all
adversely affected Series for which the Seller has not delivered an Officer's
Certificate stating that there is no Adverse Effect, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or any Supplement or of modifying in any manner the
rights of Investor Certificateholders or Series Participants; provided,
however, that no such amendment shall (a) reduce in any manner the amount of,
or delay the timing of, distributions to Investor Certificateholders or holder
of any Series Participation Interest without the consent of each such Holder,
(b)(i) change the definition of or the manner of calculating the interest of
any Investor Certificateholder or Series Participant without the consent of
each affected Investor Certificateholder or Series Participant or (ii) reduce
the aforesaid percentage required to consent to any such amendment, in either
case without the consent of each Investor Certificateholder or Series
Participant. Any such amendment and any such consent by the holder of the
Series 1997-1 Participants shall be conclusive and binding on such Series
1997-1 Participants and upon all future holders of this Series 1997-1
Participation Interest and of any Series 1997-1 Participation Interest issued
in exchange hereof or in lieu hereof whether or not notation thereof is made
upon this Series 1997-1 Participation Interest.
As set forth in Section 6.05 of the Agreement, the transfer of this
Series 1997-1 Participation Interest shall be registered in the Certificate
Register upon surrender of this Series 1997-1 Participation Interest for
registration of transfer at any office or agency maintained by the Transfer
Agent and Registrar accompanied by a written instrument of transfer, in a form
satisfactory to the Trustee or the Transfer Agent and Registrar, duly executed
by the Series 1997-1 Participant or such Series 1997-1 Participant's attorney,
and duly authorized in writing with such signature guaranteed, and thereupon
one or more new Series 1997-1 Participation Interests of authorized
denominations and for the same aggregate Fractional Undivided Interest will be
issued to the designated transferee or transferees.
A-1-5
29
As provided in the Agreement and subject to certain limitations
therein set forth, the Series 1997-1 Participation Interests are exchangeable
for new Series 1997-1 Participation Interests evidencing like aggregate
fractional undivided interests as requested by the holder surrendering such
Series 1997-1 Participation Interest. No service charge may be imposed for any
such exchange but the Servicer or Transfer Agent and Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
The Seller, the Servicer, the Trustee, the Paying Agent and the
Transfer Agent and Registrar and any agent of any of them, may treat the person
in whose name this Series 1997-1 Participation Interest is registered as the
owner hereof for all purposes, and neither the Servicer nor the Seller, the
Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any agent of
any of them, shall be affected by notice to the contrary except in certain
circumstances described in the Agreement.
THIS SERIES 1997-1 PARTICIPATION INTEREST SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
A-1-6
30
ASSIGNMENT
Social Security or other identifying number of assignee
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________________
________________________________________________________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints __________________ attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:_______________
(1) A Non-U.S. Person as Note: The signature(s)
defined in the Internal to this Assign-
Revenue Code of 1986, as ment must corre-
amended, must certify to pond with the
the Trustee in writing name(s) as writ-
as to its Non-U.S. ten on the face
Person status and such of the within
further information as certificate in
may be required under every particular
the Code or reasonably without altera-
requested by the tion or enlarge-
Trustee. ment or any
change whatsoever.
A-1-7
31
EXHIBIT B
FORM OF MONTHLY SERVICER'S CERTIFICATE
(To be delivered pursuant to Section 3.04(b)
of the Amended and Restated Pooling and Servicing
Agreement not later than the second Business
Day preceding each Distribution Date)
HOUSEHOLD FINANCE CORPORATION
HOUSEHOLD CONSUMER LOAN CORPORATION
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Consumer Loan Asset Backed Notes, Series 1997-1,
Class A-1, Class A-2, Class A-3 and Class B
___________________
The undersigned, a duly authorized representative of Household Finance
Corporation, as servicer (the "Servicer"), pursuant to the Pooling and
Servicing Agreement dated as of September 1, 1995 (the "Pooling and Servicing
Agreement") by and among Household Consumer Loan Corporation, as seller (the
"Seller"), the Servicer, and Texas Commerce Bank National Association, the
successor to The Chase Manhattan Bank, N.A., as deposit trustee (the "Deposit
Trustee"), does hereby certify with respect to the information set forth below
as follows:
1. Capitalized terms used in this Certificate shall have the
respective meanings set forth in the Pooling and Servicing
Agreement.
2. Household Finance Corporation is, as of the date hereof, the
Servicer under the Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. This Certificate relates to the Distribution Date occurring on
________________.
5. Deposit Trust Information.
(a) Total Pool Balance of the Receivables for the Due Period preceding
such Distribution Date was equal to . . . . . . . . . . . . . . . . . . . . . . . . $
-------
32
(b) Amount of Sub-total Unsecured Consumer Loans for the Due Period
preceding such Distribution Date was equal to . . . . . . . . . . . . . . . . . . . $
-------
(c) Amount of Sub-total Personal Homeowner Lines for the Due Period
preceding such Distribution Date was equal to . . . . . . . . . . . . . . . . . . . . $
-------
(d) Amount of Series 1997-1 Principal Collections for the preceding Due
Period is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(e) Amount of Series 1997-1 Finance Charge and Administrative Collections
as of the last day of the immediately preceding Due Period is . . . . . . . . . . . $
-------
(f) Amount of Additional Balances for such Distribution Date is . . . . . . . . . . . . . $
-------
(g) Amount of New Credit Lines is . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(h) Amount of Additional Credit Lines is . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(i) Amount of Removed Credit Lines is . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(j) Defaulted Amount is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(k) Amount of Repurchased Credit Lines pursuant to Section 2.10 of the
Agreement is . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
(l) Applicable allocation percentages for principal and interest for such
Distribution Date are . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . %
-------
%
-------
(m) Series 1997-1 Participation Interest Distribution Amount is . . . . . . . . . . . . . $
-------
(n) Accelerated Principal Distribution Amount is . . . . . . . . . . . . . . . . . . . . $
-------
(o) Series 1997-1 Participation Interest Principal Distribution Amount is . . . . . . . . $
-------
(p) Net Charge-Off Amounts (monthly and cumulative) are . . . . . . . . . . . . . . . . . $
-------
$
-------
B-2
33
(q) Reversals (monthly and cumulative) are . . . . . . . . . . . . . . . . . . . . . . . $
-------
$
-------
(r) Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
-------
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Certificate this ____ day of _________, 199_.
