DRAFT OF MAY 28, 1999
TRUST AGREEMENT
between
HOUSEHOLD AUTO RECEIVABLES CORPORATION
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of June 1, 1999
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Capitalized Terms. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Other Definitional Provisions. . . . . . . . . . . . . . . . 2
Section 1.3. Action by or Consent of Noteholders and
Certificate-holders. . . . . . . . . . . . . . . . . . . . 3
Section 1.4. Material Adverse Effect. . . . . . . . . . . . . . . . . . . 3
ARTICLE II ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3. Purposes and Powers. . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . 5
Section 2.5. Initial Capital Contribution of Trust Estate . . . . . . . . 5
Section 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . 5
Section 2.7. Liability. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.8. Title to Trust Property. . . . . . . . . . . . . . . . . . . 5
Section 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.10. Representations and Warranties of the Depositor. . . . . . . 6
Section 2.11. Federal Income Tax Allocations . . . . . . . . . . . . . . . 7
Section 2.12. Covenants of the Depositor . . . . . . . . . . . . . . . . . 8
Section 2.13. Covenants of the Certificateholders. . . . . . . . . . . . . 9
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS . . . . . . . . . . . . . . 9
Section 3.1. Initial Ownership. . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2. The Certificates . . . . . . . . . . . . . . . . . . . . . .10
Section 3.3. Authentication of Certificates . . . . . . . . . . . . . . .10
Section 3.4. Registration of Transfer and Exchange of Certificates. . . .10
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. . . . . .11
Section 3.6. Persons Deemed Certificateholders. . . . . . . . . . . . . .12
Section 3.7. Access to List of Certificateholders' Names and Addresses. .12
Section 3.8. Maintenance of Office or Agency. . . . . . . . . . . . . . .12
Section 3.9. ERISA Restrictions . . . . . . . . . . . . . . . . . . . . .13
Section 3.10. Securities Matters . . . . . . . . . . . . . . . . . . . . .13
Section 3.11. Distributions. . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.12. Paying Agent . . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE IV VOTING RIGHTS AND OTHER ACTIONS . . . . . . . . . . . . . . . . . .13
Section 4.1. Prior Notice to Holders with Respect to Certain Matters. . .13
Section 4.2. Action by Certificateholders with Respect to Certain
Matters . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 4.3. Action by Certificateholders with Respect to Bankruptcy. . .14
(i)
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Section 4.4. Restrictions on Certificateholders' Power. . . . . . . . . .15
Section 4.5. Majority Control . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE V CERTAIN DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 5.1. Accounting and Records to the Noteholders,
Certificate-holders, the Internal Revenue Service
and Others . . . . . . . . . . . . . . . . . . . . . . . .16
Section 5.2. Signature on Returns; Tax Matters Partner. . . . . . . . . .16
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE . . . . . . . . . . . . . . .16
Section 6.1. General Authority. . . . . . . . . . . . . . . . . . . . . .16
Section 6.2. General Duties . . . . . . . . . . . . . . . . . . . . . . .17
Section 6.3. Action upon Instruction. . . . . . . . . . . . . . . . . . .17
Section 6.4. No Duties Except as Specified in this Agreement
or in Instructions. . . . . . . . . . . . . . . . . . . .18
Section 6.5. No Action Except under Specified Documents or
Instructions. . . . . . . . . . . . . . . . . . . . . . .19
Section 6.6. Restrictions . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE VII CONCERNING THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . .19
Section 7.1. Acceptance of Trusts and Duties. . . . . . . . . . . . . . .19
Section 7.2. Furnishing of Documents. . . . . . . . . . . . . . . . . . .21
Section 7.3. Representations and Warranties . . . . . . . . . . . . . . .21
Section 7.4. Reliance; Advice of Counsel. . . . . . . . . . . . . . . . .21
Section 7.5. Not Acting in Individual Capacity. . . . . . . . . . . . . .22
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables . .22
Section 7.7. Owner Trustee May Own Certificates and Notes . . . . . . . .22
Section 7.8. Payments from Owner Trust Estate . . . . . . . . . . . . . .23
Section 7.9. Doing Business in Other Jurisdictions. . . . . . . . . . . .23
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . .23
Section 8.1. Owner Trustee's Fees and Expenses. . . . . . . . . . . . . .23
Section 8.2. Indemnification. . . . . . . . . . . . . . . . . . . . . . .23
Section 8.3. Payments to the Owner Trustee. . . . . . . . . . . . . . . .24
Section 8.4. Non-recourse Obligations . . . . . . . . . . . . . . . . . .24
ARTICLE IX TERMINATION OF TRUST AGREEMENT. . . . . . . . . . . . . . . . . . .24
Section 9.1. Termination of Trust Agreement . . . . . . . . . . . . . . .24
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES . . . . . . .26
Section 10.1. Eligibility Requirements for Owner Trustee . . . . . . . . .26
Section 10.2. Resignation or Removal of Owner Trustee. . . . . . . . . . .26
Section 10.3. Successor Owner Trustee. . . . . . . . . . . . . . . . . . .27
Section 10.4. Merger or Consolidation of Owner Trustee . . . . . . . . . .28
Section 10.5. Appointment of Co-Trustee or Separate Trustee. . . . . . . .28
(ii)
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ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Section 11.1. Supplements and Amendments . . . . . . . . . . . . . . . . .29
Section 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. . . . . . . . . . . . . . . . . . . .30
Section 11.3. Limitations on Rights of Others. . . . . . . . . . . . . . .30
Section 11.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 11.5. Severability . . . . . . . . . . . . . . . . . . . . . . . .31
Section 11.6. Separate Counterparts. . . . . . . . . . . . . . . . . . . .31
Section 11.7. Assignments; Series Support Provider . . . . . . . . . . . .31
Section 11.8. Covenants of the Depositor . . . . . . . . . . . . . . . . .31
Section 11.9. No Petition. . . . . . . . . . . . . . . . . . . . . . . . .31
Section 11.10. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . .32
Section 11.11. Headings . . . . . . . . . . . . . . . . . . . . . . . . . .32
Section 11.12. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . .32
Section 11.13. Master Servicer. . . . . . . . . . . . . . . . . . . . . . .32
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
(iii)
TRUST AGREEMENT dated as of June 1, 1999 between HOUSEHOLD AUTO
RECEIVABLES CORPORATION, a Nevada corporation (the "Depositor"), and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as Owner Trustee (the "Owner
Trustee").
ARTICLE I
DEFINITIONS
Section 1.1. CAPITALIZED TERMS. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE Section 3801 et seq. as the same may be amended
from time to time.
"Certificates" means, if the Depositor elects (i) to evidence its
interest in certificated form pursuant to Section 3.2, the certificate
substantially in the form of Exhibit A or (ii) to have its interest be
uncertified pursuant to Section 3.2, such uncertificated interest.
"Certificate Majority" shall have the meaning assigned to such term
in Section 4.1.
"Certificate Paying Agent" means The Chase Manhattan Bank.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the principal corporate trust office of any successor Owner Trustee (the address
of which the successor owner trustee will notify the Certificateholders and the
Depositor).
"Depositor" shall mean Household Auto Receivables Corporation in its
capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in
Section 3.9.
"Expenses" shall have the meaning assigned to such term in
Section 8.2.
"Holder" or "Certificateholder" shall mean a Person in whose name a
Certificate is registered on the Certificate Register.
