EXECUTION COPY EXHIBIT 10.1
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HOUSEHOLD AFFINITY FUNDING CORPORATION
and
HOUSEHOLD BANK, f.s.b.
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RECEIVABLES PURCHASE AGREEMENT
Dated as of April 30, 1993
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS............................................................... 1
Section 1.1. Definitions............................................ 1
Section 1.2. Other Definitional Provisions.......................... 4
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES.................................... 4
Section 2.1. Purchase............................................... 4
Section 2.2. Addition of Aggregate Addition Accounts................ 5
Section 2.3. Addition of New Accounts............................... 6
ARTICLE III
CONSIDERATION AND PAYMENT................................................. 6
Section 3.1. Purchase Price......................................... 6
Section 3.2. Adjustments to Purchase Price.......................... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................................ 7
Section 4.1. Bank's Representations and Warranties
Relating to the Bank................................... 7
Section 4.2. Representations and Warranties of the Bank Relating
to the Agreement and the Receivables................... 9
Section 4.3. Representations and Warranties of Funding.............. 11
ARTICLE V
COVENANTS................................................................. 12
Section 5.1. Bank Covenants......................................... 12
ARTICLE VI
REPURCHASE OBLIGATION..................................................... 14
Section 6.1. Reassignment of Ineligible Receivables................. 14
Section 6.2. Reassignment of Certificateholders' Interest in
Trust Portfolio........................................ 15
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ARTICLE VII
CONDITIONS PRECEDENT..................................................... 16
Section 7.1. Conditions to Funding's Obligations Regarding
Initial Receivables................................... 16
Section 7.2. Conditions to Funding's Obligations Regarding
Additional Receivables................................ 16
Section 7.3. Conditions Precedent to the Bank's Obligations........ 17
ARTICLE VIII
TERM AND PURCHASE TERMINATION............................................ 18
Section 8.1. Term.................................................. 18
Section 8.2. Purchase Termination.................................. 18
ARTICLE IX
MISCELLANEOUS PROVISIONS................................................. 18
Section 9.1. Amendment............................................. 18
Section 9.2. GOVERNING LAW......................................... 19
Section 9.3. Notices............................................... 19
Section 9.4. Severability of Provisions............................ 19
Section 9.5. Assignment............................................ 19
Section 9.6. Acknowledgment and Agreement of the Bank.............. 20
Section 9.7. Further Assurances.................................... 20
Section 9.8. No Waiver; Cumulative Remedies........................ 20
Section 9.9. Counterparts.......................................... 21
Section 9.10. Binding Effect; Third-Party Beneficiaries............. 21
Section 9.11. Merger and Integration................................ 21
Section 9.12. Headings.............................................. 21
Section 9.13. Schedules and Exhibits................................ 21
Section 9.14. Survival of Representatives and Warranties............ 21
EXHIBITS
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Exhibit A Form of Supplemental Conveyance
SCHEDULES
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Schedule 1 List of Accounts
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RECEIVABLES PURCHASE AGREEMENT, dated as of April 30, 1993, by and between
HOUSEHOLD BANK, f.s.b. a federal savings bank (the "Bank "), and HOUSEHOLD
AFFINITY FUNDING CORPORATION, a Delaware corporation and a subsidiary of the
Bank ("Funding").
W I T N E S S E T H:
WHEREAS, Funding desires to purchase from time to time certain Receivables
(hereinafter defined) due or to become due to the Bank under certain credit card
accounts of the Bank;
WHEREAS, the Bank desires to sell from time to time and assign certain
Receivables to Funding upon the terms and conditions hereinafter set forth;
WHEREAS, it is contemplated that the Receivables purchased hereunder will
be transferred by Funding to the Trust (hereinafter defined) in connection with
the issuance of certain Certificates (hereinafter defined); and
WHEREAS, the Bank agrees that all covenants and agreements made by the Bank
herein with respect to the Accounts (hereinafter defined) and Receivables shall
also be for the benefit of the Trustee (hereinafter defined) and all holders of
the Certificates.
NOW, THEREFORE, it is hereby agreed by and between Funding and the Bank as
follows:
ARTICLE I
DEFINITIONS
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Section 1.1. Definitions. All capitalized terms used herein or in any
certificate, document, or Conveyance Paper made or delivered pursuant hereto,
and not defined herein or therein, shall have the meaning ascribed thereto in
the Pooling and Servicing Agreement; in addition, the following words and
phrases shall have the following meanings:
"Account" shall mean (a) each MasterCard/1/ and VISA/1/ account
established pursuant to a Credit Card Agreement between the Bank and any Person,
which account is identified in the computer file or microfiche list delivered
pursuant to Section 2.01 of the Pooling and Servicing Agreement, (b) each
Additional Account, (c) each Related Account, (d) any account originated as a
replacement of an Account in connection with the upgrade of such Account to
premium status (provided that such a replacement account can be traced or
identified by reference to, or by way of, the applicable computer file or
microfiche list previously filed pursuant
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/1/ MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and of VISA USA, Inc., respectively.
hereto), (e) each account into which an Account shall be transferred (a
"Transferred Account") provided that (i) such transfer was made in accordance
with the Credit Card Guidelines and (ii) such account can be traced or
identified as an account into which an Account has been transferred, and (f)
each surviving account resulting from the combination, in accordance with the
Credit Card Guidelines, of two or more of the Accounts but shall exclude (g) any
Account all the Receivables in which are either: (i) after the Removal Date,
removed by Funding pursuant to Section 2.10 of the Pooling and Servicing
Agreement, (ii) reassigned to Funding pursuant to Section 2.05 of the Pooling
and Servicing Agreement or (iii) assigned and transferred to the Servicer
pursuant to Section 3.03 of the Pooling and Servicing Agreement.
"Addition Date" shall mean (a) with respect to Aggregate Addition Accounts,
the date from and after which such Aggregate Addition Accounts are to be
included as Accounts pursuant to Section 2.09(a) or (b) of the Pooling and
Servicing Agreement, (b) with respect to Participation Interests, the date from
and after which such Participation Interests are to be included as assets of the
Trust pursuant to Section 2.09(a) or (b) of the Pooling and Servicing Agreement,
and (c) with respect to New Accounts, the first Distribution Date following the
calendar month in which such New Accounts are originated.
"Addition Notice Date" shall have the meaning specified in Section 2.2 of
this Agreement.
"Agreement" shall mean this Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"Appointment Date" shall have the meaning specified in Section 8.2.
"Bank" shall mean Household Bank, f.s.b., a federal savings bank or its
successor and/or any transferee of the Accounts from such bank or any other
originator of accounts which enters into a receivables purchase agreement with
Funding.
"Closing Date" shall mean May 5, 1993.
