HOUSEHOLD CONSUMER LOAN CORPORATION,
as Seller and
as Holder of the
Designated Certificate
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
_________________________________________
TRUST AGREEMENT
Dated as of March 1, 1997
__________________________________________
Consumer Loan Asset Backed Certificates,
Series 1997-1
Table of Contents
Section Page
ARTICLE I
Definitions
1.01. Definitions . . . . . . . . . . . . . . . . . . 1
1.02. Other Definitional Provisions . . . . . . . . . 1
ARTICLE II
Organization
2.01. Name. . . . . . . . . . . . . . . . . . . . . . 3
2.02. Office. . . . . . . . . . . . . . . . . . . . . 3
2.03. Purposes and Powers . . . . . . . . . . . . . . 3
2.04. Appointment of Owner Trustee. . . . . . . . . . 4
2.05. Initial Capital Contribution of Owner Trust
Estate . . . . . . . . . . . . . . . . . . . . 4
2.06. Declaration of Trust. . . . . . . . . . . . . . 4
2.07. Liability of the Holder of the Designated
Certificate. . . . . . . . . . . . . . . . . . 5
2.08. Title to Trust Property . . . . . . . . . . . . 5
2.09. Location of Corporate Trust Office. . . . . . . 5
2.10. Representations and Warranties and Covenants
of HCLC. . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
Conveyance of the Series 1997-1 Participation Interest;
Certificates
3.01. Conveyance of the Series 1997-1 Participation
Interest . . . . . . . . . . . . . . . . . . . 8
3.02. Initial Ownership . . . . . . . . . . . . . . . 8
3.03. The Certificates. . . . . . . . . . . . . . . . 8
3.04. Authentication of Certificates. . . . . . . . . 9
3.05. Registration of and Limitations on Transfer
and Exchange of Certificates . . . . . . . . . 9
3.06. Mutilated, Destroyed, Lost or Stolen Certif-
icates . . . . . . . . . . . . . . . . . . . . 12
3.07. Persons Deemed Certificateholders . . . . . . . 12
3.08. Access to List of Certificateholders' Names
and Addresses. . . . . . . . . . . . . . . . . 13
3.09. Maintenance of Office or Agency . . . . . . . . 13
3.10. Certificate Paying Agent. . . . . . . . . . . . 13
3.11. Ownership by HCLC . . . . . . . . . . . . . . . 14
3.12. RESERVED. . . . . . . . . . . . . . . . . . . . 15
3.13. Optional Repurchase of the Series 1997-1
Participation Interest . . . . . . . . . . . . 15
ARTICLE IV
Actions by Owner Trustee
4.01. Prior Notice to Certificateholders with
Respect to Certain Matters . . . . . . . . . . 16
4.02. Action by Certificateholders with Respect to
Certain Matters. . . . . . . . . . . . . . . . 17
4.03. Action by Certificateholders with Respect to
Bankruptcy . . . . . . . . . . . . . . . . . . 17
4.04. Restrictions on Certificateholders' Power . . . 17
4.05. Majority Control. . . . . . . . . . . . . . . . 17
ARTICLE V
Application of Trust Funds
5.01. Distributions . . . . . . . . . . . . . . . . . 18
5.02. Method of Payment . . . . . . . . . . . . . . . 18
5.03. Signature on Returns. . . . . . . . . . . . . . 19
5.04. Statements to Certificateholders. . . . . . . . 19
5.05. Tax Reporting; Tax Elections. . . . . . . . . . 19
5.06. Capital Accounts. . . . . . . . . . . . . . . . 19
ARTICLE VI
Authority and Duties of Owner Trustee
6.01. General Authority . . . . . . . . . . . . . . . 22
6.02. General Duties. . . . . . . . . . . . . . . . . 22
6.03. Action upon Instruction . . . . . . . . . . . . 22
6.04. No Duties Except as Specified in this Trust
Agreement or in Instructions . . . . . . . . . 23
6.05. No Action Except Under Specified Documents or
Instructions . . . . . . . . . . . . . . . . . 24
6.06. Restrictions. . . . . . . . . . . . . . . . . . 24
ARTICLE VII
Concerning the Owner Trustee
7.01. Acceptance of Trusts and Duties . . . . . . . . 25
7.02. Furnishing of Documents . . . . . . . . . . . . 26
7.03. Representations and Warranties. . . . . . . . . 26
7.04. Reliance; Advice of Counsel . . . . . . . . . . 27
7.05. Not Acting in Individual Capacity . . . . . . . 27
7.06. Owner Trustee Not Liable for Certificates . . . 28
7.07. Owner Trustee May Own Certificates and Notes. . 28
ARTICLE VIII
Compensation of Owner Trustee
8.01. Owner Trustee's Fees and Expenses . . . . . . . 29
8.02. Indemnification . . . . . . . . . . . . . . . . 29
ARTICLE IX
Termination of Trust Agreement
9.01. Termination of Trust Agreement. . . . . . . . . 31
9.02. Dissolution upon Bankruptcy of the Holder of
the Designated Certificate . . . . . . . . . . 32
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
10.01. Eligibility Requirements for Owner Trustee. . . 34
10.02. Resignation or Removal of Owner Trustee . . . . 34
10.03. Successor Owner Trustee . . . . . . . . . . . . 35
10.04. Merger or Consolidation of Owner Trustee. . . . 35
10.05. Appointment of Co-Trustee or Separate
Trustee. . . . . . . . . . . . . . . . . . . . 36
ARTICLE XI
Miscellaneous
11.01. Amendments. . . . . . . . . . . . . . . . . . . 38
11.02. No Legal Title to Owner Trust Estate in
Certificateholders . . . . . . . . . . . . . . 39
11.03. Limitations on Rights of Others . . . . . . . . 39
11.04. Notices . . . . . . . . . . . . . . . . . . . . 39
11.05. Severability. . . . . . . . . . . . . . . . . . 40
11.06. Separate Counterparts . . . . . . . . . . . . . 40
11.07. Successors and Assigns. . . . . . . . . . . . . 40
11.08. Covenants of the Seller . . . . . . . . . . . . 40
11.09. No Petition . . . . . . . . . . . . . . . . . . 41
11.10. No Recourse . . . . . . . . . . . . . . . . . . 41
11.11. Headings. . . . . . . . . . . . . . . . . . . . 41
11.12. Governing Law . . . . . . . . . . . . . . . . . 41
11.13. Integration . . . . . . . . . . . . . . . . . . 41
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBITS
Exhibit A - Form of Certificate. . . . . . . . . . . . . . . .A-1
Exhibit B - RESERVED . . . . . . . . . . . . . . . . . . . . .B-1
Exhibit C - Certificate of Trust of Household
Consumer Loan Trust 1997-1 . . . . . . . . . . . .C-1
Exhibit D - Form of 144A Investment Letter . . . . . . . . . .D-1
Exhibit E - Definitions. . . . . . . . . . . . . . . . . . . .E-1
Exhibit F - Form of Certificate of Non-Foreign Status. . . . .F-1
Exhibit G - Form of Investment Letter
for Accredited Investors . . . . . . . . . . . . .G-1
This Trust Agreement, dated as of March 1, 1997 (as amended
from time to time, this "Trust Agreement"), between HOUSEHOLD
CONSUMER LOAN CORPORATION, a Nevada corporation, as Seller and as
Holder of the Designated Certificate ("HCLC", the "Seller", and
the "Designated Certificateholder" as the context requires) and
CHASE MANHATTAN BANK DELAWARE, a Delaware banking corporation, as
Owner Trustee (the "Owner Trustee"),
WITNESSETH THAT:
In consideration of the mutual agreements herein contained,
HCLC and the Owner Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Trust
Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such
terms in the Definitions attached hereto as Exhibit E, which is
incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have
the defined meanings when used in any certificate or other docu-
ment made or delivered pursuant hereto unless otherwise defined
therein.
(b) As used in this Trust Agreement and in any certificate
or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Trust Agreement or in any
such certificate or other document, and accounting terms partly
defined in this Trust Agreement or in any such certificate or
other document to the extent not defined, shall have the respec-
tive meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting
terms in this Trust Agreement or in any such certificate or other
document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions con-
tained in this Trust Agreement or in any such certificate or
other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Trust Agreement shall refer to
this Trust Agreement as a whole and not to any particular pro-
vision of this Trust Agreement; Section and Exhibit references
contained in this Trust Agreement are references to Sections and
Exhibits in or to this Trust Agreement unless otherwise speci-
fied; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Trust 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.
(e) Any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered
in connection herewith means such agreement, instrument or
statute as from time to time amended, modified or supplemented
and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorpo-
rated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Organization
Section 2.01. Name. The trust created hereby (the
"Issuer") shall be known as "Household Consumer Loan Trust
1997-1," in which name the Owner Trustee may conduct the business
of the Issuer, make and execute contracts and other instruments
on behalf of the Issuer and xxx and be sued.
Section 2.02. Office. An office of the Issuer shall be in
care of the Owner Trustee at the Corporate Trust Office or at
such other address in Delaware as the Owner Trustee may designate
by written notice to the Certificateholders and the Seller.
Section 2.03. Purposes and Powers. The purpose of the
Issuer is to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and
the Certificates pursuant to this Trust Agreement and to
sell the Notes and the Certificates;
(ii) to purchase the Series 1997-1 Participation
Interest and to pay or cause to be paid its organizational,
start-up and transactional expenses;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Indenture Trust Estate pursuant to the Indenture
and to hold, manage and distribute to the Certificateholders
pursuant to Section 5.01 any portion of the Indenture Trust
Estate released from the Lien of, and remitted to the Issuer
pursuant to the Indenture;
(iv) to enter into and perform its obligations under
the Basic Documents to which it is to be a party;
(v) 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, including, without limitation, to
accept additional contributions of equity that are not
subject to the Lien of the Indenture; and
(vi) subject to compliance with the Basic Documents, 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.
The Issuer is hereby authorized to engage in the foregoing activ-
ities. The Issuer shall not engage in any activity other than in
connection with the foregoing or other than as required or autho-
rized by the terms of this Trust Agreement or the Basic Docu-
ments.
Section 2.04. Appointment of Owner Trustee. The Seller
hereby appoints the Owner Trustee as trustee of the Issuer
effective as of the date hereof, to have all the rights, powers
and duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust
Estate. The Seller hereby sells, assigns, transfers, conveys and
sets over to the Issuer, as of the date hereof, the sum of $1.
The Owner Trustee hereby acknowledges on behalf of the Issuer,
receipt in trust from the Seller, as of the date hereof, of the
foregoing contribution, which shall constitute the initial corpus
of the Issuer and shall be deposited in the Payment Account. The
Owner Trustee also acknowledges on behalf of the Issuer receipt
of the other property transferred and assigned to the Issuer
pursuant to Section 3.01, which shall constitute the Owner Trust
Estate. The Seller shall pay or cause to be paid organizational
expenses of the Issuer 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. The
Seller shall execute and deliver any necessary state or federal
securities law filings on behalf of the Issuer.
Section 2.06. Declaration of Trust. The Owner Trustee
hereby declares that it will hold the Owner Trust Estate on
behalf of the Issuer in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificate-
holders, subject to the obligations of the Issuer under the Basic
Documents. It is the intention of the parties hereto that the
Issuer constitute a business trust under the Business Trust
Statute and that this Trust Agreement constitute the governing
instrument of such business trust. It is the intention of the
parties hereto that, for income and franchise tax purposes, the
Issuer shall be treated as a partnership, with the assets of the
partnership being the Owner Trust Estate, the partners of the
partnership being the Certificateholders, and the Notes being
debt of the partnership. Except as otherwise provided in this
Trust Agreement, the rights of the Certificateholders (other than
the Holder of the Designated Certificate) will be those of
limited partners and the rights of the Holder of the Designated
Certificate, subject to Section 6.03 hereof, will be those of a
general partner in a partnership formed under the Delaware
Revised Uniform Limited Partnership Act. The parties agree that,
unless otherwise required by appropriate tax authorities, the
Issuer will file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the
characterization of the Issuer 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 in
the Business Trust Statute with respect to accomplishing the
purposes of the Issuer. The Owner Trustee has filed with the
Secretary of State of the State of Delaware a Certificate of
Trust of the Issuer.
Section 2.07. Liability of the Holder of the Designated
Certificate. (a) The Holder of the Designated Certificate shall
be liable directly to and will indemnify any injured party for
all losses, claims, damages, liabilities and expenses of the
Issuer (including Expenses, to the extent not paid out of the
Owner Trust Estate) to the extent that the Holder of the Desig-
nated Certificate would be liable if the Issuer were a partner-
ship under the Delaware Revised Uniform Limited Partnership Act
in which the Holder of the Designated Certificate were a general
partner; provided, however, that the Holder of the Designated
Certificate shall not be liable for payments required to be made
on the Notes or the Certificates, or for any losses incurred by a
Certificateholder in the capacity of an investor in the Certifi-
xxxxx or a Noteholder in the capacity of an investor in the
Notes. In addition, any third party creditors of the Issuer
(other than in connection with the obligations described in the
preceding sentence for which the Holder of the Designated Certif-
icate shall not be liable) shall be deemed third party benefici-
aries of this subsection (a). The obligations of the Holder of
the Designated Certificate under this subsection (a) shall be
evidenced by the Designated Certificate.
(b) Subject to subsection (a) above, the Certificateholders
shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of
Delaware.
Section 2.08. Title to Trust Property. Legal title to the
Owner Trust Estate shall be vested at all times in the Issuer as
a separate legal entity except where applicable law in any juris-
diction requires title to any part of the Owner Trust Estate to
be vested in a 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.
Section 2.09. Location of Corporate Trust Office. All bank
accounts maintained by the Owner Trustee on behalf of the Issuer
shall be located in the State of Delaware or the State of New
York. The Issuer shall not have any employees; provided,
however, that nothing herein shall restrict or prohibit the Owner
Trustee from having employees within or without the State of
Delaware or taking actions outside the State of Delaware in order
to comply with Section 2.03. Payments will be received by the
Issuer only in Delaware or New York, and payments will be made by
the Issuer only from Delaware or New York. The Owner Trustee
shall maintain its Corporate Trust Office in the State of
Delaware.