HOUSEHOLD FINANCE CORPORATION,
as Servicer
By:_________________________________
Name:
Title:
B-3
34
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in any
other manner, or taken any other action, that would constitute a distribution
of the Rule 144A Securities under the Securities Act of 1933, as amended (the
"1933 Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant
thereto, and that the Seller has not offered the Rule 144A Securities to any
person other than the Buyer or another "qualified institutional buyer" as
defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Deposit Trustee, and the Seller (as defined in the Pooling and Servicing
Agreement (the "Agreement") dated as of September 1, 1995 among Household
Consumer Loan Corporation, as Seller and as Holder of the Designated
Certificate, and Texas Commerce Bank National Association, the successor to The
Chase Manhattan Bank, N.A., as Deposit Trustee) as follows:
a. The Buyer understands that the Rule 144A Securities
have not been registered under the 1933 Act or the securities laws of
any state.
35
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller and the Deposit Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of
the 1933 Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person to act, in
such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may
be resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
[3. The Buyer warrants and represents to, and covenants with, the
Seller, the Deposit Trustee, Servicer and the Seller that either (1) the Buyer
is (A) not an employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or a
plan (within the meaning of Section 4975(e)(1) of the Internal Revenue Code of
1986 ("Code")), which (in either case) is subject to ERISA or Section 4975 of
the Code (both a "Plan"), and (B) is not directly or indirectly purchasing the
Rule 144A Securities on
C-2
36
behalf of, as investment manager of, as named fiduciary of, as trustee of, or
with "plan assets" of a Plan, or (2) the Buyer understands that registration of
transfer of any Rule 144A Securities to any Plan, or to any Person acting on
behalf of any Plan, will not be made unless such Plan delivers an opinion of
its counsel, addressed and satisfactory to the Certificate Registrar and the
Seller, to the effect that the purchase and holding of the Rule 144A Securities
by, on behalf of or with "plan assets" of any Plan would not constitute or
result in a prohibited transaction under Section 406 of ERISA or Section 4975
of the Code, and would not subject the Seller, the Servicer, the Indenture
Trustee or the Issuer to any obligation or liability (including liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in the
Agreement or any other liability.]
4. The Buyer has otherwise complied with any conditions for
transfer set forth in the Trust Agreement, and (h), either (i) is a "C
Corporation" under the Internal Revenue Code of 1986, as amended, or (ii) has
provided such disclosure concerning our status for federal income tax purposes
and the status and economic interest of our beneficial owners, as the Issuer or
its representatives have reasonably requested to determine that the Buyer's
acquisition of the Certificates will not subject the Issuer to an entity level
tax.
5. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
________________________________ __________________________________
Print Name of Seller Print Name of Buyer
By:_____________________________ By:_______________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No._____________________________ No._______________________________
Date:___________________________ Date:_____________________________
C-3
37
ANNEX 1 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $______________________(1) in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____________________
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
C-1-1
38
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State or
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively (a)
plans established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or
its political subdivisions, for the benefit of its employees,
or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of
C-1-2
39
1974, but is not a trust fund that includes as participants
individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is
a majority-owned, consolidated subsidiary of another enterprise and the Buyer
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer
for the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
C-1-3
40
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
8. The Buyer has otherwise complied with any conditions for
transfer set forth in the Trust Agreement, and, either (i) is a "C Corporation"
under the Internal Revenue Code of 1986, as amended, or (ii) has provided such
disclosure concerning our status for federal income tax purposes and the status
and economic interest of our beneficial owners, as the Issuer or its
representatives have reasonably requested to determine that the Buyer's
acquisition of the Certificates will not subject the Issuer to an entity level
tax.
________________________________________
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:___________________________________
C-1-4
41
ANNEX 2 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used.
____ The Buyer owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series thereof)
that have the same investment adviser or investment advisers that are
affiliated (by virtue of being majority owned subsidiaries of the same parent
or because one investment adviser is a majority owned subsidiary of the other).
C-2-1
42
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
7. The Buyer has otherwise complied with any conditions for
transfer set forth in the Trust Agreement, and (h), either (i) is a "C
Corporation" under the Internal Revenue Code of 1986, as amended, or (ii) has
provided such disclosure concerning our status for federal income tax purposes
and the status and economic interest of our beneficial owners, as the Issuer or
its representatives have reasonably requested to determine that the Buyer's
acquisition of the Certificates will not subject the Issuer to an entity level
tax.
____________________________________
Print Name of Buyer
By:________________________________
Name:___________________________
Title:__________________________
IF AN ADVISER:
___________________________________
Print Name of Buyer
Date:_______________________________
C-2-2
