Exhibit 4.2
EXECUTION COPY
AMENDED AND RESTATED
TRUST AGREEMENT
among
HOUSEHOLD AUTO RECEIVABLES CORPORATION,
U.S. BANK NATIONAL ASSOCIATION
Owner Trustee
and
(For certain limited purposes only)
U.S. BANK TRUST NATIONAL ASSOCIATION
Delaware Trustee
Dated as of August 8, 2002
TABLE OF CONTENTS
Page
ARTICLE I Definitions....................................................................................1
Section 1.1. Capitalized Terms................................................................1
Section 1.2. Other Definitional Provisions....................................................3
Section 1.3. Action by or Consent of Noteholders and Certificateholders.......................3
Section 1.4. Material Adverse Effect..........................................................4
ARTICLE II Organization..................................................................................4
Section 2.1. Name.............................................................................4
Section 2.2. Office...........................................................................4
Section 2.3. Purposes and Powers..............................................................4
Section 2.4. Appointment of Owner Trustee and Delaware Trustee................................5
Section 2.5. Initial Capital Contribution of Owner Trust Estate...............................5
Section 2.6. Declaration of Trust.............................................................5
Section 2.7. Liability........................................................................6
Section 2.8. Title to Owner Trust Estate......................................................6
Section 2.9. Situs of Owner Trust Estate......................................................6
Section 2.10. Representations and Warranties of the Depositor..................................6
Section 2.11. Federal Income Tax Allocations...................................................8
Section 2.12. Covenants of the Depositor.......................................................8
Section 2.13. Covenants of the Certificateholders..............................................9
ARTICLE III Certificates and Transfer of Interests......................................................10
Section 3.1. Initial Ownership...............................................................10
Section 3.2. The Certificates................................................................10
Section 3.3. Authentication of Certificates..................................................11
Section 3.4. Registration of Transfer and Exchange of Certificates...........................11
Section 3.5. Mutilated, Destroyed, Lost or Stolen Certificates...............................12
Section 3.6. Persons Deemed Certificateholders...............................................13
Section 3.7. Access to List of Certificateholders' Names and Addresses.......................13
Section 3.8. Maintenance of Office or Agency.................................................13
Section 3.9. ERISA Restrictions..............................................................13
Section 3.10. Securities Matters..............................................................14
Section 3.11. Distributions...................................................................14
Section 3.12. Certificate Paying Agent........................................................14
ARTICLE IV Voting Rights and Other Actions..............................................................14
Section 4.1. Prior Notice to Holders with Respect to Certain Matters.........................14
Section 4.2. Action by Certificateholders with Respect to Certain Matters....................15
Section 4.3. Action by Certificateholders with Respect to Bankruptcy.........................15
Section 4.4. Restrictions on Certificateholders' Power.......................................15
Section 4.5. Majority Control................................................................16
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Section 4.6. Certain Litigation Matters......................................................16
ARTICLE V Certain Duties................................................................................17
Section 5.1. Accounting and Records to the Noteholders, Certificateholders, the
Internal Revenue Service and Others.............................................17
Section 5.2. Signature on Returns; Tax Matters Partner.......................................17
ARTICLE VI Authority and Duties of Owner Trustee........................................................18
Section 6.1. General Authority...............................................................18
Section 6.2. General Duties..................................................................18
Section 6.3. Action upon Instruction.........................................................18
Section 6.4. No Duties Except as Specified in this Agreement or in Instructions..............19
Section 6.5. No Action Except under Specified Documents or Instructions......................19
Section 6.6. Restrictions....................................................................20
ARTICLE VII Concerning the Owner Trustee................................................................20
Section 7.1. Acceptance of Trust and Duties..................................................20
Section 7.2. Furnishing of Documents.........................................................21
Section 7.3. Representations and Warranties..................................................21
Section 7.4. Reliance; Advice of Counsel.....................................................22
Section 7.5. Not Acting in Individual Capacity...............................................23
Section 7.6. Owner Trustee Not Liable for Certificates or Receivables........................23
Section 7.7. Owner Trustee May Own Certificates and Notes....................................23
Section 7.8. Payments from Owner Trust Estate................................................23
Section 7.9. Doing Business in Other Jurisdictions...........................................24
ARTICLE VIII Compensation of Owner Trustee and Delaware Trustee.........................................24
Section 8.1. Owner Trustee's and Delaware Trustee's Fees and Expenses........................24
Section 8.2. Indemnification.................................................................24
Section 8.3. Payments to the Owner Trustee and Delaware Trustee..............................25
Section 8.4. Non-recourse Obligations........................................................25
ARTICLE IX Termination of Agreement.....................................................................25
Section 9.1. Termination of Agreement........................................................25
ARTICLE X Successor Owner Trustees and Delaware Trustees Additional Owner Trustees......................27
Section 10.1. Eligibility Requirements for Owner Trustee and Delaware Trustee.................27
Section 10.2. Resignation or Removal of Owner Trustee or Delaware Trustee.....................27
Section 10.3. Successor Owner Trustee or Delaware Trustee.....................................28
Section 10.4. Merger or Consolidation of Owner Trustee or Delaware Trustee....................29
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Section 10.5. Appointment of Co-Trustee or Separate Trustee...................................29
ARTICLE X-A Authority and Duties of Delaware Trustee...................................................31
Section 10A.1 ACCEPTANCE OF TRUST.............................................................31
Section 10A.2 DUTIES OF DELAWARE TRUSTEE......................................................31
Section 10A.3 REPRESENTATIONS AND WARRANTIES..................................................32
Section 10A.4 NOT ACTING IN INDIVIDUAL CAPACITY...............................................33
ARTICLE XI Miscellaneous................................................................................33
Section 11.1. Supplements and Amendments......................................................33
Section 11.2. No Legal Title to Owner Trust Estate in Certificateholders......................34
Section 11.3. Limitations on Rights of Others.................................................35
Section 11.4. Notices.........................................................................35
Section 11.5. Severability....................................................................35
Section 11.6. Separate Counterparts...........................................................35
Section 11.7. Assignments; Support Provider...................................................35
Section 11.8. Covenants of the Depositor......................................................36
Section 11.9. No Petition.....................................................................36
Section 11.10. No Recourse.....................................................................36
Section 11.11. Headings........................................................................36
Section 11.12. GOVERNING LAW...................................................................36
Section 11.13. Master Servicer.................................................................36
Section 11.14. Third-Party Beneficiary.........................................................37
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
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THIS AMENDED AND RESTATED
TRUST AGREEMENT, dated as of August 8,
2002, among
HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada corporation (the
"Depositor"), U.S. BANK NATIONAL ASSOCIATION, a national banking association, as
Owner Trustee (the "Owner Trustee") and U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association with its principal place of business in Delaware,
as Delaware Trustee (the "Delaware Trustee"), amends and restates in its
entirety that certain
Trust Agreement, dated as of August 8, 2002, among the
Depositor, the Owner Trustee and the Delaware Trustee.
ARTICLE I
DEFINITIONS
Section 1.1. CAPITALIZED TERMS. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Agreement" shall mean this Amended and Restated Agreement, as the
same may be amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. CODE Section 3801 et seq. as the same may be amended from
time to time.
"Certificates" means, if the Depositor elects (i) to evidence its
interest in certificated form pursuant to Section 3.2, the certificate
substantially in the form of Exhibit A or (ii) to have its interest be
uncertified pursuant to Section 3.2, such uncertificated interest.
"Certificate Majority" shall have the meaning assigned to such term
in Section 4.1.
"Certificate Paying Agent" means JPMorgan Chase Bank, a New York
banking corporation.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
000 Xxxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000, Attention: Corporate
Trust Administration, and,
with respect to the Delaware Trustee, the principal corporate trust office of
the Delaware Trustee located at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, or, in each case, at such other address as the
Owner Trustee or Delaware Trustee, as the case may be, may designate by
notice to the Certificateholders and the Depositor, or the principal
corporate trust office of any successor Owner Trustee or Delaware Trustee
(the address of which the successor owner trustee or Delaware Trustee will
notify the Certificateholders, the Insurer and the Depositor).
"Delaware Trustee" shall mean U.S. Bank Trust National Association,
a national banking association with its principal place of business in Delaware,
not in its individual capacity but solely as Delaware trustee under this
Agreement, and any successor Delaware Trustee hereunder.
"Depositor" shall mean
Household Auto Receivables Corporation in its
capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Holder" or "Certificateholder" shall mean a Person in whose name a
Certificate is registered on the Certificate Register.
"Household" shall mean Household Finance Corporation.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 8.2.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Master Sale and Servicing Agreement, all funds on deposit from
time to time in the Trust Accounts and all other property of the Trust from time
to time, including any rights of the Owner Trustee and the Trust pursuant to the
Master Sale and Servicing Agreement and each Related Document.
"Owner Trustee" shall mean U.S. Bank National Association, a
national banking association, not in its individual capacity but solely as Owner
Trustee under this Agreement, and any successor Owner Trustee hereunder.
"Percentage Interest" shall mean, with respect to a Certificate, the
portion of the interests in the Trust represented by a Certificate, as reflected
in the Certificate Register.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Securities Act" shall have the meaning assigned to such term in
Section 3.4.