Section 2.10. Representations and Warranties and Covenants
of HCLC. (a) The Seller hereby represents and warrants to the
Owner Trustee that:
(i) The Seller is duly organized and validly existing
as a corporation in good standing under the laws of the
State of Nevada, with power and authority to own its proper-
ties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(ii) The Seller 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 or the conduct
of its business shall require such qualifications and in
which the failure to so qualify would have a material
adverse effect on the business, properties, assets or
condition (financial or other) of the Seller.
(iii) The Seller has the power and authority to execute
and deliver this Trust Agreement and to carry out its terms;
the Seller has full power and authority to sell and assign
the property to be sold and assigned to and deposited with
the Issuer, and the Seller has duly authorized such sale and
assignment and deposit to the Issuer by all necessary
corporate action; and the execution, delivery and
performance of this Trust Agreement have been duly
authorized by the Seller by all necessary corporate action.
(iv) The consummation of the transactions contemplated
by this Trust 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 bylaws of the Seller, or any indenture,
agreement or other instrument to which the Seller 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); nor
violate any law or, to the best of the Seller's knowledge,
any order, rule or regulation applicable to the Seller of
any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties.
(v) To the Seller's best knowledge, there are no
proceedings or investigations pending or threatened before
any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Seller or its properties: (A) asserting the invalidity of
this Trust Agreement, (B) seeking to prevent the consum-
mation of any of the transactions contemplated by this Trust
Agreement or (C) seeking any determination or ruling that
might materially and adversely affect the performance by the
Seller of its obligations under, or the validity or
enforceability of, this Trust Agreement.
(vi) Immediately prior to the conveyance by the Seller
to the Issuer of the Series 1997-1 Participation Interest as
contemplated by Section 3.01 hereof, the Seller owned the
Series 1997-1 Participation Interest free and clear of any
Lien.
ARTICLE III
Conveyance of the Series 1997-1 Participation Interest;
Certificates
Section 3.01. Conveyance of the Series 1997-1 Participation
Interest. The Seller, concurrently with the execution and
delivery hereof, does hereby transfer, convey, sell and assign to
the Issuer, on behalf of the Holders of the Notes and the Certif-
icates, without recourse, all its right, title and interest in
and to the Series 1997-1 Participation Interest free and clear of
any Liens, and all monies and the collections and proceeds due
thereon and any part thereof which consists of general intan-
gibles (as defined in the UCC) (the "Owner Trust Estate").
Simultaneous therewith and in consideration thereof, the Seller
shall receive from the Issuer the Securities, including the
Designated Certificate, and the obligation of the Issuer to pay
an amount equal to a deferred stream of payments represented by
the Holdback Amount in accordance with Section 3.05 of the
Indenture.
The parties hereto intend that the transaction set forth
herein be a sale by the Seller to the Issuer of all of its right,
title and interest in and to the Series 1997-1 Participation
Interest and the other property described above. In the event
that the transaction set forth herein is not deemed to be a sale,
the Seller hereby grants to the Issuer a security interest in all
of its right, title and interest in, to and under the Owner Trust
Estate, all distributions thereon and all proceeds thereof, and
this Trust Agreement shall constitute a security agreement under
applicable law.
Section 3.02. Initial Ownership. Upon the formation of the
Issuer by the contribution by the Seller pursuant to Section 2.05
and until the conveyance of the Series 1997-1 Participation
Interest pursuant to Section 3.01 and the issuance of the
Certificates, the Seller shall be the sole beneficiary of the
Issuer.
Section 3.03. The Certificates. The Certificates shall be
issued in minimum denominations of $1,000,000 and in integral
multiples of $100,000 in excess thereof; except for one
Certificate that may not be in an integral multiple of $100,000;
provided, however, that the Designated Certificate issued
pursuant to Section 3.11 may be issued in the amount of $336,000.
The Certificates may not be subdivided for resale into units that
had a Security Balance of less than $1,000,000 upon the Closing
Date. The Certificates shall be executed on behalf of the Issuer
by manual or facsimile signature of an authorized officer of the
Owner Trustee and authenticated in the manner provided in Section
3.04. 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 Issuer, shall
be validly issued and entitled to the benefit of this Trust
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. A
Person shall become a Certificateholder and shall be entitled to
the rights and subject to the obligations of a Certificateholder
hereunder upon such Person's acceptance of a Certificate duly
registered in such Person's name, pursuant to Section 3.05. Each
Person who shall become a Certificateholder shall establish its
non-foreign status by submitting to the Certificate Paying Agent
an IRS Form W-9 and the Certificate of Non-Foreign Status set
forth in Exhibit F hereto.
A transferee of a Certificate shall become a Certificate-
holder and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such trans-
feree's acceptance of a Certificate duly registered in such
transferee's name pursuant to and upon satisfaction of the
conditions set forth in Section 3.05.
Section 3.04. Authentication of Certificates. Concurrently
with the acquisition of the Series 1997-1 Participation Interest
by the Issuer, the Owner Trustee shall cause the Certificates in
an aggregate principal amount equal to the Initial Principal
Balance of the Certificates to be executed on behalf of the
Issuer, authenticated and delivered to or upon the written order
of the Seller, signed by its chairman of the board, its
president, any vice president, secretary, treasurer or any
assistant treasurer, without further corporate action by the
Seller, in authorized denominations. No Certificate shall
entitle its Holder to any benefit under this Trust Agreement or
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 The
Bank of New York, as the Issuer's 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 3.05. Registration of and Limitations on Transfer
and Exchange of Certificates. The Certificate Registrar shall
keep or cause to be kept, at the office or agency maintained
pursuant to Section 3.09, a Certificate Register in which, sub-
ject to such reasonable regulations as it may prescribe, the
Issuer shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The
Bank of New York shall be the initial Certificate Registrar.
Subject to satisfaction of the conditions set forth below
and to the provisions of Section 3.11 with respect to the Desig-
nated Certificate, upon surrender for registration of transfer of
any Certificate at the office or agency maintained pursuant to
Section 3.09, the Issuer shall execute, authenticate and deliver
(or shall cause The Bank of New York as its authenticating agent
to authenticate and deliver) in the name of the designated trans-
feree or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent.
At the option of a Holder, Certificates may be exchanged for
other Certificates of authorized denominations of a like aggre-
gate amount upon surrender of the Certificates to be exchanged at
the office or agency maintained pursuant to Section 3.09.
Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instru-
ment of transfer in form satisfactory to the Certificate Regis-
trar duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for regis-
tration of transfer or exchange shall be cancelled and subse-
quently disposed of by the Certificate Registrar in accordance
with its customary practice.
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.
No transfer of a Certificate shall be made unless such
transfer is exempt from the registration requirements of the
Securities Act and any applicable state securities laws or is
made in accordance with said Securities Act and laws. In the
event of any such transfer, the Certificate Registrar or the
Seller shall require the transferee to execute (i) (a) an
investment letter (in substantially the form attached hereto as
Exhibit D) in form and substance reasonably satisfactory to the
Certificate Registrar and the Seller certifying to the Issuer,
the Owner Trustee, the Certificate Registrar and the Seller that
such transferee is a "qualified institutional buyer" under Rule
144A under the Securities Act, or (b) an investment letter (in
substantially the form attached hereto as Exhibit G), acceptable
to and in form and substance reasonably satisfactory to the
Certificate Registrar, which investment letters shall not be an
expense of the Issuer, the Owner Trustee, the Certificate Regis-
trar, the Servicer or the Seller and (ii) the Certificate of Non-
Foreign Status (in substantially the form attached hereto as
Exhibit F) acceptable to and in form and substance reasonably
satisfactory to the Certificate Registrar, which certificate
shall not be an expense of the Issuer, the Owner Trustee, the
Certificate Registrar, the Servicer, the Administrator or the
Seller. The Holder of a Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Issuer,
the Owner Trustee, the Certificate Registrar, the Servicer and
the Seller against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal
and state laws.
No transfer of a Certificate shall be made unless the
Certificate Registrar shall have received either (i) a repre-
sentation letter from the proposed transferee of such Certificate
to the effect that such proposed transferee is not an employee
benefit plan subject to the fiduciary responsibility provisions
of ERISA, or Section 4975 of the Code, or a Person acting on
behalf of any such plan or using the assets of any such plan, or
if the proposed transferee is an insurance company, a
representation that the proposed transferee is an insurance
company which is purchasing such certificates with funds
contained in an "insurance company general account" (as such term
is defined in section v(e) of prohibited transaction class
exemption 95-60 ("ptce 95-60")), that the purchase and holding of
such certificates are covered under ptce 95-60 and that ptce 95-
60 remains a valid and available exemption, which representation
letter shall not be an expense of the Issuer, Owner Trustee, the
Certificate Registrar, the Servicer or the Seller or (ii) in the
case of any such certificate presented for registration in the
name of an employee benefit plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a
trustee of any such plan, or any other Person who is using the
assets of any such plan to effect such acquisition, an Opinion of
Counsel, in form and substance reasonably satisfactory to, and
addressed and delivered to, the Issuer, the Certificate Registrar
and the Seller, to the effect that the purchase or holding of
such Certificate will not result in the assets of the Owner Trust
Estate being deemed to be "plan assets" and subject to the
fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of the Code, will not constitute or result
in a prohibited transaction within the meaning of Section 406 or
Section 407 of ERISA or Section 4975 of the Code, and will not
subject the Issuer, the Owner Trustee, the Certificate Registrar,
the Servicer or the Seller to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those explicitly undertaken in this
Trust Agreement which Opinion of Counsel shall not be an expense
of the Issuer, the Owner Trustee, the Certificate Registrar, the
Servicer or Seller.
The Certificates shall not be listed for trading on an
established securities market, nor be readily tradeable on a
secondary market, nor be transferable through the substantial
equivalent of a secondary market, nor shall the Issuer be
permitted to have more than 100 partners, for income tax
purposes, all within the meaning of Code Section 7704, and its
attendant regulations, as applicable. If requested, in the
discretion of the Seller, transfer of a Certificate shall be made
only if accompanied by an Opinion of Counsel satisfactory to the
Owner Trustee, which Opinion of Counsel shall not be an expense
of the Issuer, the Owner Trustee, the Servicer or the Seller, to
the effect such transfer will not cause the Issuer to be a
publicly traded partnership taxable as a corporation, and will
not cause the termination of the Issuer under the federal income
tax rules applicable to partnerships in a manner having a
material adverse tax impact to any existing Certificateholder
(unless such Certificateholder provides its written consent to
such transfer).
Each Certificateholder agrees to provide information to the
Administrator when so requested concerning the beneficial owner-
ship of its Certificates as necessary for the Issuer to assure
its compliance with the requirements for avoiding taxation at the
entity level as a publicly traded partnership or otherwise. Each
Certificateholder agrees to restrict the transfer of record
ownership and beneficial ownership of its Certificates as
requested by the Administrator based upon applicable governmental
regulation, rulings or notices and any judicial decisions as may
exist from time to time, as necessary or advisable for avoiding
the Issuer's treatment as a publicly-traded partnership taxable
as a corporation, or its termination for federal income tax
purposes under Code Section 708 in a manner having a material
adverse tax impact on any non-consenting existing
Certificateholder.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certif-
icates. 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 and (b) there shall be delivered to the
Issuer, 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 Certif-
icate has been acquired by a bona fide purchaser, the Owner
Trustee on behalf of the Issuer shall execute and the Owner
Trustee or The Bank of New York, as the Issuer's 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 tenor and denomination. In connection
with the issuance of any new Certificate under this Section 3.06,
the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other govern-
mental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section 3.06 shall
constitute conclusive evidence of ownership in the Issuer, as if
originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 3.07. Persons Deemed Certificateholders. Prior to
due presentation of a Certificate for registration of transfer,
the Owner Trustee, the Certificate Registrar or any Certificate
Paying Agent may treat the Person in whose name any Certificate
is registered in the Certificate Register as the owner of such
Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none
of the Issuer, the Owner Trustee, the Certificate Registrar or
any Paying Agent shall be bound by any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names
and Addresses. The Certificate Registrar shall furnish or cause
to be furnished to the Seller or the Owner Trustee, within
15 days after receipt by the Certificate Registrar of a written
request therefor from the Seller or the Owner Trustee, a list, in
such form as the Seller or the Owner Trustee, as the case may be,
may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three
or more Certificateholders or one or more Holders of Certificates
representing not less than 25% of the Security Balance of the
Certificates apply in writing to the Certificate Registrar, and
such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under
the Basic Documents or under the Certificates and such applica-
tion is accompanied by a copy of the communication that such
applicants propose to transmit, then 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. Each Holder, by
receiving and holding a Certificate, shall be deemed to have
agreed not to hold any of the Issuer, the Seller, the Holder of
the Designated Certificate, the holder of the Holdback Amount,
the Certificate Registrar or the Owner Trustee accountable by
reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 3.09. Maintenance of Office or Agency. The Certif-
icate Registrar, on behalf of the Issuer, shall maintain in the
city of New York, an office or offices or agency or agencies
where Certificates may be surrendered for registration of
transfer or 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 Issuer initially designates the
Corporate Trust Office of the Indenture Trustee as its office for
such purposes. The Certificate Registrar shall give prompt
written notice to the Seller, the Owner Trustee, the Holder of
the Designated Certificate and the Certificateholders of any
change in the location of the Certificate Register or any such
office or agency. The Certificate Registrar shall immediately
furnish to the Owner Trustee any notices or demands to the Owner
Trustee received by the Certificate Registrar at the office
maintained by it pursuant to this Section.
Section 3.10. Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from
the Payment Account pursuant to Section 3.05 of the Indenture.
The Issuer may revoke such power and remove the Certificate
Paying Agent if the Administrator determines in its sole discre-
tion that the Certificate Paying Agent shall have failed to
perform its obligations under this Trust Agreement or as set
forth in Section 3.03 of the Indenture in any material respect;
provided that at the time of such removal, the Paying Agent shall
also be removed by the Issuer under the Indenture. The Bank of
New York shall be permitted to resign as Certificate Paying Agent
upon 30 days written notice to the Owner Trustee; provided that
The Bank of New York is also resigning as Paying Agent under the
Indenture at such time. In the event that The Bank of New York
shall no longer be the Certificate Paying Agent and Paying Agent
under the Indenture, the Administrator shall appoint a successor
to act as Certificate Paying Agent (which shall be a bank or
trust company) and which shall also be the successor Paying Agent
under the Indenture. The Administrator shall cause such succes-
sor Certificate Paying Agent or any additional Certificate Paying
Agent appointed by the Administrator to execute and deliver to
the Owner Trustee an instrument to the effect set forth in
Section 3.03 of the Indenture as it relates to the Certificate
Paying Agent. The Certificate Paying Agent shall return all
unclaimed funds to the Issuer and upon removal of a Certificate
Paying Agent such Certificate Paying Agent shall also return all
funds in its possession to the Issuer. The provisions of
Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Certificate
Paying Agent to the extent applicable. Any reference in this
Agreement to the Certificate Paying Agent shall include any co-
paying agent unless the context requires otherwise.
