EXHIBIT 1.1
HOUSEHOLD CONSUMER LOAN MASTER NOTE TRUST I
Series 2003-[ ]
$[ ] Class A [Floating Rate] [ ]% Asset Backed Notes, Series [ ]
$[ ] Class B [Floating Rate] [ ]% Asset Backed Notes, Series [ ]
UNDERWRITING AGREEMENT
[ ], 2003
[ ] as Representative of the
Underwriters set forth herein (the "Representative")
[Address]
Dear Sirs:
From time to time, specified affiliates of Household Finance
Corporation (the "Originators") have conveyed and propose to further convey, the
receivables (the "Receivables") that are generated in a portfolio of certain
consumer loan accounts pursuant to credit agreement relating to revolving
consumer loans or closed-end consumer loans and other rights and property to
Household Consumer Loan Corporation II (the "Transferor"), which has conveyed
and will convey the Receivables to the Household Consumer Loan Master Note Trust
I (the "Issuer"), and the Transferor proposes to cause the Issuer to sell to you
and to the underwriters named in Schedule I hereto (the "Underwriters"), for
whom you are acting as representatives (the "Representatives"), $[ ] Class A
[Floating Rate] [ ]% Asset Backed Notes, Series [ ] (the "Class A Notes") and $[
] Class B [Floating Rate] [ ]% Asset Backed Notes, Series [ ] (the "Class B
Notes" and, together with the Class A Notes, the "Notes") in the Trust. The
Receivables have been, and will from time to time be, conveyed to the Transferor
by the Originators pursuant to a Receivables Purchase Agreement, dated as of [
], 2003 (the "Receivables Purchase Agreement"), between the Originators and the
Transferor. The Receivables have been, and will from time to time be, conveyed
by the Transferor to the Issuer pursuant to a Transfer and Servicing Agreement,
dated as of [ ], 2003 (the "Transfer and Servicing Agreement"), among the
Transferor, Household Finance Corporation ("HFC"), as servicer (the "Servicer"),
and the Issuer. The Originator, the Transferor and HFC are direct or indirect
subsidiaries of Household International, Inc. ("Household"). HFC, and the
Transferor are referred to collectively herein as the "Household Entities". The
Originators and the Household Entities are referred to collectively herein as
the "Household Companies".
The Issuer is a Delaware common law trust formed pursuant to a
Trust Agreement, dated as of [ ], 2003 (the "Trust Agreement"), between the
Transferor and Wilmington Trust Company ("Wilmington"), as owner trustee (the
"Owner Trustee").
The Notes will be issued pursuant to a Master Indenture, dated
as of [ ], 2003 (the "Master Indenture"), between the Issuer and Xxxxx Fargo
Bank Minnesota, National Association, as indenture trustee (the "Indenture
Trustee"), as supplemented by
the Series 2003-[ ] Indenture Supplement with respect to the Notes to be dated
as of [ ], 2003 (the "Indenture Supplement," and together with the Master
Indenture, the "Indenture").
HFC has agreed to provide notices and perform on behalf of the
Issuer certain other administrative obligations required of the Issuer by the
Transfer and Servicing Agreement, the Master Indenture and each indenture
supplement for each series of Notes issued by the Issuer, pursuant to an
Administration Agreement, dated as of [ ], 2003 (the "Administration
Agreement"), between HFC, as administrator (in such capacity, the
"Administrator"), and the Issuer. The Transfer and Servicing Agreement, the
Receivables Purchase Agreement, the Indenture, the Trust Agreement and the
Administration Agreement are referred to herein, collectively, as the
"Transaction Documents."
The Notes will be sold pursuant to this Underwriting Agreement
(this "Agreement") and will represent undivided interests in certain assets of
the Trust (as hereinafter described).
Capitalized terms used herein without definition shall have
the meanings set forth in the Transaction Documents.
Section 1. REPRESENTATIONS AND WARRANTIES OF HFC AND THE
TRANSFEROR.
(a) Each of HFC and the Transferor, jointly and
severally, represents and warrants to, and agrees with, each Underwriter as set
forth in this Section 1(a). Certain terms used in this Section 1(a) are defined
in the second paragraph of subsection 1(a)(i) below.
(i) A registration statement on Form S-3 (No. [ ]),
including a form of prospectus and prospectus supplement and
such amendments thereto as may have been filed prior to the
date hereof, relating to the Notes and the offering thereof in
accordance with Rule 415 under the Securities Act of 1933, as
amended (the "Act"), has been filed by the Transferor with,
and has been declared effective by, the Commission. If any
post-effective amendment to such registration statement has
been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent such amendment has
been declared effective by the Commission.
The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall
mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or
become effective under the Act. "Execution Time" shall mean
the date and time that this Agreement is executed and
delivered by the parties hereto. "Registration Statement"
shall mean the registration statement referred to in the
preceding
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paragraph and any registration statement required to be filed
under the Act or rules thereunder, including amendments,
incorporated documents, exhibits and financial statements, in
the form in which it has or shall become effective and, in the
event that any post-effective amendment thereto becomes
effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement as so amended.
"Rule 424" refers to such rule under the Act. The Transferor
proposes to file with the Commission pursuant to Rule 424(b)
("Rule 424(b)") under the Act a supplement (the "Prospectus
Supplement") to the prospectus included in the Registration
Statement (such prospectus, in the form it appears in the
Registration Statement or in the form most recently revised
and filed with the Commission pursuant to Rule 424(b), is
hereinafter referred to as the "Base Prospectus") relating to
the Notes and the method of distribution thereof. The Base
Prospectus and the Prospectus Supplement, together with any
amendment thereof or supplement thereto, are hereinafter
referred to as the "Prospectus."
(ii) On the Effective Date, the Registration Statement
conformed in all respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and the
TIA and the rules and regulations thereunder and did not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
on the date of this Agreement, the Registration Statement and
the Prospectus conform, and at the time of filing of the
Prospectus pursuant to Rule 424(b) the Registration Statement
and the Prospectus will conform, in all respects with the
requirements of the Act and the Rules and Regulations and the
TIA and the rules and regulations thereunder and neither of
such documents includes, or will include, any untrue statement
of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however,
that neither HFC nor the Transferor makes any representations
or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to HFC or the Transferor by
or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation of the
Registration Statement or the Prospectus (or any supplements
thereto).