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"Series Trust Estate" shall mean the property granted to the
Indenture Trustee on behalf of the Trust pursuant to Section 1.02 of the Series
Supplement.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
Section 1.2. OTHER DEFINITIONAL PROVISIONS. (a) Capitalized
terms used herein and not otherwise defined have the meanings assigned to
them in the Master Sale and Servicing Agreement or, if not defined therein,
in the Indenture; PROVIDED THAT, as used herein, Series means only the Series
of Notes and Series of Certificates with respect to which the Trust is the
Issuer and only such Series Trust Estates included in the Owner Trust Estate.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any Certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any Certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
Section 1.3. ACTION BY OR CONSENT OF NOTEHOLDERS AND
CERTIFICATEHOLDERS. Whenever any provision of this Agreement refers to action
to be taken, or consented to, by Noteholders or Certificateholders, such
provision shall be deemed to refer to the Certificateholder or Noteholder, as
the case may be, of record as of the Record Date immediately preceding the
date on which such action is to be taken, or consent given, by Noteholders or
Certificateholders. Solely for the purposes of any
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action to be taken, or consented to, by Noteholders, any Note registered in
the name of the Depositor or any Affiliate thereof shall be deemed not to be
outstanding; PROVIDED, HOWEVER, that, solely for the purpose of determining
whether the Indenture Trustee is entitled to rely upon any such action or
consent, only Notes which the Owner Trustee or the Indenture Trustee knows to
be so owned shall be so disregarded.
Section 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination
is to be made under this Agreement as to whether a given event, action,
course of conduct or set of facts or circumstances could or would have a
material adverse effect on the Noteholders or Certificateholders (or any
similar or analogous determination), such determination shall be made without
taking into account the funds available from claims under any policy or other
Series Support.
ARTICLE II
ORGANIZATION
Section 2.1. NAME. There is hereby formed a trust to be known as
"Household Automotive Trust 2002-2", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
Section 2.2. OFFICE. The principal place of business of the
Trust for purposes of Delaware law shall be in care of the Delaware Trustee
at the Corporate Trust Office of the Delaware Trustee or at such other
address as the Delaware Trustee may designate by written notice to the
Certificateholders, the Insurer and the Depositor. The Trust may establish
additional offices located at such place or places inside or outside the
State of Delaware as the Owner Trustee may designate from time to time by
written notice to the Certificateholders and the Depositor. Initially, the
Trust shall establish one such additional office at the Corporate Trust
Office of the Owner Trustee.
Section 2.3. PURPOSES AND POWER. (a) The purpose of the Trust
is, and the Trust shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture and the Series
Supplement and the Certificates pursuant to this Agreement and the Series
Supplement, and to sell the Notes;
(ii) with the proceeds of the sale of the Notes, to fund the expense
of obtaining any Series Support and to pay the organizational, start-up
and transactional expenses of the Trust and to pay the balance to the
Depositor pursuant to the Master Sale and Servicing Agreement;
(iii) with respect to the Series Trust Estate, to assign, grant,
transfer, pledge, mortgage and convey the Series Trust Estate to the
Indenture Trustee pursuant to the Indenture and the Series Supplement for
the benefit of the Secured Parties;
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(iv) to enter into and perform its obligations under the Basic
Documents and the Related Documents, in each case, to which it is a party;
(v) to acquire, hold and manage the Owner Trust Estate;
(vi) to make distributions on the Certificates in accordance with
their respective terms;
(vii) to own Class SV Preferred Stock of the Depositor;
(viii) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(ix) subject to compliance with the Basic Documents and the Related
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.
(b) The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in connection
with the foregoing or other than as required or authorized by the terms of this
Agreement, the Basic Documents or any Related Documents.
Section 2.4. APPOINTMENT OF OWNER TRUSTEE AND DELAWARE TRUSTEE.
The Depositor hereby appoints the Owner Trustee and the Delaware Trustee as
trustees of the Trust effective as of the date hereof, to have all the
respective rights, powers and duties set forth herein.
Section 2.5. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, on behalf of the Trust, as of the date hereof, the sum of
$1,000 and one share of Class SV Preferred Stock of the Depositor. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the
date hereof, of the foregoing contribution, which shall constitute the
initial Owner Trust Estate. The Depositor shall pay organizational expenses
of the Trust as they may arise.
Section 2.6. DECLARATION OF TRUST. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject
to the conditions set forth herein, on behalf of the Trust, for the use and
benefit of the Certificateholders, subject to the obligations of the Trust
under the Basic Documents. It is the intention of the parties hereto that the
Trust constitute a business trust under the Business Trust Statute and that
this Agreement constitute the governing instrument of such business trust. It
is the intention of the parties hereto that, solely for income and franchise
tax purposes, the Trust shall be treated as a branch; PROVIDED, HOWEVER, that
in the event Certificates are owned by more than one Certificateholder, it is
the intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall then be treated as a partnership and that, unless
otherwise required by appropriate tax authorities, only
5
after such time the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes.
Effective as of the date hereof, the Owner Trustee shall have all rights,
powers and duties set forth herein and to the extent not inconsistent
herewith, in the Business Trust Statute with respect to accomplishing the
purposes of the Trust. The Owner Trustee shall file the Certificate of Trust
with the Secretary of State.
Section 2.7. LIABILITY. (a) The Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
(b) No Holder, other than to the extent set forth in clause (a),
shall have any personal liability for any liability or obligation of the Trust.
Section 2.8. TITLE TO OWNER TRUST ESTATE. (a) Legal title to all
of the Owner Trust Estate shall be vested at all times in the Trust as a
separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The holders of the Certificates shall not have legal title to
any part of the Series Trust Estate. The Holders of the Certificates shall be
entitled to receive distributions with respect to their undivided ownership
interest therein in accordance with the terms hereof and the Series Supplement.
No transfer, by operation of law or otherwise, of any right, title or interest
by any Certificateholder of its ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Series Trust Estate.
Section 2.9. SITUS OF OWNER TRUST ESTATE. The Trust will be
located in the State of Delaware and administered in the State of Illinois.
All bank accounts maintained by the Owner Trustee on behalf of the Trust
shall be located with the Certificate Paying Agent in the State of New York.
Payments will be received by the Certificate Paying Agent on behalf of the
Trust in Illinois and payments will be made by the Trust from New York. The
Trust shall not have any employees in any state other than Delaware;
PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the Owner
Trustee, the Master Servicer or any agent of the Trust from having employees
within or without the State of Delaware. The principal office of the Trust
will be at the Corporate Trust Office in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.
The Depositor makes the following representations and warranties on which the
Owner Trustee relies in accepting the Owner Trust Estate in trust and
executing the Certificates and Notes and upon which any Support Provider
relies in providing any Series Support. Each of the following representations
and warranties shall be deemed to be made on each date on which a Series
Trust Estate is pledged under the Indenture.
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(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly
organized and validly existing as a Nevada corporation with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted and
is proposed to be conducted pursuant to this Agreement and the Basic
Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification and
in which the failure to so qualify would have a material adverse effect on
the business, properties, assets or condition (financial or otherwise) of the
Depositor.
(c) POWER AND AUTHORITY. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out its
terms; the Depositor has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trust; the
Depositor has duly authorized such sale, assignment and deposit to the Trust
by all necessary corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor by
all necessary corporate action.
(d) BINDING OBLIGATIONS. This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Depositor enforceable against the Depositor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) NO CONSENT REQUIRED. To the best knowledge of the Depositor,
no consent, license, approval or authorization or registration or declaration
with, any Person or with any governmental authority, bureau or agency is
required in connection with the execution, delivery or performance of this
Agreement and the Related Documents, except for such as have been obtained,
effected or made or as to which a failure to obtain, effect or make would not
have a material adverse effect on the business, properties, assets or
condition (financial or other) of the Depositor.
(f) NO VIOLATION. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party or
by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents or
any applicable Related Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation
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applicable to the Depositor of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties, PROVIDED, HOWEVER,
that the Receivables will not satisfy the Eligibility Criteria set forth in
Schedule I to the Series Supplement until the Closing Date.
(g) NO PROCEEDINGS. To the best of the Depositor's knowledge,
there are no proceedings or investigations pending or, to its knowledge
threatened against it before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having jurisdiction
over it or its properties (A) asserting the invalidity of this Agreement or
any of the Basic Documents, (B) seeking to prevent the issuance of the
Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of,
this Agreement or any Related Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of any
of the Notes or Certificates.
Section 2.11. FEDERAL INCOME TAX ALLOCATIONS. (a) For so long
as the Trust has a single owner for federal income tax purposes, it will,
pursuant to Treasury Regulations promulgated under section 7701 of the Code,
be disregarded as an entity distinct from the Certificateholder for all
federal income tax purposes. Accordingly, for federal income tax purposes,
the Certificateholder will be treated as (i) owning all assets owned by the
Trust, (ii) having incurred all liabilities incurred by the Trust, and (iii)
all transactions between the Trust and the Certificateholder will be
disregarded.