"Household" shall mean Household Finance Corporation.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 8.2.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Master Sale and Servicing Agreement, all funds on deposit from
time to time in the Trust Accounts and all other property of the Trust from time
to time, including any rights of the Owner Trustee and the Trust pursuant to the
Master Sale and Servicing Agreement, each Basic Document and each Series Related
Document.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Percentage Interest" shall mean, with respect to a Certificate, the
portion of the interests in the Trust represented by a Certificate, as reflected
in the Certificate Register.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Securities Act" shall have the meaning assigned to such term in
Section 3.4.
"Series Trust Estate" shall mean the property granted to the Trustee
pursuant to Section 1.02 of the Series 1999-1 Supplement.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
Section 1.2. OTHER DEFINITIONAL PROVISIONS (a) Capitalized
terms used herein and not otherwise defined have the meanings assigned to
them in the Master Sale and Servicing Agreement or, if not defined therein,
in the Indenture, PROVIDED THAT, as used
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herein, Series means only the Series of Notes and Series of Certificates with
respect to which the Trust is the Issuer and only such Series Trust Estates
included in the Owner Trust Estate.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any Certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any Certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as
applicable. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
Section 1.3. ACTION BY OR CONSENT OF NOTEHOLDERS AND
CERTIFICATE-HOLDERS. Whenever any provision of this Agreement refers to
action to be taken, or consented to, by Noteholders or Certificateholders,
such provision shall be deemed to refer to the Certificateholder or
Noteholder, as the case may be, of record as of the Record Date immediately
preceding the date on which such action is to be taken, or consent given, by
Noteholders or Certificateholders. Solely for the purposes of any action to
be taken, or consented to, by Noteholders, any Note registered in the name of
the Depositor or any Affiliate thereof shall be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the
Trustee is entitled to rely upon any such action or consent, only Notes which
the Owner Trustee or the Trustee knows to be so owned shall be so disregarded.
Section 1.4. MATERIAL ADVERSE EFFECT. Whenever a
determination is to be made under this Agreement as to whether a given event,
action, course of conduct or set of facts or circumstances could or would
have a material adverse effect on the Noteholders or Certificateholders (or
any similar or analogous determination), such determination shall be made
without taking into account the funds available from claims under any policy
or other Series Support.
3
ARTICLE II
ORGANIZATION
Section 2.1. NAME. There is hereby formed a trust to be
known as "Household Automotive Trust III", in which name the Owner Trustee
may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
Section 2.2. OFFICE. The office of the Trust shall be in
care of the Owner Trustee at the Corporate Trust Office or at such other
address as the Owner Trustee may designate by written notice to the
Certificateholders and the Depositor.
Section 2.3. PURPOSES AND POWERS. (a) The purpose of the
Trust is, and the Trust shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture and each Series
Supplement and the Certificates pursuant to this Agreement and each Series
Supplement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to fund the
expense of obtaining any Series Support and to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance to
the Depositor pursuant to the Master Sale and Servicing Agreement;
(iii) with respect to each Series Trust Estate, to assign, grant,
transfer, pledge, mortgage and convey each Series Trust Estate to the
Trustee pursuant to the Indenture and the related Series Supplement for
the benefit of the Noteholders;
(iv) to enter into and perform its obligations under the Basic
Documents and the Series Related Documents with respect to each Series, in
each case, to which it is a party;
(v) to acquire, hold and manage the Owner Trust Estate;
(vi) to make distributions on the Certificates in accordance with
their respective terms;
(vii) to own Class SV Preferred Stock of the Depositor;
(viii) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(ix) subject to compliance with the Basic Documents and the Series
Related Documents with respect to each Series, to engage in such other
activities as may be required in connection with conservation of the Owner
Trust Estate and the making of distributions to the Certificateholders and
the Noteholders.
4
(b) The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement, the Basic Documents or any Series Related Documents.
Section 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
Section 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, on behalf of the Trust, as of the date hereof, the sum of $1
and one share of Class SV Preferred Stock of the Depositor. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the
date hereof, of the foregoing contribution, which shall constitute the
initial Owner Trust Estate. The Depositor shall pay organizational expenses
of the Trust as they may arise.
Section 2.6. DECLARATION OF TRUST. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject
to the conditions set forth herein, on behalf of the Trust, for the use and
benefit of the Certificateholders, subject to the obligations of the Trust
under the Basic Documents and the Series Related Documents with respect to
each Series. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is
the intention of the parties hereto that, solely for income tax purposes, the
Trust shall be treated as a branch; PROVIDED, HOWEVER, that in the event
Certificates are owned by more than one Certificateholder, it is the
intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall then be treated as a partnership and that, unless
otherwise required by appropriate tax authorities, only after such time the
Trust will file or cause to be filed annual or other necessary returns,
reports and other forms consistent with the characterization of the Trust as
a partnership for such tax purposes. Effective as of the date hereof, the
Owner Trustee shall have all rights, powers and duties set forth herein and
to the extent not inconsistent herewith, in the Business Trust Statute with
respect to accomplishing the purposes of the Trust. The Owner Trustee shall
file the Certificate of Trust with the Secretary of State.
Section 2.7. LIABILITY. (a) The Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
(b) No Holder, other than to the extent set forth in clause (a),
shall have any personal liability for any liability or obligation of the Trust.
Section 2.8. TITLE TO TRUST PROPERTY. (a) Legal title to all
the Owner Trust Estate shall be vested at all times in the Trust as a
separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a
5
trustee or trustees, in which case title shall be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The holders of the Certificates shall not have legal title to
any part of the related Series Trust Estate. The Holders of the Certificates
shall be entitled to receive distributions with respect to their undivided
ownership interest therein in accordance with the terms hereof and the related
Series Supplement. No transfer, by operation of law or otherwise, of any right,
title or interest by any Certificateholder of its ownership interest in the
Owner Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of any Series Trust Estate.
Section 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located with the Certificate
Paying Agent in the State of New York. Payments will be received by the
Certificate Paying Agent on behalf of the Trust in New York and payments will
be made by the Trust from New York. The Trust shall not have any employees
in any state other than Delaware; PROVIDED, HOWEVER, that nothing herein
shall restrict or prohibit the Owner Trustee, the Master Servicer or any
agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office
in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor makes the following representations and warranties on which
the Owner Trustee relies in accepting the Owner Trust Estate in trust and
executing the Certificates and Notes and upon which any Series Support
Provider relies in providing any Series Support. Each of the following
representations and warranties shall be deemed to be made on each date on
which a Series Trust Estate is pledged under the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a Nevada corporation with power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted and is proposed to be
conducted pursuant to this Agreement and the Basic Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification and in
which the failure to so qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Depositor.
(c) POWER AND AUTHORITY. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out its terms;
the Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust; the Depositor has duly
authorized such sale, assignment and
6
deposit to the Trust by all necessary corporate action; and the execution,
delivery and performance of this Agreement has been duly authorized by the
Depositor by all necessary corporate action.
(d) BINDING OBLIGATIONS. This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Depositor enforceable against the Depositor in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
by equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(e) NO CONSENT REQUIRED. To the best knowledge of the Depositor,
no consent, license, approval or authorization or registration or declaration
with, any Person or with any governmental authority, bureau or agency is
required in connection with the execution, delivery or performance of this
Agreement, the Basic Documents and the applicable Series Related Documents,
except for such as have been obtained, effected or made or as to which a failure
to obtain, effect or make would not have a material adverse effect on the
business, properties, assets or condition (financial or other) of the Depositor.