(iii) Each of the Originators and the Transferor is a
corporation duly organized and validly existing and in good
standing under the laws of its jurisdiction of incorporation.
Each of the Originators and the Transferor has all requisite
power and authority to own its properties and conduct its
business as presently conducted and is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction which requires such
qualification, except where failure to have
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such requisite power and authority or to be so qualified would
not have a material adverse effect on the business or
consolidated financial condition of such Originator or the
Transferor.
(iv) Neither the Transferor nor any Originator is in
violation of its charter or certificate of incorporation or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which it is a party or by which it may be
bound, or to which any of the property or assets of the
Transferor or such Originator, as the case may be, is subject,
except where any such violation or default would not have a
material adverse effect on the transactions contemplated by
this Agreement.
(v) The execution, delivery and performance by the
Transferor of each of this Agreement, the Receivables Purchase
Agreement, the Transfer and Servicing Agreement and the Trust
Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Transferor
pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the
Transferor is a party or by which it may be bound, or to which
any of the property or assets of the Transferor is subject,
nor will such action result in any violation of the provisions
of the charter or by-laws of the Transferor or any applicable
law, administrative regulation or administrative or court
decree, except where any such conflict, breach, default,
encumbrance or violation would not have a material adverse
effect on the transactions contemplated by this Agreement.
(vi) The execution, delivery and performance by each
Originator of the Receivables Purchase Agreement, and the
consummation of the transactions contemplated thereby have
been duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets
of such Originator pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which such Originator is a party or by which it may be bound,
or to which any of the property or assets of such Originator
is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of such Originator or
any applicable law, administrative regulation or
administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not
have a material adverse effect on the transactions
contemplated by this Agreement.
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(vii) This Agreement, the Receivables Purchase Agreement,
the Transfer and Servicing Agreement and the Trust Agreement
have been duly executed and delivered by the Transferor; and
this Agreement, the Receivables Purchase Agreement, the
Transfer and Servicing Agreement and the Trust Agreement
constitute legal, valid and binding instruments enforceable
against the Transferor in accordance with their respective
terms, subject as to enforceability (A) to applicable
bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and the
rights and remedies of creditors of thrifts, savings
institutions or national banking associations, (B) to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (C) with
respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities laws.
(viii) The Receivables Purchase Agreement has been duly
executed and delivered by each Originator; and the Receivables
Purchase Agreement constitutes a legal, valid and binding
instrument enforceable against such Originator in accordance
with its terms, subject as to the enforceability (A) to
applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting creditors' rights generally
and the rights and remedies of creditors of thrifts, savings
institutions or national banking associations, and (B) to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(ix) Each Originator has authorized the conveyance of the
related Receivables to the Transferor; the Transferor has
authorized the conveyance of the Receivables to the Issuer;
and the Transferor has directed the Issuer to issue and sell
the Notes.
(x) Any taxes, fees and other governmental charges in
connection with the execution, delivery and performance of
this Agreement, each of the Transaction Documents and the
Notes shall have been paid or will be paid by the Transferor
at or prior to the Closing Date.
(xi) The Notes have been duly and validly authorized, and,
when validly executed, authenticated, issued and delivered in
accordance with the Indenture and as provided herein will
conform in all material respects to the description thereof
contained in the Prospectus and will be validly issued and
outstanding and entitled to the benefits of the Indenture.
(xii) There are no legal or governmental proceedings
pending, or to the knowledge of HFC or the Transferor
threatened, to which any of the Originators or the Transferor
is a party or of which any property of any of them is the
subject, other than actions, suits or proceedings which are
not reasonably expected, individually or in the aggregate, to
have a material adverse effect on the shareholder's equity or
consolidated financial
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position of such person and its subsidiaries taken as a whole,
or which would have a material adverse effect upon the
consummation of this Agreement.
(xiii) KPMG LLP is an independent public accountant with
respect to the Originators and Transferor.
(xiv) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body of the United
States is required for the issue and sale of the Notes, or the
consummation by the Originators or the Transferor of the other
transactions contemplated by this Agreement or any Transaction
Document to which it is a party, except for (A) the
registration under the Act of the Notes, (B) such consents,
approvals, authorizations, orders, registrations,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the
failure to obtain such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
business or consolidated financial condition of the
Originators or the Transferor or the transactions contemplated
by such agreements.
(xv) Neither the Originators nor the Transferor will
conduct their operations while any of the Notes are
outstanding in a manner that would require the Transferor or
the Issuer to be registered as an "investment company" under
the Investment Company Act of 1940, as amended (the "1940
Act") as in effect on the date hereof.
(b) HFC represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 1(b).
(i) HFC is a corporation duly organized and validly
existing and in good standing under the laws of its
jurisdiction of incorporation. HFC has all requisite power and
authority to own its properties and conduct its business as
presently conducted and is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction which requires such qualification, except
where the failure to have such power and authority or to be so
qualified would not have a material adverse effect on the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole.
(ii) HFC is not in violation of its restated articles of
incorporation or in default in the performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which HFC is a
party or by which it may be bound, or to which any of the
property or
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assets of HFC is subject except where any such violation or
default would not have a material adverse effect on the
transactions contemplated by this Agreement.
(iii) The execution, delivery and performance by HFC of
this Agreement, the Transfer and Servicing Agreement, the
Indenture, the Indenture Supplement and the Administration
Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly
authorized by all necessary action or proceedings and will not
conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of HFC pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which HFC is a party or by which it may
be bound, or to which any of the property or assets of HFC is
subject, nor will such action result in any violation of the
provisions of the restated articles of incorporation or
by-laws of HFC or any applicable law, administrative
regulation or administrative or court decree, except where any
such conflict, breach, default, encumbrance or violation would
not have a material adverse effect on the transactions
contemplated by this Agreement.