"Conveyance" shall have the meaning specified in Section 2.1(a).
"Conveyance Papers" shall have the meaning specified in Section 4.1(c).
"Credit Adjustment" shall have the meaning specified in Section 3.2
"Dissolution Event" shall have the meaning specified in Section 8.2.
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"Funding" shall mean Household Affinity Funding Corporation, a Delaware
corporation.
"Initial Account" shall mean any Account in existence on the Closing
Date.
"Initial Cut-Off Date" shall mean the close of business on April 1,
1993.
"Interchange" shall mean interchange fees payable to the Bank, in its
capacity as credit card issuer, through VISA USA, Inc. and MasterCard
International Incorporated or any other similar entity or organization with
respect to any other type of revolving credit card accounts included as Accounts
(except as otherwise provided in the initial Assignment with respect to any such
other type of Accounts), in connection with cardholder charges for goods and
services.
"New Principal Receivables" shall have the meaning set forth in Section
3.1.
"Pooling and Servicing Agreement" shall mean the Pooling and Servicing
Agreement, dated as of April 30, 1993, among Household Finance Corporation, as
Servicer, Funding, as Seller and the Trustee, and all amendments and supplements
thereto.
"Portfolio Reassignment Price" shall mean the portion of the amount payable
by Funding to the Trustee pursuant to Section 2.06 of the Pooling and Servicing
Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Receivables" shall mean, including when used in other defined terms
herein, Receivables as defined in the Pooling and Servicing Agreement existing
or created after the Initial Cut-Off Date in respect of the Initial Accounts or
the Additional Cut-off Date in respect of Additional Accounts.
"Repurchase Price" shall have the meaning set forth in Section 6.1.
"Supplemental Conveyance" shall have the meaning set forth in Section
2.2.
"Trust" shall mean the trust created by the Pooling and Servicing
Agreement.
"Trustee" shall mean The Bank of New York, a New York banking corporation,
the institution executing the Pooling and Servicing Agreement as, and acting in
the capacity of,
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Trustee thereunder, or its successor in interest, or any successor trustee
appointed as provided in the Pooling and Servicing Agreement.
Section 1.2. Other Definitional Provisions. (a) All terms defined in this
Agreement shall have the defined meanings when used in any certificate, other
documents, or Conveyance Paper made or delivered pursuant hereto unless
otherwise defined herein.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Pooling and Servicing Agreement and all applicable Supplements.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
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Section 2.1. Purchase. (a) By execution of this Agreement, the Bank does
hereby sell, transfer, assign, set over and otherwise convey to Funding
(collectively, the "Conveyance "), without recourse all of its right, title and
interest in, to and under (i) the Receivables now existing and hereafter created
from time to time but prior to the termination of this Agreement pursuant to
Article VIII hereof and all monies due and or to become due and all amounts
received with respect thereto and all proceeds (including, without limitation,
"proceeds" as defined in the UCC as in effect in the State of California)
thereof and all Recoveries allocable to the Accounts and all Recoveries which
are identified as relating to specific Defaulted Receivables and (ii) the right
to receive Interchange and Recoveries allocable to the Accounts (the "Purchased
Assets").
(b) In connection with such Conveyance, the Bank agrees (i) to record and
file, at its own expense, any financing statements (and continuation statements
with respect to such financing statements when applicable) with respect to the
Receivables now existing and hereafter created, meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect, and maintain perfection of, the Conveyance of such Purchased Assets
from the Bank to Funding on and after the Closing Date, (ii) that such financing
statements shall name the Bank, as seller, and Funding, as purchaser, of the
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Receivables and (iii) to deliver a file-stamped copy of such financing
statements or other evidence of such filings (excluding such continuation
statements, which shall be delivered as filed) to Funding (or to the Trustee, if
Funding so directs) as soon as is practicable after filing.
(c) In connection with such Conveyance, the Bank further agrees that it
will, at its own expense, on or prior to the Closing Date (i) indicate in its
computer files or microfiche lists that Receivables created in connection with
the Initial Accounts have been conveyed to Funding in accordance with this
Agreement and have been conveyed by Funding to the Trustee pursuant to the
Pooling and Servicing Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Removed Accounts) in such computer files
and microfiche lists the code identifying each such Account and (ii) deliver to
Funding (or to the Trustee, if Funding so directs) a computer file or microfiche
list containing a true and complete list of all such Initial Accounts specifying
for each such Account, as of the Initial Cut-Off Date (A) its account number (B)
the aggregate amount outstanding in such Account and (C) the aggregate amount of
Principal Receivables in such Initial Account. Such computer files or microfiche
lists, as supplemented from time to time to reflect Additional Accounts or
Removed Accounts, shall be marked as Schedule 1 to this Agreement, shall be
delivered to Funding (or to the Trustee, if so directed by Funding) and marked
as proprietary and confidential, and is hereby incorporated into and made a part
of this Agreement. The Bank further agrees not to alter the code referenced in
clause (i) of this paragraph with respect to any Account during the term of this
Agreement unless and until such Account becomes a Removed Account.
(d) The parties hereto intend that the conveyance of the Bank's right,
title and interest in and to the Receivables shall constitute a sale, conveying
good title free and clear of any liens, claims, encumbrances or rights of others
from the Bank to Funding and that the Receivables shall not be part of the
Bank's estate in the event of the insolvency of the Bank or a conservatorship,
receivership or similar event with respect to the Bank. It is the intention of
the parties hereto that the arrangements with respect to the Receivables shall
constitute a purchase and sale of such Receivables and not a loan. In the event,
however, that a court of competent jurisdiction were to hold that the
transactions evidenced hereby constitute a loan and not a purchase and sale, it
is the intention of the parties hereto that this Agreement shall constitute a
security agreement under applicable law, and that the Bank shall be deemed to
have granted to Funding a first priority perfected security interest in all of
the Bank's right, title and interest in, to and under the Receivables and other
Purchased Assets.
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Section 2.2. Addition of Aggregate Addition Accounts. (a) If, from time to
time, Funding becomes obligated to require the Bank to designate Aggregate
Addition Accounts pursuant to Section 2.09(a) of the Pooling and Servicing
Agreement, then Funding shall give the Bank written notice thereof on or before
the eighth Business Day (the "Addition Notice Date") prior to the Addition Date
therefor, and the Bank shall on or before the Addition Date, designate
sufficient Eligible Accounts to be included as Additional Accounts so that after
the inclusion thereof Funding will be in compliance with the requirements of
said Section 2.09. Additionally, subject to Section 2.09(b) and (c) of the
Pooling and Servicing Agreement, from time to time Eligible Accounts may be
designated to be included as Aggregate Addition Accounts, upon the mutual
agreement of Funding and the Bank. In either event, the Bank shall have sole
responsibility for selecting the Aggregate Addition Accounts and shall on or
prior to the Addition Date therefor execute and deliver to Funding a written
assignment from the Bank to Funding in substantially the form of Exhibit A (the
"Supplemental Conveyance"). The Bank shall take all actions necessary to comply,
or to enable Funding to comply, with the requirements of Section 2.09 of the
Pooling and Servicing Agreement and shall perform with respect to the
Receivables in such Aggregate Addition Accounts all actions specified in Section
2.09(c) of the Pooling and Servicing Agreement.