Section 3.11. Ownership by HCLC. (a) HCLC shall receive
on the Closing Date, in partial consideration for the transfer of
the Series 1997-1 Participation Interest, a Certificate repre-
senting at least 1% of the Initial Principal Balance of the
Certificates (the "Designated Certificate") and the right to the
entire payment stream represented by the Holdback Amount. The
Owner Trustee shall cause the Designated Certificate and any
Successor Designated Certificate created pursuant to Section 9.02
to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE
EXCEPT UPON SATISFACTION OF THE CONDITIONS IN SECTION 3.11(b) OF
THE TRUST AGREEMENT." For purposes of the Business Trust
Statute, the Designated Certificate and any Successor Designated
Certificate shall be deemed to be a separate class of
Certificates from all other Certificates issued by the Issuer;
provided that the rights and obligations evidenced by all
Certificates, regardless of class, shall, except as provided in
this Section, be identical.
(b) The Designated Certificate and Holdback Amount shall,
for income and franchise tax purposes, be treated as the general
partnership interest of the Issuer. The Designated Certificate
shall at all times represent an investment in the Issuer of not
less than 1.00% of the capital represented by all Certificates.
The Designated Certificate and Holdback Amount shall not be
separately transferable. HCLC may transfer the Designated
Certificate to an Affiliate of HCLC if, (a) the applicable
provisions of Section 3.05 are satisfied and (b) the Certificate
Registrar receives an Opinion of Counsel to the effect that the
transfer of the Designated Certificate shall not cause the Issuer
to be subject to an entity level tax. Otherwise, HCLC may
transfer the Designated Certificate if, (a) the conditions in
clauses (a) and (b) in the preceding sentence are satisfied, (b)
a majority in interest by Security Balance of the Certificates
(exclusive of the Designated Certificate) approves such transfer,
which will not be unreasonably withheld, and (c) the Rating
Agencies shall consent to such transfer.
Section 3.12. RESERVED
Section 3.13. Optional Repurchase of the Series 1997-1
Participation Interest. (a) The Seller may, with 10 days prior
written notice to the Owner Trustee, Servicer and the Indenture
Trustee, purchase the entire Series 1997-1 Participation
Interest, on any Payment Date in which the Aggregate Security
Balance is equal to or less than ten percent of the initial
Aggregate Security Balance. The Seller shall deposit into the
Payment Account on the Business Day prior to the Payment Date on
which such purchase is to occur, an amount equal to the principal
balance of the Series 1997-1 Participation Interest and the
amount of interest and Certificate Yield to be distributed to the
Security holders pursuant to Section 3.05(a) of the Indenture as
of such Payment Date.
ARTICLE IV
Actions by Owner Trustee
Section 4.01. Prior Notice to Certificateholders 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 the Certificateholders 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 initiation of any claim or lawsuit by the Issuer
(except claims or lawsuits brought in connection with the collec-
tion of the Series 1997-1 Participation Interest) and the com-
promise of any action, claim or lawsuit brought by or against the
Issuer (except with respect to the aforementioned claims or
lawsuits for collection of the Series 1997-1 Participation
Interest);
the election by the Issuer to file an amendment to the
Certificate of Trust (unless such amendment is required to be
filed under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental inden-
ture in circumstances where the consent of any Noteholder is
required;
(d) (i) 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 (ii) the amendment of the
Pooling and Servicing Agreement under circumstances where the
consent of the holder of Series Participation Interests is
required;
(e) the amendment, change or modification of the Adminis-
tration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that
would not materially adversely affect the interests of the
Certificateholders; or
(f) the appointment pursuant to the Indenture of a succes-
sor Note Registrar, Paying Agent or Indenture Trustee or pursuant
to this Trust Agreement of a successor Certificate Registrar,
Certificate Paying Agent or Administrator or the consent to the
assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar, Certificate Paying Agent or
Administrator of its obligations under the Indenture or this
Trust Agreement, as applicable.
Section 4.02. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee shall not have the power,
except upon the direction of the Certificateholders, to
(a) remove the Administrator under the Administration Agreement
pursuant to Section 8 thereof, (b) appoint a successor Adminis-
trator pursuant to Section 8 of the Administration Agreement,
(c) remove the Servicer under the Pooling and Servicing Agreement
pursuant to Article X thereof or (d) except as expressly provided
in the Basic Documents, sell the Series 1997-1 Participation
Interest 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 Certifi-
cateholders.
Section 4.03. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to com-
mence a voluntary proceeding in bankruptcy relating to the Issuer
without the unanimous prior approval of all Certificateholders
and the delivery to the Owner Trustee by each such Certificate-
holder of a certificate certifying that such Certificateholder
reasonably believes that the Issuer is insolvent.
Section 4.04. Restrictions on Certificateholders' Power.
The Certificateholders shall not direct the Owner Trustee to take
or to refrain from taking any action if such action or inaction
would be contrary to any obligation of the Issuer or the Owner
Trustee under this Trust Agreement or any of the Basic Documents
or would be contrary to Section 2.03, nor shall the Owner Trustee
be obligated to follow any such direction, if given.
Section 4.05. Majority Control. Except as expressly pro-
vided herein, any action that may be taken by the Certificate-
holders under this Trust Agreement may be taken by the Holders of
Certificates evidencing not less than a majority of the outstand-
ing Security Balance of the Certificates. Except as expressly
provided herein, any written notice of the Certificateholders
delivered pursuant to this Trust Agreement shall be effective if
signed by Holders of Certificates evidencing not less than a
majority of the outstanding Security Balance of the Certificates
at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds
Section 5.01. Distributions. (a) On each Payment Date,
the Certificate Paying Agent shall distribute out of the Payment
Account to the extent of funds on deposit therein and available
therefor, distributions on the Certificates and in payment of the
Holdback Amount as provided in Section 3.05 of the Indenture.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder,
such tax shall reduce the amount otherwise distributable to the
Certificateholder in accordance with Section 3.05 of the Inden-
ture. The Certificate Paying Agent is hereby authorized and
directed to retain or cause to be retained from amounts otherwise
distributable to the Certificateholders sufficient funds for the
payment of any tax that is legally owed by the Issuer (but such
authorization shall not prevent the Issuer or the effected
Certificateholder with the consent of the Designated
Certificateholder), from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the
time it is withheld by the Certificate Paying Agent and remitted
to the appropriate taxing authority. If there is a possibility
that withholding tax is payable with respect to a distribution
(such as a distribution to a non-U.S. Certificateholder), the
Certificate Paying Agent may in its sole discretion withhold such
amounts in accordance with this paragraph (b).
(c) All calculations of the Certificate Yield on the
Certificates shall be made on the basis of the actual number of
days in an Interest Period and a year assumed to consist of 360
days.
Section 5.02. Method of Payment. Subject to Section
9.01(c), distributions required to be made to Certificateholders
on any Payment Date as provided in Section 3.05 of the Indenture
shall be made to each Certificateholder of record on the preced-
ing Record Date either by, in the case of any Certificateholder
owning Certificates, other than the Designated Certificate, hav-
ing denominations aggregating at least $1,000,000, wire transfer,
in immediately available funds, to the account of such Holder at
a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business
Days prior to such Payment Date or, if not, by check mailed to
such Certificateholder at the address of such Holder appearing in
the Certificate Register. All distributions in respect of the
initial Designated Certificate and the Holdback Amount shall be
made to HCLC, the initial Holder of the Designated Certificate or
its permitted transferee, as the case may be, by wire transfer,
in immediately available funds, to the account of such entity at
a bank or other entity having appropriate facilities therefor, as
specified in written instructions to the Certificate Paying Agent
on the fifth Business Day prior to the first Payment Date.
Section 5.03. Signature on Returns. The Holder of the
Designated Certificate shall sign on behalf of the Issuer the tax
returns of the Issuer.
Section 5.04. Statements to Certificateholders. No later
than the second Business Day prior to each Payment Date, the
Owner Trustee on behalf of the Issuer shall cause to be delivered
to the Certificate Paying Agent and the Indenture Trustee the
Monthly Security Report for such Payment Date prepared by the
Administrator substantially in the form set forth on Exhibit B to
the Indenture. On each Payment Date, the Certificate Paying
Agent shall send to each Certificateholder the statement or
statements provided to the Owner Trustee, the Certificate Paying
Agent and the Indenture Trustee by the Servicer pursuant to
Article V of the Pooling and Servicing Agreement with respect to
such Payment Date.
Section 5.05. Tax Reporting; Tax Elections. The Holder of
the Designated Certificate shall cause the Issuer to file federal
and state income tax returns and information statements as a
partnership for each of its taxable years. Within 90 days after
the end of each calendar year, the Holder of the Designated
Certificate shall cause the Issuer to provide to each Certifi-
cateholder an Internal Revenue Service form "K-1" or any succes-
sor schedule and supplemental information, if required by law, to
enable each Certificateholder to file its federal and state
income tax returns. The Holder of the Designated Certificate may
from time to time make and revoke such tax elections with respect
to the Issuer as it deems necessary or desirable in its sole
discretion to carry out the business of the Issuer or the pur-
poses of this Trust Agreement if permitted by applicable law.
Notwithstanding the foregoing, an election under Section 754 of
the Code shall not be made without the written consent of the
Holder of the Designated Certificate, which consent shall be
given in the sole discretion of the Holder of the Designated
Certificate. The Holder of the Designated Certificate shall
serve as tax matters partner for the Issuer.
Section 5.06. Capital Accounts. Separate capital accounts
shall be maintained for each Certificateholder in accordance with
tax accounting principles. Each such account shall initially
equal the amount paid to the Issuer by the Certificateholder for
its Certificate and shall be (i) increased by the distributive
share of profits and capital gains of such Certificateholder, and
(ii) decreased by the amount of any cash and the fair market
value of any non-cash assets distributed to such Certificate-
holder by the Issuer pursuant to this Trust Agreement, and by
such Certificateholder's distributive share of losses.
The fiscal year of the Issuer shall end on the 31st day of
December in each year, unless otherwise required by the Code.
For each fiscal year of the Issuer, net profits shall be allo-
cated among the Certificateholders (including the Holder of the
Designated Certificate to which the payments in respect of the
Holdback Amount will be made to the extent possible) in such
manner as to cause their ending capital accounts (prior to any
reduction for distributions for such year and to the extent
possible) to reflect their respective rights to current and
future distributions with respect to income and the return of
their investment. Such allocation shall be made to the Cer-
tificateholders in the order of their right to such distributions
and proportionately among Certificateholders having equal prior-
ity. For each fiscal year of the Issuer, net losses shall be
allocated among the Certificateholders in such manner as to
reflect the order and amount in which they would respectively
bear the economic burden of such losses, and then in accordance
with their relative Percentage Interests.
The partnership tax returns of the Issuer shall be prepared
in such a manner as to fairly reflect the respective interest in
the Issuer of each Certificateholder in accordance with the prin-
ciples of the regulations under Code Section 704(b). Items of
income and gain shall be allocated in proportion to the overall
allocation of income to each Certificateholder, and items of
loss, expense and deduction shall be allocated in proportion to
the overall allocation of loss to each Certificateholder. Any
unexpected adjustments, allocations or distributions shall be
offset by allocations of items of income and gain as quickly as
possible in accordance with the qualified income offset provi-
sions of the Code Section 704(b) regulations.
If during any fiscal year of the Issuer there is a change in
any Certificateholder's interest as a result of the issuance,
transfer or redemption of any Certificates, profits and losses
shall be allocated among the Certificateholders so as to reflect
their varying interest in the Issuer during the period. The
allocation shall be made using the "interim closing of the books"
method or any other method permissible under Code Section 706
selected by the Administrator. The Administrator shall determine
when any transferee of a Certificate shall be deemed admitted to
the "partnership" for federal income tax purposes. Any trans-
feree shall succeed to that portion of the assignor's capital
account attributable to the interest so transferred.
The maintenance of capital accounts by the Issuer is solely
for the preparation of its income tax returns, and is not
intended to confer rights upon any third parties. No Certifi-
cateholder shall have, by reason of its capital account, any
right to demand or receive any property or cash from the Issuer
or any obligation to contribute such items to the Issuer. No
creditor of the Issuer shall be deemed a third party beneficiary
of any obligation of any Certificateholder by reason of its
capital account to contribute capital or make loans or advances
to the Issuer.
ARTICLE VI
Authority and Duties of Owner Trustee
Section 6.01. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Docu-
ments to which the Issuer is to be a party and each certificate
or other document attached as an exhibit to or contemplated by
the Basic Documents to which the Issuer is to be a party and any
amendment or other agreement or instrument described herein, in
each case, in such form as the Administrator shall approve, as
evidenced conclusively by the Owner Trustee's execution thereof.
In addition to the foregoing, the Owner Trustee is authorized,
but shall not be obligated, to take all actions required of the
Issuer pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the
Administrator directs with respect to the Basic Documents.
Section 6.02. 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 Trust Agreement
and the Basic Documents to which the Issuer is a party and to
administer the Issuer in the interest of the Certificateholders,
subject to the Basic Documents and in accordance with the pro-
visions of this Trust Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the Basic Documents to
the extent the Administrator has agreed in the Administration
Agreement to perform such acts or to discharge such duties of the
Owner Trustee or the Issuer hereunder or under any Basic Docu-
ment, and the Owner Trustee shall not be held liable for the
default or failure of the Administrator to carry out its obliga-
tions under the Administration Agreement. The Designated
Certificateholder may delegate its duties hereunder, provided,
however, that such delegation of duties shall not relieve the
Designated Certificateholder of its obligations hereunder.