(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party or by
which it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents or any applicable
Series Related Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties.
(g) NO PROCEEDINGS. To the best of the Depositor's knowledge,
there are no proceedings or investigations pending or, to its knowledge
threatened against it before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality having jurisdiction over it or
its properties (A) asserting the invalidity of this Agreement or any of the
Basic Documents, (B) seeking to prevent the issuance of the Certificates or the
Notes or the consummation of any of the transactions contemplated by this
Agreement or any of the Basic Documents, (C) seeking any determination or ruling
that might materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement, any of the Basic
Documents or any Series Related Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of any of
the Notes or Certificates.
Section 2.11. FEDERAL INCOME TAX ALLOCATIONS. (a) For so long
as the Trust has a single owner for federal income tax purposes, it will,
pursuant to Treasury Regulations
7
promulgated under section 7701 of the Code, be disregarded as an entity distinct
from the Certificateholder for all federal income tax purposes. Accordingly,
for federal income tax purposes, the Certificateholder will be treated as (i)
owning all assets owned by the Trust, (ii) having incurred all liabilities
incurred by the Trust, and (iii) all transactions between the Trust and the
Certificateholder will be disregarded.
(b) In the event that the Trust has two equity owners for federal
income tax purposes, the Trust will be treated as a partnership. At any such
time that the Trust has two equity owners, this Agreement will be amended, in
accordance with Section 11.1 herein, and appropriate provisions will be added so
as to provide for treatment of the Trust as a partnership.
Section 2.12. COVENANTS OF THE DEPOSITOR. The Depositor
agrees and covenants for the benefit of the Owner Trustee and the Trustee for
the benefit of the Noteholders, during the term of this Agreement, and to the
fullest extent permitted by applicable law, that:
(a) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation, the Basic Documents and the Series Related
Documents;
(b) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document
to which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial
8
part of its property, or make any assignment for the benefit of creditors, or
admit in writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance of
any such action.
Section 2.13. COVENANTS OF THE CERTIFICATEHOLDERS. Each
Certificateholder agrees:
(a) to be bound by the terms and conditions of the related
Certificates, of this Agreement and, with respect to the holders of
Certificates, of the related Series Supplement, including any supplements or
amendments hereto and to perform the obligations of a Certificateholder as set
forth therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee and the
Noteholders;
(b) to hereby appoint the Depositor as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if any, and agree that, if requested by the Trust,
it will sign such federal income tax information return in its capacity as
holder of an interest in the Trust. Each Certificateholder also hereby agrees
that in its tax returns it will not take any position inconsistent with those
taken in any tax returns that may be filed by the Trust;
(c) if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer;
(d) until the completion of the events specified in Section
9.1(e), not to, for any reason, institute proceedings for the Trust or the
Depositor to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(e) that there shall not be more than 98 other holders of
Certificates.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.1. INITIAL OWNERSHIP. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.5, the Trust
shall issue an uncertificated ownership interest in the Trust (the
"Uncertificated Certificate") to the Depositor. Unless and until the
Depositor transfers all or a portion of the Percentage Interest represented
by such Uncertificated Certificate, such Uncertificated Certificate shall
represent one hundred percent (100%) of the Percentage Interest.
9
Section 3.2. THE CERTIFICATES. (a) The Certificates shall
be in uncertificated form with records of interest ownership maintained by
the Certificate Registrar in the Certificate Register. If, on or after the
Closing Date, the holder of any Uncertificated Certificate delivers to the
Owner Trustee a written request that the Uncertificated Certificate specified
in such request be issued in certificated form (a related "Certification
Request"), the Owner Trustee shall promptly issue such Certificate to the
holder thereof in certificated form. If a Certification Request has been
delivered, the Certificate will be issued in registered form, substantially
in the form of Exhibit A, and shall upon issue, be executed and delivered by
the Depositor to the Owner Trustee for authentication and redelivery as
provided in Section 3.3.
(b) If the Certificates are in certificated form, they shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the authentication and delivery of such Certificates or did not hold such
offices at the date of authentication and delivery of such Certificates.
(c) A transferee of a Certificate(whether in certificated or
uncertificated form) shall become a Certificateholder, and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder, upon
due registration of such Certificate in such transferee's name pursuant to
Section 3.4.
(d) No Certificates shall be issued under this Agreement unless
such Certificates have been authorized pursuant to a Series Supplement and all
conditions precedent to the issuance thereof, as specified in the related Series
Supplement shall have been satisfied. All Certificates of each Series issued
under this Agreement shall be in all respects entitled to the benefits hereof
and of the related Series Trust Estate.
Section 3.3. AUTHENTICATION OF CERTIFICATES. If the
Certificates are in certificated form, the Owner Trustee shall cause the
related Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by its
chairman of the board, its president or any vice president, its treasurer or
any assistant treasurer without further corporate action by the Depositor, in
authorized denominations. No Certificate shall entitle its holder to any
benefit under this Agreement or, with respect to a Series, the related Series
Supplement, or shall be valid for any purpose, unless there shall appear on
such Certificate a certificate of authentication substantially in the form
set forth in Exhibit A, executed by the Owner Trustee or its authenticating
agent, by manual signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES. (a) The Certificate Registrar shall keep or cause to be kept,
at the office or agency maintained pursuant to Section 3.8, a Certificate
Register in which, subject to such reasonable regulations
10
as it may prescribe, the Owner Trustee shall provide for the registration of
Certificates (whether in certificated or uncertificated form) and of transfers
and exchanges of Certificates (whether in certificated or uncertificated form)
as herein provided. The Owner Trustee shall be the initial Certificate
Registrar .
(b) The Certificate Registrar shall provide the Trustee with a
list of the names and addresses of the Certificateholders on each Series Closing
Date in the form which such information is provided to the Certificate Registrar
by the Depositor. Upon any transfers of Certificates, the Certificate Registrar
shall notify the Trustee of the name and address of the transferee in writing,
by facsimile, on the day of such transfer.
(c) If a Certificate is in certificated form, upon surrender for
registration of transfer of any Certificate to the Certificate Registrar at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Series in the aggregate
Percentage Interest to be transferred, dated the date of authentication by the
Owner Trustee or any authenticating agent. If a Certificate is in
uncertificated form, upon representation of such Certificate in accordance with
Section 3.2, the Certificate Registrar shall reflect in the Certificate
Registrar the transfer of the relevant Percentage Interest. If a Certificate is
in certificated form, at the option of the Holder thereof, such Certificate may
be exchanged for one or more other Certificates of the same Series in authorized
denominations of a like Percentage Interest upon surrender of the Certificates
of the same Series, to be exchanged at the office or agency maintained pursuant
to Section 3.8. Certificates may be issued in any Percentage Interest not to
exceed 100%.
(d) Every Certificate presented or, in the case of certificated
Certificates, surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each certificated Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Owner Trustee in accordance with its customary practice.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
Section 3.5. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Certificate
11
and (b) there shall be delivered to the Certificate Registrar and the Owner
Trustee, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee or its authenticating agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Series
principal balance. In connection with the issuance of any new Certificate under
this Section, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this section shall constitute conclusive evidence of an ownership
interest in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person
by virtue of becoming a Certificateholder in accordance with this Agreement
and the rules and regulations of the Certificate Registrar shall be deemed to
be bound by the terms of this Agreement. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any agent of the Owner Trustee and the Certificate Registrar
may treat the Person in whose name any Certificate shall be registered in the
Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant hereto, the Indenture or any Series
Supplement (in the case of a Certificate) and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar, nor any
agent of the Owner Trustee or the Certificate Registrar shall be bound by any
notice to the contrary.