Section 2.3. Addition of New Accounts. Upon the mutual agreement of
Funding and the Bank, subject to compliance by the Seller with the conditions
specified in Sections 2.09(d) and (e) of the Pooling and Servicing Agreement,
the Bank may designate newly originated Eligible Accounts to be included as New
Accounts. Upon such designation, such New Accounts shall be deemed to be
Accounts hereunder. The Bank shall take all actions necessary to comply, or to
enable Funding to comply, with the requirements of Section 2.09 of the Pooling
and Servicing Agreement and shall cooperate with Funding to enable it to perform
with respect to the Receivables in such New Accounts all actions specified in
Section 2.09(d) and (e) of the Pooling and Servicing Agreement.
ARTICLE III
CONSIDERATION AND PAYMENT
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Section 3.1. Purchase Price. The "Purchase Price" for the Receivables
which came into existence on or prior to the Closing Date conveyed to Funding
under this Agreement shall be payable on the Closing Date and shall be an amount
equal to 100% of Principal Receivables plus present value of anticipated excess
spread, including Interchange computed by taking into account factors such as
historical losses (and discounted to take into account any uncertainty
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as to future performance matching historical performance), servicing fees,
delinquencies and pay-down rates, yield and such other factors as may be
mutually agreed between the Bank and Funding. This computation of initial
purchase price should assume no reinvestment in new Receivables. The Purchase
Price for the Receivables (including Receivables in Additional Accounts) to be
conveyed to Funding under this Agreement which come into existence after the
Closing Date, shall be payable on the Distribution Date following the Due Period
during which such Receivables are conveyed by the Bank to Funding in an amount
equal to the aggregate amount of the Principal Receivables so conveyed (the "New
Principal Receivables") plus the present value of Collections of Finance Charge
and Administration Receivables estimated to be received (and discounted to take
into account any uncertainty as to future performance matching historical
performance) with respect to such New Principal Receivables computed by taking
into account factors such as anticipated charge-offs (including charge-offs of
Principal Receivables which shall be deemed to reduce such Collections), pay-
down rates, servicing fees and delinquencies.
Section 3.2. Adjustments to Purchase Price. The Purchase Price shall be
adjusted on each Distribution Date (a "Credit Adjustment") with respect to any
Receivable previously conveyed to Funding by the Bank which has since been
reversed by the Bank or the Servicer because of a rebate, refund, unauthorized
charge or billing error to a cardholder, because such Receivable was created in
respect of merchandise which was refused or returned by a cardholder, or due to
the occurrence of any other event referred to in Section 3.09 of the Pooling and
Servicing Agreement. The amount of such adjustment equals (x) the reduction in
the principal balance of such Receivable resulting from the occurrence of such
event multiplied by (y) the quotient (expressed as a percentage) of (i) the
Purchase Price payable on such Payment Date computed in accordance with Section
3.1 divided by (ii) the Principal Receivables paid for on such date pursuant to
such Section. In the event that an adjustment pursuant to this Section 3.2
causes the Purchase Price to be a negative number, the Bank agrees that, not
later than 1:00 p.m. New York City time on such Distribution Date, the Bank
shall pay to Funding, by making a deposit into the Collection Account in same-
day funds, an amount equal to the amount by which the Purchase Price minus the
Credit Adjustment would be reduced below zero.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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Section 4.1. Bank's Representations and Warranties Relating to the Bank.
The Bank hereby represents and warrants to, and agrees with, Funding as of
the Closing
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Date and on each Addition Date, that:
(a) Organization and Good Standing. The Bank is a federal savings bank duly
organized and validly existing in good standing under the laws of the United
States of America and has, in all material respects, full power and authority to
own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
(b) Due Qualification. The Bank is duly qualified to do business and is in
good standing as a foreign corporation (or is exempt from such requirements) and
has obtained all necessary licenses and approvals, in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would (i) render
any Credit Card Agreement relating to an Account or any Receivable unenforceable
by the Bank, Funding or the Trust and (ii) have a material adverse effect on the
Investor Certificateholders.
(c) Due Authorization. The execution, delivery and performance of this
Agreement and any other document or instrument delivered pursuant hereto (such
other documents or instruments, collectively, the "Conveyance Papers") and the
consummation of the transactions provided for in this Agreement or any other
Conveyance Papers have been duly authorized by all necessary corporate action on
the part of the Bank and this Agreement will remain from the time of its
execution, an official record of the Bank.
(d) No Conflict. The execution and delivery of this Agreement and the
Conveyance Papers by the Bank, the performance of the transactions contemplated
by this Agreement and the Conveyance Papers, and the fulfillment of the terms of
this Agreement and the Conveyance Papers applicable to the Bank will not
conflict with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
material default under, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which the Bank is a party or by which it or any of
its properties are bound.
(e) No Violation. The execution, delivery and performance of this Agreement
and the Conveyance Papers by the Bank and the fulfillment of the terms
contemplated herein and therein applicable to the Bank will not conflict with or
violate any Requirements of Law applicable to the Bank.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Bank, threatened against the Bank, before any
court, regulatory body, administrative agency or other tribunal or
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governmental instrumentality (i) asserting the invalidity of this Agreement or
the Conveyance Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance Papers, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Bank, would materially and adversely affect the performance by the Bank of its
obligations under this Agreement or the Conveyance Papers, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Conveyance Papers or (v) seeking to
affect adversely the income tax attributes of the Trust under United States
Federal, New York, California or Illinois income tax systems.
(g) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by the Bank in connection with the execution and
delivery by the Bank of this Agreement or the Conveyance Papers and the
performance of the transactions contemplated by this Agreement or the Conveyance
Papers by the Bank have been duly obtained, effected or given and are in full
force and effect.
The representations and warranties set forth in this Section 4.1 shall
survive the transfer and assignment of the Receivables to Funding. Upon
discovery by the Bank or Funding of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
written notice to the other party within three Business Days following such
discovery.
Section 4.2. Representations and Warranties of the Bank Relating
to the Agreement and the Receivables.