Section 6.0 Action upon Instruction. (a) Unless the
Owner Trustee has actual knowledge that an Insolvency Event or
breach of representation or violation of any material obligation
under the Basic Documents has occurred in respect of the
Designated Certificateholder or of any Affiliate thereof, the
Designated Certificateholder may by written instruction direct
the Owner Trustee in the management of the Issuer. In the event
the Owner Trustee has actual knowledge that an Insolvency Event
or breach of representation or violation of any material
obligation under the Basic Documents has occurred in respect of
the Designated Certificateholder or any Affiliate thereof, the
Certificateholders may by written instruction direct the Owner
Trustee in the management of the Issuer. Such direction may be
exercised at any time by written instruction of the Designated
Certificateholder or the Certificateholders as the case may be
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic 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 is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms
of this Trust Agreement or under any Basic Document, the Owner
Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted,
and to the extent the Owner Trustee acts in good faith in accor-
dance with any written instruction of the Certificateholders
received, 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 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 circum-
stances) it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust
Agreement or the Basic Documents, 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 Trust Agreement or any Basic
Document or any such provision is ambiguous as to its applica-
tion, or is, or appears to be, in conflict with any other appli-
cable provision, or in the event that this Trust Agreement per-
mits 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 appro-
priate under the circumstances) to the Certificateholders
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 Trust Agreement or the Basic Documents, 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 6.0 No Duties Except as Specified in this Trust
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 Trust Agreement or in
any document or written instruction received by the Owner Trustee
pursuant to Section 6.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic 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 main-
tain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Trust Agreement
or any Basic 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 that are not related to the ownership
or the administration of the Owner Trust Estate.
Section 6.05. 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 (1) in accordance with the powers granted to
and the authority conferred upon the Owner Trustee pursuant to
this Trust Agreement, (2) in accordance with the Basic Documents
and (3) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 6.03.
Section 6.06. Restrictions. The Owner Trustee shall not
take any action (i) that is inconsistent with the purposes of the
Issuer set forth in Section 2.03 or (ii) that, to the actual
knowledge of the Owner Trustee, would result in the Issuer becom-
ing taxable as a corporation for federal income tax purposes.
The Certificateholders shall not direct the Owner Trustee to take
action that would violate the provisions of this Section 6.06.
ARTICLE VII
Concerning the Owner Trustee
Section 7.01. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trust hereby created and agrees to perform
its duties hereunder with respect to such trusts but only upon
the terms of this Trust Agreement. The Owner Trustee and the
Certificate Paying Agent also agree to disburse all moneys
actually received by it constituting part of the Owner Trust
Estate upon the terms of the Basic Documents and this Trust
Agreement. The Owner Trustee shall not be answerable or account-
able hereunder or under any Basic Document under any circum-
stances, except (i) for its own willful misconduct, negligence or
bad faith or (ii) in the case of the inaccuracy of any represen-
tation or warranty contained in Section 7.03 expressly made 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;
(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 Administrator, Holder of the Designated
Certificate or the Certificateholders;
(c) No provision of this Trust Agreement or any Basic Docu-
ment shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any
of its rights, duties or powers hereunder or under any Basic
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, 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 Trust Agreement or
for the due execution hereof by the Seller or the Holder of the
Designated Certificate 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, other than the certificate of authentication on the
Certificates, if executed by the Owner Trustee and the Owner
Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any Certificateholder, other
than as expressly provided for herein or expressly agreed to in
the Basic Documents;
(f) The Owner Trustee shall not be liable for the default
or misconduct of the Administrator, the Certificate Paying Agent,
the Certificate Registrar, the Holder of the Designated Certifi-
cate, the Seller, the Indenture Trustee or the Servicer under any
of the Basic Documents or otherwise and the Owner Trustee shall
have no obligation or liability to perform the obligations of the
Issuer under this Trust Agreement or the Basic Documents that are
required to be performed by the Administrator under the Adminis-
tration Agreement, the Indenture Trustee, the Certificate Paying
Agent, the Certificate Registrar under this Trust Agreement or
the Indenture or the Seller under the Receivables Purchase
Agreement; and
(g) The Owner Trustee shall be under no obligation to exer-
cise any of the rights or powers vested in it or duties imposed
by this Trust Agreement, or to institute, conduct or defend any
litigation under this Trust Agreement or otherwise or in relation
to this Trust Agreement or any Basic Document, at the request,
order or direction of any of the Certificateholders, unless such
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 Owner Trustee to perform any discre-
tionary act enumerated in this Trust 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 or willful
misconduct in the performance of any such act.
Section 7.02. Furnishing of Documents. The Issuer shall
furnish to the Certificateholders promptly upon receipt of a
written reasonable request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Issuer
under the Basic Documents.
Section 7.03. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Seller, for the
benefit of the Certificateholders, that:
(a) It is a 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 Trust
Agreement.
(b) It has taken all corporate action necessary to autho-
rize the execution and delivery by it of this Trust Agreement,
and this Trust Agreement will be executed and delivered by one of
its officers who is duly authorized to execute and deliver this
Trust Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Trust 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 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
bylaws or any indenture, mortgage, contract, agreement or instru-
ment to which it is a party or by which any of its properties may
be bound.
Section 7.04. 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 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 presi-
dent or by the treasurer or any assistant treasurer 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.
(b) In the exercise or administration of the trusts here-
under and in the performance of its duties and obligations under
this Trust Agreement or the Basic Documents, the Owner Trustee
(1) may act directly or through its agents, attorneys or
administrators 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 (2) 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 not contrary to
this Trust Agreement or any Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby cre-
ated, Chase Manhattan Bank Delaware 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 Trust Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 7.06. Owner Trustee Not Liable for Certificates.
The recitals contained herein and in the Certificates (other than
the signatures of the Owner Trustee on the Certificates) shall be
taken as the statements of the Seller, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or suffici-
ency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on
the Certificates) or the Notes. The Owner Trustee shall at no
time have any responsibility or liability 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 Trust Agreement or the Noteholders under the Inden-
ture, including, the compliance by the Seller 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 Administrator, the Certificate Paying Agent,
the Certificate Registrar or the Indenture Trustee taken in the
name of the Owner Trustee.
Section 7.07. 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 Notes and may deal
with the Seller, the Certificate Paying Agent, the Certificate
Registrar, the Administrator and the Indenture Trustee in banking
transactions with the same rights as it would have if it were not
Owner Trustee.
ARTICLE VIII
Compensation of Owner Trustee
Section 8.01. 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, and the Owner Trustee shall be reimbursed by HCLC, the
initial Holder of the Designated Certificate for its reasonable
expenses hereunder and under the Basic Documents, including the
reasonable compensation, expenses and disbursements of such
agents, representatives, experts and outside counsel as the Owner
Trustee may reasonably employ in connection with the exercise and
performance of its rights and its duties hereunder and under the
Basic Documents.
Section 8.02. Indemnification. The Holder of the Desig-
nated Certificate shall be liable as primary obligor for, and
shall indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified 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 reason-
able 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 or any
Indemnified Party in any way relating to or arising out of this
Trust Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inac-
tion of the Owner Trustee hereunder; provided that:
(i) the Holder of the Designated Certificate shall not
be liable for or required to indemnify an Indemnified Party
from and against Expenses arising or resulting from the
Owner Trustee's willful misconduct, negligence or bad faith
or as a result of any inaccuracy of a representation or
warranty contained in Section 7.03 expressly made by the
Owner Trustee;
(ii) with respect to any such claim, the Indemnified
Party shall have given the Holder of the Designated Certif-
icate written notice thereof promptly after the Indemnified
Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense,
the Holder of the Designated Certificate shall consult with
the Indemnified Party in preparing such defense; and
(iv) notwithstanding anything in this Agreement to the
contrary, the Holder of the Designated Certificate shall not
be liable for settlement of any claim by an Indemnified
Party entered into without the prior consent of the Holder
of the Designated Certificate which consent shall not be
unreasonably withheld.
The indemnities contained in this Section shall survive the
resignation or termination of the Owner Trustee or the termina-
tion of this Trust Agreement. In the 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, if other
than the legal counsel retained by the Owner Trustee in connec-
tion with the execution and delivery of this Trust Agreement,
shall be subject to the approval of the Holder of the Designated
Certificate, which approval shall not be unreasonably withheld.
In addition, upon written notice to the Owner Trustee and with
the consent of the Owner Trustee which consent shall not be
unreasonably withheld, the Holder of the Designated Certificate
has the right to assume the defense of any claim, action or
proceeding against the Owner Trustee.
ARTICLE IX
Termination of Trust Agreement
Section 9.01. Termination of Trust Agreement. (a) This
Trust Agreement (other than Article VIII) and the Issuer shall
terminate and be of no further force or effect upon the earliest
of (i) upon the final distribution of all moneys or other prop-
erty or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture and this Trust Agreement, (ii) the Payment
Date in March 2007 or (iii) at the time provided for in Section
9.02. The bankruptcy, liquidation, dissolution, death or inca-
pacity of any Certificateholder, other than the Holder of the
Designated Certificate, shall not (x) operate to terminate this
Trust Agreement or the Issuer or (y) entitle such Certificate-
holder'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 Issuer or the Owner Trust
Estate or (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), none of the
Seller, the Holder of the Designated Certificate or any other
Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Issuer, specifying the
Payment Date upon which Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the
final distribution and cancellation, shall be given by the
Certificate Paying Agent by letter to Certificateholders mailed
within five Business Days of receipt of notice of such termina-
tion from the Administrator, stating (i) the Payment Date upon or
with respect to which final payment of the Certificates shall be
made upon presentation and surrender of the Certificates at the
office of the Certificate Paying Agent therein designated,
(ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Certificate
Payment Agent therein specified. The Certificate Paying Agent
shall give such notice to the Owner Trustee and the Certificate
Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Certifi-
cate Paying Agent shall cause to be distributed to Certificate-
holders amounts distributable on such Payment Date pursuant to
Section 5.01.
In the event that all of the Certificateholders 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 to surrender their Certifi-
xxxxx for cancellation and receive the final distribution with
respect thereto. Subject to applicable laws with respect to
escheat of funds, if within two years following the Payment Date
on which final payment of the Certificates was to have been made
all the Certificates shall not have been surrendered for cancel-
lation, the Certificate Paying Agent may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds
and other assets that shall remain subject to this Trust Agree-
ment. Any funds remaining in the Payment Account after exhaus-
tion of such remedies shall be distributed by the Certificate
Paying Agent to the Holder of the Designated Certificate.
(d) Upon the winding up of the Issuer and its termination,
the Owner Trustee shall cause the Certificate of Trust to be
cancelled by filing a certificate of cancellation with the
Secretary of State in accordance with the provisions of Section
3810(c) of the Business Trust Statute.
Section 9.02. Dissolution upon Bankruptcy of the Holder of
the Designated Certificate. In the event that an Insolvency
Event shall occur with respect to the Holder of the Designated
Certificate, this Agreement shall be terminated in accordance
with Section 9.01, 90 days after the date of such Insolvency
Event, unless, before the end of such 90-day period, the Owner
Trustee shall have received written instructions from Holders of
Certificates (other than the Holder of the Designated Certif-
icate) representing more than 50% of the Security Balance of the
Certificates (not including the Security Balance of the Desig-
nated Certificate or any other Certificates held by HCLC or any
Affiliate thereof), to the effect that such Holders disapprove of
the termination of the Issuer and have elected or appointed any
one of such Holders or a transferee of Certificates meeting the
requisite conditions set forth in an Opinion of Counsel delivered
to the Owner Trustee as a new Designated Certificateholder (the
"Successor Designated Certificateholder") for the continuation of
the tax treatment of the Issuer. Such Successor Designated
Certificate shall represent at least 1% of the Initial Principal
Balance of the Certificates. The appointment of a Successor
Designated Certificateholder will not deprive HCLC or its
transferee of its economic interest in the Designated Certificate
or Holdback Amount, its Certificates or otherwise in the Owner
Trust Estate. Promptly after the occurrence of any Insolvency
Event with respect to any Holder of the Designated Certificate
(A) the Holder of such Designated Certificate or Successor
Designated Certificate shall give the Indenture Trustee and the
Owner Trustee written notice of such Insolvency Event, (B) the
Owner Trustee shall, upon the receipt of such written notice from
the Holder of such Designated Certificate, give prompt written
notice to the Certificateholders of the occurrence of such event
and (C) the Indenture Trustee shall give prompt written notice of
such event to the Noteholders; provided, however, that any
failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Issuer
pursuant to the first sentence of this Section 9.02. Upon a
termination pursuant to this Section, the Owner Trustee shall
direct the Indenture Trustee promptly to sell the assets of the
Issuer (other than the Payment Account) in a commercially
reasonable manner and on commercially reasonable terms. The
proceeds of such a sale of the assets of the Issuer shall be
deposited to the Payment Account for distribution in accordance
with Section 5.03(a) of the Indenture.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
Section 10.01. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation satisfying
the provisions of Section 3807(a) of the Business Trust Statute;
authorized to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to super-
vision or examination by federal or state authorities; and having
(or having a parent that has) a rating of at least Baa3 by
Moody's (or a rating otherwise acceptable to Moody's). If such
corporation shall publish reports of condition at least annually
pursuant to law or to the requirements of the aforesaid supervis-
ing 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 10.01, the Owner Trustee
shall resign immediately in the manner and with the effect
specified in Section 10.02.
Section 10.02. 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
Administrator and the Designated Certificateholder. Upon
receiving such notice of resignation, the Designated
Certificateholder shall promptly appoint a successor Owner
Trustee, 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. 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 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 10.01 and shall fail
to resign after written request therefor by the Designated
Certificateholder 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 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 Designated Certificateholder may remove the Owner Trustee.
If the Designated Certificateholder shall remove the Owner
Trustee under the authority of the immediately preceding
sentence, the Designated Certificateholder shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner
Trustee, and shall pay all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and appoint-
ment of a successor Owner Trustee pursuant to any of the pro-
visions of this Section shall not become effective until accep-
tance of appointment by the successor Owner Trustee pursuant to
Section 10.03 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Administrator shall provide notice
of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.
Section 10.03. Successor Owner Trustee. Any successor
Owner Trustee appointed pursuant to Section 10.02 shall execute,
acknowledge and deliver to the Designated Certificateholder and
to its predecessor Owner Trustee an instrument accepting such
appointment under this Trust 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 Trust 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 Trust Agreement; and the Designated Certificateholder 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 10.03 unless at the time of such accep-
tance such successor Owner Trustee shall be eligible pursuant to
Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.03, the Administrator shall mail
notice thereof to all Certificateholders, the Indenture Trustee,
the Noteholders and the Rating Agencies. If the Administrator
shall fail to mail such notice within 10 days after acceptance of
such appointment by the successor Owner Trustee, the successor
Owner Trustee shall cause such notice to be mailed at the expense
of the Administrator.