(iv) This Agreement, the Transfer and Servicing Agreement
and the Administration Agreement have been duly executed and
delivered by HFC; and this Agreement, the Transfer and
Servicing Agreement and the Administration Agreement
constitute legal, valid and binding instruments enforceable
against HFC in accordance with their respective terms, subject
as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally, (B) to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (C) with
respect to rights of indemnity under this Agreement, to
limitations of public policy under applicable securities laws.
(v) HFC will, upon request by the Representative, provide
to the Representative complete and correct copies of all
reports filed by it with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), during 2003. Except as set forth in or contemplated in
such reports, there has been no material adverse change in the
consolidated financial condition of HFC and its subsidiaries
taken as a whole since the respective dates as of which
information is given in the Prospectus.
(vi) There are no legal or governmental actions, suits or
proceedings pending, or to the knowledge of HFC threatened, to
which HFC is a party or of which any of its property is the
subject, other than proceedings which are not reasonably
expected, individually or in the aggregate, to have a material
adverse effect on the shareholder's equity or consolidated
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financial position of HFC and its subsidiaries taken as a
whole or which would have a material adverse effect upon the
consummation of this Agreement.
(vii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body of the United
States is required for the consummation by HFC of the
transactions contemplated by this Agreement, the Transfer and
Servicing Agreement, the Indenture, the Indenture Supplement
and the Administration Agreement, except for (A) the
registration under the Act of the Notes, (B) such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Notes and the subsequent
distribution of the Notes by the Underwriters or (C) where the
failure to obtain such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole or the transactions contemplated
by such agreements.
(viii) KPMG LLC is an independent public accountant with
respect to HFC.
(c) Any certificate signed by an officer on behalf of any
of the Household Entities and delivered to the Underwriters or counsel for the
Underwriters in connection with an offering of the Notes shall be deemed, and
shall state that it is, a representation and warranty as to the matters covered
thereby to each person to whom the representations and warranties in this
Section 1 are made.
Section 2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance
upon the covenants, representations and warranties herein set forth, the
Transferor agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Transferor
the principal amount of Class A Notes set forth opposite such Underwriter's name
in Schedule I pursuant to the terms of this Agreement at a purchase price equal
to [ ]% of the aggregate principal amount represented by the Class A Notes.
(b) Subject to the terms and conditions and in reliance
upon the covenants, representations and warranties herein set forth, the
Transferor agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Transferor
the principal amount of Class B Notes set forth opposite such Underwriter's name
in Schedule I pursuant to the terms of this Agreement at a purchase price equal
to [ ]% of the aggregate principal amount represented by the Class B Notes.
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Section 3. DELIVERY AND PAYMENT. Delivery of and payment for
the Notes to be purchased by the Underwriters in accordance with this Agreement
shall be made at 9:00 A.M. at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on ______. 200_, which date, time or
place may be postponed or changed by agreement between the Representatives and
the Transferor (such date and time of delivery and payment for the Notes being
herein referred to as the "Closing Date"). Delivery of one or more global notes
representing the Notes shall be made to the accounts of the several Underwriters
against payment by the several Underwriters of the purchase price therefor, to
or upon the order of the Transferor by one or more wire transfers in immediately
available funds. The global notes to be so delivered shall be registered in the
name of Cede & Co., as nominee for The Depository Trust Company ("DTC"). The
interests of beneficial owners of the Notes will be represented by book entries
on the records of DTC and participating members thereof. Definitive Notes
representing the Notes will be available only under limited circumstances as
described in the Indenture.
The Transferor agrees to have copies of the global notes or
the Definitive Notes available for inspection, checking and packaging by the
Underwriters in New York, New York, not later than 1:00 p.m., New York City
time, on the business day prior to the Closing Date.
Section 4. OFFERING BY UNDERWRITERS.
(a) It is understood that the Underwriters propose to
offer the Notes for sale to the public as set forth in the Prospectus. The
Household Entities agree that the Underwriters may, but are not obligated to,
make a market in the Notes and that any such market making by the Underwriters
may be discontinued at any time in the respective sole discretion of the
Underwriters
(b) Each Underwriter severally agrees that if it is a
foreign broker dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it will not effect any transaction in the
Notes within the United States or induce or attempt to induce the purchase of or
sale of the Notes within the United States, except that it shall be permitted to
make sales to the other Underwriters or to its United States affiliates provided
that such sales are made in compliance with an exemption of certain foreign
brokers or dealers under Rule 15a-6 under the Exchange Act and in conformity
with the NASD's Conduct Rules as such Rules apply to non-NASD brokers or
dealers.
(c) Each Underwriter severally represents and agrees that
(i) it has not offered or sold and, prior to the expiry of six months from the
Closing Date, will not offer or sell any Notes to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purpose of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
or caused to be communicated and will only communicate or
9
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and Markets
Act 2000 (the "FSMA")) received by it in connection with the issue or sale of
any Notes in circumstances in which section 21(1) of the FSMA does not apply to
the Issuer; and (iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom.
(d) Each Underwriter may prepare and provide to
prospective investors certain Computational Materials, ABS Term Sheets or
Collateral Term Sheets in connection with its offering of the Notes, subject to
the following conditions:
(i) The Underwriters shall comply with the requirements
of the No-Action Letter of May 20, 1994 issued by the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I and
certain affiliates, as made applicable to other issuers and
underwriters by the Commission in response to the request of
the Public Securities Association dated May 24, 1994
(collectively, the "Xxxxxx/PSA Letter"), and the requirements
of the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (the "PSA
Letter" and, together with the Xxxxxx/PSA Letter, the
"No-Action Letters").
(ii) For purposes hereof, "Computational Materials" shall
have the meaning given such term in the No-Action Letters, but
shall include only those Computational Materials that have
been prepared or delivered to prospective investors by the
Underwriters. For purposes hereof, "ABS Term Sheets" and
"Collateral Term Sheets" shall have the meanings given such
terms in the PSA Letter but shall include only those ABS Term
Sheets or Collateral Term Sheets that have been prepared or
delivered to prospective investors by the Underwriter.
(iii) Each Underwriter shall provide to the Transferor any
related Computational Materials, ABS Term Sheets or Collateral
Term Sheets which are provided to investors no later than the
second Business Day preceding the date such Computational
Materials, ABS Term Sheets or Collateral Term Sheets are
required to be filed pursuant to the applicable No-Action
Letters. The Underwriters may provide copies of the foregoing
in a consolidated or aggregated form including all information
required to be filed.