(a) Representations and Warranties. The Bank hereby represents and warrants
to Funding as of the date of this Agreement, as of the Closing Date and, with
respect to Additional Accounts, as of the related Addition Date that:
(i) this Agreement and, in the case of Additional Accounts, the
related Supplemental Conveyance, each constitutes a valid and binding
obligation of the Bank enforceable against the Bank in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (b)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought, and (c)
in addition to the exceptions set forth in (a) above, the Financial
Institutions Reform,
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Recovery and Enforcement Act or other laws relating to or affecting the
enforcement of creditors' rights, or by the rights of the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, the Resolution
Trust Corporation or creditors of federal savings banks;
(ii) as of the Initial Cut-Off Date, and as of the related Addition
Date with respect to Additional Accounts, Schedule 1 to this Agreement, as
supplemented to such date, is an accurate and complete listing in all
material respects of all the Accounts as of the Initial Cut-Off Date or
such Additional Cut-Off Date, as the case may be, and the information
contained therein supplied by the Bank with respect to the identity of such
Accounts and the Receivables existing thereunder is true and correct in all
material respects as of the Initial Cut-Off Date or such applicable
Additional Cut-Off Date, as the case may be, and as of the Initial Cut-Off
Date, the aggregate amount of Receivables in all the Initial Accounts was
$665,481,467.16 of which $661,490,254.59 were Principal Receivables;
(iii) each Receivable has been conveyed to Funding free and clear of
any Lien;
(iv) with respect to each Receivable, all consents, orders, approvals
or authorizations of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Bank in
connection with the conveyance of such Receivable to Funding have been duly
obtained, effected or given and are in full force and effect;
(v) either this Agreement or, in the case of Additional Accounts, the
related Assignment constitutes a valid sale, transfer and assignment to
Funding of all right, title and interest of the Bank in the Receivables and
the proceeds thereof and the Interchange payable pursuant to this Agreement
and the Recoveries payable pursuant to this Agreement and Recoveries
identified as relating to specific Defaulted Receivables, or, if this
Agreement or, in the case of Additional Accounts, the related Assignment
does not constitute a sale of such property, it constitutes a grant of a
first priority perfected "security interest" (as defined in the UCC) in
such property to Funding, which, in the case of existing Receivables and
the proceeds thereof and said Interchange, is enforceable upon execution
and delivery of this Agreement, or, with respect to then existing
Receivables in Additional Accounts, as of the applicable Addition Date, and
which will be enforceable with respect to such Receivables hereafter and
thereafter created and the proceeds thereof upon such creation. Upon the
filing of the financing statements and, in the case of Receivables
hereafter created and the proceeds
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thereof, upon the creation thereof, Funding shall have a first priority
perfected security or ownership interest in such property and proceeds;
(vi) on the Initial Cut-Off Date, each Account is an Eligible Account
and, in the case of Additional Accounts, on the Additional Cut-Off Date
with respect thereto, each such Additional Account is an Eligible Account;
(vii) on the Initial Cut-Off Date, each Receivable then existing is an
Eligible Receivable, and in the case of Additional Accounts, on the
applicable Additional Cut-Off Date, each Receivable generated thereunder is
an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable, such
Receivable is an Eligible Receivable; and
(ix) no selection procedures believed by the Bank to be materially
adverse to the interests of Funding or the Investor Certificateholders have
been used in selecting the Accounts from among any pool of Accounts of a
similar type.
(b) Notice of Breach. The representations and warranties set forth in this
Section 4.2 shall survive the transfer and assignment of the Receivables to
Funding. Upon discovery by either the Bank or Funding of a breach of any of the
representations and warranties set forth in this Section 4.2, the party
discovering such breach shall give written notice to the other party within
three Business Days following such discovery; provided that the failure to give
notice within three Business Days does not preclude subsequent notice. The Bank
hereby acknowledges that Funding intends to rely on the representations
hereunder in connection with representations made by Funding to secured parties,
assignees or subsequent transferees including but not limited to transfers made
by Funding to the Trust pursuant to the Pooling and Servicing Agreement.
Section 4.3. Representations and Warranties of Funding. As of the Closing
Date, Funding hereby represents and warrants to, and agrees with, the Bank that:
(a) Organization and Good Standing. Funding is a corporation duly organized
and validly existing under the laws of the State of Delaware and has, in all
material respects, full power and authority to own its properties and conduct
its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations under
this Agreement and the Conveyance Papers.
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(b) Due Authorization. The execution and delivery of this Agreement and the
Conveyance Papers and the consummation of the transactions provided for in this
Agreement and the Conveyance Papers have been duly authorized by Funding by all
necessary corporate action on the part of Funding.
(c) No Conflict. The execution and delivery of this Agreement and the
Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which Funding is a party or by which it or
its properties is bound.
(d) No Violation. The execution, delivery and performance of this Agreement
and the Conveyance Papers by Funding and the fulfillment of the terms
contemplated herein and therein applicable to Funding will not conflict with or
violate any Requirements of Law applicable to Funding.
(e) No Proceeding. There are no proceedings or investigations pending or,
to the best knowledge of Funding, threatened against Funding, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of Funding, would
materially and adversely affect the performance by Funding of its obligations
under this Agreement or the Conveyance Papers or (iv) seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Conveyance Papers.
(f) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by Funding in connection with the execution and
delivery by Funding of this Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement and the
Conveyance Papers or the fulfillment of the terms of this Agreement and the
Conveyance Papers by Funding have been duly obtained, effected or given and are
in full force and effect.
The representations and warranties set forth in this Article IV shall
survive the Conveyance of the Receivables to Funding and termination of the
rights and obligations of
12
Funding and the Bank under this Agreement. Upon discovery by Funding or the Bank
of a breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other party.
ARTICLE V
COVENANTS
---------
Section 5.1. Bank Covenants. The Bank hereby covenants and agrees with
Funding as follows:
(a) Receivables Not To Be Evidenced by Promissory Notes. The Bank will take
no action to cause any Receivable to be evidenced by any instrument (as defined
in the UCC) except in connection with the enforcement or collection undertaken
with regard to the related Account in which event such Receivable shall be an
Ineligible Receivable in accordance with Section 6.1(a) and shall be reassigned
to the Bank in accordance with Section 6.1(b).
(b) Security Interests. Except for the conveyances hereunder or as
otherwise provided herein, the Bank will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with Funding's ownership
of the Receivables or grant, create, incur, assume or suffer to exist any Lien
on any Receivable, whether now existing or hereafter created, or any interest
therein, and the Bank shall not claim any ownership interest in the Receivables
and shall defend the right, title and interest of Funding in, to and under the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under the Bank.
(c) Bank's Interest. Except for the conveyances hereunder and in connection
with any transaction permitted pursuant to Section 9.5, the Bank hereby agrees
not to transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in the Accounts and any such attempted
transfer, assignment, exchange, conveyance, pledge, hypothecation or grant shall
be void.