Section 10.04. Merger or Consolidation of Owner Trustee.
Any Person into which the Owner Trustee may be merged or convert-
ed or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which the Owner
Trustee shall be a party, or any Person succeeding to all or
substantially all of the corporate trust business of the Owner
Trustee, shall be the successor of the Owner Trustee hereunder,
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 that such Person shall be
eligible pursuant to Section 10.01 and, provided, further, that
the Owner Trustee shall mail notice of such merger or consolida-
tion to the Rating Agencies.
Section 10.05. Appointment of Co-Trustee or Separate
Trustee. Notwithstanding any other provisions of this Trust
Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Owner
Trust Estate may at the time be located, the Designated
Certificateholder 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 Designated
Certificateholder and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as 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 Owner
Trust Estate or any part thereof and, subject to the other
provisions of this Section, such powers, duties, obligations,
rights and trusts as the Designated Certificateholder and the
Owner Trustee may consider necessary or desirable. If the
Designated Certificateholder shall not have joined in such
appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee under this
Trust Agreement shall be required to meet the terms of
eligibility as a successor Owner Trustee pursuant to
Section 10.01 and no notice of the appointment of any co-trustee
or separate trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(a) All rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exer-
cised 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 Owner Trust Estate 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;
(b) No trustee under this Trust Agreement shall be
personally liable by reason of any act or omission of any other
trustee under this Trust Agreement; and
(c) The Designated Certificateholder 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 Trust Agreement and the condi-
tions 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 appoint-
ment, either jointly with the Owner Trustee or separately, as may
be provided therein, subject to all the provisions of this Trust
Agreement, specifically including every provision of this Trust
Agreement relating to the conduct of, affecting the liability of,
or affording protection to, the Owner Trustee. Each such instru-
ment shall be filed with the Owner Trustee and a copy thereof
given to the Administrator.
Any separate trustee or co-trustee may at any time appoint
the Owner Trustee as 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 Trust 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
co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
Section 11.01. Amendments. (a) This Trust 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
Seller (which Opinion of Counsel may, as to factual matters, rely
upon Officer's Certificates of the Seller) is addressed and
delivered to the Owner Trustee, dated the date of any such amend-
ment, to the effect that the conditions precedent to any such
amendment have been satisfied and the Seller shall have delivered
to the Owner Trustee an Officer's Certificate, dated the date of
any such Amendment, stating that the Seller reasonably believes
that such amendment will not have a material adverse effect on
the Securityholders. Notwithstanding the foregoing, the Trust
Agreement may be amended by the parties hereto, without delivery
of the foregoing Opinion of Counsel or Officer's Certificates, to
amend the per annum percentage that is added to LIBOR to
calculate the Certificate Rate related to the Certificates to an
amount not exceeding 1.25% per annum.
(b) This Agreement may also be amended from time to time
with the consent of the Holders of the Securities evidencing not
less than 66-2/3% 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 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 Certificate without the consent of the related
Certificateholder, or (ii) reduce the aforesaid percentage of
Certificates the Holders 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.
(c) If the purpose of the amendment is to (i) prevent the
imposition of any federal or state taxes at any time that any
Security is outstanding (i.e., technical in nature), or (ii)
eliminate the provisions for termination of this Trust Agreement
and replacement of the Holder of the Designated Certificate upon
an Insolvency Event with respect to the Holder, and eliminate
Section 2.07(a) so that Section 2.07(b) applies as well to the
Holder of the Designated Certificate, or (iii) permit the
election or qualification of the Issuer as a "FASIT" or other
similar form of entity for federal income tax purposes pursuant
to FASIT legislation, it shall not be necessary to obtain the
consent of any Holder, but the Owner Trustee shall be furnished
with an Opinion of Counsel that in the case of (i) above such
amendment is necessary or helpful to prevent the imposition of
such taxes, or in the case of (ii) or (iii) above such amendment
will not cause the Issuer to be subject to an entity level tax
and the Seller shall deliver an Officer's Certificate to the
Owner Trustee stating that the Seller reasonably believes that
such amendment will not have a material adverse effect on
Securityholders.
(d) Promptly after the execution of any such amendment or
consent (other than an amendment pursuant to paragraph (a)), the
Owner Trustee shall furnish notification of the substance of such
amendment to each Certificateholder, and to each Rating Agency.
(e) It shall not be necessary for the consent of Certifi-
cateholders under this Section to approve the particular form of
any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of
obtaining such consents 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 Certif-
icate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State of the State of Delaware.
Section 11.02. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal
title to any part of the Owner Trust Estate. The Certificate-
holders shall be entitled to receive distributions with respect
to their undivided beneficial 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 Certificate-
holders to and in their ownership interest in the Owner Trust
Estate shall operate to terminate this Trust 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 Owner Trust
Estate.
Section 11.03. Limitations on Rights of Others. Except for
Section 2.07, the provisions of this Trust Agreement are solely
for the benefit of the Owner Trustee, the Seller, the Holder of
the Designated Certificate, the Certificateholders, the Adminis-
trator and, to the extent expressly provided herein, the Inden-
ture Trustee and the Noteholders, and nothing in this Trust
Agreement (other than Section 2.07), 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 Trust Agreement or any covenants,
conditions or provisions contained herein.
Section 11.04. 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 by the intended
recipient or three Business Days after mailing if mailed by cer-
tified mail, postage prepaid (except that notice to the Owner
Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Seller, addressed to Household
Consumer Loan Corporation, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxx 00000, Attn: Compliance Officer, with a copy to Household
Finance Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000, Attn: Treasurer; 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 Certif-
icate Register. Any notice so mailed within the time prescribed
in this Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives
such notice.
(c) A copy of any notice delivered to the Owner Trustee or
the Issuer shall also be delivered to the Seller, the
Administrator and The Chase Manhattan Bank, 000 Xxxx 00xx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Global Trust
Services.
Section 11.05. Severability. Any provision of this Trust
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 unen-
forceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 11.06. Separate Counterparts. This Trust Agreement
may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an origi-
nal, but all such counterparts shall together constitute but one
and the same instrument.
Section 11.07. Successors and Assigns. All representa-
tions, warranties, covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, each of the
Seller, the Owner Trustee and its successors and each Certif-
icateholder and its successors and permitted assigns. Any
request, notice, direction, consent, waiver or other instrument
or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
Section 11.08. Covenants of the Seller. Neither the Seller
nor the Holder of the Designated Certificate will at any time
institute against the Issuer any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law in con-
nection with any obligations relating to the Certificates, the
Notes, this Trust Agreement or any of the Basic Documents.
Section 11.09 No Petition. The Owner Trustee, by entering
into this Trust Agreement, and each Certificateholder, by accept-
ing a Certificate, hereby covenant and agree that they will not
at any time institute against the Seller or the Issuer, or join
in any institution against the Seller or the Issuer of any
bankruptcy proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations to
the Certificates, the Notes, this Trust Agreement or any of the
Basic Documents.
Section 11.10. No Recourse. Each Certificateholder by
accepting a Certificate acknowledges that such Certificate-
holder's Certificates represent beneficial interests in the
Issuer only and do not represent interests in or obligations of
the Seller, the Holder of the Designated Certificate, the
Administrator, the Owner Trustee, the Indenture Trustee or any
Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contem-
plated in this Trust Agreement, the Certificates or the Basic
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 TRUST 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. Integration. This Trust Agreement consti-
tutes the entire agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior agreements and
understanding pertaining thereto.
IN WITNESS WHEREOF, the Seller and the Owner Trustee have
caused their names to be signed hereto by their respective
officers thereunto duly authorized, all as of the day and year
first above written.
HOUSEHOLD CONSUMER LOAN CORPORATION,
as Seller and Holder of the
Designated Certificate
By:________________________________
Name:
Title:
CHASE MANHATTAN BANK DELAWARE, not in
its individual capacity but solely
as Owner Trustee
By:________________________________
Name: Xxxx X. Xxxxxx
Title: Senior Trust Officer
Acknowledged and Agreed:
THE BANK OF NEW YORK, as Certificate
Registrar and Certificate
Paying Agent
By:_________________________
Name:
Title:
EXHIBIT A
[FORM OF CERTIFICATE]
[Face]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS
REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANS-
FERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE TRUST
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI-
CATE REGISTRAR SHALL HAVE RECEIVED (I) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"), OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING
THE ASSETS OF ANY SUCH PLAN, (II) IF THIS CERTIFICATE IS
PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, OR SECTION 4975 OF
THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS),
OR A TRUSTEE OF ANY SUCH PLAN, OR ANY OTHER PERSON WHO IS USING
THE ASSETS OF ANY SUCH PLAN TO EFFECT SUCH ACQUISITION, AN
OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE OWNER TRUST
ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED
TRANSACTION PROVISIONS OF THE CODE, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED TRANSACTION WITHIN THE MEANING OF SECTION 406 OR
SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND WILL NOT
SUBJECT THE OWNER TRUSTEE OR THE SELLER TO ANY OBLIGATION OR
LIABILITY, (III) OR IF THE PURCHASER IS AN INSURANCE COMPANY, A
REPRESENTATION THAT THE PURCHASER IS AN INSURANCE COMPANY WHICH
IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN
SECTION V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
("PTCE 95-60")), THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60 AND THAT PTCE 95-60
REMAINS A VALID AND AVAILABLE EXEMPTION, OR (IV) IN THE CASE OF
ANY SUCH PROPOSED TRANSFEREE WHICH IS A PLAN, AN OPINION OF
COUNSEL SATISFACTORY TO THE OWNER TRUSTEE AND THE SELLER TO THE
EFFECT SET FORTH IN THE TRUST AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI-
CATE REGISTRAR SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN
STATUS CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A U.S. PERSON
OR CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE SELLER, THE SERVICER, THE INDENTURE TRUSTEE, THE
ADMINISTRATOR OR THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE TRUST AGREEMENT
OR THE BASIC DOCUMENTS.
Certificate No. ___
Original principal amount ("Denomination")
of this Certificate: $____________
Aggregate Denominations of all Certificates:
$33,600,000
Certificate Rate: Floating
Closing Date: March 12, 1997
First Payment Date
April 15, 1997
CUSIP NO. _________
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
Evidencing a fractional undivided interest in the Owner
Trust Estate, the property of which consists primarily of the
Series 1997-1 Participation Interest in the Receivables, sold by
HOUSEHOLD CONSUMER LOAN CORPORATION, AS SELLER
This certifies that [name of Holder] is the registered owner
of the Percentage Interest represented hereby in the Household
Consumer Loan Trust 1997-1 (the "Issuer").
The Issuer was created pursuant to a Trust Agreement dated
as of March 1, 1997 (as amended and supplemented from time to
time, the "Trust Agreement") among the Seller, as seller and as
holder of the Designated Certificate, and Chase Manhattan Bank
Delaware, as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth
hereinafter. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of
Consumer Loan Asset Backed Certificates, Series 1997-1 (the
"Certificates") issued under the Trust Agreement to which
reference is hereby made for a statement of the respective rights
thereunder of the Seller, the Designated Certificateholder, the
Owner Trustee and the Holders of the Certificates and the terms
upon which the Certificates are executed and delivered. All
terms used in this Certificate which are defined in the Trust
Agreement shall have the meanings assigned to them in the Trust
Agreement. The Owner Trust Estate consists of the Series 1997-1
Participation Interest and all monies and the collections and
proceeds due thereon and any part thereof which consists of
general intangibles (as defined in the UCC). The rights of the
Holders of the Certificates are subordinated to the rights of the
Holders of the Notes, as set forth in the Indenture (as defined
herein).
There will be distributed on the fifteenth day of each month
or, if such fifteenth day is not a Business Day, the next Busi-
ness Day (each, a "Payment Date"), commencing in April 1997, to
the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month preceding
the month of such Payment Date (the "Record Date"), such Certif-
icateholder's Percentage Interest (obtained by dividing the
Denomination of this Certificate by the aggregate Denominations
of all Certificates) in the amount to be distributed to Certifi-
cateholders on such Payment Date.
The Certificateholder, by its acceptance of this Certifi-
cate, agrees that it will look solely to the funds on deposit in
the Payment Account that have been released from the Lien of the
Indenture for payment hereunder and that neither the Owner
Trustee in its individual capacity nor the Seller is personally
liable to the Certificateholders for any amount payable under
this Certificate or the Trust Agreement or, except as expressly
provided in the Trust Agreement, subject to any liability under
the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certifi-
cate are subordinated to the rights of the Noteholders as
described in the Indenture, dated as of March 1, 1997, between
the Issuer and The Bank of New York, as Indenture Trustee (the
"Indenture").
It is the intent of the Seller and the Certificateholders
that, for purposes of federal income, state and local income and
single business tax and any other income taxes, the Issuer will
be treated as a partnership. The Seller and the other Certif-
icateholders, by acceptance of a Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Certif-
icates for such tax purposes as an equity interest in a partner-
ship.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any
time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer 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, the Trust
Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided
in the Trust Agreement by the Certificate Paying Agent to each
Certificateholder of record on the preceding Record Date either
by, in the case of any Certificateholder owning Certificates hav-
ing denominations aggregating at least $1,000,000, wire transfer,
in immediately available funds, to the account of such Holder at
a bank or other entity having appropriate facilities therefor, if
such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business
Days prior to such Payment Date or, if not, by check mailed to
such Certificateholder at the address of such Holder appearing in
the Certificate Register. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by
the Certificate Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at
the office or agency maintained by the Certificate Registrar for
that purpose by the Issuer in the Borough of Manhattan, The City
of New York.
Reference is hereby made to the further provisions of this
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, or
an authenticating agent by manual signature, this Certificate
shall not entitle the Holder hereof to any benefit under the
Trust Agreement or be valid for any purpose.
THIS 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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Issuer and not in its individual capacity, has caused this
Certificate to be duly executed.
HOUSEHOLD CONSUMER LOAN TRUST
1997-1
By: Chase Manhattan Bank
Delaware, not in its
individual capacity but
solely as Owner Trustee
Dated: March ___, 1997
Name: Xxxx X. Xxxxxx
Title: Senior Trust Officer
Certificate of Authentication
This is one of the Certificates referred to in the within men-
tioned Trust Agreement.