(iv) In the event that the Household Entities or the
Underwriters discover a material error in the Computational
Materials, ABS Term Sheets or Collateral Term Sheets, the
related Underwriter shall prepare corrected Computational
Materials, ABS Term Sheets or Collateral Term Sheets and
deliver them to Transferor for filing pursuant to Section
5(j).
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Section 5. AGREEMENTS. Each of the Household Entities, each as
to itself, covenants and agrees with the several Underwriters that:
(a) Immediately following the execution of this
Agreement, the Transferor will prepare a Prospectus Supplement setting forth the
amount of Notes covered thereby and the terms thereof not otherwise specified in
the Base Prospectus, the price at which such Notes are to be purchased by the
Underwriters, the initial public offering price, the selling concessions and
allowances, and such other information as the Transferor deems appropriate. The
Transferor will transmit the Prospectus, including such Prospectus Supplement,
to the Commission pursuant to Rule 424(b) by a means reasonably calculated to
result in filing with the Commission pursuant to Rule 424(b). The Transferor
will promptly advise the Representative (i) when the Registration Statement
shall have become effective, (ii) when any amendment thereof shall have become
effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration Statement or the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (v) of the receipt by the
Transferor of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Transferor will not file any
amendment of the Registration Statement or supplement to the Prospectus to which
the Representative reasonably objects. The Transferor will use its best efforts
to prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a Prospectus relating to the
Notes is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to supplement such Prospectus to
comply with the Act or the rules thereunder, the Transferor shall be required to
notify the Representative and upon the Representative's request to prepare and
furnish without charge to each Underwriter as many copies as such Underwriter
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which shall correct such statement or omission or
effect such compliance.
(c) As soon as practicable, the Transferor will make
generally available to Noteholders and to the Representative an earnings
statement or statements of the Issuer which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(d) The Transferor will furnish to the Representative and
counsel for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a prospectus
by an Underwriter or dealer may be required by the Act, as many copies of the
Prospectus and any supplement thereto as the Underwriters may reasonably
request.
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(e) The Household Entities, jointly and severally, agree
to pay all expenses incidental to the performance of their obligations under
this Agreement, including without limitation (i) expenses of preparing, printing
and reproducing the Registration Statement, the Prospectus, this Agreement, the
Transaction Documents and the Notes, (ii) any fees charged by any rating agency
for the rating of the Notes, (iii) any expenses (including reasonable fees and
disbursements of counsel not to exceed $[ ]) incurred by the Underwriters in
connection with qualification of the Notes for sale under the laws of such
jurisdictions as the Representative designates, (iv) the fees and expenses of
[accountants name], (v) the fees and expenses of the Indenture Trustee and any
agent of the Indenture Trustee and the fees and disbursements of counsel for the
Indenture Trustee in connection with the Indenture and the Notes, and (vi) the
cost of delivering the Notes to the offices of the Underwriters, insured to the
satisfaction of the Underwriters (it being understood that, except as provided
in this paragraph (e) and in Sections 7 and 8 hereof, the Underwriters will pay
their own expenses, including the expense of preparing, printing and reproducing
this Agreement, any agreement among underwriters, the fees and expenses of
counsel for the Underwriters, any transfer taxes on resale of any of the Notes
by them and advertising expenses connected with any offers that the Underwriters
may make).
(f) The Transferor will take all reasonable actions
requested by the Underwriters to arrange for the qualification of the Notes for
sale under the laws of such jurisdictions within the United States or as
necessary to qualify for the Euroclear System or Clearstream Banking, societe
anonyme and as the Representative may designate, will maintain such
qualifications in effect so long as required for the distribution of the Notes.
(g) For so long as the Notes are outstanding, the
Transferor shall deliver to the Representative by first-class mail and as soon
as practicable a copy of all reports and notices related to Series 2003-[ ] and
delivered to the Owner Trustee, the Indenture Trustee or the Noteholders under
the Indenture.
(h) For so long as the Notes are outstanding, the
Household Entities will furnish to the Representative as soon as practicable
after filing, any other information concerning the Household Entities filed with
any government or regulatory authority which is otherwise publicly available, as
the Representative may reasonably request.
(i) To the extent, if any, that any rating provided with
respect to the Notes set forth in Sections 6(j), (k) and (l) hereof is
conditional upon the furnishing of documents reasonably available to the
Household Entities, the Household Entities shall furnish such documents.
(j) The Transferor shall file or cause to be filed with
the Commission, in accordance with the No-Action Letters, any Computational
Materials, ABS Term Sheets and Collateral Term Sheets provided that the
Transferor has received such Computational Materials, ABS Term Sheets and
Collateral Term Sheets at least 2 Business Days prior to the time for filing
same.
12
Section 6. CONDITIONS OF CLOSING; TERMINATION OF RIGHTS UNDER
SECTION 2. The obligations of the Underwriters to purchase and pay for the Notes
on the Closing Date shall be subject to the material accuracy of the
representations and warranties of the Household Entities contained herein as of
the Execution Time and as of the Closing Date, to the material accuracy of the
statements of the Household Entities made in any certificates delivered pursuant
to the provisions hereof, to the performance by the Household Entities of their
obligations hereunder and to the following additional conditions:
(a) The Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of this
Agreement; and, prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) Each of the Household Entities shall have delivered a
certificate, dated the Closing Date, signed by its President or any Vice
President and its principal financial or principal accounting officer or its
Treasurer or any Assistant Treasurer or its Secretary or any Assistant Secretary
to the effect that the signers of such certificate, on behalf of the named
Household Entity, have carefully examined this Agreement, each of the
Transaction Documents, the Prospectus (and any supplements thereto) and the
Registration Statement, stating that:
(i) the representations and warranties of such Household
Entity in this Agreement are true and correct in all material
respects at and as of the date of such certificate as if made
on and as of such date (except to the extent they expressly
relate to an earlier date);
(ii) such Household Entity has complied, in all material
respects, with all the agreements and satisfied, in all
material respects, all the conditions on its part to be
performed or satisfied at or prior to the date of such
certificate;
(iii) nothing has come to the attention of such Household
Entity that would lead it to believe that the Registration
Statement contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the knowledge of the
xxxxxx, threatened.