(b) Neither the Owner Trustee nor any Certificateholder will,
under any circumstances, and at any time, make an election on IRS Form 8832
or otherwise, to classify the Trust as an association taxable as a
corporation for federal, state or any other applicable tax purpose.
(c) In the event that the Trust has two equity owners for federal
income tax purposes, the Trust will be treated as a partnership. At any such
time that the Trust has two equity owners, this Agreement will be amended, in
accordance with Section 11.1 herein, and appropriate provisions will be added
so as to provide for treatment of the Trust as a partnership.
Section 2.12. COVENANTS OF THE DEPOSITOR. The Depositor agrees
and covenants for the benefit of the Owner Trustee and the Indenture Trustee
for the benefit of the Secured Parties, during the term of this Agreement,
and to the fullest extent permitted by applicable law, that:
(a) (i) it shall not create, incur or suffer to exist any
indebtedness or (ii) engage in any business, except (x) as permitted by its
articles of incorporation and the Related Documents and (y) in connection
with a securitization transaction (including warehousing transactions) and
the related documents in which the related indebtedness is issued pursuant to
an indenture having a provision substantially similar to Section 11.18
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of the Indenture; PROVIDED, HOWEVER, that no other Series shall be issued
under the Basic Documents so long as the Notes are outstanding;
(b) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
Section 2.13. COVENANTS OF THE CERTIFICATEHOLDERS. Each
Certificateholder agrees:
(a) to be bound by the terms and conditions of the related
Certificates, of this Agreement and, with respect to the holders of
Certificates, of the Series Supplement, including any supplements or
amendments hereto and to perform the obligations of a Certificateholder as
set forth therein or herein, in all respects as if it were a signatory
hereto. This undertaking is made for the benefit of the Trust, the Owner
Trustee and the Secured Parties;
(b) to hereby appoint the Depositor as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if any, and agree that, if requested by the
Trust, it will sign such federal income tax information return in its
capacity as holder of an interest in the Trust. Each
9
Certificateholder also hereby agrees that in its tax returns it will not take
any position inconsistent with those taken in any tax returns that may be
filed by the Trust;
(c) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee of any transfer by it of a Certificate
in a taxable sale or exchange, within 30 days of the date of the transfer;
(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or the Depositor to
be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action; and
(e) that there shall not be more than 98 other holders of
Certificates.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.1. INITIAL OWNERSHIP. Upon the formation of the Trust
by the contribution by the Depositor pursuant to Section 2.5, the Trust shall
issue an uncertificated ownership interest in the Trust (the "Uncertificated
Certificate") to the Depositor. Unless and until the Depositor transfers all
or a portion of the Percentage Interest represented by such Uncertificated
Certificate, such Uncertificated Certificate shall represent one hundred
percent (100%) of the Percentage Interest.
Section 3.2. THE CERTIFICATES. (a) The Certificates shall be in
uncertificated form with records of interest ownership maintained by the
Certificate Registrar in the Certificate Register. If, on or after the
Closing Date, the holder of any Uncertificated Certificate delivers to the
Owner Trustee a written request that the Uncertificated Certificate specified
in such request be issued in certificated form (a related "Certification
Request"), the Owner Trustee shall promptly issue such Certificate to the
holder thereof in certificated form. If a Certification Request has been
delivered, the Certificate will be issued in registered form, substantially
in the form of Exhibit A, and shall upon issue, be executed and delivered by
the Depositor to the Owner Trustee for authentication and redelivery as
provided in Section 3.3.
(b) If the Certificates are in certificated form, they shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Certificates bearing the manual or
facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on
10
behalf of the Trust, shall be validly issued and entitled to the benefit of
this Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
(c) A transferee of a Certificate (whether in certificated or
uncertificated form) shall become a Certificateholder, and shall be entitled
to the rights and subject to the obligations of a Certificateholder
hereunder, upon due registration of such Certificate in such transferee's
name pursuant to Section 3.4.
(d) No Certificates shall be issued under this Agreement unless
such Certificates have been authorized pursuant to the Series Supplement and
all conditions precedent to the issuance thereof, as specified in the Series
Supplement shall have been satisfied. All Certificates issued under this
Agreement shall be in all respects entitled to the benefits hereof and of the
Owner Trust Estate.
Section 3.3. AUTHENTICATION OF CERTIFICATES. If the Certificates
are in certificated form, the Owner Trustee shall cause the related
Certificates to be executed on behalf of the Trust, authenticated and
delivered to or upon the written order of the Depositor, signed by its
chairman of the board, its president or any vice president, its treasurer or
any assistant treasurer without further corporate action by the Depositor, in
authorized denominations. No Certificate shall entitle its holder to any
benefit under this Agreement or, with respect to a Series, the Series
Supplement, or shall be valid for any purpose, unless there shall appear on
such Certificate a certificate of authentication substantially in the form
set forth in Exhibit A, executed by the Owner Trustee or its authenticating
agent, by manual signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
Section 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES. (a) The Certificate Registrar shall keep or cause to be kept,
at the office or agency maintained pursuant to Section 3.8, a Certificate
Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of
Certificates (whether in certificated or uncertificated form) and of
transfers and exchanges of Certificates (whether in certificated or
uncertificated form) as herein provided. The Owner Trustee shall be the
initial Certificate Registrar.
(b) The Certificate Registrar shall provide the Indenture Trustee
with a list of the names and addresses of the Certificateholders on the
Closing Date in the form which such information is provided to the
Certificate Registrar by the Depositor. Upon any transfers of Certificates,
the Certificate Registrar shall notify the Indenture Trustee of the name and
address of the transferee in writing, by facsimile, on the day of such
transfer.
(c) If a Certificate is in certificated form, upon surrender for
registration of transfer of any Certificate to the Certificate Registrar at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee
shall execute, authenticate
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and deliver, in the name of the designated transferee or transferees, one or
more new Certificates of the same Series in the aggregate Percentage Interest
to be transferred, dated the date of authentication by the Owner Trustee or
any authenticating agent. If a Certificate is in uncertificated form, upon
representation of such Certificate in accordance with Section 3.2, the
Certificate Registrar shall reflect in the Certificate Register the transfer
of the relevant Percentage Interest. If a Certificate is in certificated
form, at the option of the Holder thereof, such Certificate may be exchanged
for one or more other Certificates of the same Series in authorized
denominations of a like Percentage Interest upon surrender of the
Certificates of the same Series, to be exchanged at the office or agency
maintained pursuant to Section 3.8. Certificates may be issued in any
Percentage Interest not to exceed 100%.
(d) Every Certificate presented or, in the case of certificated
Certificates, surrendered for registration of transfer or exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include
membership or participation in the Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Exchange Act. Each certificated
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
Section 3.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee,
such security or indemnity as may be required by them to hold each of them
harmless, then in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee or its authenticating agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Series
principal balance. In connection with the issuance of any new Certificate
under this Section, the Owner Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be
found at any time.
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Section 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by
virtue of becoming a Certificateholder in accordance with this Agreement and
the rules and regulations of the Certificate Registrar shall be deemed to be
bound by the terms of this Agreement. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee and the
Certificate Registrar and any agent of the Owner Trustee and the Certificate
Registrar may treat the Person in whose name any Certificate shall be
registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving distributions pursuant hereto, the Indenture or the
Series Supplement (in the case of a Certificate) and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar nor any
agent of the Owner Trustee or the Certificate Registrar shall be bound by any
notice to the contrary.
Section 3.7. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Owner Trustee or the Certificate Registrar shall furnish or
cause to be furnished to the Master Servicer, the Depositor, the Insurer or
the Indenture Trustee within 15 days after receipt by the Owner Trustee or
the Certificate Registrar of a request therefor from such Person in writing,
a list, of the names and addresses of the Certificateholders as of the most
recent Record Date. If three or more Holders of Certificates or one or more
Holders of Certificates evidencing not less than 25% of the Percentage
Interest apply in writing to the Owner Trustee or the Certificate Registrar,
and such application states that the applicants desire to communicate with
other Certificateholders with respect to their rights under this Agreement,
under the Certificates of such Series or under the Series Supplement and such
application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Owner Trustee or the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to
the current list of Certificateholders of such Series. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to
hold any of the Depositor, the Master Servicer, the Owner Trustee or any
agent thereof accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
Section 3.8. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
or the Certificate Registrar shall maintain in Chicago, Illinois, 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 Owner Trustee initially designates its Corporate Trust Office
for such purposes. The Owner Trustee shall give prompt written notice to the
Depositor, the Certificateholders and any Support Provider of any change in
the location of the Certificate Register or any such office or agency.
Section 3.9. ERISA RESTRICTIONS. The Certificates may not be
acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) that is subject to the provisions of Title I of ERISA,
(ii) a plan (as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code or (iii) any entity whose underlying assets include
assets of a plan described in (i) or (ii) by reason of such plan's investment
in the entity (each, a "Benefit Plan"). The Certificate Registrar shall not
register the
13
transfer of a Certificate unless the transferee has delivered to the Owner
Trustee a representation letter in form and substance satisfactory to the
Owner Trustee to the effect that the transferee is not, and is not acquiring
the Certificate for the account of, a Benefit Plan.
