1
HOUSEHOLD PRIVATE LABEL CREDIT CARD MASTER NOTE TRUST I
Series 2001-[-]
$[-] Class A [Floating Rate] [-]% Asset Backed Notes, Series [-]
$[-] Class B [Floating Rate] [-]% Asset Backed Notes, Series [-]
UNDERWRITING AGREEMENT
[-], 2001
[-] as Representative of the
Underwriters set forth herein (the "Representative")
[Address]
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 (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 representatives (the
"Representatives"), $[-] Class A [Floating Rate] [-]% Asset Backed Notes, Series
[-] (the "Class A Notes") and $[-] Class B [Floating Rate] [-]% Asset Backed
Notes, Series [-] (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 the Bank pursuant to a Receivables Purchase
Agreement, dated as of [-], 2001 (the "Receivables Purchase Agreement"), between
the Bank and the Transferor. 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 [-], 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. ("Household").
HFC, the Bank and the Transferor are referred to collectively herein as the
"Household Entities".
The Issuer is a Delaware common law business trust formed pursuant to
a Trust Agreement, dated as of [-], 2001 (the "Trust Agreement"), between the
Transferor and __________ ("____"), as owner trustee (the "Owner Trustee").
The Notes will be issued pursuant to a Master Indenture, dated as of
[-], 2001 (the "Master Indenture"), between the Issuer and ___________, as
indenture trustee (the "Indenture Trustee"), as supplemented by the Series
2001-[-] Indenture Supplement with respect to the Notes to be dated as of [-],
200_ (the "Indenture Supplement," and together with the Master Indenture, the
"Indenture").
2
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 [-], 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. [-]), including a form
of prospectus 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 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
2
3
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 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 Representatives specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplements thereto).
(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.
3
4
(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 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 Transferor 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 and the Receivables Purchase 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 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 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
Receivables Purchase Agreement, the Transfer and Servicing Agreement
4
5
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 Receivables Purchase Agreement have been
duly executed and delivered by the Bank; and this Agreement and the
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.
(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 [-], 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 [-].
(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
5
6
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 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) [account's name] 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 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
6
7
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 charter
or by-laws of HFC or any applicable law, administrative regulation or
administrative or court decree, except where any such conflict,
breach, default, encumbrance or violation would not have a material
adverse effect on the transactions contemplated by this Agreement.
(iv) 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 2000. Except as set forth in
or contemplated in such reports, there has been no material adverse
change in
7
8
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 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.
(viii) [Accountant's name] 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.
(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 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 [-]% of the
aggregate principal amount represented by the Class A Notes.
8
9
(b) 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 [-]% 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 ______. 200_, 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.
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.
9
10
(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 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988 (as amended); (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 of the Financial Services (Promotion of Unregulated Collective Investment
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 Collective Investment Schemes)
Regulations 1991; and (iv) it is a person of a kind described in Article 9(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1988 (as amended).
(d) Each Underwriter may prepare and provide to prospective investors
certain Computational Materials, ABS Term Sheets or Collateral Term Sheets in
connection with its offering of the Notes, subject to the following conditions:
(i) The Underwriters shall comply with the requirements of the
No-Action Letter of May 20, 1994 issued by the Commission to Xxxxxx,
Peabody Acceptance Corporation I and certain affiliates, as made
applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May
24, 1994 (collectively, the "Xxxxxx/PSA Letter"), and the requirements
of the No-Action Letter of February 17, 1995 issued by the Commission
to the Public Securities Association (the "PSA Letter" and, together
with the Xxxxxx/PSA Letter, the "No-Action Letters").
(ii) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include
only those Computational Materials that have been prepared or
delivered to prospective investors by the Underwriters. For purposes
hereof, "ABS Term Sheets" and "Collateral Term Sheets" shall have the
meanings given such terms in the PSA Letter but shall include only
those ABS Term Sheets or Collateral Term Sheets that have been
prepared or delivered to prospective investors by the Underwriter.
(iii) Each Underwriter shall provide to the Transferor any related
Computational Materials, ABS Term Sheets or Collateral Term Sheets
which are provided to investors no later than the second Business Day
preceding the date such Computational Materials, ABS Term Sheets or
Collateral Term Sheets are required to be filed pursuant to the
applicable No-Action Letters. The Underwriters may provide copies of
the foregoing
10
11
in a consolidated or aggregated form including all information
required to be filed.
(iv) In the event that the Household Entities or the Underwriters
discover a material error in the Computational Materials, ABS Term
Sheets or Collateral Term Sheets, the related Underwriter shall
prepare corrected Computational Materials, ABS Term Sheets or
Collateral Term Sheets and deliver them to Transferor for filing
pursuant to Section 5(j).