Chase Manhattan Bank Delaware,
not in its individual capacity
but solely as Owner Trustee
By:______________________________
Name:
Title:
or
The Bank of New York,
as Authenticating Agent of the Issuer
By:______________________________
Name:
Title:
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee or any Affiliates of any of them and no recourse
may be had against such parties or their assets, except as
expressly set forth or contemplated herein or in the Trust
Agreement or the Basic Documents. In addition, this Certificate
is not guaranteed by any governmental agency or instrumentality
and is limited in right of payment to certain collections and
recoveries with respect to the Series 1997-1 Participation
Interest (and certain other amounts), all as more specifically
set forth herein. A copy of the Trust Agreement may be examined
by any Certificateholder upon written request during normal
business hours at the principal office of the Seller and at such
other places, if any, designated by the Seller.
The Trust Agreement permits the amendment thereof as speci-
fied below; provided that any amendment be accompanied by an
Opinion of Counsel for the Seller (which Opinion of Counsel may,
as to factual matters, rely upon Officer's Certificates of the
Seller) addressed and delivered to the Owner Trustee, to the
effect that the conditions precedent in the Trust Agreement to
any such amendment have been satisfied and the Seller shall have
delivered to the Owner Trustee an Officer's Certificate, stating
that the Seller reasonably believes that such amendment will not
have a material adverse effect on the Securityholders. If the
purpose of the amendment is to (i) prevent the imposition of any
federal or state taxes at any time that any Security is
outstanding (i.e., technical in nature), or (ii) eliminate or
modify certain provisions relating to the Designated Certificate
or to permit the election or qualification of the Issuer as a
"FASIT" or other similar form of entity for federal income tax
purposes pursuant to FASIT legislation, it shall not be necessary
to obtain the consent of any Holder, but the Owner Trustee shall
be furnished with an Opinion of Counsel that in the case of (i)
above such amendment is necessary or helpful to prevent the
imposition of such taxes, or in the case of (ii) above such
amendment will not cause the Issuer to be subject to an entity
level tax. If the purpose of the amendment is to add or
eliminate or change any provision of the Trust Agreement, other
than as specified in the preceding two sentences, the amendment
shall require the consent of the Holders of the Certificates
evidencing not less than 66-2/3% of the aggregate unpaid Security
Balance of all affected Certificateholders; 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 Certificate without the consent of the
related Certificateholder, or (ii) reduce the aforesaid
percentage of Certificates the Holders 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.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate
is registerable in the Certificate Register upon surrender of
this Certificate for registration of transfer at the offices or
agencies of the Certificate Registrar maintained by the Issuer in
the Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the
Certificate Registrar duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing
the same aggregate interest in the Issuer will be issued to the
designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is The Bank of New York.
Except as provided in the Trust Agreement, the Certificates
are issuable only in minimum denominations of $1,000,000 and in
integral multiples of $100,000 in excess thereof, except for one
Certificate issued in a denomination of $336,000 which will be
held by the Seller and one other Certificate that may not be in
an integral multiple of $100,000. As provided in the Trust
Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized
denominations evidencing the same aggregate denomination, 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 Paying Agent, the Certif-
icate Registrar and any agent of the Owner Trustee, the Certifi-
cate Paying Agent, or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Owner Trustee, the
Certificate Paying Agent, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Issuer created thereby shall terminate (i) upon
the final distribution of all moneys or other property or pro-
ceeds of the Owner Trust Estate in accordance with the terms of
the Indenture and the Trust Agreement, (ii) the Payment Date in
March 2007, or (iii) upon the bankruptcy or insolvency of the
Holder of the Designated Certificate and the satisfaction of
other conditions specified in Section 9.01 of the Trust Agree-
ment.
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
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 as it appears upon the face of
the within Certificate in every particular, without alteration,
enlargement or any change whatever. Such
signature must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or
trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the infor-
mation of the Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately
available funds to
for the account of ,
account number , or, if mailed by check,
to .
Applicable statements should be mailed to
.
______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT B
[RESERVED]
EXHIBIT C
CERTIFICATE OF TRUST OF
HOUSEHOLD CONSUMER LOAN TRUST 1997-1
This Certificate of Trust of HOUSEHOLD CONSUMER LOAN
TRUST 1997-1 (the "Trust"), dated as of March ___, 1997, is being
duly executed and filed by Chase Manhattan Bank Delaware, a
Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. Code, Section 3801
et seq.).
1. Name. The name of the business trust formed hereby
is HOUSEHOLD CONSUMER LOAN TRUST 1997-1.
2. Delaware Trustee. The name and business address of
the trustee of the Trust in the State of Delaware is Chase
Manhattan Bank Delaware, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trustee Administration.
3. Effective Date. This Certificate of Trust shall be
effective on March ___, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole
trustee of the Trust, has executed this Certificate of Trust as
of the date first above written.
Chase Manhattan Bank Delaware,
as Owner Trustee
By:
Name:
Title:
EXHIBIT D
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned seller, as registered holder (the
"Seller"), intends to transfer the Rule 144A Securities described
above to the undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance
with the agreements pursuant to which the Rule 144A Securities
were issued, the Seller hereby certifies the following facts:
Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securi-
ties, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities
under the Securities Act of 1933, as amended (the "1933 Act"), or
that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Seller has not offered the Rule
144A Securities to any person other than the Buyer or another
"qualified institutional buyer" as defined in Rule 144A under the
0000 Xxx.
2. The Buyer warrants and represents to, and covenants
with, the Owner Trustee, and the Seller (as defined in the Trust
Agreement (the "Agreement"), dated as of March 1, 1997 among
Household Consumer Loan Corporation, as Seller, and as Holder of
the Designated Certificate and Chase Manhattan Bank Delaware, as
Owner Trustee pursuant to Section 3.05 of the Agreement and The
Bank of New York as Indenture Trustee, as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or
the securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge
and experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in
the Rule 144A Securities.
c. The Buyer has been furnished with all informa-
tion regarding the Rule 144A Securities that it has request-
ed from the Seller, the Indenture Trustee, the Owner Trustee
or the Servicer.
d. Neither the Buyer nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to
the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any
other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render
the disposition of the Rule 144A Securities a violation of
Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it
authorize any person to act, in such manner with respect to
the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer"
as that term is defined in Rule 144A under the 1933 Act and
has completed either of the forms of certification to that
effect attached hereto as Annex 1 or Annex 2. The Buyer is
aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for
its own account or the accounts of other qualified institu-
tional buyers, understands that such Rule 144A Securities
may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on
Rule 144A, or (ii) pursuant to another exemption from regis-
tration under the 0000 Xxx.
[3. The Buyer warrants and represents to, and
covenants with, the Seller, the Indenture Trustee, Owner Trustee,
Servicer and the Seller that either (1) the Buyer is (A) not an
employee benefit plan (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")), or a plan (within the meaning of Section 4975(e)(1)
of the Internal Revenue Code of 1986 ("Code")), which (in either
case) is subject to ERISA or Section 4975 of the Code (both a
"Plan"), and (B) is not directly or indirectly purchasing the
Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with "plan assets" of a
Plan, or (2) the Buyer understands that registration of transfer
of any Rule 144A Securities to any Plan, or to any Person acting
on behalf of any Plan, will not be made unless such Plan delivers
an opinion of its counsel, addressed and satisfactory to the
Certificate Registrar and the Seller, to the effect that the
purchase and holding of the Rule 144A Securities by, on behalf of
or with "plan assets" of any Plan would not constitute or result
in a prohibited transaction under Section 406 of ERISA or Section
4975 of the Code, and would not subject the Seller, the Servicer,
the Indenture Trustee or the Issuer to any obligation or
liability (including liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Agreement or any
other liability.]
4. This document may be executed in one or more
counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed to
be an original; such counterparts, together, shall constitute one
and the same document.
IN WITNESS WHEREOF, each of the parties has executed
this document as of the date set forth below.
Print Name of Seller Print Name of Buyer
By: By:
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
Date: Date:
Annex 1 to Exhibit D
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this
Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive
officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer
is a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act of 1933 ("Rule 144A") because
(i) the Buyer owned and/or invested on a discretionary basis
$______________________ in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Buyer satisfies the criteria in the
category marked below.
___ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar
institution), Massachusetts or similar business trust,
partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State,
territory or the District of Columbia, the business of
which is substantially confined to banking and is
supervised by the State or territorial banking commission
or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal
authority having supervision over any such institutions
or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth
of at least $25,000,000 as demonstrated in its latest
annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies and which is subject
to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the
District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment
Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a
bank or trust company and whose participants are
exclusively (a) plans established and maintained by a
State, its political subdivisions, or any agency or
instrumentality of the State or its political
subdivisions, for the benefit of its employees, or
(b) employee benefit plans within the meaning of Title I
of the Employee Retirement Income Security Act of 1974,
but is not a trust fund that includes as participants
individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with the
Buyer, (ii) securities that are part of an unsold allotment to or
subscription by the Buyer, if the Buyer is a dealer, (iii) bank
deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned
but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount
of securities owned and/or invested on a discretionary basis by
the Buyer, the Buyer used the cost of such securities to the
Buyer and did not include any of the securities referred to in
the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared
in accordance with generally accepted accounting principles and
if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if
the Buyer is a majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company under
the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with
Rule 144A and understands that the seller to it and other parties
related to the Certificates are relying and will continue to rely
on the statements made herein because one or more sales to the
Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no",
the Buyer agrees that, in connection with any purchase of
securities sold to the Buyer for the account of a third party
(including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning
of Rule 144A. In addition, the Buyer agrees that the Buyer will
not purchase securities for a third party unless the Buyer has
obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition
of "qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which
this certification is made of any changes in the information and
conclusions herein. Until such notice is given, the Buyer's
purchase of Rule 144A Securities will constitute a reaffirmation
of this certification as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
Annex 2 to Exhibit D
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in
connection with the Rule 144A Investment Representation to which
this Certification is attached:
1. As indicated below, the undersigned is the
President, Chief Financial Officer or Senior Vice President of
the Buyer or, if the Buyer is a "qualified institutional buyer"
as that term is defined in Rule 144A under the Securities Act of
1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of
the Adviser.
2. In connection with purchases by Buyer, the Buyer is
a "qualified institutional buyer" as defined in SEC Rule 144A
because (i) the Buyer is an investment company registered under
the Investment Company Act of 1940, and (ii) as marked below, the
Buyer alone, or the Buyer's Family of Investment Companies, owned
at least $100,000,000 in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of
Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities
(other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year
(such amount being calculated in accordance with
Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $______________ in
securities (other than the excluded securities referred
to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or
series thereof) that have the same investment adviser or
investment advisers that are affiliated (by virtue of being
majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not
include (i) securities of issuers that are affiliated with the
Buyer or are part of the Buyer's Family of Investment Companies,
(ii) bank deposit notes and certificates of deposit, (iii) loan
participations, (iv) repurchase agreements, (v) securities owned
but subject to a repurchase agreement and (vi) currency, interest
rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and
understands that each of the parties to which this certification
is made are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in
reliance on Rule 144A. In addition, the Buyer will only purchase
for the Buyer's own account.
6. The undersigned will notify each of the parties to
which this certification is made of any changes in the
information and conclusions herein. Until such notice, the
Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification by the undersigned as of the
date of such purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT E
DEFINITIONS
The definitions contained herein are incorporated into and
made a part of the Trust Agreement and Indenture, each as defined
below.
Accelerated Principal Payment Amount: With respect to any
Payment Date, the lesser of (i) the Excess Interest reduced by
the amount of the Net Charge-Off and (ii) one-twelfth of the
Series 1997-1 Participation Interest Invested Amount as of the
beginning of the related Interest Period multiplied for each
Payment Date occurring prior to April 1998, by 0.75%, and for
each Payment Date occurring in April 1998 or thereafter, by
0.25%.
Act: The meaning assigned to such term in Section 10.03 of
the Indenture.
Adjusted Principal Balance: With respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes, the
Class A-1 Adjusted Principal Balance, Class A-2 Adjusted
Principal Balance, Class A-3 Adjusted Principal Balance and Class
B Adjusted Principal Balance, respectively.
Adjusted Security Balance: With respect to any Payment
Date, the sum of the Class A Adjusted Principal Balance, the
Class B Adjusted Principal Balance and the Certificate Adjusted
Security Balance.
Administration Agreement: The Administration Agreement
dated as of March 1, 1997 among the Issuer, the Indenture Trustee
and HFC, as Administrator, as it may be amended from time to
time.
Administrator: HFC, as administrator under the
Administration Agreement or any successor Administrator appointed
pursuant to the terms of the Administration Agreement.
Affiliate: The meaning assigned to such term in the Pooling
and Servicing Agreement.
Aggregate Security Balance: With respect to any Payment
Date, the aggregate of the Principal Balances of all Securities
as of such date.
Amortization Event: The meaning assigned to such term in
the Pooling and Servicing Agreement.
Authorized Newspaper: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the
English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer
of the Owner Trustee who is authorized to act for the Owner
Trustee in matters relating to the Issuer and who is identified
on the list of Authorized Officers delivered by the Owner Trustee
to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any
Responsible Officer of the Administrator who is authorized to act
for the Administrator in matters relating to the Issuer and to be
acted upon by the Administrator pursuant to the Administration
Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee
on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).
Available Investor Principal Collections: The meaning
assigned to such term in the Pooling and Servicing Agreement.
Basic Documents: The Trust Agreement, the Certificate of
Trust, the Indenture, Receivables Purchase Agreement, the Admin-
istration Agreement, the Pooling and Servicing Agreement, and the
other documents and certificates delivered in connection with any
of the above.
Beneficial Owner: With respect to any Note, the Person who
is the beneficial owner of such Note as reflected on the books of
the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or
indirectly through a Depositary Participant, in accordance with
the rules of such Depositary).
Book-Entry Notes: Beneficial interests in the Notes, owner-
ship and transfers of which shall be made through book entries by
the Seller as described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the State of New
York or Illinois are required or authorized by law to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Sections 3801 et seq., as the same may be
amended from time to time.
Certificate Adjusted Security Balance: With respect to any
Payment Date, the Certificate Balance after giving effect to any
distributions thereon pursuant to Section 3.05(a)(iii) and (vi)
of the Indenture on all Payment Dates including the current
Payment Date less all Net Charge-Offs allocated to the
Certificates after giving effect to any such allocation to be
made on such Payment Date.