Section 3.10. SECURITIES MATTERS. Notwithstanding anything
contained herein to the contrary, the Owner Trustee shall not be responsible
for ascertaining whether any transfer complies with the registration
provisions or exemptions from the Securities Act, the Exchange Act,
applicable state securities law or the Investment Company Act; PROVIDED,
HOWEVER, that if a certificate is specifically required to be delivered to
the Owner Trustee by a purchaser or transferee of a Certificate, the Owner
Trustee shall be under a duty to examine the same to determine whether it
conforms to the requirements of this Agreement and shall promptly notify the
party delivering the same if such certificate does not so conform.
Section 3.11. DISTRIBUTIONS. Distributions shall be made from
time to time by the Owner Trustee or the Certificate Paying Agent in
accordance with the Percentage Interests of the Certificateholders.
Section 3.12. CERTIFICATE PAYING AGENT. Distributions to be
made in respect of the Certificates pursuant to this Agreement, or the Series
Supplement shall be made by the Certificate Paying Agent, by wire transfer or
check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of the Certificate or the making of any
notation thereon, except as provided in Section 9.1(c) with respect to the
final distribution on a Certificates.
ARTICLE IV
VOTING RIGHTS AND OTHER ACTIONS
Section 4.1. PRIOR NOTICE TO HOLDERS WITH RESPECT TO
CERTAIN MATTERS. With respect to the following matters, the Owner Trustee
shall not take action unless at least 30 days before the taking of such
action, the Owner Trustee shall have notified the Certificateholders in
writing of the proposed action and Certificateholders holding, in the
aggregate, greater than 50% of the Percentage Interests (a "Certificate
Majority") shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust, which amendment shall have satisfied the Rating Agency
Condition (unless such amendment is required to be filed under the Business
Trust Statute or unless such amendment would not materially and adversely affect
the interests of the Holders) and shall have been consented to by the Insurer
(for so long as it is the Controlling Party);
(b) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
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(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
(d) except pursuant to Section 13.1(b) of the Master Sale and
Servicing Agreement, the amendment, change or modification of the Master Sale
and Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially adversely affect
the interests of the Certificateholders; or
(e) the Depositor shall not, without the unanimous consent of the
holders of the Class SV Preferred Stock of the Depositor, institute proceedings
to be adjudicated insolvent, or consent to the institution of any bankruptcy or
insolvency case or proceedings against it, or file or consent to a petition
under any applicable federal or state law relating to bankruptcy, seeking the
Depositor's liquidation or reorganization or any other relief for the
Corporation as debtor, or consent to the appointment of a receiver, liquidator,
assignee, trustee, custodian or sequestrator (or other similar official) of the
Corporation or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any corporate action in furtherance of
such action.
The Owner Trustee shall notify the Certificateholders in writing of
any appointment of a successor Note Registrar or Certificate Registrar within
five Business Days thereof.
Section 4.2. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power (a) to remove the
Master Servicer under the Master Sale and Servicing Agreement or (b) except
as expressly provided in the Indenture and the Series Supplement and at the
written direction of the Certificateholders, sell the Receivables after the
termination of the Indenture. The Owner Trustee shall take the actions
referred to in the preceding sentence only upon written instructions signed
by the Certificateholders, with the prior written consent of the Insurer (for
so long as it is the Controlling Party) and the furnishing of indemnification
satisfactory to the Owner Trustee by the Certificateholders.
Section 4.3. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO
BANKRUPTCY. Until one year and one day following the date of payment in full
of the Notes, the Owner Trustee shall not have the power to, and shall not,
commence any proceeding or other actions contemplated by Section 2.13(d)
hereof relating to the Trust without the prior written consent of the Insurer
(for so long as it is the Controlling Party) and all the Certificateholders
and the delivery to the Owner Trustee by each such Certificateholder of a
certificate certifying that such Certificateholder reasonably believes that
the Trust is insolvent.
Section 4.4. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Trust or the
15
Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.3 or otherwise contrary to law nor shall the Owner
Trustee be obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to
this Agreement or any Basic Document, unless there are no outstanding Notes
and unless the Certificate Majority previously shall have given to the Owner
Trustee a written notice of default and of the continuance thereof, as
provided in this Agreement, and also unless the Certificate Majority shall
have made written request upon the Owner Trustee to institute such action,
suit or proceeding in its own name as Owner Trustee under this Agreement and
shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding, and during such 30-day period no
request or waiver inconsistent with such written request has been given to
the Owner Trustee pursuant to and in compliance with this section or Section
6.3; it being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Owner Trustee,
that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb, or prejudice the rights of
the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner provided in this Agreement and for
the equal, ratable, and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 4.4, each and
every Certificateholder and the Owner Trustee shall be entitled to such
relief as can be given either at law or in equity.
Section 4.5. MAJORITY CONTROL. No Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust except as expressly provided in this Agreement.
Except as expressly provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Certificate
Majority. Except as expressly provided herein, any written notice of the
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by the Certificate Majority at the time of the delivery of such notice.
Section 4.6. CERTAIN LITIGATION MATTERS. (a) The Owner Trustee
and the Delaware Trustee shall provide prompt written notice to the Insurer
of any action, proceeding or investigation of which a Responsible Officer of
the Owner Trustee or the Delaware Trustee as applicable, has actual knowledge
that could adversely affect the Trust or the Owner Trust Estate or the rights
or obligations of the Insurer under any of the Basic Documents, the Note
Policy or any other document delivered with respect thereto.
(b) Neither the Owner Trustee or the Delaware Trustee shall,
without the Insurer's prior written consent (for so long as it is the
Controlling Party) or unless directed by the Insurer (if it is the
Controlling Party), undertake or join any litigation or
16
agree to any settlement of any action, proceeding or investigation that could
adversely affect the Trust or the rights or obligations of the Insurer under
any of the Basic Documents, the Note Policy or any other document delivered
with respect thereto.
ARTICLE V
CERTAIN DUTIES
Section 5.1. ACCOUNTING AND RECORDS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. Subject to
Sections 12.1(b)(iii) and 12.1(c) of the Master Sale and Servicing Agreement,
the Master Servicer shall (a) maintain (or cause to be maintained) the books
of the Trust on a calendar year basis on the accrual method of accounting,
including, without limitation, the allocations of net income under Section
2.11, (b) deliver (or cause to be delivered) to each Certificateholder, as
may be required by the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1, if applicable) to
enable each Certificateholder to prepare its Federal and state income tax
returns, (c) file or cause to be filed, if necessary, such tax returns
relating to the Trust (including a partnership information return, Form
1065), and direct the Owner Trustee or the Master Servicer, as the case may
be, to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
branch, or if applicable, as a partnership, for Federal income tax purposes
and (d) collect or cause to be collected any withholding tax as described in
and in accordance with the Master Sale and Serving Agreement or the Series
Supplement with respect to income or distributions to Certificateholders and
the appropriate forms relating thereto. The Owner Trustee or the Master
Servicer, as the case may be, shall make all elections pursuant to this
Section 5.1 as directed in writing by the Depositor. The Owner Trustee shall
sign all tax information returns, if any, filed pursuant to this Section 5.1
and any other returns as may be required by law, and in doing so shall rely
entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Depositor or the Master Servicer. The Owner
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables.
The Owner Trustee shall not make the election provided under Section 754 of
the Code.
Section 5.2. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a)
Notwithstanding the provisions of Section 5.1 and in the event that the Trust
is characterized as a partnership, the Owner Trustee shall sign on behalf of
the Trust the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall
be signed by the Depositor.
(b) In the event that the Trust is characterized as a
partnership, the Depositor shall be the "tax matters partner" of the Trust
pursuant to the Code.
17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1. GENERAL AUTHORITY. The Owner Trustee is authorized
and directed to execute and deliver on behalf of the Trust the Basic
Documents to which the Trust is named as a party and each certificate or
other document attached as an exhibit to or contemplated by the Basic
Documents to which the Trust is named as a party and any amendment thereto,
in each case, in such form as the Depositor shall approve as evidenced
conclusively by the Owner Trustee's execution thereof, and on behalf of the
Trust, to direct the Indenture Trustee to authenticate and deliver the Notes.
In addition to the foregoing, the Owner Trustee is authorized, but shall not
be obligated, to take all actions required of the Trust pursuant to the Basic
Documents. The Owner Trustee is further authorized from time to time to take
such action as the Certificate Majority recommends with respect to the Basic
Documents so long as such activities are consistent with the terms of the
Basic Documents.
Section 6.2. GENERAL DUTIES. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and to administer the Trust in
accordance with the provisions of this Agreement and in the interest of the
Holders, subject to the Basic Documents. 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
Master Servicer has agreed in the Master Sale and Servicing Agreement to
perform any act or to discharge any duty of the Trust or the Owner Trustee
hereunder or under any Basic Document and the Owner Trustee shall not be
liable for the default or failure of the Master Servicer to carry out its
obligations under the Master Sale and Servicing Agreement.