Section 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee or the Certificate Registrar shall furnish or
cause to be furnished to the Master Servicer, the Depositor or Owner Trustee
within 15 days after receipt by the Owner Trustee or the Certificate
Registrar of a request therefor from such Person in writing, a list, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If three or more Holders of Certificates or one or more Holders of
Certificates evidencing not less than 25% of the Percentage Interest apply in
writing to the Owner Trustee or the Certificate Registrar, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement, under
the Certificates of such Series or under the related Series Supplement and
such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Owner Trustee or the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to
the current list of Certificateholders of such Series. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Master Servicer, the Owner Trustee or any
agent thereof accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 3.8. MAINTENANCE OF OFFICE OR AGENCY. The Owner
Trustee or the Certificate Registrar shall maintain in Wilmington, Delaware,
an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or
12
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the Basic Documents may be served. The Owner Trustee
initially designates its Corporate Trust Office for such purposes. The Owner
Trustee shall give prompt written notice to the Depositor, the
Certificateholders and (unless a Support Default shall have occurred and be
continuing) any Series Support Provider of any change in the location of the
Certificate Register or any such office or agency.
Section 3.9. ERISA RESTRICTIONS. The Certificates may not be
acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA,
(ii) a plan (as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code or (iii) any entity whose underlying assets include
assets of a plan described in (i) or (ii) by reason of such plan's investment
in the entity (each, a "Benefit Plan"). The Certificate Registrar shall not
register the transfer of a Certificate unless the transferee has delivered to
the Owner Trustee a representation letter in form and substance satisfactory
to the Owner Trustee to the effect that the transferee is not, and is not
acquiring the Certificate for the account of, a Benefit Plan.
Section 3.10. SECURITIES MATTERS. Notwithstanding anything
contained herein to the contrary, the Owner Trustee shall not be responsible
for ascertaining whether any transfer complies with the registration
provisions or exemptions from the Securities Act, the Exchange Act,
applicable state securities law or the Investment Company Act; PROVIDED,
HOWEVER, that if a certificate is specifically required to be delivered to
the Owner Trustee by a purchaser or transferee of a Certificate, the Owner
Trustee shall be under a duty to examine the same to determine whether it
conforms to the requirements of this Trust Agreement and shall promptly
notify the party delivering the same if such certificate does not so conform.
Section 3.11. DISTRIBUTIONS. Distributions shall be made from
time to time by the Owner Trustee or the Certificate Paying Agent in
accordance with the Percentage Interests of the Certificateholders.
Section 3.12. PAYING AGENT. Distributions to be made in
respect of the Certificates pursuant to this Agreement, or any Series
Supplement shall be made by the Certificate Paying Agent, by wire transfer or
check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of the Certificate or the making of any
notation thereon, except as provided in Section 9.1(c) with respect to the
final distribution on a Certificates.
ARTICLE IV
VOTING RIGHTS AND OTHER ACTIONS
Section 4.1. PRIOR NOTICE TO HOLDERS WITH RESPECT TO CERTAIN
MATTERS. With respect to the following matters, the Owner Trustee shall not
take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders in writing of the
proposed action and Certificateholders holding, in the
13
aggregate, greater than 50% of the Percentage Interests (a "Certificate
Majority") shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that such Certificateholders have withheld
consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust, which amendment shall have satisfied the Rating Agency
Condition (unless such amendment is required to be filed under the Business
Trust Statute or unless such amendment would not materially and adversely affect
the interests of the Holders);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
or
(d) except pursuant to Section 13.1(b) of the Master Sale and
Servicing Agreement, the amendment, change or modification of the Master Sale
and Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially adversely affect
the interests of the Certificateholders.
(e) the Depositor shall not, without the unanimous consent of the
holders of the Class SV Preferred Stock of the Depositor, institute proceedings
to be adjudicated insolvent, or consent to the institution of any bankruptcy or
insolvency case or proceedings against it, or file or consent to a petition
under any applicable federal or state law relating to bankruptcy, seeking the
Depositor's liquidation or reorganization or any other relief for the
Corporation as debtor, or consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian or sequestrator (or other similar official) of the
Corporation or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any corporate action in furtherance of
such action.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Note Registrar or Certificate Registrar within five
Business Days thereof.
Section 4.2. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power (a) to remove the
Master Servicer under the Master Sale and Servicing Agreement or (b) except
as expressly provided in the Indenture and the related Series Supplement and
at the written direction of the Certificateholders, sell the Receivables
after the termination of the Indenture. The Owner Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders and the furnishing of indemnification
satisfactory to the Owner Trustee by the Certificateholders.
Section 4.3. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO
BANKRUPTCY. Until one year and one day following the date of payment in full
of the Notes of each Series have been paid in full, the Owner Trustee shall
not have the power to, and shall not, commence
14
any proceeding or other actions contemplated by Section 2.13(d) hereof relating
to the Trust without the prior written consent of _____________ and of all the
Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
Section 4.4. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. (a)
The Certificateholders shall not direct the Owner Trustee to take or refrain
from taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement, any of the
Basic Documents or any Series Related Documents or would be contrary to
Section 2.3 or otherwise contrary to law nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to
this Agreement or any Basic Document, unless there are no outstanding notes
of any Series and unless the Certificate Majority previously shall have given
to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless the Certificate
Majority shall have made written request upon the Owner Trustee to institute
such action, suit or proceeding in its own name as Owner Trustee under this
Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected
or refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this
section or Section 6.3; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and
the Owner Trustee, that no one or more Holders of Certificates shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provisions of this Agreement to affect, disturb, or prejudice the rights
of the Holders of any other of the Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce
any right under this Agreement, except in the manner provided in this
Agreement and for the equal, ratable, and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of
this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 4.5. MAJORITY CONTROL. No Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust except as expressly provided in this Agreement.
Except as expressly provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Certificate
Majority. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by the Certificate Majority at the time of the delivery of such notice.
15
ARTICLE V
CERTAIN DUTIES
Section 5.1. ACCOUNTING AND RECORDS TO THE NOTEHOLDERS,
CERTIFICATE-HOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to
Sections 12.1(b)(iii) and 12.1(c) of the Master Sale and Servicing Agreement,
the Master Servicer shall (a) maintain (or cause to be maintained) the books
of the Trust on a calendar year basis on the accrual method of accounting,
including, without limitation, the allocations of net income under Section
2.11, (b) deliver (or cause to be delivered) to each Certificateholder, as
may be required by the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1, if applicable) to
enable each Certificateholder to prepare its Federal and state income tax
returns, (c) file or cause to be filed, if necessary, such tax returns
relating to the Trust (including a partnership information return, Form
1065), and direct the Owner Trustee or the Master Servicer, as the case may
be, to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
branch, or if applicable, as a partnership, for Federal income tax purposes
and (d) collect or cause to be collected any withholding tax as described in
and in accordance with the Master Sale and Serving Agreement or any Series
Supplement with respect to income or distributions to Certificateholders and
the appropriate forms relating thereto. The Owner Trustee or the Master
Servicer, as the case may be, shall make all elections pursuant to this
Section 5.1 as directed in writing by the Depositor. The Owner Trustee shall
sign all tax information returns, if any, filed pursuant to this Section 5.1
and any other returns as may be required by law, and in doing so shall rely
entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Depositor or the Master Servicer. The Owner
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables.