(c) Xxxxxxx X. Xxxxxxxx, General Counsel-Treasury &
Corporate Law and Assistant Secretary of Household, as counsel for the Household
Entities, shall have delivered a favorable opinion with respect to clauses (i)
through (xii) of this paragraph (c), Xxxxx Xxxxxxxxxx LLP, special counsel to
the Household Entities, shall have
13
delivered a favorable opinion with respect to clauses (xiii) through (xvi) of
this paragraph (c) each opinion shall be dated the Closing Date and satisfactory
in form and substance to the Representative and counsel for the Underwriters, to
the effect that:
(i) each of HFC, each Originator and the Transferor is
duly incorporated and validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation with corporate power and authority to own its
properties and to conduct its business, except where failure
to have such power and authority do not have a material
adverse effect, as the case may be, on the business or
consolidated financial condition of HFC and its subsidiaries,
taken as a whole, such Originator or the Transferor, to enter
into and perform its obligations under this Agreement and the
Transaction Documents which it is a party thereto and to
consummate the transactions contemplated hereby and thereby;
(ii) this Agreement and each of the Transaction Documents
have been duly authorized, executed and delivered by HFC, each
Originator or the Transferor, as the case may be, and, when
executed by the Indenture Trustee and the Representative,
constitute the legal, valid and binding agreement of HFC, such
Originator or the Transferor, as the case may be, enforceable
in accordance with its terms subject, as to enforceability (A)
to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights
generally and the rights and remedies of creditors of thrifts,
savings institutions or national banking associations, (B) to
general principles of equity (regardless of whether
enforcement is sought in a proceedings in equity or at law)
and (C) with respect to rights of indemnity under this
Agreement, to limitations of public policy under applicable
securities laws;
(iii) the Notes have been duly created and, when executed
and authenticated in accordance with the terms of the
Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued and
outstanding, enforceable in accordance with their terms
subject, as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or
national banking associations and (B) to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(iv) neither the execution nor the delivery of this
Agreement or any Transaction Document nor the issuance or
delivery of the Notes, nor the consummation of any of the
transactions contemplated herein or therein, nor the
fulfillment of the terms of the Notes, this Agreement or any
Transaction Document will conflict with or violate any term or
provision of the charter, by-laws or organizational documents
of any of the applicable Household Companies, as the case may
be, or result in a breach
14
or violation of, or default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
property or assets of any of the applicable Household
Companies pursuant to, any material statute currently
applicable to any of them or any order or regulation known to
such counsel to be currently applicable to any of them of any
court, regulatory body, administrative agency or governmental
body having jurisdiction over the Originator or the
Transferor, as the case may be, or the terms of any indenture
or other agreement or instrument known to such counsel to
which any of the applicable Household Companies is a party or
by which any of them or any of their properties are bound,
except where any such conflict, breach, violation, default or
encumbrance would not have a material adverse effect on the
transactions contemplated by this Agreement;
(v) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator with respect to this Agreement, the Notes or the
Transaction Documents or any of the transactions contemplated
herein or therein or with respect to the Household Companies
which, in the case of any such action, suit or proceeding with
respect to any of them, would have a material adverse effect
on the Noteholders or upon the ability of any of them to
perform their obligations under any of such agreements; and
the statements included in the Registration Statement and
Prospectus describing statutes (other than those relating to
tax and ERISA matters), legal proceedings, contracts and other
documents (other than financial statements and other financial
and statistical information contained therein as to which such
counsel need express no opinion) fairly summarize the matters
therein described;
(vi) the Registration Statement has become effective under
the Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 424 has been made in the
manner and within the time period required by Rule 424; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened; the Registration Statement and the Prospectus (and
any supplements thereto) (other than financial and statistical
information contained therein as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules
thereunder;
(vii) such counsel has no reason to believe that at any
Effective Date the Registration Statement (excluding any
exhibits filed therewith) contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or the Prospectus, as of its date,
includes any untrue statement of a material fact or omits to
state a material fact necessary to
15
make the statements therein, in light of the circumstances
under which they were made, not misleading (other than
financial and statistical information contained therein as to
which such counsel need express no opinion);
(viii) no consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court, federal or state governmental agency or
regulatory body is required for any Household Company to
consummate the transactions contemplated in this Agreement or
the Transaction Documents, except (A) such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been made or
obtained or as may be required under the State securities or
blue sky laws of any jurisdiction in connection with the
purchase of the Notes by the Underwriters and the subsequent
distribution of the Notes by the Underwriters or (B) where the
failure to have such consents, approvals, authorizations,
orders, registrations, filings, qualifications, licenses or
permits would not have a material adverse effect on the
Issuer's interests in the Receivables or the transactions
contemplated by such agreements;
(ix) the Notes, this Agreement and the Transaction
Documents conform in all material respects to the descriptions
thereof contained in the Registration Statement and the
Prospectus;
(x) the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), and complies as
to form with the TIA and the rules and regulations of the
Commission thereunder;
(xi) the statements in the Registration Statement under
the heading "Certain Legal Aspects of the Receivables" to the
extent that they constitute statements of matters of law or
legal conclusions with respect thereto, have been prepared or
reviewed by such counsel or attorneys under the control of
such counsel and are correct in all material respects;
(xii) the Issuer is not required to be registered as an
"investment company" under the 1940 Act;
(xiii) to the extent that the transfer of the Receivables by
any Originator to the Transferor does not constitute an
absolute assignment of such Receivables, the Receivables
Purchase Agreement creates in favor of the Transferor a
security interest in the rights of such Originator in such
Receivables, and to the extent that the transfer of the
Receivables by the Transferor to the Issuer does not
constitute an absolute assignment of such Receivables, the
Transfer and Servicing Agreement creates in favor of the
Issuer a security interest in the rights of the Transferor in
such Receivables;
16
(xiv) the Indenture creates in favor of the Indenture
Trustee a security interest in the rights of the Issuer in the
Receivables;
(xv) the statements in the Registration Statement and
Prospectus under the headings "Prospectus Summary--Tax Status"
and "Material Federal Income Tax Consequences", to the extent
that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or
reviewed by such counsel and accurately describe the material
Federal income tax consequences to holders of the Notes and
the statements under the heading "ERISA Considerations", to
the extent that they constitute statements of matters of law
or legal conclusions with respect thereto, have been prepared
or reviewed by such counsel and accurately describe the
material consequences to holders of the Notes under XXXXX; and
(xvi) No other filings or other actions, with respect to
the Indenture Trustee's interest in the Receivables, are necessary to
perfect the interest of the Indenture Trustee in the Receivables, and
proceeds thereof, against third parties, except that appropriate
continuation statements must be filed in accordance with the applicable
state's requirements, which is presently at least every five years.