Section 6.3. ACTION UPON INSTRUCTION. (a) Subject to Article IV,
the Certificate Majority shall have the exclusive right to direct the actions
of the Owner Trustee in the management of the Trust, so long as such
instructions are not inconsistent with the express terms set forth herein or
in any Basic Document. The Certificate Majority shall not instruct the Owner
Trustee in a manner inconsistent with this Agreement or the Basic Documents.
(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
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Certificate Majority and the Insurer requesting instruction as to the course
of action to be adopted, and to the extent the
18
Owner Trustee acts in good faith in accordance with any written instruction
of the Certificate Majority or the Insurer, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall
not have received appropriate instruction within ten days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the Basic Documents or as it shall deem to be in the
best interests of the Certificateholders, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be,
in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Certificate Majority requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement 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 6.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR
IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.3;
and no implied duties or obligations shall be read into this Agreement or any
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or
file any Commission filing for the Trust or to record this 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 (solely in its individual
capacity) and that are not related to the ownership or the administration of
the Owner Trust Estate.
Section 6.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell,
dispose of or
19
otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents or any Related Document and (iii) in accordance with any document
or instruction delivered to the Owner Trustee pursuant to Section 6.3.
Section 6.6. RESTRICTIONS. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation or a publicly traded
partnership for Federal income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1. ACCEPTANCE OF TRUST AND DUTIES. The Owner Trustee
accepts the trust hereby created and agrees to perform its duties hereunder
with respect to such trust but only upon the terms of this Agreement. The
Owner Trustee and the Certificate Paying Agent also agree to disburse all
monies actually received by it constituting part of the Owner Trust Estate
upon the terms of this Agreement or the Basic Documents. The Owner Trustee
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, bad faith
or negligence, (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Owner Trustee in its
individual capacity, (iii) for liabilities arising from the failure of the
Owner Trustee to perform obligations expressly undertaken by it in the last
sentence of Section 6.4 hereof, (iv) for any investments issued by the Owner
Trustee or any branch or affiliate thereof in its commercial capacity or (v)
for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Owner Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions
of the Certificate Majority, the Depositor, the Master Servicer or any
Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document 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;
20
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents or any
Related Document, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness, sufficiency,
value or validity of any of the Owner Trust Estate or for or in respect of
the validity or sufficiency of the Basic Documents or any Related Document,
other than the certificate of authentication on the Certificates, and the
Owner Trustee shall in no event assume or incur any liability, duty or
obligation to the Depositor, any Support Provider, the Indenture Trustee, the
Certificate Paying Agent, any Noteholder or to any Certificateholder, other
than as expressly provided for herein or in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Depositor, any Support Provider, the Indenture Trustee or
the Master Servicer under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the
obligations under this Agreement or the Basic Documents that are required to
be performed by the Depositor or the Certificate Paying Agent under this
Agreement, by the Indenture Trustee under the Indenture, the Series
Supplement or any Related Document or the Master Servicer under the Master
Sale and Servicing Agreement or the Series Supplement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document at the request, order or
direction of the Certificate Majority or any of the Certificateholders,
unless such Certificate Majority or Certificateholders have offered to the
Owner Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for other than its
negligence, bad faith or willful misconduct in the performance of any such
act.
Section 7.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee or the Delaware Trustee under the Basic Documents.
Section 7.3. REPRESENTATIONS AND WARRANTIES. The Owner Trustee
hereby represents and warrants, in its individual capacity, to the Depositor,
the Holders and any Support Provider (which shall have relied on such
representations and warranties in issuing any policy relating to Series
Support), that:
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(a) It is a national banking association, duly organized and
validly existing under the laws of the United States. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware state law, governmental rule or regulation
governing the banking or trust powers of it or any judgment or order binding
on it, or constitute any default under its charter documents or by-laws or
any indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Owner Trustee, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
Section 7.4. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept
a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by
the treasurer, secretary or other authorized officers of the relevant party,
as to such fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by
the Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written
opinion or advice of any such
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counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any Basic Document.
Section 7.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as
provided in this Article VII, in accepting the trusts hereby created the
Owner Trustee acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 7.6. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR
RECEIVABLES. The recitals contained herein and in certificated Certificates
(other than the signature and countersignature of the Owner Trustee on such
Certificates) shall be taken as the statements of the Depositor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Certificates (other than the
signature and countersignature of the Owner Trustee on certificated
Certificates) or the Notes, or of any Receivable or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Receivable,
or the perfection and priority of any security interest created by any
Receivable in any Financed Vehicle or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Owner Trust
Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the
compliance by the Depositor, the Master Servicer or any other Person with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation or any action
of the Indenture Trustee or the Master Servicer or any subservicer taken in
the name of the Owner Trustee.
Section 7.7. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates or Notes and may deal with the Depositor, the
Indenture Trustee and the Master Servicer in banking transactions with the
same rights as it would have if it were not Owner Trustee.
Section 7.8. PAYMENTS FROM OWNER TRUST ESTATE All payments to
be made by the Owner Trustee or any Certificate Paying Agent under this
Agreement or any of the Basic Documents shall be made only from the income
and proceeds of the Owner Trust Estate and only to the extent that the Owner
Trustee shall have received income or proceeds from the Owner Trust Estate to
make such payments in accordance with the terms hereof. The Owner Trustee, or
any successor thereto, in its individual capacity,
23
shall not be liable for any amounts payable under this Agreement or any of
the Basic Documents.
Section 7.9. DOING BUSINESS IN OTHER JURISDICTIONS.
Notwithstanding anything contained herein to the contrary, the Owner Trustee
(in its individual and trustee capacities) shall not be required to take any
action in any jurisdiction other than in the State of Delaware if the taking
of such action will, even after the appointment of a co-trustee or separate
trustee in accordance with Section 10.5 hereof, (i) require the consent or
approval or authorization or order of or the giving of notice to, or the
registration with or the taking of any other action in respect of, any state
or other governmental authority or agency of any jurisdiction other than the
State of Delaware; (ii) result in any fee, tax or other governmental charge
under the laws of the State of Delaware becoming payable by the Owner Trustee
(in its individual capacity); or (iii) subject the Owner Trustee (in its
individual capacity) to personal jurisdiction in any jurisdiction other than
the State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by the Owner Trustee (in its individual and
trustee capacities) contemplated hereby.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE AND DELAWARE TRUSTEE
Section 8.1. OWNER TRUSTEE'S AND DELAWARE TRUSTEE'S FEES AND
EXPENSES. The Owner Trustee and the Delaware Trustee shall receive as
compensation for their respective services hereunder such fees as have been
separately agreed upon before the date hereof between Household and the Owner
Trustee and the Delaware Trustee, respectively, and each of the Owner Trustee
and the Delaware Trustee shall be entitled to be reimbursed by the Depositor
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee or the Delaware Trustee, as the case
may be, may employ in connection with the exercise and performance of its
respective rights and duties hereunder or under the Basic Documents.
Section 8.2. INDEMNIFICATION. The Depositor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and Delaware
Trustee (in their respective individual and trustee capacities) and their
respective officers, directors, 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
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by,
or asserted against the Owner Trustee or the Delaware Trustee (in their trust
or individual capacities) or any Indemnified Party in any way relating to or
arising out of this Agreement or the Basic Documents, the Owner Trust Estate,
the administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee or the Delaware Trustee hereunder, except only that the
Depositor shall not be liable for or required to indemnify the Owner Trustee
or the Delaware Trustee from and against Expenses arising or resulting from
any of the matters described
24
in the third sentence of Section 7.1 with respect to the Owner Trustee and
Section 10A.2(c) with respect to the Delaware Trustee. The indemnities
contained in this Section 8.2 and the rights under Section 8.1 shall survive
the resignation or termination of the Owner Trustee or the Delaware Trustee
or the termination of this Agreement. In any event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section, the
Owner Trustee's and Delaware Trustee's choice of legal counsel shall be
subject to the approval of the Depositor which approval shall not be
unreasonably withheld.
Section 8.3. PAYMENTS TO THE OWNER TRUSTEE AND DELAWARE TRUSTEE.
Any amounts paid to the Owner Trustee or the Delaware Trustee, as applicable,
in their respective trustee capacities pursuant to this Article VIII shall be
deemed not to be a part of the Owner Trust Estate immediately after such
payment and any amounts so paid to the Owner Trustee or the Delaware Trustee,
as applicable, in its individual capacity shall not be so paid out of the
Owner Trust Estate but shall be the property of the Owner Trustee in its
individual capacity or the Delaware Trustee in its individual capacity, as
applicable.
Section 8.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything
in this Agreement or any Basic Document, (i) the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Owner Trust Estate only and
specifically shall not be recourse to the assets of any Certificateholder and
(ii) the Delaware Trustee agrees in its individual capacity and in its
capacity as Delaware Trustee for the Trust that all obligations of the Trust
to the Delaware Trustee individually or as Delaware Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not
be recourse to the assets of any Certificateholder.