The Owner Trustee shall not make the election provided under Section 754 of
the Code.
Section 5.2. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.1 and in the event that the Trust
is characterized as a partnership, the Owner Trustee shall sign on behalf of
the Trust the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall
be signed by the Depositor.
(b) In the event that the Trust is characterized as a
partnership, the Depositor shall be the "tax matters partner" of the Trust
pursuant to the Code.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1. GENERAL AUTHORITY. The Owner Trustee is
authorized and directed to execute and deliver on behalf of the Trust the
Basic Documents and each Series Supplement and the related Series Related
Documents to which the Trust is named as a
16
party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents and each Series Supplement and the related
Series Related Documents to which the Trust is named as a party and any
amendment thereto, in each case, in such form as the Depositor shall approve as
evidenced conclusively by the Owner Trustee's execution thereof, and on behalf
of the Trust, to direct the Trustee to authenticate and deliver each Series of
Notes (or Class of such Series). In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Basic Documents and each Series Supplement and the
related Series Related Documents. The Owner Trustee is further authorized from
time to time to take such action as the Certificate Majority recommends with
respect to the Basic Documents and each Series Supplement and the related Series
Related Documents so long as such activities are consistent with the terms of
the Basic Documents and each Series Supplement and the related Series Related
Documents.
Section 6.2. GENERAL DUTIES. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and to administer
the Trust in accordance with the provisions of this Agreement and in the
interest of the Holders, subject to the Basic Documents and, with respect to
Certificates, each Series Supplement and the related Series Related
Documents. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the
Basic Documents and, with respect to Certificates, each Series Supplement and
the related Series Related Documents to the extent the Master Servicer has
agreed in the Master Sale and Servicing Agreement to perform any act or to
discharge any duty of the Trust or the Owner Trustee hereunder or under any
Basic Document and, with respect to Certificates, each Series Supplement and
the related Series Related Documents, and the Owner Trustee shall not be
liable for the default or failure of the Master Servicer to carry out its
obligations under the Master Sale and Servicing Agreement.
Section 6.3. ACTION UPON INSTRUCTION. (a) Subject to
Article IV, the Certificate Majority shall have the exclusive right to direct
the actions of the Owner Trustee in the management of the Trust, so long as
such instructions are not inconsistent with the express terms set forth
herein, in any Basic Document or, with respect to Certificates, in any Series
Supplement or in any Series Related Document. The Certificate Majority shall
not instruct the Owner Trustee in a manner inconsistent with this Agreement
or the Basic Documents or, with respect to Certificates, any Series
Supplement or any Series Related Document.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document or, with respect to Certificates, any
Series Supplement or any Series Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Basic Document or, with respect to Certificates,
any Series Supplement or any Series Related Document or is otherwise contrary to
law.
17
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document or, with respect to Certificates, any Series
Supplement or any Series Related Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Certificate Majority requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificate Majority, the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instruction within ten days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic Documents or, with respect to Certificates, any
Series Supplement or any Series Related Document, as it shall deem to be in the
best interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or, with
respect to Certificates, any Series Supplement or any Series Related Document or
any such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Certificate
Majority requesting instruction and, to the extent that the Owner Trustee acts
or refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement, the Basic
Documents or any Series Related Document, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
Section 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT
OR IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation
to manage, make any payment with respect to, register, record, sell, dispose
of, or otherwise deal with the Owner Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.3;
and no implied duties or obligations shall be read into this Agreement or any
Basic Document or, with respect to Certificates, any Series Supplement or any
Series Related Document against the Owner Trustee. The Owner Trustee shall
have no responsibility for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file
18
any Commission filing for the Trust or to record this Agreement or any Basic
Document or, with respect to Certificates, any Series Supplement or any Series
Related Document. The Owner Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any Liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee (solely in its individual capacity) and that
are not related to the ownership or the administration of the Owner Trust
Estate.
Section 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents or any Series Related Document and (iii) in accordance with any
document or instruction delivered to the Owner Trustee pursuant to Section
6.3.
Section 6.6. RESTRICTIONS. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth
in Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee,
would result in the Trust's becoming taxable as a corporation or a publicly
traded partnership for Federal income tax purposes. The Certificateholders
shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee and the Certificate Paying Agent also agree to
disburse all monies actually received by it constituting part of the Owner
Trust Estate upon the terms of this Agreement or the Basic Documents or, with
respect to Certificates, any Series Supplement or any Series Related
Document. The Owner Trustee shall not be answerable or accountable hereunder
or under any Basic Document or, with respect to Certificates, any Series
Supplement or any Series Related Document under any circumstances, except (i)
for its own willful misconduct, bad faith or negligence, (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.3
expressly made by the Owner Trustee in its individual capacity, (iii) for
liabilities arising from the failure of the Owner Trustee to perform
obligations expressly undertaken by it in the last sentence of Section 6.4
hereof, (iv) for any investments issued by the Owner Trustee or any branch or
affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
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(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions of
the Certificate Majority, the Depositor, the Master Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document or, with
respect to Certificates, any Series Supplement or any Series Related Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document or, with respect to Certificates, any Series
Supplement or any Series Related Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents or, with
respect to Certificates, any Series Supplement or any Series Related Document,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents or, with respect to Certificates, any
Series Supplement or any Series Related Document, other than the certificate of
authentication on the Certificates, and the Owner Trustee shall in no event
assume or incur any liability, duty or obligation to the Depositor, any Series
Support Provider, Trustee, the Certificate Paying Agent, any Noteholder or to
any Certificateholder, other than as expressly provided for herein, in the Basic
Documents or, with respect to Certificates, any Series Supplement or any Series
Related Document;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Depositor, any Series Support Provider, the Trustee or the
Master Servicer under any of the Basic Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations under
this Agreement, the Basic Documents or, with respect to Certificates, any Series
Supplement or any Series Related Document that are required to be performed by
the Depositor or the Certificate Paying Agent under this Agreement, by the
Trustee under the Indenture, any Series Supplement or any Series Related
Document or the Master Servicer under the Master Sale and Servicing Agreement or
any Series Supplement or any Series Related Document; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related Document, at the
request, order or direction of the Certificate Majority or any of the
Certificateholders, unless such Certificate Majority or Certificateholders have
offered to the Owner Trustee security or indemnity satisfactory to it against
the costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the
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Owner Trustee to perform any discretionary act enumerated in this Agreement or
in any Basic Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its negligence, bad faith or willful
misconduct in the performance of any such act.
Section 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee
shall furnish to the Certificateholders promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee under the Basic Documents or, with respect to
Certificates, any Series Supplement or any Series Related Document.
Section 7.3. REPRESENTATIONS AND WARRANTIES. The Owner
Trustee hereby represents and warrants, in its individual capacity, to the
Depositor, the Holders and any Series Support Provider (which shall have
relied on such representations and warranties in issuing any policy relating
to Series Support), that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any Federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
Section 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner
Trustee may accept a certified copy of a resolution of the board of directors
or other governing body of any corporate party as conclusive evidence that
such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and
such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance
thereon.