(d) Account Allocations. In the event that the Bank is unable for any
reason to transfer Receivables to Funding in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application of
the provisions of Section 8 or any Governmental Authority having regulatory
authority over the Bank or any court of competent jurisdiction ordering that the
Bank not transfer any additional Principal Receivables to Funding) then, in any
such event, the Bank agrees (except as prohibited by any such order) to allocate
and pay to Funding, after the date of such inability, all amounts in the manner
by which Funding will
13
allocate and pay to the Trust after such inability by Funding pursuant to
Section 2.11 of the Pooling and Servicing Agreement.
(e) Delivery of Collections or Recoveries. In the event that the Bank
receives Collections or Recoveries, the Bank agrees to pay to Funding (or to the
Servicer if Funding so directs) all such Collections and Recoveries to the
extent such amounts are payable to Funding as soon as practicable after receipt
thereof.
(f) Notice of Liens. The Bank shall notify Funding promptly after becoming
aware of any Lien on any Receivable other than the conveyances hereunder.
(g) Periodic Rate Finance Charges. (i) Except (x) as otherwise required by
any Requirements of Law or (y) as is deemed by the Bank to be necessary in order
for the Bank to maintain its credit card business or a program operated by such
credit card business on a competitive basis based on a good faith assessment by
the Bank of the nature of the competition with respect to the credit card
business or such program and only if the change giving rise to such reduction
with respect to a specific program is made applicable to substantially all of
the credit card accounts subject to such program, the Bank shall not at any time
take any action which would have the effect of reducing the Portfolio Yield to a
level that could be reasonably expected to cause any Series to experience any
Amortization Event based on the insufficiency of the Portfolio Yield or any
similar test and (ii) except as otherwise required by any Requirements of Law,
the Bank shall not take any action which would have the effect of reducing the
Portfolio Yield to less than the highest Average Rate for any Group.
(h) Credit Card Agreements and Guidelines. Subject to compliance with all
Requirements of Law, and paragraph (g) above, the Bank may change the terms and
provisions of the Credit Card Agreements or the Credit Card Guidelines in any
respect (including the calculation of the amount or the timing of charge-offs
and the Periodic Rate Finance Charges to be assessed thereon) only if the change
made with respect to a specific program is made applicable to substantially all
of the credit card accounts subject to such program. Notwithstanding the above,
unless required by Requirements of Law or as permitted by Section 5.19(g), the
Bank will take no action with respect to the Credit Card Agreements or the
Credit Card Guidelines, which, at the time of such action, the Bank reasonably
believes will have a material adverse effect on the Investor Certificateholders.
(i) MasterCard International and VISA USA. The Bank shall, to the extent
applicable to Accounts owned or serviced by it, use its best efforts to remain,
either directly or indirectly, a member in good standing of the
14
MasterCard System, the VISA system and any other similar entity's or
organization's system relating to any other type of revolving credit card
accounts included as Accounts.
(j) Interchange. Not later than 1:00 p.m., New York City time, on the
Distribution Date, the Bank shall deposit into the Collection Account, in same-
day funds, (i) the amount of Interchange to be included as Collections of
Finance Charge Receivables with respect to the preceding Due Period or (ii) if
at any time the Servicer cannot identify the amount of such Interchange, the
amount reasonably estimated and notified to the Bank by the Servicer as the
amount of such Interchange.
(k) Documentation of Transfer. The Bank shall undertake to file the
documents which would be necessary to perfect and maintain the transfer of the
security interest in and to the Purchased Assets.
(l) Approval of Official Records. The Bank shall cause this Agreement to be
duly approved by the Bank's Board of Directors, and the Bank shall maintain the
Agreement as a part of the official records of the Bank for the term of the
Agreement.
ARTICLE VI
REPURCHASE OBLIGATION
---------------------
Section 6.1. Reassignment of Ineligible Receivables.
(a) In the event any representation or warranty under Section 4.2(a) (ii),
(iii), (iv), (vi), (vii) or (viii) is not true and correct in any material
respect as of the date specified therein with respect to any Receivable or the
related Account and as a result of such breach Funding is required to accept
reassignment of Ineligible Receivables previously sold by the Bank to Funding
pursuant to Section 2.05(a) of the Pooling and Servicing Agreement, the Bank
shall accept reassignment of Funding's interest in such Ineligible Receivables
on the terms and conditions set forth in Section 6.1(b).
(b) The Bank shall accept reassignment of any Ineligible Receivables
previously sold by the Bank to Funding from Funding on or prior to the end of
the Due Period in which such reassignment obligation arises, and shall pay for
such reassigned Ineligible Receivables by treating such Ineligible Receivables
as if they were subject to a reversal of the entire unpaid principal balance
thereof plus accrued and unpaid finance charges at the annual percentage rate
applicable to such Receivables from the last date billed through the end of such
Due Period and by adjusting the purchase price of future Receivables purchased
as provided in
15
Section 3.2 (the "Repurchase Price"). Upon reassignment of such Ineligible
Receivables, Funding shall automatically and without further action be deemed to
sell, transfer, assign, set-over and otherwise convey to the Bank, without
recourse, representation or warranty, all the right, title and interest of
Funding in and to such Ineligible Receivables, all monies due or to become due
with respect thereto and all proceeds thereof; and such reassigned Ineligible
Receivables shall be treated by Funding as collected in full as of the date on
which they were transferred. Funding shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Bank to effect the conveyance of such Ineligible
Receivables pursuant to this subsection.
Section 6.2. Reassignment of Certificateholders' Interest in Trust
Portfolio. In the event any representation or warranty set forth in Section
4.1(a)or(c) or Section 4.2 (a)(i) or (a)(v) is not true and correct in any
material respect and as a result of such breach Funding is required to accept a
reassignment of the Certificateholders' Interest in the Receivables previously
sold by the Bank to Funding pursuant to Section 2.06 of the Pooling and
Servicing Agreement, the Bank shall be obligated to accept a reassignment of
Funding's interest in such Receivables on the terms set forth below.
The Bank shall pay to Funding by depositing in the Collection Account in
same-day funds, not later than 1:00 p.m. New York City time, on the Distribution
Date following the Due Period in which such reassignment obligation arises, in
payment for such reassignment, an amount equal to the Portfolio Reassignment
Price.