ARTICLE IX
TERMINATION OF AGREEMENT
Section 9.1. TERMINATION OF AGREEMENT. (a) This Agreement shall
terminate and the Trust shall wind up, dissolve and be of no further force or
effect upon the latest to occur of (i) the maturity or other liquidation of
the last Receivable (including the optional purchase by the Depositor or the
Master Servicer of the corpus of the Trust as described in Section 11.1 of
the Master Sale and Servicing Agreement) and the subsequent distribution of
amounts in respect of such Receivables as provided in the Basic Documents
and, with respect to amounts released from the Lien of the Indenture,
distribution thereof to the Certificateholders, or (ii) the payment to
Noteholders and Certificateholders of all amounts required to be paid to them
pursuant to the Indenture and this Agreement, including, with respect to
amounts released from the Lien of the Indenture, distribution thereof to the
Certificateholders and the payment to any Support Provider of all amounts
payable or reimbursable to it pursuant to the Series Supplement; PROVIDED,
HOWEVER, that the rights to indemnification under Section 8.2 and the rights
under Section 8.1 shall survive the termination of the Trust. The Master
Servicer shall
25
promptly notify the Owner Trustee of any prospective termination pursuant to
this Section 9.1. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder shall not (x) operate to terminate this
Agreement or the Trust, nor (y) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of
the Trust or Owner Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Depositor, the
Insurer nor any other Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) If any Certificates are in certificated form, notice of any
termination of a Series Trust Estate, specifying the Distribution Date upon
which the Certificateholders of such Series shall surrender their
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter
to Certificateholders of such Series mailed within five Business Days of
receipt of notice of such termination given pursuant to Section 9.1(a)
hereof, stating (i) the Distribution Date upon or with respect to which final
payment of the Certificates of such Series shall be made upon presentation
and surrender of the Certificates of such Series at the office of the
Certificate Paying Agent therein designated, (ii) the amount of any such
final payment, (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates of such Series at the office
of the Certificate Paying Agent therein specified and (iv) interest will
cease to accrue on the Certificates of such Series. The Owner Trustee shall
give such notice to the Certificate Registrar (if other than the Owner
Trustee) and the Certificate Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates of
such Series, the Certificate Paying Agent shall cause to be distributed to
Certificateholders of such Series amounts distributable pursuant to the
Series Supplement.
(d) If any Certificates are in certificated form, in the event
that all of the Certificateholders holding certificated Certificates of such
Series shall not surrender their Certificates for cancellation within six
months after the date specified in the above-mentioned written notice, the
Certificate Paying Agent shall give a second written notice to the remaining
Certificateholders holding certificated Certificates of such Series to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the certificated Certificates of such Series shall not have been
surrendered for cancellation, the Certificate Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders holding certificated Certificates
concerning surrender of their Certificates, and the cost thereof shall be
paid out of the funds and other Series Trust Estate assets that shall remain
subject to this Agreement. Any funds remaining in the Trust after exhaustion
of such remedies shall be distributed, subject to applicable escheat laws, by
the Certificate Paying Agent to the Depositor and Holders shall look solely
to the Depositor for payment.
26
(e) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Certificate Paying Agent to the Depositor.
(f) Upon the winding up of the Trust and its dissolution, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND DELAWARE TRUSTEES ADDITIONAL OWNER TRUSTEES
Section 10.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE AND
DELAWARE TRUSTEE. The Delaware Trustee shall at all times be a corporation or
national banking association satisfying the provisions of Section 3807(a) of
the Business Trust Statute. The Owner Trustee shall at all times be a
corporation or national banking association (i) authorized to exercise
corporate trust powers; (ii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or
State authorities; (iii) having (or having a parent which has) a rating of at
least Baa3 by Moody's or A-1 by Standard & Poors; and (iv) acceptable to the
Certificateholders. If such corporation shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Owner
Trustee shall resign immediately in the manner and with the effect specified
in Section 10.2.
Section 10.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE OR
DELAWARE TRUSTEE. The Owner Trustee or the Delaware Trustee may at any time
resign and be discharged from the trusts hereby created by giving written
notice thereof to the Depositor (or in the event that the Depositor is not
the sole Certificateholder, the Certificate Majority), any Support Provider
and the Master Servicer. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Owner Trustee or Delaware
Trustee, as applicable, in each case, meeting the qualifications set forth in
Section 10.1 herein, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee or Delaware
Trustee and one copy to the successor Owner Trustee or Delaware Trustee;
PROVIDED THAT the Depositor and the Insurer shall have received written
confirmation from each of the Rating Agencies that the proposed appointment
will not result in an increased capital charge to any Support Provider by
either of the Rating Agencies. If no successor Owner Trustee or Delaware
Trustee, as applicable, shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation,
the resigning Owner Trustee or Delaware Trustee, as applicable, any Support
Provider may petition any court of competent jurisdiction for the appointment
of a successor Owner Trustee or Delaware Trustee.
27
If at any time the Owner Trustee or the Delaware Trustee shall
cease to be eligible in accordance with the provisions of Section 10.1 and
shall fail to resign after written request therefor by the Depositor or the
Insurer (for so long as it is the Controlling Party), or if at any time the
Owner Trustee or the Delaware Trustee shall be legally unable to act, or
shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee
or the Delaware Trustee or of its respective property shall be appointed, or
any public officer shall take charge or control of the Owner Trustee or the
Delaware Trustee or of its respective property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor or the
Insurer (for so long as it is the Controlling Party) may remove the Owner
Trustee or the Delaware Trustee, as applicable. If the Depositor or the
Insurer shall remove the Owner Trustee or the Delaware Trustee under the
authority of the immediately preceding sentence, the Depositor shall promptly
appoint a successor Owner Trustee or Delaware Trustee, as applicable, meeting
the qualifications set forth in Section 10.1 herein and acceptable to the
Insurer (for so long as it is the Controlling Party), by written instrument,
in triplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee or Delaware Trustee so removed, one copy to any
Support Provider and one copy to the successor Owner Trustee or Delaware
Trustee.
Any resignation or removal of the Owner Trustee or the Delaware
Trustee and appointment of a successor Owner Trustee or Delaware Trustee
pursuant to any of the provisions of this Section 10.2 shall not become
effective until acceptance of appointment by the successor Owner Trustee or
Delaware Trustee pursuant to Section 10.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee or Delaware Trustee, as
applicable. The Depositor shall provide notice of such resignation or removal
of the Owner Trustee or the Delaware Trustee, as applicable, to each of the
Rating Agencies.
Section 10.3. SUCCESSOR OWNER TRUSTEE OR DELAWARE TRUSTEE. Any
successor Owner Trustee or Delaware Trustee appointed pursuant to Section
10.2 shall execute, acknowledge and deliver to the Depositor, the Master
Servicer, any Support Provider and to its predecessor Owner Trustee or
Delaware Trustee, as applicable, an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of its
predecessor shall become effective and the successor Owner Trustee or
Delaware Trustee, as applicable, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations
of its predecessor under this Agreement, with like effect as if originally
named as Owner Trustee or Delaware Trustee, as applicable. The predecessor
Owner Trustee or Delaware Trustee, as applicable, shall upon payment of its
fees and expenses deliver to the successor Owner Trustee or Delaware Trustee,
as applicable, all documents and statements and monies held by it under this
Agreement; and the Depositor and the predecessor Owner Trustee or Delaware
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 or Delaware Trustee all such rights, powers,
duties and obligations.
28
No successor Owner Trustee or Delaware Trustee shall accept
appointment as provided in this Section 10.3 unless at the time of such
acceptance such successor Owner Trustee or Delaware Trustee, as applicable,
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Master Servicer shall mail notice of the
successor of such Owner Trustee or Delaware Trustee, as applicable, to all
Certificateholders, the Insurer, the Indenture Trustee, the Noteholders and
the Rating Agencies. If the Master Servicer shall fail to mail such notice
within 10 days after acceptance of appointment by the successor Owner Trustee
or Delaware Trustee, as applicable, the successor Owner Trustee or Delaware
Trustee, as applicable, shall cause such notice to be mailed at the expense
of the Master Servicer.
Any successor Delaware Trustee appointed pursuant to this Section
10.3 shall promptly file an amendment to the Certificate of Trust with the
Secretary of State identifying the name and principal place of business of
such successor Delaware Trustee in the State of Delaware.
Section 10.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE OR
DELAWARE TRUSTEE. Any corporation into which the Owner Trustee or the
Delaware Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee or the Delaware Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Owner Trustee or the Delaware Trustee, shall
be the successor of the Owner Trustee or the Delaware Trustee hereunder,
provided such corporation shall be eligible pursuant to Section 10.1, without
the execution or filing of any instrument or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, further, that the Owner Trustee or the Delaware Trustee, as
applicable, shall mail notice of such merger or consolidation to the Rating
Agencies, the Depositor and the Master Servicer.
Section 10.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Master Servicer and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee and any Support Provider to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Master Servicer and the Owner Trustee
may consider necessary or desirable. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee and the Insurer (for so long as it is the
Controlling Party) and, if the Insurer is not the Controlling Party, subject
to the approval of the Certificate Majority (which approval shall not be
unreasonably withheld), shall
29
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 10.1 and no notice of the appointment
of any co-trustee or separate trustee shall be required pursuant to Section
10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not
authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Master Servicer, the Insurer (for so long as it is the
Controlling Party) and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Master Servicer
and the Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE X-A
AUTHORITY AND DUTIES OF DELAWARE TRUSTEE
Section 10A.1 ACCEPTANCE OF TRUST. The Delaware Trustee accepts
the trust hereby created and agrees to perform its duties hereunder with
respect to such trust but only upon the terms of this Agreement.