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(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related Document.
Section 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as
provided in this Article VII, in accepting the trusts hereby created
Wilmington Trust Company acts solely as Owner Trustee hereunder and not in
its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document or, with respect to Certificates, any Series Supplement or any
Series Related Document shall look only to the Owner Trust Estate for payment
or satisfaction thereof.
Section 7.6. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR
RECEIVABLES. The recitals contained herein and in certificated Certificates
(other than the signature and countersignature of the Owner Trustee on such
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Certificates (other than the
signature and countersignature of the Owner Trustee on certificated
Certificates) or the Notes, or of any Receivable or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Receivable,
or the perfection and priority of any security interest created by any
Receivable in any Financed Vehicle or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the
compliance by the Depositor, the Master Servicer or any other Person with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation or any action
of the Trustee or the Master Servicer or any subservicer taken in the name of
the Owner Trustee.
Section 7.7. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES.
The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates or
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Notes and may deal with the Depositor, the Trustee and the Master Servicer in
banking transactions with the same rights as it would have if it were not Owner
Trustee.
Section 7.8. PAYMENTS FROM OWNER TRUST ESTATE All payments
to be made by the Owner Trustee or any Certificate Paying Agent under this
Agreement or any of the Basic Documents or, with respect to Certificates, any
Series Supplement or any Series Related Document to which the Trust or the
Owner Trustee is a party shall be made only from the income and proceeds of
the Owner Trust Estate and only to the extent that the Owner Trust shall have
received income or proceeds from the Owner Trust Estate to make such payments
in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents or, with
respect to Certificates, any Series Supplement or any Series Related Document
to which the Trust or the Owner Trustee is a party.
Section 7.9. DOING BUSINESS IN OTHER JURISDICTIONS.
Notwithstanding anything contained to the contrary, neither Wilmington Trust
Company or any successor thereto, nor the Owner Trustee shall be required to
take any action in any jurisdiction other than in the State of Delaware if
the taking of such action will, even after the appointment of a co-trustee or
separate trustee in accordance with Section 10.5 hereof, (i) require the
consent or approval or authorization or order of or the giving of notice to,
or the registration with or the taking of any other action in respect of, any
state or other governmental authority or agency of any jurisdiction other
than the State of Delaware; (ii) result in any fee, tax or other governmental
charge under the laws of the State of Delaware becoming payable by Wilmington
Trust Company (or any successor thereto); or (iii) subject Wilmington Trust
Company (or any successor thereto) to personal jurisdiction in any
jurisdiction other than the State of Delaware for causes of action arising
from acts unrelated to the consummation of the transactions by Wilmington
Trust Company (or any successor thereto) or the Owner Trustee, as the case
may be, contemplated hereby.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between Household and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder or under the Basic Documents or, with respect to Certificates,
under any Series Supplement or under any Series Related Documents.
Section 8.2. INDEMNIFICATION. The Depositor shall be liable
as primary obligor for, and shall indemnify the Owner Trustee (in its
individual and trust capacities) and its officers, directors, successors,
assigns, agents and servants (collectively, the "Indemnified
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Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee (in its trust or
individual capacities) or any Indemnified Party in any way relating to or
arising out of this Agreement or the Basic Documents or, with respect to
Certificates, any Series Supplement, any series Related Documents, the Owner
Trust Estate, the administration of the Owner Trust Estate or the action or
inaction of the Owner Trustee hereunder, except only that the Depositor shall
not be liable for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1. The indemnities contained in this Section 8.2 and
the rights under Section 8.1 shall survive the resignation or termination of
the Owner Trustee or the termination of this Agreement. In any event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Depositor which approval shall not be unreasonably withheld.
Section 8.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid
to the Owner Trustee in its Trust Capacity pursuant to this Article VIII
shall be deemed not to be a part of the Owner Trust Estate immediately after
such payment and any amounts so paid to the Owner Trustee, in its individual
capacity shall not be so paid out of the Owner Trust Estate but shall be the
property of the Owner Trustee in its individual capacity.
Section 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding
anything in this Agreement or any Basic Document or, with respect to
Certificates, any Series Supplement or any Series Related Document, the Owner
Trustee agrees in its individual capacity and in its capacity as Owner
Trustee for the Trust that all obligations of the Trust to the Owner Trustee
individually or as Owner Trustee for the Trust shall be recourse to the Owner
Trust Estate only and specifically shall not be recourse to the assets of any
Certificateholder.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.1. TERMINATION OF TRUST AGREEMENT. (a) This
Agreement shall terminate and the Trust shall wind up, dissolve and be of no
further force or effect upon the latest to occur of (i) the maturity or other
liquidation of the last Receivable (including the optional purchase by the
Depositor or the Master Servicer of the corpus of the Trust as described in
Section 11.1 of the Master Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Basic Documents and, with respect to amounts released from the Lien of the
Indenture, distribution thereof to the Certificateholders, or (ii) the
payment to Noteholders and Certificateholders of each Series of all amounts
required to be paid to them pursuant to the Indenture and this Agreement,
including, with respect to amounts released from the Lien of the Indenture,
distribution thereof to the Certificateholders, and the payment to any Series
Support Provider of all amounts payable or reimbursable to it pursuant to the
related Series
24
Supplement; PROVIDED, HOWEVER, that the rights to indemnification under Section
8.2 and the rights under Section 8.1 shall survive the termination of the
Trust. The Master Servicer shall promptly notify the Owner Trustee of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Depositor nor
any other Certificateholder shall be entitled to revoke or terminate the Trust.
(c) If any Certificates are in certificated form, notice of any
termination of a Series Trust Estate, specifying the Distribution Date upon
which the Certificateholders of such Series shall surrender their Certificates
to the Certificate Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders of such Series mailed within five Business Days of receipt of
notice of such termination given pursuant to Section 9.1(a) hereof, stating (i)
the Distribution Date upon or with respect to which final payment of the
Certificates of such Series shall be made upon presentation and surrender of the
Certificates of such Series at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final payment, (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates of
such Series at the office of the Certificate Paying Agent therein specified and
(iv) interest will cease to accrue on the Certificates of such Series. The
Owner Trustee shall give such notice to the Certificate Registrar (if other than
the Owner Trustee) and the Certificate Paying Agent at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates of such Series, the Certificate Paying Agent shall cause to be
distributed to Certificateholders of such Series amounts distributable pursuant
to the related Series Supplement.
(d) If any Certificates are in certificated form, in the event
that all of the Certificateholders holding certificated Certificates of such
Series shall not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Certificate
Paying Agent shall give a second written notice to the remaining
Certificateholders holding certificated Certificates of such Series to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the
certificated Certificates of such Series shall not have been surrendered for
cancellation, the Certificate Paying Agent may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders holding certificated Certificates concerning surrender of
their Certificates, and the cost thereof shall be paid out of the funds and
other Series Trust Estate assets that shall remain subject to this Agreement.
Any funds remaining in the Trust after exhaustion of such remedies shall be
distributed, subject to applicable escheat laws, by the Certificate Paying Agent
to the Depositor and Holders shall look solely to the Depositor for payment.
25
(e) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Certificate Paying Agent to the Depositor.
(f) Upon the winding up of the Trust and its dissolution, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE.