ARTICLE VII
CONDITIONS PRECEDENT
--------------------
Section 7.1. Conditions to Funding's Obligations Regarding Initial
Receivables. The obligations of Funding to purchase the Receivables in the
Initial Accounts on the Closing Date shall be subject to the satisfaction of the
following conditions:
(a) All representations and warranties of the Bank contained in this
Agreement shall be true and correct on the Closing Date with the same
effect as though such representations and warranties had been made on such
date;
(b) All information concerning the Initial Accounts provided to
Funding shall be true and correct as of the Initial Cut-off Date in all
material respects;
16
(c) The Bank shall have (i) delivered to Funding (or to the Trustee,
if Funding so directs) a computer file or microfiche list containing a true
and complete list of all Initial Accounts identified by account number and
by the Receivables balance as of the Initial Cut-Off Date and (ii)
substantially performed all other obligations required to be performed by
the provisions of this Agreement;
(d) The Bank shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables (other than Receivables
in Additional Accounts) now existing and hereafter created for the transfer
of accounts (as defined in Section 9-106 of the UCC) meeting the
requirements of applicable state law in such manner and in such
jurisdiction as would be necessary to perfect the sale of the Receivables
from the Bank to Funding, and shall deliver a file-stamped copy of such
financing statements or other evidence of such filings to Funding;
(e) On or before the Closing Date, Funding and the Trustee shall have
entered into the Pooling and Servicing Agreement and the closing under the
Pooling and Servicing Agreement shall take place simultaneously with the
initial closing hereunder; and
(f) All the corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Funding, and Funding shall have
received from the Bank copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as Funding may reasonably have requested.
Section 7.2. Conditions to Funding's Obligations Regarding Additional
Receivables. The obligations of Funding to purchase any Receivable created on or
after the Closing Date shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Bank contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;
(b) All information (concerning any Account to which such Receivables
relate) provided or to be provided to Funding shall be true and correct in
all material respects;
(c) The Bank shall have indicated in its computer files or microfiche
list that such Receivables
17
(created in respect of any Account to which such Receivables relate) have
been sold to Funding in accordance with this Agreement and transferred to
the Trust pursuant to the Pooling and Servicing Agreement for the benefit
of the Certificateholders; and
(d) The Bank shall have recorded and filed, at its expense, any
financing statement with respect to such Receivables in any Additional
Accounts in connection with the transfer of accounts (as defined in Section
9-106 of the UCC) meeting the requirements of applicable state law in such
manner and in such jurisdictions as would be necessary to perfect the sale
of such Receivables from the Bank to Funding, and shall deliver a file-
stamped copy of such financing statements or other evidence of such filings
to Funding.
Section 7.3. Conditions Precedent to the Bank's Obligations. The
obligations of the Bank to sell on any date Receivables shall be subject to
the satisfaction of the following conditions:
(a) All representations and warranties of Funding contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provision of Section 3.1 and 3.2 hereof shall have been
made; and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Bank, and the Bank shall have
received from Funding copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Bank may reasonably have requested.
ARTICLE VIII
TERM AND PURCHASE TERMINATION
-----------------------------
Section 8.1. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue until the termination of the
Trust as provided in Article XII of the Pooling and Servicing Agreement.
Section 8.2. Purchase Termination. If the Bank voluntarily goes into
liquidation or consents to the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
18
liabilities or similar proceeding of or relating to the Bank or of or relating
to all or substantially all its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceeding, or for the winding-up or liquidation of its affairs, shall have been
entered against the Bank; or the Bank shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations (such
voluntary liquidation, appointment, entering of such decree, admission, filing,
making or suspension, a "Dissolution Event"), the Bank shall on the day of such
appointment, voluntary liquidation, entering of such decree, admission, filing,
making or suspension, as the case may be (the "Appointment Date"), immediately
cease to transfer Principal Receivables to Funding and shall promptly give
notice to Funding and the Trustee of such Dissolution Event. Notwithstanding any
cessation of the transfer to Funding of additional Principal Receivables,
Principal Receivables transferred to Funding prior to the occurrence of such
Dissolution Event and Collections in respect of such Principal Receivables and
Finance Charge and Administrative Receivables whenever created, accrued in
respect of such Principal Receivables, shall continue to be property of Funding
available for transfer by Funding to the Trust pursuant to the Pooling and
Servicing Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
------------------------
Section 9.1. Amendment. This Agreement and any Conveyance Papers and the
rights and obligations of the parties hereunder may not be changed orally, but
only by an instrument in writing signed by Funding and the Bank in accordance
with this Section 9.1. This Agreement and any Conveyance Papers may be amended
from time to time by Funding and the Bank (i) to cure any ambiguity, (ii) to
correct or supplement any provisions herein which may be inconsistent with any
other provisions herein or in any such other Conveyance Papers, (iii) to add any
other provisions with respect to matters or questions arising under this
Agreement or any Conveyance Papers which shall not be inconsistent with the
provisions of this Agreement or any Conveyance Papers, (iv) to change or modify
the Purchase Price (v) to change, modify, delete or add any other obligation of
the Bank or Funding and (vi) to provide for the transfer by the Bank or Funding
of its interest in and to all or part of the Accounts in accordance with the
provisions of the Pooling and Servicing Agreement (if such transfer is for less
than all of
19
the Accounts, the respective rights, duties and obligations of Funding, the Bank
and the Servicer will be determined at the time of such transfer); provided
however, that no amendment pursuant to clause (v) of this Section 9.1 shall be
effective unless the Bank and Funding have been notified in writing that the
Rating Agency Condition has been satisfied; provided, further, that such action
shall not (as evidenced by an Opinion of Counsel delivered to the Trustee)
adversely affect in any material respect the interests of the Trustee or the
Certificateholders, unless the Trustee shall consent thereto. Any reconveyance
executed in accordance with the provisions hereof shall not be considered to be
an amendment to this Agreement. A copy of any amendment to this Agreement shall
be sent to the Rating Agency.
SECTION 9.2. GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE PAPERS SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, 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 9.3. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a) in
the case of the Bank, Household Bank, f.s.b., 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel (facsimile no.(000) 000-0000), (b)
in the case of Funding, Household Affinity Funding Corporation, 0000 Xxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxx 00000, Attention: General Counsel (facsimile no. (702)
222-4096); or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party .
Section 9.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement or Conveyance
Paper shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement or any Conveyance
Paper and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of any Conveyance Paper.
Section 9.5. Assignment. Notwithstanding anything to the contrary
contained herein, other than Funding's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trustee for the benefit of the
Certificateholders as contemplated by the Pooling and Servicing Agreement and
Section 9.6 hereof, the Accounts, this Agreement and all other Conveyance Papers
may not be assigned by the parties hereto, provided, however, that the Bank
shall have the right to assign its rights, title and
20
interests, in to and under the Accounts and this Agreement to (i) any successor
by merger assuming this Agreement (ii) to any affiliate owned directly or
indirectly by Household International, Inc. which assumes the obligations of
this Agreement or (iii) to any entity provided that the Rating Agency has
advised Funding and the Bank that the Rating Agency Condition has been
satisfied.