Section 10A.2 DUTIES OF DELAWARE TRUSTEE. (a) It is understood
and agreed that the duties and responsibilities of the Delaware Trustee shall
be limited to (i) accepting legal process served on the Trust in the State of
Delaware and (ii) the execution and delivery of all documents, and the
maintenance of all records, necessary to form and maintain the existence of
the Trust under the Business Trust Statute.
(b) Except as otherwise expressly required by Section 10A.2(a)
above, the Delaware Trustee shall not have any duty or liability with respect
to the administration of the Trust, the investment of the Owner Trust Estate
or the Series Trust Estate or the payment of dividends or other distributions
of income or principal to the Certificateholder or any of the Trust's
beneficiaries.
(c) The Delaware Trustee shall not be answerable or accountable
hereunder or under any Basic Document under any circumstances, except (i) for
its own willful misconduct, bad faith or negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 10A.3
expressly made by the Delaware Trustee in its individual capacity, (iii) for
any investments issued by the Delaware Trustee or any branch or affiliate
thereof in its commercial capacity or (iv) for taxes, fees or other charges
on, based on or measured by, any fees, commissions or compensation received
by the Delaware Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(A) the Delaware Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Delaware Trustee;
(B) the Delaware Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of the Certificate Majority, the Depositor, the Master
Servicer or any Certificateholder;
(C) no provision of this Agreement or any Basic Document shall
require the Delaware Trustee to expend or risk funds or otherwise
incur any financial liability in the performance of any of its
rights or powers hereunder or under any Basic Document if the
Delaware 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 Delaware Trustee be
liable for indebtedness evidenced by or arising under any of the
Basic
31
Documents or any Related Document, including the principal of and
interest on the Notes;
(E) the Delaware Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner
Trust Estate or for or in respect of the validity or sufficiency of
the Basic Documents or any Related Document, and the Delaware
Trustee shall in no event assume or incur any liability, duty or
obligation to the Depositor, any Support Provider, the Indenture
Trustee, the Certificate Paying Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein or in
the Basic Documents;
(F) the Delaware Trustee shall not be liable for the default
or misconduct of the Depositor, any Support Provider, the Indenture
Trustee or the Master Servicer under any of the Basic Documents or
otherwise and the Delaware Trustee shall have no obligation or
liability to perform the obligations under this Agreement or the
Basic Documents that are required to be performed by the Depositor
or the Certificate Paying Agent under this Agreement, by the
Indenture Trustee under the Indenture, the Series Supplement or any
Related Document or the Master Servicer under the Master Sale and
Servicing Agreement or the Series Supplement;
(G) the Delaware Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any Basic
Document at the request, order or direction of the Certificate
Majority or any of the Certificateholders, unless such Certificate
Majority or Certificateholders have offered to the Delaware Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Delaware Trustee therein
or thereby. The right of the Delaware Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Delaware Trustee
shall not be answerable for other than its negligence, bad faith or
willful misconduct in the performance of any such act; and
(H) the Delaware Trustee shall be entitled to any other
rights, benefits and protection provided to the Owner Trustee in
this Agreement.
Section 10A.3 REPRESENTATIONS AND WARRANTIES. The Delaware
Trustee hereby represents and warrants, in its individual capacity, to the
Depositor, the Holders, any Support Provider (which shall have relied on such
representations and warranties in issuing any policy related to the Series
Supplement), that:
32
(a) It is a national banking association, duly organized and
validly existing under the laws of the United States. It has requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware state law, governmental rule or regulation
governing the banking or trust powers of it or any judgment or order binding
on it, or constitute any default under its charter documents or by-laws or
any indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
(d) This Agreement constitutes the legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(e) It is authorized to exercise trust powers in the State of
Delaware as and to the extent contemplated herein and it has a principal
place of business in the State of Delaware.
Section 10A.4 NOT ACTING IN INDIVIDUAL CAPACITY. Except as
provided in this Article XA, in accepting the trusts hereby created the
Delaware Trustee acts solely as Delaware Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Delaware
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1. SUPPLEMENTS AND AMENDMENTS. (a) This Agreement may
be amended from time to time by the parties hereto with the consent of the
Insurer (for so long as it is the Controlling Party), by a written instrument
signed by each of them, without the consent of any of the Securityholders;
PROVIDED that an Opinion of Counsel for the Depositor (which Opinion of
Counsel may, as to factual matters, rely upon Officer's Certificates of the
Depositor) is addressed and delivered to the Owner Trustee and the Delaware
Trustee, dated the date of any such amendment, to the effect that the
conditions precedent to any such amendment have been satisfied and the
Depositor shall have delivered to the Owner Trustee and the Delaware Trustee
an Officer's Certificate
33
dated the date of any such Amendment, stating that the Depositor reasonably
believes that such Amendment will not have a material adverse effect on the
Securityholders.
(b) This Agreement may also be amended from time to time with the
consent of the Insurer (for so long as it is the Controlling Party), the
consent of the Noteholders evidencing not less than a majority of the
Outstanding Amount of the Notes, and the consent of the Certificateholders
representing at least a 50% Percentage Interest, 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 Security
without the consent of the related Securityholder, or (ii) reduce the
aforesaid percentage of Securities the Holder of which are required to
consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding or cause any material adverse tax consequences
to any Certificateholders or Noteholders.
Prior to the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the
Insurer and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders,
the Noteholders or the Indenture Trustee pursuant to this Section to approve
the particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe. Promptly after the execution of any amendment to the Certificate
of Trust, including, without limitation, amendments pursuant this Section and
pursuant to Section 10A.4, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(c) The Owner Trustee and Delaware Trustee shall not be required
to enter into any amendment to this Agreement which adversely affects their
respective rights, duties or immunities under this Agreement.
Section 11.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN
CERTIFICATEHOLDERS. The Certificateholders shall not have legal title to any
part of the Series Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest
therein only in accordance with Articles V and IX. No transfer, by operation
of law or otherwise, of any right, title or interest of the
Certificateholders to and in their ownership interest in the Series Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Series Trust Estate.
34
Section 11.3. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the
Depositor, the Certificateholders, the Master Servicer and any Support
Provider, the Indenture Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions
or provisions contained herein.
Section 11.4. NOTICES. (a) Unless otherwise expressly specified
or permitted by the terms hereof, all notices shall be in writing and shall
be deemed given upon receipt personally delivered, delivered by overnight
courier or mailed first class mail or certified mail, in each case return
receipt requested, and shall be deemed to have been duly given upon receipt,
if to the Owner Trustee or the Delaware Trustee, addressed to its respective
Corporate Trust Office; if to the Depositor, addressed to
Household Auto
Receivables Corporation, 0000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000,
with a copy to Household Finance Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000, Attn: Treasurer; if to the Insurer, to Ambac
Assurance Corporation, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attn: Risk Management, Consumer Asset-Backed Securities, if to any Support
Provider, at the address of such Support Provider as set forth in the Series
Supplement; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.
Section 11.5. SEVERABILITY. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 11.6. SEPARATE COUNTERPARTS. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.7. ASSIGNMENTS; SUPPORT PROVIDER. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and
their respective successors and permitted assigns. This Agreement shall also
inure to the benefit of any Support Provider. Without limiting the generality
of the foregoing, all covenants and agreements in this Agreement which confer
rights upon any Support Provider shall be for the benefit of and run directly
to any Support Provider, and any Support Provider shall be entitled to rely
on and enforce such covenants, subject, however, to the limitations on such
rights provided in this Agreement and the Basic Documents. The Support
Provider,
35
if any, may disclaim any of its rights and powers under this Agreement (but
not its duties and obligations under any Series Support) upon delivery of a
written notice to the Owner Trustee.
Section 11.8. COVENANTS OF THE DEPOSITOR. The Depositor will not
at any time institute against the Trust any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, this Agreement or
any of the Basic Documents.
Section 11.9. NO PETITION. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee) and the Delaware Trustee
(not in its individual capacity but solely as Delaware Trustee), by entering
into this Agreement, each Certificateholder, by accepting a Certificate, and
the Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any time
institute against the Depositor, or join in any institution against the
Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations
relating to the Certificates, the Notes, this Agreement, any of the Basic
Documents, the Series Supplement or any Related Documents.
Section 11.10. NO RECOURSE. Each Certificateholder by accepting
a Certificate acknowledges that such Certificateholder's Certificates
represent beneficial interests in the Owner Trust Estate only and do not
represent interests in or obligations of the Master Servicer, the Depositor,
the Owner Trustee, the Delaware Trustee, the Indenture Trustee, any Support
Provider or any Affiliate thereof and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
in this Agreement, the Certificates, the Basic Documents, the Series
Supplement or any Related Documents.