Certificate Balance: With respect to any Payment Date, the
Initial Certificate Balance, reduced by all distributions thereon
other than distributions in respect of the Certificate Yield,
prior to such Payment Date.
Certificate of Trust: The Certificate of Trust filed for
the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
Certificateholder: The Person in whose name a Certificate
is registered in the Certificate Register except that, any
Certificate registered in the name of the Seller, the Owner
Trustee or the Indenture Trustee or any Affiliate of any of them
shall be deemed not to be outstanding and the registered holder
will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction,
notice, consent or waiver under the Indenture or the Trust
Agreement provided that, in determining whether the Indenture
Trustee or the Owner Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice,
consent or waiver, only Certificates that the Indenture Trustee
or the Owner Trustee knows to be so owned shall be so
disregarded. Owners of Certificates that have been pledged in
good faith may be regarded as Holders if the pledgee establishes
to the satisfaction of the Indenture Trustee or the Owner
Trustee, as the case may be, the pledgee's right so to act with
respect to such Certificates and that the pledgee is not the
Seller, any other obligor upon the Certificates or any Affiliate
of any of the foregoing Persons.
Certificate Minimum Adjusted Balance: $11,200,000.
Certificate Minimum Balance: With respect to any Payment
Date the Series 1997-1 Participation Interest Invested Amount,
after giving effect to the distribution made on the Series 1997-1
Participation Interest on such Payment Date, multiplied by
1.0101%.
Certificate Paying Agent: The meaning specified in Section
3.03 of the Indenture.
Certificate Rate: With respect to any Interest Period, the
per annum rate equal to the sum of (i) LIBOR and (ii) 1.0% (or
such other percentage determined pursuant to an amendment to the
Trust Agreement pursuant to Section 11.01 thereof not to exceed
1.25%), but in no event greater than 15.0% per annum.
Certificate Register: The register maintained by the
Certificate Registrar in which the Certificate Registrar shall
provide for the registration of Certificates and of transfers and
exchanges of Certificates.
Certificate Registrar: Initially, The Bank of New York, in
its capacity as Certificate Registrar, or any successor to the
Indenture Trustee in such capacity as appointed pursuant to
Section 3.05 of the Trust Agreement.
Certificates: The Consumer Loan Asset Backed Certificates,
Series 1997-1, each evidencing undivided beneficial interests in
the Issuer and executed by the Owner Trustee in substantially the
form set forth in Exhibit A to the Trust Agreement.
Certificate Targeted Balance: An amount equal to (i) the
Series 1997-1 Participation Interest Invested Amount multiplied
by 91.5%, less (ii) the Class A Adjusted Principal Balance and
the Class B Adjusted Principal Balance immediately prior to such
Payment Date and after giving effect to payments of principal on
the Class A Notes and Class B Notes pursuant to Section
3.05(a)(ii) of the Indenture on such Payment Date.
Certificate Yield: The sum of (a) the amount accrued during
the related Interest Period at the Certificate Rate on the sum of
(i) the Certificate Balance immediately prior to such Payment
Date and (ii) any previously accrued and unpaid amount at the
Certificate Rate for prior Payment Dates, and (b) any previously
accrued and unpaid amount at the Certificate Rate for prior
Payment Dates.
Class: Any of class of the Class A Notes and Class B Notes
issued pursuant to Article II of the Indenture.
Class A Adjusted Principal Balance: The sum of the Class A-
1 Adjusted Principal Balance, Class A-2 Adjusted Principal
Balance and Class A-3 Adjusted Principal Balance.
Class A Notes: Any of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes issued pursuant to Article II of the
Indenture.
Class A Targeted Principal Balance: The sum of the Class X-
0 Targeted Principal Balance, Class A-2 Targeted Principal
Balance, and Class A-3 Targeted Principal Balance.
Class A-1 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-1 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-1 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-1 Notes: The Class A-1 Notes issued pursuant to
Article II of the Indenture.
Class A-1 Targeted Principal Balance: The Series 1997-1
Participation Interest Invested Amount multiplied by 52.0%.
Class A-2 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-2 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-2 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-2 Notes: The Class A-2 Notes issued pursuant to
Article II of the Indenture.
Class A-2 Targeted Principal Balance: With respect to any
Payment Date an amount equal to (i) the Series 1997-1
Participation Interest Invested Amount multiplied by 62.0%, less
(ii) the Class A-1 Adjusted Principal Balance immediately prior
to such Payment Date and after giving effect to payments of
principal on the Class A-1 Notes pursuant to Section
3.05(a)(ii)(a) of the Indenture on such Payment Date.
Class A-3 Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class A-3 Notes after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payment Dates
including the current Payment Date less any Net Charge-Off allo-
cated to the Class A-3 Notes after giving effect to any such
allocation to be made on such Payment Date.
Class A-3 Notes: The Class A-3 Notes issued pursuant to
Article II of the Indenture.
Class A-3 Targeted Principal Balance: With respect to any
Payment Date an amount equal to (i) the Series 1997-1
Participation Interest Invested Amount multiplied by 75.0%, less
(ii) the sum of the Class A-1 Adjusted Principal Balance and
Class A-2 Adjusted Principal Balance immediately prior to such
Payment Date and after giving effect to payments of principal on
the Class A-1 Notes and Class A-2 Notes pursuant to Section
3.05(a)(ii) of the Indenture on such Payment Date.
Class B Adjusted Principal Balance: With respect to any
Payment Date, the Principal Balance of the Class B Notes, after
giving effect to any distributions thereon pursuant to Section
3.05(a)(ii), (v) and (vi) of the Indenture on all Payments Dates
including the current Payment Date less all Net Charge-Off allo-
cated to the Class B Notes after giving effect to any such
allocation to be made on such Payment Date.
Class B Notes: The Class B Notes issued pursuant to Article
II of the Indenture.
Class B Targeted Principal Balance: With respect to any
Payment Date an amount equal to (i) the Series 1997-1
Participation Interest Invested Amount multiplied by 84.5%, less
(ii) the Class A Adjusted Principal Balance immediately prior to
such Payment Date and after giving effect to payments of
principal on the Class A Notes pursuant to Section 3.05(a)(ii) of
the Indenture on such Payment Date.
Class Interest Distribution: With respect to any Payment
Date and Class of Notes, the sum of (a) the amount of interest
accrued during the Interest Period relating to such Payment Date
at the related Note Rate for such Class of Notes on the sum of
(i) the Principal Balance of such Class of Notes immediately
prior to such Payment Date and (ii) any previously accrued and
unpaid interest on such Class of Notes for prior Payment Dates,
and (b) any previously accrued and unpaid interest on such Class
of Notes for prior Payment Dates.
Class Percentage: With respect to each Class of Notes and
Payment Date, the ratio, expressed as a percentage, of the aggre-
gate Principal Balance of such Class of Notes to the aggregate
Principal Balance of the Notes, in each case immediately prior to
such Payment Date.
Closing Date: March 12, 1997.
Code: The Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
Corporate Trust Office: With respect to the Indenture
Trustee, Certificate Registrar, Certificate Paying Agent and
Paying Agent, the principal corporate trust office of the
Indenture Trustee and Note Registrar at which at any particular
time its corporate trust business shall be principally admin-
istered, which office at the date of the execution of this in-
strument is located at 000 Xxxxxxx Xxxxxx, Xxxxx 12 East, New
York, New York 10286, Attention: Corporate Trust Administration
Asset-Backed Unit. With respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee at which at
any particular time its corporate trust business shall be admin-
istered, which office at the date of the execution of the Trust
Agreement is located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trustee Administration.
Default: Any occurrence which is or with notice or the
lapse of time or both would become an Event of Default.
Definitive Notes: The meaning specified in Section 4.06 of
the Indenture.
Deposit Trust: The trust created pursuant to the Pooling
and Servicing Agreement.
Deposit Trustee: Texas Commerce Bank National Association,
as successor trustee to The Chase Manhattan Bank, N.A., and any
successor thereto under the Pooling and Servicing Agreement.
Depository or Depository Agency: The Depository Trust
Company or a successor appointed by the Indenture Trustee with
the approval of the Seller. Any successor to the Depository
shall be an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act and the regulations
of the Securities and Exchange Commission thereunder.
Depository Participant: A Person for whom, from time to
time, the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Designated Certificate: The meaning specified in Section
3.11 of the Trust Agreement.
Determination Date: With respect to any Payment Date, the
5th Business Day prior to such Payment Date occurs or if such day
is not a Business Day, the next succeeding Business Day.
Distribution Date: The meaning specified in the Supplement.
Due Period: The meaning assigned to such term in the
Pooling and Servicing Agreement.
Eligible Deposit Account: The meaning assigned to such term
in the Pooling and Servicing Agreement.
Eligible Investments: The meaning assigned to such term in
the Pooling and Servicing Agreement.
ERISA: The meaning assigned to such term in the Pooling and
Servicing Agreement.
Event of Default: With respect to the Indenture, any one of
the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any
administrative or governmental body):
i. a default in the payment on any related Payment
Date of any interest accrued on any Note during the related
Interest Period, and such default shall continue for a
period of five days;
ii. a default in the payment of the principal of or any
installment of the principal of any Note when the same
becomes due and payable;
iii. default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture,
or any representation or warranty of the Issuer made in the
Indenture or in any certificate or other writing delivered
pursuant thereto or in connection therewith proving to have
been incorrect in any material respect as of the time when
the same shall have been made and shall have had a material
adverse effect on any Noteholders, and such default shall
continue or not be cured, or the circumstance or condition
in respect of which such representation or warranty was
incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given,
by registered or certified mail, to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee
by the Holders of at least 25% in principal amount of the
Notes then outstanding, a written notice specifying such
default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is
a notice of default hereunder;
iv. the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the
Issuer or any substantial part of the Indenture Trust Estate
in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Indenture Trust
Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or
v. the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency
or other similar law now or hereafter in effect, or the
consent by the Issuer to the entry of an order for relief in
an involuntary case under any such law, or the consent by
the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the
making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the
foregoing.
Excess Interest: With respect to any Payment Date the
amount if any by which Series 1997-1 Participation Interest
Monthly Interest exceeds the sum of (a) the amount to be
distributed pursuant to Section 3.05(a)(i) of the Indenture on
such Payment Date and (b) Series 1997-1 Participation Interest
Charge-Offs for the related Due Period.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
Expenses: The meaning specified in Section 8.02 of the
Trust Agreement.
FASIT: Financial Asset Securitization Investment Trust as
passed by Congress in the Small Business Tax Xxxx, H.R. 3448, in
August 1996, and as enacted and amended from time to time.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Final Scheduled Payment Date: To the extent not previously
paid, the principal balance of each Class of Notes will be due on
the Payment Date in March 2007.
Grant: Mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x
xxxx upon and a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture.
A Grant of the Indenture Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including
the immediate and continuing right to claim for, collect, receive
and give receipt for principal and interest payments in respect
of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise
all rights and options, to bring proceedings in the name of the
granting party or otherwise, and generally to do and receive
anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
HFC: Household Finance Corporation, a Delaware corporation
and a subsidiary of Household International, Inc.
Holdback Amount: An amount initially equal to the excess of
(i) the Series 1997-1 Participation Interest Initial Invested
Amount over (ii) the aggregate Initial Principal Balances of the
Class A Notes, the Class B Notes and the Certificates. Such
amount will be reduced through payments made pursuant to Section
3.05(a)(iv) and 3.05(a)(vi) of the Indenture and will be reduced
or increased through the allocation of Series 1997-1
Participation Interest Charge-Offs and Reversals pursuant to
Section 3.05(c) and (d) of the Indenture.
Holder: Any of the Noteholders or Certificateholders.
Indemnified Party: The meaning specified in Section 8.02 of
the Trust Agreement.
Indenture: The Indenture dated as of March 1, 1997 between
the Issuer, as debtor, and the Indenture Trustee, as Indenture
Trustee, as may be amended from time to time.
Indenture Collateral: The meaning specified in the Granting
Clause of the Indenture.
Indenture Trustee: The Bank of New York, and its successors
and assigns or any successor indenture trustee appointed pursuant
to the terms of the Indenture.
Indenture Trust Estate: The meaning specified in the
Granting Clause of the Indenture.
Independent: When used with respect to any specified
Person, the Person (i) is in fact independent of the Issuer, any
other obligor on the Notes, the Seller, the Servicer and any
Affiliate of any of the foregoing Persons, (ii) does not have any
direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons and
(iii) is not connected with the Issuer, any such other obligor,
the Seller, the Servicer or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Independent Certificate: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 10.01 of the Indenture, made by an
Independent appraiser or other expert appointed by the Issuer and
approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in this Indenture and
that the signer is Independent within the meaning thereof.
Initial Certificate Balance: $33,600,000.
Initial Principal Balance: With respect to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes,
$729,600,000, $48,000,000, $62,400,000 and $45,600,000, respec-
tively.
Insolvency Event: With respect to a specified Person, (a)
the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any
substantial part of its property in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs,
and such decree or order shall remain unstayed and in effect for
a period of 60 consecutive days; or (b) the commencement by such
Person of a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in
an involuntary case under any such law, or the consent by such
Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its
property, or the making by such Person of any general assignment
for the benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due or the
admission by such Person in writing (as to which the Indenture
Trustee shall have notice) of its inability to pay its debts
generally, or the adoption by the Board of Directors or managing
member of such Person of a resolution which authorizes action by
such Person in furtherance of any of the foregoing.
Interest Period: With respect to any Payment Date other
than the first Payment Date, the period beginning on the preced-
ing Payment Date and ending on the day preceding such Payment
Date, and in the case of the first Payment Date, the period
beginning on the Closing Date and ending on the day preceding the
first Payment Date.
Issuer: The Household Consumer Loan Trust 1997-1, a
Delaware business trust, or its successor in interest.