The Owner Trustee shall at all times be a corporation (i) satisfying the
provisions of Section 3807(a) of the Business Trust Statute; (ii) authorized
to exercise corporate trust powers; (iii) having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
Federal or State authorities; (iv) having (or having a parent which has) a
rating of at least Baa3 by Moody's or A-1 by Standard & Poors; and (v)
acceptable to the Certificateholders. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Owner Trustee shall resign immediately in the
manner and with the effect specified in Section 10.2.
Section 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor (or in the event
that the Depositor is not the sole Certificateholder, the Certificate
Majority), any Series Support Provider and the Master Servicer. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Owner Trustee, meeting the qualifications set forth in Section
10.1 herein, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee, provided that the Depositor shall have received
written confirmation from each of the Rating Agencies that the proposed
appointment will not result in an increased capital charge to any Series
Support Provider by either of the Rating Agencies. If no successor Owner
Trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, the resigning Owner
Trustee or any Series Support Provider may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall
26
be appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Owner Trustee.
If the Depositor shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Owner Trustee, meeting the qualifications set forth in Section 10.1 herein, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed, one copy to any Series
Support Provider and one copy to the successor Owner Trustee and payment of all
fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Depositor shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 10.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Depositor, the Master Servicer, each Series Support Provider
and to its predecessor Owner Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
under this Agreement, with like effect as if originally named as Owner
Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements
and monies held by it under this Agreement; and the Depositor and the
predecessor Owner Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in
this section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Master Servicer shall mail notice of the successor of such
Owner Trustee to all Certificateholders, the Trustee, the Noteholders and the
Rating Agencies. If the Master Servicer shall fail to mail such notice within
10 days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Master Servicer.
Any successor Owner Trustee appointed pursuant to this Section 10.3
shall promptly file an amendment to the Certificate of Trust with the Secretary
of State identifying the name and principal place of business of such successor
Owner Trustee in the State of Delaware.
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Section 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section
10.1, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided further (i) that the Owner Trustee shall mail
notice of such merger or consolidation to the Rating Agencies, the Depositor
and the Master Servicer and (ii) any successor Owner Trustee shall file an
amendment to the Certificate of Trust as required by Section 10.3.
Section 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Master Servicer and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee and any Series Support Provider to
act as co-trustee, jointly with the Owner Trustee, or separate trustee or
separate trustees, of all or any part of the Owner Trust Estate, and to vest
in such Person, in such capacity, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Master Servicer and the Owner
Trustee may consider necessary or desirable. If the Master Servicer shall
not have joined in such appointment within 15 days after the receipt by it of
a request so to do, the Owner Trustee, subject to the approval of the
Certificate Majority (which approval shall not be unreasonably withheld),
shall have the power to make such appointment. No co-trustee or separate
trustee under this Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 10.1 and no notice of
the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner Trustee;
28
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Master Servicer and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Master Servicer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement
may be amended from time to time by the parties hereto, by a written
instrument signed by each of them, without the consent of any of the
Securityholders; PROVIDED that an Opinion of Counsel for the Depositor (which
Opinion of Counsel may, as to factual matters, rely upon Officer's
Certificates of the Depositor) is addressed and delivered to the Owner
Trustee, dated the date of any such amendment, to the effect that the
conditions precedent to any such amendment have been satisfied and the
Depositor shall have delivered to the Owner Trustee an Officer's Certificate
dated the date of any such Amendment, stating that the Depositor reasonably
believes that such Amendment will not have a material adverse effect on the
Securityholders.
(b) This Agreement may also be amended from time to time with the
consent of the Holders of the Certificates and Notes evidencing not less than
50% of the aggregate unpaid principal amount of the Security Balance of all
affected Securityholders for which the Seller has not delivered an Officer's
Certificate stating that there is no material adverse effect, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any
29
manner the rights of the Securityholders; PROVIDED, HOWEVER, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments received that are required to be distributed on any Security without
the consent of the related Securityholder, or (ii) reduce the aforesaid
percentage of Securities the Holder of which are required to consent to any such
amendment, without the consent of the Holders of all such Certificates then
outstanding or cause any material adverse tax consequences to any
Certificateholders or Noteholders.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution
of any amendment to the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.
(c) The Owner Trustee shall not be required to enter into any
amendment to this Agreement which adversely affects its own rights, duties or
immunities under this Agreement.
Section 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the related Series Trust Estate. The Certificateholders shall be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title or interest of the
Certificateholders to and in their ownership interest in the related Series
Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it
of legal title to any part of the related Series Trust Estate.
Section 11.3. LIMITATIONS ON RIGHTS OF OTHERS. The
provisions of this Agreement are solely for the benefit of the Owner Trustee,
the Depositor, the Certificateholders, the Master Servicer and, to the extent
expressly provided herein, any Series Support Provider, the Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement
or any covenants, conditions or provisions contained herein.
Section 11.4. NOTICES. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing
and shall be deemed given upon receipt personally delivered, delivered by
overnight courier or mailed first class mail or certified
30
mail, in each case return receipt requested, and shall be deemed to have been
duly given upon receipt, if to the Owner Trustee, addressed to the Corporate
Trust Office; if to the Depositor, addressed to Household Auto Receivables
Corporation, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, with a copy to
Household Finance Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx
00000, Attn: Treasurer; if to any Series Support Provider, at the address of
such Series Support Provider as set forth in the related Series Supplement; or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.5. SEVERABILITY. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 11.6. SEPARATE COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.7. ASSIGNMENTS; SERIES SUPPORT PROVIDER. This
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. This Agreement
shall also inure to the benefit of any Series Support Provider for so long as
a Support Default shall not have occurred and be continuing. Without
limiting the generality of the foregoing, all covenants and agreements in
this Agreement which confer rights upon any Series Support Provider shall be
for the benefit of and run directly to any Series Support Provider, and any
Series Support Provider shall be entitled to rely on and enforce such
covenants, subject, however, to the limitations on such rights provided in
this Agreement and the Basic Documents. The Series Support Provider, if any,
may disclaim any of its rights and powers under this Agreement (but not its
duties and obligations under any Series Support Provider) upon delivery of a
written notice to the Owner Trustee.
Section 11.8. COVENANTS OF THE DEPOSITOR. The Depositor will
not at any time institute against the Trust any bankruptcy proceedings under
any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificates, the Notes, this Agreement
or any of the Basic Documents.
Section 11.9. NO PETITION. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, each Certificateholder, by accepting a Certificate, and the
Trustee and each Noteholder by accepting the benefits of
31
this Agreement, hereby covenants and agrees that they will not at any time
institute against the Depositor, or join in any institution against the
Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, this Agreement, any of the Basic Documents, any
Series Supplement or any Series Related Documents.
Section 11.10. NO RECOURSE. Each Certificateholder by
accepting a Certificate acknowledges that such Certificateholder's
Certificates represent beneficial interests in the related Series Trust
Estate only and do not represent interests in or obligations of the Master
Servicer, the Depositor, the Owner Trustee, the Trustee, any Series Support
Provider or any Affiliate thereof and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
in this Agreement, the Certificates, the Basic Documents, any Series
Supplement or any Series Related Documents.
Section 11.11. HEADINGS. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
Section 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.13. MASTER SERVICER. The Master Servicer is
authorized to prepare, or cause to be prepared, execute and deliver on behalf
of the Trust all such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of the Trust or Owner Trustee to
prepare, file or deliver pursuant to the Basic Documents, any Series
Supplement or any Series Related Documents. Upon written request, the Owner
Trustee shall execute and deliver to the Master Servicer a limited power of
attorney appointing the Master Servicer the Trust's agent and
attorney-in-fact to prepare, or cause to be prepared, execute and deliver all
such documents, reports, filings, instruments, certificates and opinions.