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.
(c) As soon as practicable, the Transferor will make generally
available to Noteholders and to the Representative an earnings statement or
statements of
11
12
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 $[-]) 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
[accountants name], (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-[-] 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.
(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
12
13
documents reasonably available to the Household Entities, the Household Entities
shall furnish such documents.
(j) The Transferor shall file or cause to be filed with the
Commission, in accordance with the No-Action Letters, any Computational
Materials, ABS Term Sheets and Collateral Term Sheets provided that the
Transferor has received such Computational Materials, ABS Term Sheets and
Collateral Term Sheets at least 2 Business Days prior to the time for filing
same.
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.
(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 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
13
14
(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 (xiii) of this
paragraph (c), Xxxxx Xxxxxxxxxx LLP, special counsel to the Household Entities,
shall have delivered a favorable opinion with respect to clauses (xiv) through
(xviii) 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 and is in good
standing 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 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 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 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;
14
15
(iv) the Notes have been duly created 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 pursuant to, any
material statute 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 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;
15
16
(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 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) no consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court, federal or
state governmental agency or regulatory body 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;
16
17
(xii) the statements in the Registration Statement under the heading
"Certain Legal Aspects of the Receivables" 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 or
attorneys under the control of such counsel and are correct in all
material respects;
(xiii) the Issuer is not required to be registered as an "investment
company" under the 1940 Act;
(xiv) 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;
(xv) the Indenture creates in favor of the Indenture Trustee a
security interest in the rights of the Issuer in the Receivables;
(xvi) the statements in the Registration Statement and Prospectus
under the headings "Prospectus Summary--Tax Status" and "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;
(xvii) 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
(xviii) 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
17
18
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 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, [accountants name]
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 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.
18
19
(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 [-], 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 or the
by-laws of the Indenture Trustee or contravene any provision of or
constitute a default under any indenture, contract 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;
(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
[-] 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:
19
20
(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, 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;
(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 or bylaws 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
20
21
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 business 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 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
21
22
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 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 Owner is the sole beneficial owner of the Issuer.
(j) The Class A Notes shall be given the highest investment grade
rating by both Xxxxx'x Investors Service, Inc. ("Xxxxx'x"), and Standard &
Poor's Ratings Services ("S&P") and neither Xxxxx'x nor S&P shall have placed
the Class A Notes under review with possible negative implications.
(k) The Class B Notes shall be rated at least "[-]" or its equivalent
by both Xxxxx'x and S&P and neither Xxxxx'x nor S&P 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
judgment of the Representative, so material and adverse as to make it
22
23
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.
(n) The Representative shall have received a letter or letters, dated
as of the date of the Computational Materials, as of ____, 200_, and as of the
Closing Date, respectively, of [Certified Public Accountants], substantially in
the from of the drafts to which the Representative has previously agreed and
otherwise in form and substance satisfactory to the Representative and its
counsel.
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
Representatives. 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 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
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 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
23
24
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 any material fact contained in the
Computational Materials, any ABS Term Sheet or any Collateral Term Sheet
provided by the related Underwriter which is derived from the Transferor
Provided Information or (ii) 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, 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 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, 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.
(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 losses, claims, damages or
liabilities which arise from (a) 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 (b) any untrue statement or alleged untrue statement
of any material fact contained in the Computational Materials, any ABS Term
Sheet or any Collateral Term Sheet distributed by such Underwriter other than
one which is derived from 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 last paragraph of the cover page, the
second paragraph under the heading "Reports to Noteholders", the second sentence
under the heading "Risk Factors -- Limited Liquidity," and the statements 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].
24
25
(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. The indemnifying party shall be entitled 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 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
25
26
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
Company 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 23(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
"Transferor Provided Information" means the information contained in
the data tape delivered by the Transferor to the Representative (i) dated as of
______, 200_ containing information with respect to the Receivables as of the
Cutoff Date.
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 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.
26
27
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 telegraphed and confirmed to the Representative at [-] Attention:
[-]; 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.
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.
27
28
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.
28
29
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:
---------------------------
Name:
Title:
HRSI FUNDING, INC. II
By:
---------------------------
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By:
---------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date hereof.
[Name]
By [-]
By
------------------------------
Name:
Title:
For themselves and the other several Underwriters named in Schedule I to the
foregoing Agreement.
29
30
SCHEDULE I
CLASS A NOTES
Principal
Amount
-------------
CLASS B NOTES
Principal
Amount
-------------
30