Issuer Request: A written order or request signed in the
name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
LIBOR: For any Interest Period other than the first
Interest Period, the rate for United States dollar deposits for
one month which appears on the Telerate Screen Page 3750 as of
11:00 A.M., London time, on the second LIBOR Business Day prior
to the first day of such Interest Period. With respect to the
first Interest Period, the rate for United States dollar deposits
for one month which appears on the Telerate Screen Page 3750 as
of 11:00 A.M., London time, two LIBOR Business Days prior to the
Closing Date. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such
service is no longer offered, such other service for displaying
LIBOR or comparable rates as may be reasonably selected by the
Indenture Trustee after consultation with the Servicer), the rate
will be the Reference Bank Rate. If no such quotations can be
obtained and no Reference Bank Rate is available, LIBOR will be
LIBOR applicable to the preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State
of New York or Illinois, or in the city of London, England are
required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority
right or interest or other security agreement or preferential
arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agree-
ment, any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any financing
statement under the UCC (other than any such financing statement
filed for informational purposes only) or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however,
that any assignment pursuant to Section 6.02 of the Pooling and
Servicing Agreement shall not be deemed to constitute a Lien.
Minimum Adjusted Principal Balance: With respect to the
Class A-2 Notes, Class A-3 Notes and Class B Notes, $16,000,000,
$20,800,000, and $15,200,000, respectively.
Monthly Security Report: The report attached as Exhibit C
to the Indenture.
Monthly Servicer's Certificate: The Monthly Servicer's
Certificate attached to the Supplement for Series 1997-1 as
Exhibit X.
Xxxxx'x: Xxxxx'x Investors Service, Inc. or its successor
in interest.
Net Charge-Off: With respect to any Payment Date, the
aggregate amount of Optimum Monthly Principal not distributed on
such Payment Date and all prior Payment Dates less the aggregate
amount of Reversals allocated on such Payment Date and prior
Payment Dates.
Note Depositary Agreement: The DTC Letter of
Representations dated as of the Closing Date by and among, The
Depository Trust Company, the Indenture Trustee and the Issuer.
Note Owner: The Beneficial Owner of a Note.
Note Rate: With respect to any Interest Period, a per annum
rate equal to the sum of (a) LIBOR and (b) 0.125% with respect to
the Class A-1 Notes, 0.250% with respect to the Class A-2 Notes,
0.350% with respect to the Class A-3 Notes, and 0.65% (or such
other percentage determined pursuant to an amendment to the
Indenture adopted pursuant to Section 9.02 thereof not to exceed
0.875%) with respect to the Class B Notes but in no event greater
than 12.5%, 14.0%, 14.0% and 14.0% per annum, respectively.
Note Register: The register maintained by the Note
Registrar in which the Note Registrar shall provide for the
registration of Notes and of transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as
Note Registrar.
Noteholder: The Person in whose name a Note is registered
in the Note Register, except that, any Note registered in the
name of the Seller, the Issuer or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding
and the registered holder will not be considered a Noteholder or
holder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the
Trust Agreement provided that, in determining whether the
Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or
waiver, only Notes that the Indenture Trustee or the Owner
Trustee knows to be so owned shall be so disregarded. Owners of
Notes that have been pledged in good faith may be regarded as
Holders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes or any Affiliate of any
of the foregoing Persons.
Notes: Each of the Class A Notes and Class B Notes.
Officer's Certificate: With respect to the Servicer, a
certificate signed by the President, Treasurer or Assistant
Treasurer, a Vice President or an Assistant Vice President, of
the Servicer and delivered to the Indenture Trustee. With
respect to the Issuer, a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section
10.01 of the Indenture, and delivered to the Indenture Trustee.
Unless otherwise specified, any reference in the Indenture to an
Officer's Certificate shall be to an Officer's Certificate of any
Authorized Officer of the Issuer.
Opinion of Counsel: A written opinion of counsel who may be
in-house counsel for the Servicer, Seller or Household Inter-
national, Inc. if acceptable to the Indenture Trustee, and the
Rating Agencies or counsel for the Seller, as the case may be.
Optimum Monthly Principal: As to any Payment Date, the sum
of Available Investor Principal Collections, any Series 1997-1
Participation Interest Charge-Offs during the preceding Due
Period and the lesser of Excess Interest and the Net Charge-Off
as of the end of the preceding Payment Date.
Outstanding: With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and
delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar
or delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other
Notes have been executed, authenticated and delivered pur-
suant to the Indenture unless proof satisfactory to the
Indenture Trustee is presented that any such Notes are held
by a holder in due course.
Overcollateralization Amount: As to any Payment Date, the
amount by which the Series 1997-1 Participation Interest Invested
Amount exceeds the Aggregate Security Balances in each case after
giving effect to distributions on such Payment Date.
Overcollateralization Minimum Amount: $13,600,000.
Owner Trust Estate: The corpus of the Issuer created by the
Trust Agreement.
Owner Trustee: Chase Manhattan Bank Delaware and its
successors and assigns or any successor owner trustee appointed
pursuant to the terms of the Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed
pursuant to Section 3.03 of the Indenture and Section 3.10 of the
Trust Agreement, which initially shall be the Indenture Trustee.
Payment Account: The account established by the Indenture
Trustee pursuant to Section 8.02 of the Indenture. The Payment
Account shall be an Eligible Deposit Account.
Payment Date: The 15th day of each month, or if such day is
not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Payment Date and
any Note, the percentage obtained by dividing the Security
Balance of such Note prior to distributions on such Payment Date
by the aggregate of the Security Balances of all Notes of the
same Class. With respect to any Certificate, the percentage
obtained by dividing the denomination specified on such
Certificate by the Initial Principal Balance of the Certificates.
Person: The meaning assigned to such term in the Pooling
and Servicing Agreement.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement dated as of September 1, 1995, as supplemented by the
Supplement for Series 1997-1 dated as of March 1, 1997, by and
among the Seller, the Servicer and the Deposit Trustee, as each
of the foregoing may be amended from time to time.
Principal Balance: With respect to any Payment Date and
each Note, the Initial Principal Balance thereof, reduced by all
distributions of principal thereon prior to such Payment Date.
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
Rating Agency: The meaning assigned to such term in the
Pooling and Servicing Agreement.
Receivables: The meaning assigned to such term in the
Pooling and Servicing Agreement.
Receivables Purchase Agreement: The meaning assigned to
such term in the Pooling and Servicing Agreement.
Record Date: With respect to the Notes and any Payment
Date, the Business Day next preceding such Payment Date and with
respect to the Certificates and any Payment Date, the last
Business Day of the month preceding the month of such Payment
Date.
Reference Bank Rate: With respect to any Interest Period,
as follows: the arithmetic mean (rounded upwards, if necessary,
to the nearest one sixteenth of a percent) of the offered rates
for United States dollar deposits for one month which are offered
by the Reference Banks as of 11:00 A.M., London time, on the
second LIBOR Business Day prior to the first day of such Interest
Period to prime banks in the London interbank market for a period
of one month in amounts approximately equal to the Aggregate
Security Balance; provided that at least two such Reference Banks
provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by
the Indenture Trustee after consultation with the Servicer, as of
11:00 A.M., New York City time, on such date for loans in U.S.
Dollars to leading European Banks for a period of one month in
amounts approximately equal to the Aggregate Security Balance.
If no such quotations can be obtained, the Reference Bank Rate
shall be the Reference Bank Rate applicable to the preceding
Interest Period.
Reference Banks: Three money center banks as selected by
the Indenture Trustee after consultation with the Servicer.
Registered Holder: The Person in whose name a Note is
registered in the Note Register on the applicable Record Date.
Responsible Officer: With respect to the Indenture Trustee,
any officer of the Indenture Trustee with direct responsibility
for the administration of the Indenture and also, with respect to
a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity
with the particular subject.
Reversals: With respect to any Payment Date the sum of (i)
the Net Charge-Off previously allocated, to the extent of Excess
Interest for such Payment Date and (ii) the amounts treated as
Available Investor Principal Collections pursuant to Section
4.11(a)(iv) of the Supplement for the related Distribution Date;
provided however, in no event will such Reversals exceed the Net
Charge-Off.
Sale: The meaning assigned to such term in Section 5.15 of
the Indenture.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
Security: Any of the Certificates or Notes.
Security Balance: The Principal Balance of the Notes, or
the Certificate Balance, as the case may be.
Security Collections: With respect to any Payment Date the
sum of Series 1997-1 Participation Interest Monthly Interest and
Series 1997-1 Participation Interest Monthly Principal for such
Payment Date.
Securityholder or Holder: Any Noteholder or a Certificate-
holder.
Seller: Household Consumer Loan Corporation, a Nevada
corporation and a wholly-owned, special purpose subsidiary of
Household Finance Corporation, or its successor in interest.
Seller's Trust Amount: The meaning assigned to such term in
the Pooling and Servicing Agreement.
Series Participation Interest: The meaning assigned to such
term in the Pooling and Servicing Agreement.
Series 1997-1 Participation Interest: The Series 1997-1
Participation Interest issued pursuant to the Pooling and
Servicing Agreement.
Series 1997-1 Participation Interest Charge-Offs: The
meaning assigned to such term in the Pooling and Servicing
Agreement.
Series 1997-1 Participation Interest Invested Amount: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Series 1997-1 Participation Interest Monthly Interest: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Series 1997-1 Participation Interest Monthly Principal: The
meaning assigned to such term in the Pooling and Servicing Agree-
ment.
Servicer: HFC and its successors and assigns.
Servicer Default: An event specified in Section 10.01 of
the Pooling and Servicing Agreement.
Single Certificate: A Certificate in the denomination of
$1,000,000.
Single Note: A Note in the denomination of $100,000.
Standard & Poor's: Standard & Poor's Ratings Services, a
Division of The XxXxxx-Xxxx Companies, Inc., or its successor in
interest.
Successor Designated Certificateholder: The meaning
assigned to such term in Section 9.02 of the Trust Agreement.
Telerate Screen Page 3750: The display designated as page
3750 on the Telerate Service (or such other page as may replace
page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks).
Treasury Regulations: Regulations, including proposed or
temporary Regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regula-
tions shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.
Trust Agreement: The Trust Agreement dated as of March 1,
1997 between the Owner Trustee and the Seller, as amended from
time to time.
Trust Indenture Act or TIA: The Trust Indenture Act of
1939, as amended from time to time, as in effect on any relevant
date.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is
delivered pursuant to Section 3.03 of the Trust Agreement, dated
as of March 1, 1997 (the "Trust Agreement"), among the Household
Consumer Loan Corporation, as seller and the entity who is the
general partner for tax purposes (the "Designated Holder") and
Chase Manhattan Bank Delaware, as Owner Trustee, in connection
with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial
Owner"), or nominee on behalf of the Beneficial Owner of the
Household Consumer Loan Asset Backed Certificates, Series 1997-1
(the "Certificate"). Capitalized terms used but not defined in
this certificate have the respective meanings given them in the
Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a
nominee), and in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS
Form W-9 relating to such holder.
To confirm to the Issuer that the provisions of Section 1446 of
the Internal Revenue Code (relating to withholding tax on foreign
partners) do not apply in respect of the Certificate held by the
undersigned, the undersigned hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is) not a non-
resident alien for purposes of U.S. income
taxation;
2. My (The Beneficial Owner's) name and home
address are:
;
and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security
Number) is .
B. Corporate, Partnership or Other Entity as
Beneficial Owner
1. (Name of the
Beneficial Owner) is not a foreign
corporation, foreign partnership, foreign
trust or foreign estate (as those terms are
defined in the Code and Treasury
Regulations);
2. The Beneficial Owner's office address and
place of incorporation (if applicable) is
; and
3. The Beneficial Owner's U.S. employer
identification number is .
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner,
the undersigned certifies that this certificate has been made in
reliance upon information contained in:
an IRS Form W-9
a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the
undersigned agrees to notify the Issuer at least thirty (30) days
prior to the date that the form relied upon becomes obsolete, and
(ii) in connection with change in Beneficial Owners, the
undersigned agrees to submit a new Certificate of Non-Foreign
Status to the Issuer promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee
thereof, agrees to notify the Issuer within sixty (60) days of
the date that the Beneficial Owner becomes a foreign person. The
undersigned understands that this certificate may be disclosed to
the Internal Revenue Service by the Issuer and any false
statement contained therein could be punishable by fines,
imprisonment or both.
Under penalties of perjury, I declare that I have examined
this certificate and to the best of my knowledge and belief it is
true, correct and complete and will further declare that I will
inform the Issuer of any change in the information provided
above, and, if applicable, I further declare that I have the
authority* to sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of
attorney must accompany this certificate.
EXHIBIT G
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
[Certificate Registrar]
Re: Household Consumer Loan Trust 1997-1
Consumer Loan Asset Backed Certificates,
Series 1997-1 (the "Certificates")
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned
Certificates, we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from
the registration requirements of the Act and any such laws, (b)
we are an "accredited investor," as defined in Regulation D under
the Act, and have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and
risks of investments in the Certificates, (c) we have had the
opportunity to review the Trust Agreement, Indenture and Pooling
and Servicing Agreement and we have had the opportunity to ask
questions of and receive answers from the Seller concerning the
purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit
plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or a plan that is subject to Section
4975 of the Internal Revenue Code of 1986, as amended, nor are we
acting on behalf of or using the assets of any such plan, [or if
the Purchaser is an insurance company, a representation that the
Purchaser is an insurance company which is purchasing such
certificates with funds contained in an "insurance company
general account" (as such term is defined in section v(e) of
prohibited transaction class exemption 95-60 ("ptce 95-60")),
that the purchase and holding of such certificates are covered
under ptce 95-60 and that ptce 95-60 is a valid and available
exemption,] or (iv) in the case of any such proposed transferee
which is a plan, an opinion of counsel satisfactory to the Owner
Trustee and the Seller to the effect set forth in the agreement
(e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such
Certificates (but without prejudice to our right at all times to
sell or otherwise dispose of the Certificates in accordance with
clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates
from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, (g) we will
not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or
is exempt from such registration requirements, and if such
transfer is made pursuant to an exemption other than Rule 144A,
we will, if requested, at our expense provide an opinion of
counsel satisfactory to the addressees of this certificate that
such sale, transfer or other disposition may be made pursuant to
an exemption from the Act, (2) the purchaser or transferee of
such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the
purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Trust Agreement, and
(h), either (i) we are a "C Corporation" under the Internal
Revenue Code of 1986, as amended, or (ii) we have provided such
disclosure concerning our status for federal income tax purposes
and the status and economic interest of our beneficial owners, as
the Issuer or its representatives have reasonably requested to
determine that our acquisition of the Certificates will not
subject the Issuer to an entity level tax.
Very truly yours,
[TRANSFEREE]
By:
Authorized Officer