Section 11.11. HEADINGS. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
Section 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. MASTER SERVICER. The Master Servicer is
authorized to prepare, or cause to be prepared, execute and deliver on behalf
of the Trust all such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of the Trust, the Delaware Trustee or
Owner Trustee to prepare, file or deliver pursuant to the Basic Documents,
the Series Supplement or any Related Documents. Upon written request, the
Owner Trustee shall execute and deliver to the Master Servicer a limited
power of attorney appointing the Master Servicer the Trust's agent and
attorney-in-fact to
36
prepare, or cause to be prepared, execute and deliver all such documents,
reports, filings, instruments, certificates and opinions.
Section 11.14. THIRD-PARTY BENEFICIARY. The parties hereto agree
that the Insurer is a third-party beneficiary hereof.
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers hereunto duly authorized as
of the day and year first above written.
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
By: /s/ Xxxxxxxx X. Child
---------------------------------------
Name: Xxxxxxxx X. Child
Title: Vice President
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Delaware Trustee
By: /s/ Xxxxxxxx X. Child
---------------------------------------
Name: Xxxxxxxx X. Child
Title: Vice President
HOUSEHOLD AUTO RECEIVABLES
CORPORATION
Depositor
By: /s/ X. X. Xxxxx
----------------------------------------
Name: X. X. Xxxxx
Title: Vice President and Assistant
Treasurer
Acknowledged and Agreed:
HOUSEHOLD FINANCE CORPORATION
Master Servicer
By: /s/ X. X. Xxxx, Xx.
--------------------------
Name: X. X. Xxxx, Xx.
Title: Vice President and Treasurer
JPMORGAN CHASE BANK
not in its individual capacity
but solely as Certificate Paying Agent
By: /s/ Xxxxxx X. Xxxx
--------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Vice President
[Signature Page for Amended and Restated
Trust Agreement]
EXHIBIT A
[FORM OF CERTIFICATE]
NUMBER
HOUSEHOLD AUTOMOTIVE TRUST 2002-2
CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE IN
RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT AND SUCH STATE
SECURITIES LAWS. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE
UNLESS SUCH RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE
AMENDED AND RESTATED
TRUST AGREEMENT PERTAINING TO THE HOUSEHOLD AUTOMOTIVE
TRUST 2002-2 (THE "AGREEMENT") AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF
CERTAIN OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT. NEITHER THE DEPOSITOR,
THE MASTER SERVICER, THE TRUST NOR THE OWNER TRUSTEE IS OBLIGATED TO REGISTER
THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS.
---------------------------------
CERTIFICATE
evidencing a beneficial ownership interest in the assets of the Trust
relating to the Series Trust Estate, which includes a pool of motor vehicle
retail installment sale contracts sold to the Trust by
Household Auto
Receivables Corporation.
(This Certificate does not represent an interest in or obligation of
Household Auto Receivables Corporation or any of its Affiliates, except to
the extent described below.)
THIS CERTIFIES THAT
Household Auto Receivables Corporation is the
registered owner of a nonassessable, fully-paid, beneficial ownership
interest representing a 100% Percentage Interest in the assets of Household
Automotive Trust
A-1
2002-2 (the "Trust") formed by
Household Auto Receivables Corporation, a
Nevada corporation (the "Depositor") and the Series Trust Estate.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION
not in its individual
capacity but solely as
Owner Trustee
by __________________________________________________ Authenticating Agent
by _______________________________________________________________________
Household Automotive Trust 2002-2 (the "Trust"), was created
pursuant to a
Trust Agreement, dated as of August 8, 2002 (the "Agreement"),
between the Depositor and U.S. Bank National Association, as owner trustee
(the "Owner Trustee") and U.S. Bank Trust National Association with its
principal place of business in Delaware, as Delaware Trustee, as amended and
restated as of August 8, 2002 and as supplemented by a Series Supplement
dated as of August 8, 2002 (the "Series Supplement"). A summary of certain of
the pertinent provisions of the Agreement and Series Supplement is set forth
below. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement and the Series
Supplement.
This certificate is one of the duly authorized certificates of
Trust of Household Automotive Trust 2002-2 designated as Certificates.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to
which Agreement the holder of this Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
consists of the Series Trust Estate which includes a pool of motor vehicle
retail installment sale contracts (the "Receivables"), all monies due
thereunder on or after specified Cutoff Dates, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Agreement and the Master Sale and Servicing Agreement and each
related Transfer Agreement, all right, to and interest of, the Depositor in
and to (i) the Master Receivables Purchase Agreement dated as of December 18,
2001 between Household Automotive Finance Corporation and the Depositor, as
such agreement may be amended and supplemented from time to time, (ii) the
Master Receivables Purchase Agreement dated as of December 18, 2001 and
amended and restated as of May 15, 2002, among Household Finance Corporation,
Household Bank and the Depositor, as such agreement may be further amended
and supplemented from time to time, (iii) the Master Receivables Purchase
Agreement dated
A-2
as of June 24, 2002 between Household Automotive Credit Corporation and the
Depositor, as such agreement may be amended or supplemented from time to
time, and (iv) the Master Receivables Purchase Agreement dated as of August
8, 2002 between HACC and the Depositor, as such agreement may be amended or
supplemented from time to time.
The Notes have been issued pursuant to an Indenture dated as of
August 8, 2002 (the "Indenture"), among the Trust, Household Finance
Corporation, as Master Servicer and JPMorgan Chase Bank, as Indenture Trustee
and the Series Supplement.
Under the Series Supplement, there will be distributed on the
17th day of each month or, if such 17th day is not a Business Day, the next
Business Day (the "Distribution Date"), commencing on September 17, 2002, to
the Person in whose name this Certificate is registered at the close of
business on the Business Day preceding such Distribution Date (the "Record
Date") such Certificateholder's fractional undivided interest in any amount
to be distributed to Certificateholders on such Distribution Date.
The holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Master Sale
and Servicing Agreement, the Indenture, the Agreement and the Series
Supplement, as applicable.
Distributions on this Certificate will be made as provided in the
Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Agreement and notwithstanding the
above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only
upon presentation and surrender of this Certificate at the office or agency
maintained for the purpose by the Owner Trustee in the Corporate Trust Office.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Agreement or the Master Sale and Servicing 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.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Certificate to be duly
executed.
HOUSEHOLD AUTOMOTIVE TRUST
2002-2
By: U.S. BANK NATIONAL
ASSOCIATION not in its individual
capacity but solely as Owner Trustee
Dated: By: _____________________________
By: _____________________________
Name:
Title:
A-4
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or
in the Agreement, the Indenture, the Basic Documents or any Related
Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables, as more specifically set
forth herein and in the Master Sale and Servicing Agreement. A copy of each
of the Master Sale and Servicing Agreement, the Agreement and the Series
Supplement may be examined during normal business hours at the principal
office of the Depositor, and at such other places, if any, designated by the
Depositor, by any Certificateholder upon written request.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable 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 Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The
initial Certificate Registrar appointed under the Agreement is the Owner
Trustee.
The Certificates are issuable as registered Certificates in any
Percentage Interest not to exceed 100%. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates in authorized denominations evidencing the
same aggregate Percentage Interest, as requested by the holder surrendering
the same. No service charge will be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee and the Certificate Registrar and any agent of
the Owner Trustee 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 Registrar nor any such agent shall
be affected by any notice to the contrary.
The Certificates may not be acquired by or for the account of (a)
an employee benefit plan (as defined in Section 3(3) of ERISA) that is
subject to the provisions of Title I of ERISA, (b) a plan (as defined in
Section 4975(e) (1) of the Code) that is subject to Section 4975 of the Code
or (c) any entity whose underlying assets include plan assets by reason of
such plan's investment in the entity (each, a "Benefit Plan"). The
Certificate Registrar shall not register the transfer of a Certificate unless
the transferee has delivered to the Owner Trustee a representation letter in
form and substance satisfactory to the
A-5
Owner Trustee to the effect that the transferee is not, and is not acquiring
the Certificate for the account of, a Benefit Plan.
The recitals contained herein shall be taken as the statements of
the Depositor or the Master Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to
any benefit under the Agreement or the Master Sale and Servicing Agreement or
be valid for any purpose.
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________ Attorney to transfer said Certificate on the books of the
Certificate Registrar, with full power of substitution in the premises.
Dated:
___________________________________*
Signature Guaranteed:
___________________________________*
______________
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Certificate Registrar, which requirements
include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-7
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST
OF
HOUSEHOLD AUTOMOTIVE TRUST 2002-2
THIS Certificate of Trust of Household Automotive Trust 2002-2
(the "Trust") is being duly executed and filed on behalf of the Trust by the
undersigned, as trustee, to form a business trust under the Delaware Business
Trust Act (12 DEL. C. Section 3801 ET SEQ.) (the "Act").
1. NAME. The name of the business trust formed by this
Certificate of Trust is Household Automotive Trust 2002-2.
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware are U.S. Bank Trust National
Association, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
U.S. BANK NATIONAL ASSOCIATION, not
in its individual capacity but
solely as Owner Trustee
By:_________________________________
Name:
Title:
U.S. BANK TRUST NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Delaware
Trustee
By:_________________________________
Name:
Title:
B-1