Section 9.6. Acknowledgment and Agreement of the Bank. By execution below,
the Bank expressly acknowledges and agrees that all of Funding's right, title,
and interest in, to, and under this Agreement, including, without limitation,
all of Funding's right, title, and interest in and to the Receivables purchased
pursuant to this Agreement, shall be assigned by Funding to the Trustee for the
benefit of the Certificateholders, and the Bank consents to such assignment.
Additionally, the Bank agrees for the benefit of the Trustee that any amounts
payable by the Bank to Funding hereunder which are to be paid by Funding to the
Trustee for the benefit of the Certificateholders shall be paid by the Bank, on
behalf of Funding, directly to the Trustee. Any payment required to be made on
or before a specified date in same-day funds may be made on the prior business
day in next-day funds.
Section 9.7. Further Assurances. Funding and the Bank agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party more fully to
effect the purposes of this Agreement and the Conveyance Papers, including,
without limitation, the execution of any financing statements or continuation
statements or equivlaent documents relating to the Receivables for filing under
the provisions of the UCC or other law of any applicable jurisdiction.
Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of Funding or the Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
Section 9.9. Counterparts. This Agreement and all Conveyance Papers may be
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
21
Section 9.10. Binding Effect; Third-Party Beneficiaries. This Agreement
and the Conveyance Papers will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The
Trustee shall be considered a third-party beneficiary of this Agreement.
Section 9.11. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers. This Agreement and the Conveyance Papers may not be modified,
amended, waived or supplemented except as provided herein.
Section 9.12. Headings. The headings are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision
hereof.
Section 9.13. Schedules and Exhibits. The schedules and exhibits attached
hereto and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.
Section 9.14. Survival of Representations and Warranties. All
representations, warranties and agreements contained in this Agreement or
contained in any Assignment, shall remain operative and in full force and effect
and shall survive conveyance of the Receivables by Funding to the Trustee
pursuant to the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, Funding and the Bank have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
HOUSEHOLD BANK, f.s.b.
By: /s/ X. X. Xxxx, Xx.
------------------------------
Title /s/ Treasurer
HOUSEHOLD AFFINITY FUNDING CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Title /s/ Vice President & Asst.
Treasurer
22
EXHIBIT A
---------
FORM OF SUPPLEMENTAL CONVEYANCE
(As required by Section 2.2 of
the Receivables Purchase Agreement)
SUPPLEMENTAL CONVEYANCE No. ___, dated as of ___________________, 19____,
by and between HOUSEHOLD BANK, f.s.b., as Seller (the "Bank"), and HOUSEHOLD
AFFINITY FUNDING CORPORATION,("Funding"),pursuant to the Receivables Purchase
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Bank and Funding are parties to a Receivables Purchase
Agreement, dated as of April 30, 1993 (hereinafter as such agreement may have
been, or may from time to time be, amended, supplemented or otherwise modified,
the "Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Bank wishes to
designate Aggregate Addition Accounts to be included as Accounts and the Bank
wishes to convey the Receivables of such Aggregate Addition Accounts, whether
now existing or hereafter created, to Funding pursuant to the Receivables
Purchase Agreement (as each such term is defined in the Receivables Purchase
Agreement); and
WHEREAS, Funding is willing to accept such designation and conveyance
subject to the terms and conditions hereof.
NOW THEREFORE, the Bank and Funding hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Aggregate Addition
Accounts designated hereby, , 19 .
2. Designation of Aggregate Addition Accounts. The Bank delivers herewith
a computer file or microfiche list containing a true and complete schedule
identifying all such Aggregate Addition Accounts and specifying for each such
Account, as of the Additional Cut-Off Date, its account number, the aggregate
amount outstanding in such Account and the aggregate amount of Principal
Receivables in such Account. Such computer file, microfiche list or other
documentation shall be as of the date of this Assignment incorporated into and
made part of this Assignment and is marked as Schedule 1 to this Assignment.
3. Conveyance of Receivables.
(a) The Bank does hereby sell, transfer, assign, set over and otherwise
convey to Funding, without recourse, all its right, title and interest in, to
and under the Receivables generated by such Aggregate Addition Accounts, now
existing and hereafter created, all monies due or to become due and all amounts
received with respect thereto and all "proceeds" (including, without limitation,
"proceeds" as defined in Article 9 of the UCC as in effect in the State of
California) thereof. The foregoing sale, transfer, assignment, set-over and
conveyance does not constitute and is not intended to result in a creation or an
assumption by Funding of any obligation of the Servicer, the Bank or any other
Person in connection with the Accounts, the Receivables or under any agreement
or instrument relating thereto, including, without limitation, any obligation to
any Obligers, merchant banks, merchants clearance systems, VISA USA, Inc.,
MasterCard International Incorporated or insurers.
(b) In connection with such sale, the Bank agrees to record and file, at
its own expense, one or more financing statements (and continuation statements
with respect to such financing statements when applicable) with respect to the
Receivables, now existing and hereafter created, for the sale of accounts
meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment of the
Receivables to Funding, and to deliver a file-stamped copy of such financing
statement or other evidence of such filing to Funding.
(c) In connection with such sale, the Bank further agrees, at its own
expense, on or prior to the date of this Supplemental Conveyance, to indicate in
the appropriate computer files or microfiche list that all Receivables created
in connection with the Aggregate Addition Accounts designated hereby have been
conveyed to Funding pursuant to this Assignment.
4. Acceptance by Funding. Subject to the satisfaction of the conditions
set forth in Section 6 of this Supplemental Conveyance, Funding hereby
acknowledges its acceptance of all right, title and interest to the property,
now existing and hereafter created, conveyed to Funding pursuant to Section 3(a)
of this Assignment, and declares that it shall maintain such right, title and
interest. Funding further acknowledges that, prior to or simultaneously with the
execution and delivery of this Assignment, the Bank delivered to Funding (or to
the Trustee if Funding has so directed) the computer file or microfiche list
described in Section 2 of this Assignment.