In rendering such opinion, counsel may rely (A) as to matters
involving the application of the law of any jurisdiction other than (i) with
respect to the opinion delivered by Xxxxxxx X. Xxxxxxxx, General Counsel -
Treasury & Corporate Law and Assistant Secretary of Household, the State of
Illinois, the United States Federal laws and the corporation law of the State of
Delaware and (ii) with respect to the opinion delivered by Xxxxx Xxxxxxxxxx LLP,
the State of New York, the United States Federal Laws and the corporation law of
the State of Delaware, to the extent deemed proper and stated in each such
opinion, upon the opinion of other counsel of good standing believed by each
such counsel to be reliable and acceptable to you and your counsel, and (B) as
to matters of fact on certificates of responsible officers of the Issuer,
Household Entities and public officials. References to the Prospectus in this
paragraph (c) include any supplements thereto.
(d) Xxxxx Xxxxxxxxxx LLP, as counsel for the
Underwriters, shall have delivered a favorable opinion dated the Closing Date
with respect to the validity of the Notes, this Agreement, the Transfer and
Servicing Agreement, the Indenture, the Registration Statement, the Prospectus
and such other related matters as the Representatives may reasonably require and
the Household Companies shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass on such
matters. In giving their opinion, Xxxxx Xxxxxxxxxx LLP may rely (i) as to
matters of Illinois law upon the opinions of counsel delivered pursuant to
subsection (c) above, (ii) as to matters involving the application of laws of
any jurisdiction other than the State of New York, the United States Federal
laws or the corporation law of the State of Delaware, to the extent deemed
proper and specified in such opinion, upon the opinion of other counsel of good
standing believed to be reliable, and (iii) as to matters of fact, to the extent
deemed proper and as stated therein on
17
certificates of responsible officers of the Issuer, Household Companies and
public officials.
(e) At the Execution Time and at the Closing Date, KPMG
LLC shall have furnished to the Representatives a letter or letters, dated
respectively as of the date of this Agreement and the date of the Closing Date,
in form and substance satisfactory to the Representative and counsel for the
Underwriters, confirming that they are certified independent public accountants
within the meaning of the Act, the Exchange Act and the rules and regulations
promulgated thereunder and stating in effect that they have performed certain
specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from the general
accounting records of the Issuer, the Originators and the Transferor) set forth
in the Registration Statement and the Prospectus (and any supplements thereto),
agrees with the accounting records of the Issuer, and the Household Companies,
excluding any questions of legal interpretation, and (ii) they have performed
certain specified procedures with respect to the computer programs used to
select the Eligible Accounts and to generate information with respect to the
Accounts set forth in the Registration Statement and the Prospectus (and any
supplements thereto).
(f) The Representative shall receive evidence
satisfactory to the Representative that, on or before the Closing Date, UCC-1
financing statements are being or have been filed in the offices of the
Secretaries of State of its incorporation (and such other states as may be
necessary or desirable pursuant to applicable state law) reflecting the interest
of the Indenture Trustee in the Receivables and the proceeds thereof.
(g) Counsel to the Indenture Trustee shall have delivered
a favorable opinion, dated the Closing Date, and satisfactory in form and
substance to the Representative and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that:
(i) the Indenture Trustee has been duly incorporated and
is validly existing and in good standing as a banking
corporation under the laws of the State of [ ], is duly
qualified to do business in all jurisdictions where the nature
of its operations as contemplated by the Indenture requires
such qualifications, and has the power and authority
(corporate and other) to issue, and to take all action
required of it under, Indenture;
(ii) the execution, delivery and performance by the
Indenture Trustee of the Indenture and the issuance of the
Notes by the Indenture Trustee have been duly authorized by
all necessary corporate action on the part of the Indenture
Trustee, and under present laws do not and will not contravene
any law or governmental regulation or order presently binding
on the Indenture Trustee or the charter or the by-laws of the
Indenture Trustee or contravene any provision of or constitute
a default under any indenture, contract or other instrument to
which the Indenture Trustee is a party or by which the
Indenture Trustee is bound;
18
(iii) the execution, delivery and performance by the
Indenture Trustee of the Indenture and the issuance of the
Notes by the Indenture Trustee do not require the consent or
approval of, the giving of notice to, the registration with,
or the taking of any other action in respect of any Federal,
state or other governmental agency or authority which has not
previously been effected;
(iv) each of the Notes has been duly authenticated and
delivered by the Indenture Trustee and each of the Notes and
the Indenture constitute legal, valid and binding agreements
of the Indenture Trustee, enforceable against the Indenture
Trustee in accordance with its terms (subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally); and
(v) no approval, authorization or other action by, or
filing with, any governmental authority of the United States
of America or the State of [ ] having jurisdiction over the
banking or trust powers of the Indenture Trustee is required
in connection with its execution and delivery of the Indenture
or the performance by the Indenture Trustee of the terms of
the Indenture.