32
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY
Owner Trustee
By:
----------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
Depositor
By:
----------------------------------
Name:
Title:
Acknowledged and Agreed:
HOUSEHOLD FINANCE CORPORATION
Master Servicer
By:
----------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Certificate Paying Agent
By:
----------------------------
Name:
Title:
[Signature Page for Trust Agreement]
EXHIBIT A
[FORM OF SERIES 1999-1 TRUST CERTIFICATE]
NUMBER
HOUSEHOLD AUTOMOTIVE TRUST III
SERIES 1999-1 CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS SERIES 1999-1 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND
SUCH STATE SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY
BE MADE UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION
3.4 OF THE TRUST AGREEMENT PERTAINING TO THE HOUSEHOLD AUTOMOTIVE TRUST III
(THE "AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN
OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE DEPOSITOR, THE
MASTER SERVICER, THE TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER THE
SERIES 1999-1 CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAWS.
---------------------------------
SERIES 1999-1 CERTIFICATE
evidencing a beneficial ownership interest in the assets of the Trust relating
to the Series 1999-1 Trust Estate, which includes a pool of motor vehicle retail
installment sale contracts sold to the Trust by Household Auto Receivables
Corporation.
(This Series 1999-1 Certificate does not represent an interest in or obligation
of Household Auto Receivables Corporation or any of its Affiliates, except to
the extent described below.)
THIS CERTIFIES THAT Household Auto Receivables Corporation is the
registered owner of a nonassessable, fully-paid, beneficial ownership interest
representing a _________ % Percentage Interest in the assets of Household
Automotive Trust III (the
A-1
"Trust") formed by Household Auto Receivables Corporation, a Nevada corporation
(the "Depositor") and the Series 1999-1 Trust Estate.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY
not in its individual
capacity but solely as
Owner Trustee
by Authenticating Agent
--------------------------------------------------------
by
-----------------------------------------------------------------------------
Household Automotive Trust III (the "Trust"), was created pursuant
to a Trust Agreement dated as of June 1, 1999 (the "Trust Agreement"), between
the Depositor and Wilmington Trust Company, as owner trustee (the "Owner
Trustee") as supplemented by a Series 1999-1 Supplement dated as of June 1, 1999
(the "Series 1999-1 Supplement"). A summary of certain of the pertinent
provisions of the Trust Agreement and Series 1999-1 Supplement is set forth
below. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement and the Series
1999-1 Supplement.
This certificate is one of the duly authorized certificates of Trust
of Household Automotive Trust III designated as Series 1999-1 Certificates.
This Series 1999-1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement and the Series 1999-1
Supplement, to which Trust Agreement the holder of this Series 1999-1
Certificate by virtue of the acceptance hereof assents and by which such holder
is bound. The property of the Trust consists of the Series 1999-1 Trust Estate
which includes a pool of motor vehicle retail installment sale contracts (the
"Receivables"), all monies due thereunder on or after specified Cutoff Dates,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Master Sale and Servicing
Agreement and each related Transfer Agreement, all right, to and interest of,
the Depositor in and to the Master Receivables Purchase Agreement dated as of
June 1, 1999 between Household Automotive Finance Corporation and the Depositor
and each Receivables Purchase Agreement Supplement and all proceeds of the
foregoing.
Series 1999-1 Notes have been issued pursuant to an Indenture dated
as of June 1, 1999 (the "Indenture"), among the Trust, Household Finance
Corporation, as Master Servicer and The Chase Manhattan Bank, as Trustee and the
Series 1999-1 Supplement.
Under the Series 1999-1 Supplement, there will be distributed on the
17th day of each month or, if such 17th day is not a Business Day, the next
Business Day (the
A-2
"Distribution Date"), commencing on July 19, 1999, to the Person in whose name
this Series 1999-1 Certificate is registered at the close of business on the
Business Day preceding such Distribution Date (the "Record Date") such Series
1999-1 Certificateholder's fractional undivided interest in any amount to be
distributed to Series 1999-1 Certificateholders on such Distribution Date.
The holder of this Series 1999-1 Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Series 1999-1
Certificate are subordinated to the rights of the Series 1999-1 Noteholders as
described in the Master Sale and Servicing Agreement, the Indenture, the Trust
Agreement and the Series 1999-1 Supplement, as applicable.
Distributions on this Series 1999-1 Certificate will be made as
provided in the Trust Agreement by the Owner Trustee by wire transfer or check
mailed to the Series 1999-1 Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Series 1999-1
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this Series
1999-1 Certificate at the office or agency maintained for the purpose by the
Owner Trustee in the Corporate Trust Office.
Reference is hereby made to the further provisions of this Series
1999-1 Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Series 1999-1 Certificate shall not entitle the holder hereof to any
benefit under the Trust Agreement or the Master Sale and Servicing Agreement or
be valid for any purpose.
THIS SERIES 1999-1 CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Series 1999-1 Certificate to be
duly executed.
HOUSEHOLD AUTOMOTIVE TRUST III
By: WILMINGTON TRUST COMPANY not in its
individual capacity but solely as Owner
Trustee
Dated: By:
------------------------------
By:
------------------------------
Name:
Title:
A-4
(Reverse of Certificate)
The Series 1999-1 Certificates do not represent an obligation of, or
an interest in, the Depositor, the Master Servicer, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Trust Agreement, the Indenture, the Basic Documents or any Series Related
Documents. In addition, this Series 1999-1 Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables, as more specifically set
forth herein and in the Master Sale and Servicing Agreement. A copy of each of
the Master Sale and Servicing Agreement, the Trust Agreement and the Series
1999-1 Supplement may be examined during normal business hours at the principal
office of the Depositor, and at such other places, if any, designated by the
Depositor, by any Series 1999-1 Certificateholder upon written request.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Series 1999-1 Certificate is
registrable in the Certificate Register upon surrender of this Series 1999-1
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Corporate Trust
Office, accompanied by a written instrument of transfer in form satisfactory to
the Owner Trustee and the Certificate Registrar duly executed by the holder
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Series 1999-1 Certificates in authorized denominations evidencing
the same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Trust
Agreement is Wilmington Trust Company.
The Certificates are issuable as registered Certificates in any
Percentage Interest not to exceed 100%. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Series 1999-1 Certificates are
exchangeable for new Series 1999-1 Certificates in authorized denominations
evidencing the same aggregate Percentage Interest, as requested by the holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Series 1999-1 Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The Series 1999-1 Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan described in Section 4975(e) (1)
of the Code or (c) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each,
A-5
a "Benefit Plan"). By accepting and holding this Series 1999-1 Certificate, the
Holder hereof shall be deemed to have represented and warranted that it is not a
Benefit Plan.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Series 1999-1
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Series 1999-1 Certificate shall not entitle the holder hereof to
any benefit under the Trust Agreement or the Master Sale and Servicing Agreement
or be valid for any purpose.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________ Attorney to transfer said Certificate on the books of the
Certificate Registrar, with full power of substitution in the premises.
Dated:
*
------------------------------------------
Signature Guaranteed:
*
------------------------------------------
-----------------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
A-7