-A2-
5. Representations and Warranties of the Bank. The Bank hereby
represents and warrants to Funding as of the date of this Supplemental
Conveyance and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental Conveyance
constitutes a legal, valid and binding obligation of the Bank enforceable
against the Bank in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally from time to time in
effect or general principals of equity;
(b) Eligibility of Accounts. Each Aggregate Addition Account designated
hereby is an Eligible Account;
(c) Selection Procedures. (i) No selection procedure believed by the Bank
to be adverse to the interests of Funding or the Investor Certificateholders was
utilized in selecting the Aggregate Addition Accounts; (ii) the selection
procedures used in selecting the Aggregate Addition Accounts designated hereby
are substantially the same as the selection procedures used in selecting the
Initial Accounts identified in the computer file or microfiche list delivered
pursuant to Section 2.1(c) of the Receivables Purchase Agreement;
(d) Insolvency. The Bank is not insolvent and, after giving effect to the
conveyance set forth in Section 3 of this Supplemental Conveyance, will not be
insolvent;
(e) Sale of Receivables. This Supplemental Conveyance constitutes a valid
sale, transfer and assignment to Funding of all right, title and interest of the
Bank in the Receivables now existing or hereafter created, all monies due or to
become due and all amounts received with respect thereto and the "proceeds"
(including, without limitation, "proceeds" as defined in Article 9 of the UCC)
thereof, relating thereto;
(f) No Conflict. The execution and delivery of this Supplemental
Conveyance, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of terms hereof, will not conflict
with, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material default
under, any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Bank is a party or by which it or its properties are
bound;
(g) No Violation. The execution and delivery of this Supplemental
Conveyance by the Bank, the performance of the transactions contemplated by this
Supplemental
-A3-
Conveyance and the fulfillment of the terms hereof applicable to the Bank will
not conflict with or violate any Requirements of Law applicable to the Bank;
(h) No Proceedings. There are no proceedings or investigations, pending or,
to the best knowledge of the Bank, threatened against the Bank before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Supplemental Conveyance,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Supplemental Conveyance, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Bank, would materially and adversely affect
the performance by the Bank of its obligations under this Supplemental
Conveyance or (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Supplemental Conveyance;
and
(i) All Consents. All authorizations, consents, orders or approvals of any
court or other governmental authority required to be obtained by the Bank in
connection with the execution and delivery of this Supplemental Conveyance by
the Bank and the performance of the transactions contemplated by this
Supplemental Conveyance by the Bank, have been obtained.
6. Conditions Precedent. The acceptance of Funding set forth in Section 4
of this Supplemental Conveyance is subject to the satisfaction, on or prior to
the Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Bank in Section 5 of this Supplemental Conveyance
shall be true and correct as of the date of this Supplemental Conveyance
and as of the Addition Date
(b) Officer's Certificate. The Bank shall have delivered to Funding an
Officer's Certificate confirming that (i) the Aggregate Addition Accounts
shall be Eligible Accounts and (ii) (A) no selection procedures believed by
the Bank or Funding to be materially adverse to the interests of the
Investor Certificateholders shall have been used in selecting the Aggregate
Addition Accounts; (B) the selection procedures used in selecting the
Aggregate Addition Accounts shall be substantially the same as the
selection procedures used in selecting the original Accounts identified in
the computer file or microfiche list delivered pursuant to Section 2.01 of
the Pooling and Servicing Agreement; (C) the list of Aggregate Addition
Accounts, as of the Additional Cut-Off Date, is a true and complete
schedule identifying all such Aggregate Addition Accounts and specifies for
each such
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Account, as of the Additional Cut-Off Date, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables in such Account.
(c) Additional Information. The Bank shall have delivered to Funding
such information as was reasonably requested by Funding to satisfy itself
as to the accuracy of the representation and warranty set forth in Section
5(d) of this Supplemental Conveyance.
7. Ratification of the Receivables Purchase Agreement. The Receivables
Purchase Agreement is hereby ratified, and all references to the "Receivables
Purchase Agreement", to "this Agreement" and "herein" shall be deemed from and
after the Addition Date to be a reference to the Receivables Purchase Agreement
as supplemented by this Supplemental Conveyance. Except as expressly amended
hereby, all the representations, warranties, terms, covenants and conditions of
the Receivables Purchase Agreement shall remain unamended and shall continue to
be, and shall remain, in full force and effect in accordance with its terms and
except as expressly provided herein shall not constitute or be deemed to
constitute a waiver of compliance with or consent to non-compliance with any
term or provision of the Receivables Purchase Agreement.
8. Counterparts. This Supplemental Conveyance may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly authorized
officers on the day and the year first above written.
HOUSEHOLD AFFINITY FUNDING CORPORATION
By: _____________________________________
Name:
Title:
HOUSEHOLD BANK, f.s.b.
By: _____________________________________
Name:
Title:
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Schedule 1
----------
LIST OF ACCOUNTS
DEEMED INCORPORATED BY REFERENCE
Schedule 1 to
Supplemental
Conveyance
Aggregate Addition Accounts
---------------------------
AMENDMENT NO. 1
TO
RECEIVABLES PURCHASE AGREEMENT DATED APRIL 30, 1993
BETWEEN
HOUSEHOLD BANK, f.s.b.
AND
HOUSEHOLD AFFINITY FUNDING CORPORATION
AMENDMENT NO. 1 TO RECEIVABLES PURCHASE AGREEMENT
-------------------------------------------------
AMENDMENT NO. 1 made as of the 1st day of June, 1993 between HOUSEHOLD
BANK, f.s.b., a federal savings bank (the "Bank") and HOUSEHOLD AFFINITY FUNDING
CORPORATION, a Delaware corporation and a subsidiary of the Bank ("Funding").
W I T N E S S E T H:
-------------------
WHEREAS, the Bank and Funding have entered into a Receivables Purchase
Agreement, dated as of April 30, 1993 (the "RPA", and as amended from time to
time hereafter, including by this Amendment No. 1, the "Amended RPA");
WHEREAS, capitalized terms used herein (and not otherwise defined herein)
shall have the respective meanings ascribed thereto in the RPA;
WHEREAS, the parties hereto desire to amend the RPA in certain respects;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants stated herein below, the parties hereto agree as follows:
1. Amendment to RPA.
Section 9.1. of the RPA is deleted in its entirety and replaced by the
following:
Section 9.1. Amendment. This Agreement and any Conveyance Papers and
the rights and obligations of the parties hereunder or thereunder may
not be changed orally, but only by an instrument in writing signed by
Funding and the Bank in accordance with this Section 9.1. This
Agreement and any Conveyance Papers may be amended from time to time
by Funding and the Bank, providing that Funding provides to the Bank
(a) an Officer's Certificate to the effect that Funding reasonably
believes that such amendment will not have an Adverse Effect and (b)
an Opinion of Counsel addressed and delivered to the Bank, dated the
date of such amendment, to the effect that the conditions precedent to
any such amendment have been satisfied.
2. Miscellaneous.
All references in the RPA to "the Receivables Purchase Agreement", "this
Agreement", "herein", "hereby" or "hereof" shall refer to the Amended RPA.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed on the date first above written.
HOUSEHOLD BANK, f.s.b.
By: /s/ X. X. Xxxx, Xx.
--------------------------------------
Name: X. X. Xxxx, Xx.
Title: Treasurer
HOUSEHOLD AFFINITY FUNDING
CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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