(h) Counsel to the Owner Trustee shall have delivered a
favorable opinion, dated the Closing Date, and satisfactory in form and
substance to the Representative and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that:
(i) the Owner Trustee is duly incorporated and validly
existing as a banking corporation in good standing under the
laws of the State of Delaware and has the power and authority
to execute, deliver and perform the Trust Agreement and to
consummate the transactions contemplated thereby;
(ii) the Trust Agreement has been duly authorized,
executed and delivered by the Owner Trustee and constitutes a
legal, valid and binding obligation of the Owner Trustee,
enforceable against the Owner Trustee in accordance with its
terms;
(iii) each of the Indenture, the Trust Agreement and the
Transfer and Servicing Agreement (collectively referred to in
this subsection (h) as the "Trust Documents") has been duly
executed and delivered by the Owner Trustee, as Owner Trustee
on behalf of the Issuer;
(iv) neither the execution, delivery or performance by the
Owner Trustee, in its individual capacity or as Owner Trustee,
as the case may be, of the Trust Documents, nor the
consummation of the transactions by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
contemplated thereby, requires the consent or approval of, the
19
withholding of objection on the part of, the giving of notice
to, the filing, registration or qualification with, or the
taking of any other action in respect of, any governmental
authority or agency of the State of Delaware or the United
States of America governing the banking or trust powers of the
Owner Trustee;
(v) neither the execution, delivery and performance by
the Owner Trustee, in its individual capacity or as Owner
Trustee, as the case may be, of the Trust Documents, nor the
consummation of the transactions by the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
contemplated thereby, is in violation of the charter or bylaws
of the Owner Trustee or of any law, governmental rule or
regulation of the State of Delaware or of the United States of
America governing the banking or trust powers of the Owner
Trustee or, to such counsel's knowledge, without independent
investigation, any indenture, mortgage, bank credit agreement,
note or bond purchase agreement, long-term lease, license or
other agreement or instrument to which it is a party or by
which it is bound or, to such counsel's knowledge, without
independent investigation, of any judgment or order applicable
to the Owner Trustee;
(vi) no consent, approval or other authorization of, or
registration, declaration or filing with, any court or
governmental agency or commission of the State of Delaware is
required by or with respect to the Owner Trustee, in its
individual capacity or as Owner Trustee, as the case may be,
for the valid execution and delivery of the Trust Documents,
or for the validity or enforceability thereof (other than the
filing of the certificate of trust, which certificate of trust
has been duly filed); and
(vii) to such counsel's knowledge, without independent
investigation, there are no pending or threatened actions,
suits or proceedings affecting the Owner Trustee before any
court or other governmental authority which, if adversely
determined, would materially and adversely affect the ability
of the Owner Trustee to carry out the transactions
contemplated by the Trust Agreement.
(i) Special Delaware counsel to the Issuer shall have
delivered a favorable opinion, dated the Closing Date, and satisfactory in form
and substance to the Representatives and counsel for the Underwriters, the
Household Entities and their counsel, to the effect that;
(i) the Issuer has been duly formed and is validly
existing in good standing as a common law trust under Delaware
law.
(ii) the Trust Agreement constitutes a legal, valid and
binding obligation of the Owner Trustee and the Transferor,
enforceable against the Owner Trustee and the Transferor, in
accordance with its terms;
20
(iii) under the Trust Agreement, the execution and delivery
of the Transfer and Servicing Agreement and the Indenture, the
issuance of the Notes, the Transferor Certificate and the
Ownership Interest Certificate and the granting of the
Collateral to the Indenture Trustee as security for the Notes
has been duly authorized by all necessary trust action on the
part of the Issuer;
(iv) under the Trust Agreement, the Issuer has (i) the
trust power and authority to execute, deliver and perform its
obligations under the Administration Agreement, the Indenture
and the Transfer and Servicing Agreement (collectively
referred to in this subsection (i) as the "Trust Documents"),
the Notes, the Transferor Certificate and the Owner Interest
Certificate and (ii) duly authorized, executed and delivered
such agreements and obligations;
(v) when the Transferor Certificate and Ownership
Interest Certificate have been duly executed and issued by the
Issuer and duly authenticated by the Owner Trustee in
accordance with the Trust Agreement, the Transferor
Certificate and Ownership Interest Certificate will be validly
issued and entitled to the benefits of the Trust Agreement;
(vi) neither the execution, delivery and performance by
the Issuer of the Trust Documents, the Notes, the Transferor
Certificate or the Ownership Interest Certificate, nor the
consummation by the Issuer of any of the transactions by the
Issuer contemplated thereby, requires the consent or approval
of, the withholding of objection on the part of, the giving of
notice to, the filing, registration or qualification with, or
the taking of any other action in respect of, any governmental
authority or agency of the State of Delaware and the filing of
any financing statements with the Delaware Secretary of State
in connection with the Indenture;
(vii) neither the execution, delivery and performance by
the Issuer of the Trust Documents, nor the consummation by the
Issuer of the transactions contemplated thereby, is in
violation of the Trust Agreement or of any law, rule or
regulation of the State of Delaware applicable to the Issuer;
(viii) with respect to the Issuer and the Receivables: (a)
there is no document, stamp, exercise or other similar tax
imposed by the State of Delaware upon the perfection of a
security interest in the Receivables, in the transfer of the
Receivables to or from the Issuer, or upon the issuance of the
Notes; (b) there is no personal property tax imposed by the
State of Delaware upon or measured by the corpus of the
Issuer; (c) the characterization of the Issuer for federal
income tax purposes will be determinative of the
characterization of the Issuer for Delaware income tax
purposes and assuming that the Issuer will be taxed as a
partnership for federal income tax purposes, the Issuer will
not be subject to Delaware
21
income tax and Noteholders who are not otherwise subject to
Delaware income tax will not be subject to tax by reason of
their ownership of the Notes and the receipt of income
therefrom; and (d) any income tax imposed by the State of
Delaware that might be applicable to the Issuer would be based
upon "federal taxable income," and for the purposes of
determining such income, the characterization of such income
for federal income tax purposes will be determinative, whether
the characterization of the transaction is that of a sale or a
loan; and
(ix) the Owner is the sole beneficial owner of the Issuer.
(j) The Class A Notes shall be given the highest
investment grade rating by both Xxxxx'x Investors Service, Inc. ("Xxxxx'x"), and
Standard & Poor's Ratings Services ("S&P") and neither Xxxxx'x nor S&P shall
have placed the Class A Notes under review with possible negative implications.
(k) The Class B Notes shall be rated at least "[ ]" or
its equivalent by both Moody's and S&P and neither Moody's nor S&P shall have
placed the Class B Notes under review with possible negative implications.
(l) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall not have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Issuer or any of the
Household Companies other than as set forth or contemplated in the Registration
Statement or Prospectus, the effect of which, in any case referred to above, is,
in the judgment of the Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the delivery of the
Notes as contemplated by the Registration Statement and the Prospectus.
(m) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
reasonably satisfactory in form and substance to the Representative and counsel
for the Underwriters, and the Representative and counsel for the Underwriters
shall have received such information, certificates and documents as the
Representative or counsel for the Underwriters may reasonably request.
(n) The Representative shall have received a letter or
letters, dated as of the date of the Computational Materials, as of ____, 200_,
and as of the Closing Date, respectively, of KPMG LLC, substantially in the from
of the drafts to which the Representative has previously agreed and otherwise in
form and substance satisfactory to the Representative and its counsel.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representative and counsel for the
Underwriters, this Agreement and all obligations of the
22
Representative and the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Indenture Trustee and the Transferor in writing or by
telephone or telegraph confirmed in writing.
Section 7. REIMBURSEMENT OF EXPENSES. If the sale of the Notes
provided for herein is not consummated because any condition to the
Representative's obligations set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Indenture Trustee or the
Household Entities to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Representative or the
Underwriters, the Household Entities, jointly and severally, will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Notes.
Section 8. INDEMNIFICATION AND CONTRIBUTION.
(a) As an inducement to the Underwriters to participate
in the public offering of the Notes, the Transferor and HFC, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each person
who controls any Underwriter within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Computational Materials, any ABS Term Sheet or any Collateral
Term Sheet provided by the related Underwriter which is derived from the
Transferor Provided Information or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, or in the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that (x) the Household Entities will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Household Entities by or on behalf of any
Underwriter through the Representative specifically for use in connection with
the preparation thereof, and (y) such indemnity with respect to any such untrue
statement or alleged untrue statement or omission or alleged omission in the
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Notes which are the subject thereof if
such person was not sent a copy of the Prospectus (or the
23
Prospectus as supplemented) at or prior to the confirmation of the sale of such
Notes to such person in any case where such delivery is required by the Act.
This indemnity agreement will be in addition to any liability which the
Household Entities may otherwise have.
(b) Each Underwriter, severally, agrees to indemnify and
hold harmless each of the Household Entities, each of their directors, each of
the officers who signs the Registration Statement, and each person who controls
any Household Entity within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnities from the
Household Entities to each Underwriter, but only with reference to losses,
claims, damages or liabilities which arise from (a) written information relating
to such Underwriter furnished to the Household Entities by or on behalf of such
Underwriter specifically for use in the preparation of the documents referred to
in the foregoing indemnity (b) any untrue statement or alleged untrue statement
of any material fact contained in the Computational Materials, any ABS Term
Sheet or any Collateral Term Sheet distributed by such Underwriter other than
one which is derived from Transferor Provided Information. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have. [The Household Entities acknowledge that the statements relating
to the Underwriters set forth in the last paragraph of the cover page, the
second paragraph under the heading "Reports to Noteholders", the second sentence
under the heading "Risk Factors -- Limited Liquidity," and the statements under
the heading "Underwriting" in the Prospectus constitute the only information
furnished in writing by the Underwriters or on behalf of the Underwriters for
inclusion in the Prospectus].
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the
24
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 8
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Household Entities on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Household Entities on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Household Entities on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Household Entities bears to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Household Entities or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection 23(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
25
"Transferor Provided Information" means the information
contained in the data tape delivered by the Transferor to the Representative (i)
dated as of ______, 200_ containing information with respect to the Receivables
as of the Cutoff Date.
Section 9. DEFAULT BY AN UNDERWRITER. If any one or more
Underwriters shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Underwriter or Underwriters hereunder on the Closing Date and
such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the respective proportions which
the amount of Notes set forth opposite their names in Schedule I with respect to
the Closing Date hereto bears to the aggregate amount of Notes set forth
opposite the names of all the remaining Underwriters) the Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Notes which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Notes set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Notes, and if such nondefaulting
Underwriters do not purchase all the Notes, the obligations will terminate
without liability of any nondefaulting Underwriter, the Issuer, or any Household
Entity. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Underwriters shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Transferor, HFC, and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
Section 10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by notice given to
the Transferor if after the Execution Time and prior to delivery of and payment
for the Notes on the Closing Date, (i) trading in the Common Stock of Household
International, Inc. shall have been suspended by the Commission or the New York
Stock Exchange or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
by Federal or State of New York authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities involving the United States of
America, declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the reasonable judgment
of the Representative, impractical or inadvisable to proceed with the offering
or delivery of the Notes as contemplated by the Prospectus.
Section 11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Household Entities or the officers of each of them and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriters, the Household Entities or any of
26
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Notes. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
Section 12. NOTICES. All communications hereunder shall be in
writing and effective only on receipt, and, if sent to the Underwriters, will be
mailed, delivered or telegraphed and confirmed to the Representative at [ ]
Attention: [ ]; if sent to any Household Entity, will be mailed, delivered or
telegraphed and confirmed to them at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000, attention of General Counsel; provided, however, that any notice
to an Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed
and confirmed to such Underwriter.
Section 13. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
Section 14. SUCCESSORS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
Section 15. COUNTERPARTS. This Agreement may be executed by
one or more parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 16. MISCELLANEOUS. This agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
27
If you are in agreement with the foregoing, please sign two
counterparts hereof and return one to each of HFC and the Transferor whereupon
this letter and your acceptance shall become a binding agreement among the
Household Entities and the several Underwriters.
Very truly yours,
HOUSEHOLD CONSUMER LOAN
CORPORATION II
By: __________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By: __________________________
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date hereof.
[Name]
By [ ]
By _____________________________
Name:
Title:
For themselves and the other
several Underwriters named
in Schedule I to the
foregoing Agreement.
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SCHEDULE I
CLASS A NOTES
Principal
Amount
---------------
CLASS B NOTES
Principal
Amount
---------------
29
