Exhibit 1.1
HOUSEHOLD HOME EQUITY LOAN TRUST 200_-_
HFC REVOLVING CORPORATION
(Depositor)
HOUSEHOLD FINANCE CORPORATION
(Master Servicer)
[ ] Home Equity Loan Asset Backed Notes,
Series 200_-_
$[ ] Class A Notes
UNDERWRITING AGREEMENT
[Date]
[Representative Underwriter]
as Representative of the Underwriters
[address]
Attention: [ ]
[Representative Underwriter]
as Representative of the Underwriters
[address]
Attention: [ ]
Ladies and Gentlemen:
HFC Revolving Corporation (the "Depositor"), has entered into a Trust
Agreement dated as of (the "Trust Agreement") with [Owner Trustee] (the "Owner
Trustee") and Household Finance Corporation ("HFC") creating [ ] Home Equity
Loan Trust 200_-_ (the "Trust"), a statutory business trust established under
the laws of the State of Delaware. The Depositor proposes to direct the Owner
Trustee pursuant to the Trust Agreement to cause the Trust to issue Home
Equity Loan Trust Series 200_-_, Class A Notes (the "Class A Notes") and a
single class of ownership interests (the "Ownership Interests" and, together
with the Class A Notes, the "Securities"). Simultaneously with the execution
of the Trust Agreement, the Depositor will enter into a Sale and Servicing
Agreement dated as of [ ] (the "Sale and Servicing
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Agreement") among the Depositor, the Trust, [Indenture Trustee], as indenture
trustee (the "Indenture Trustee") and HFC, as master servicer (the "Master
Servicer").
Only the Class A Notes are being purchased by the several
underwriters named in Schedule I hereto (collectively, the "Underwriters"),
for whom [ ] and [ ] together are acting as representatives (the
"Representatives"), except that the amount purchased by each Underwriter may
change in accordance with Section 13 of this Agreement.
The Class A Notes will be secured by the assets of the Trust
consisting of, among other things, a pool of [ ] home equity loans conveyed to
the Trust at the Closing Time (as defined herein) and any eligible home equity
loan substituted for a loan pursuant to the Sale and Servicing Agreement
(each, an "Eligible Substitute Home Equity Loan" and, together with the home
equity loans conveyed to the Trust at the Closing Time, the "Home Equity
Loans"), secured primarily by first and second mortgages on residential
properties that are primarily one- to four-family properties and certain
monies due thereunder. The Depositor will acquire the Home Equity Loans
pursuant to the Home Equity Loan Purchase Agreement, as described below. The
Depositor is a subsidiary of HFC.
The Depositor will acquire the Home Equity Loans, simultaneously with
the execution of the Sale and Servicing Agreement, pursuant to a home equity
loan purchase agreement dated as of [ ] (the "Home Equity Loan Purchase
Agreement"), between the Depositor, as purchaser, and certain originators,
each of which is a subsidiary of HFC (collectively, the "Sellers" and each
individually, a "Seller"). Pursuant to the Home Equity Loan Purchase
Agreement, the Sellers will sell to the Depositor all of their right, title
and interest in and to the unpaid principal balance of the Home Equity Loans,
including all interest and principal payments in respect thereof received on
or after the Cut-Off Date, and certain other rights with respect to the
collateral supporting the Home Equity Loans. Pursuant to the Sale and
Servicing Agreement, the Depositor will assign and grant to the Trust all of
its right, title and interest in and to the unpaid principal balance of the
Home Equity Loans. In addition, the Sellers have entered into an agreement
dated as of [ ] (the "Transfer Agreement"), between the Trustee and each
Seller, pursuant to which the Sellers will assign to the Trust all of their
right, title and interest in and to the collateral supporting the Home Equity
Loans, including the loan agreement and mortgage notes relating thereto
(collectively, the "Transferred Assets") not otherwise transferred pursuant to
the Home Equity Loan Purchase Agreement.
The Class A Notes will be issued pursuant to an indenture to be dated
as of [ ] (the "Indenture") between the Trust, as issuer and the Indenture
Trustee. The Ownership Interests will evidence fractional undivided interests
in the property held in the Trust and evidence the right to receive amounts in
respect of the Transferor Interest (as defined in the Trust Agreement). The
aggregate principal balance of the Class A Notes initially will be equal to $[
], which represents approximately 100% of the outstanding principal balances
of the Home Equity Loans as of the close of business on [ ] (the "Cut-Off
Date").
The Class A Notes will have the benefit of a financial guaranty
insurance policy (the "Policy") issued by [Insurer], a stock insurance
corporation organized under the laws of the State of New York (the "Insurer")
pursuant to an Insurance and Reimbursement Agreement (the "Insurance
Agreement") to be dated as of [ ] among the Depositor, the Master Servicer,
the
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Indenture Trustee, [ ] and the Insurer. Forms of the Indenture, the Sale and
Servicing Agreement and the Trust Agreement have been filed as an exhibit to
the Registration Statement (hereinafter defined).
The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-84611)
relating to the Class A Notes, and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"1933 Act"), and has filed, and proposes to file, such amendments thereto as
may have been required to the date hereof pursuant to the 1933 Act and the
rules of the Commission thereunder (the "1933 Act Regulations"). Such
registration statement, including all exhibits thereto, as amended at the time
when it became effective under the 1933 Act and at the Closing Time defined
below, is referred to herein as the "Registration Statement". The Depositor
proposes to file with the Commission pursuant to Rule 424(b) under the 1933
Act Regulations a supplement (the "Prospectus Supplement") to the prospectus
(as it may be amended in connection with such Prospectus Supplement, the
"Basic Prospectus"; the Basic Prospectus, together with the Prospectus
Supplement, the "Prospectus").
For purposes of this Agreement, all references to the Registration
Statement, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which are incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration
Statement or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
Capitalized terms used but not otherwise defined herein shall have
the meanings assigned thereto in the Sale and Servicing Agreement.
SECTION 1. Representations and Warranties.
(a) The Depositor represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 1(a):
(i) The Depositor meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement has become effective
under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Depositor, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with. At the time the
Registration Statement became effective and at the Closing Time, the
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Registration Statement and any amendments and supplements thereto,
including documents incorporated or deemed to be incorporated by
reference in the Registration Statement, complied and will comply in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations and the 1934 Act and the rules and regulations
of the Commission thereunder (the "1934 Act Regulations"), and did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time
the Prospectus or any such amendment or supplement was filed with
the Commission and at the Closing Time, included or will include an
untrue statement of a material fact or omitted or will omit to state
a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Depositor makes no
representations or warranties as to (i) any statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Depositor in writing by the Underwriters expressly for use in the
Registration Statement or the Prospectus or (ii) information in any
"Computational Materials", "Collateral Term Sheets" or "Structural
Term Sheets" (each as hereinafter defined) provided by the
Underwriters except to the extent that the information set forth
therein is "Pool Information" or "Prospectus Information". As used
herein, Pool Information means information provided by the Depositor
or HFC to the Representatives in written form or on computer tape,
floppy disk or other electronic media with respect to the financial
characteristics of the Home Equity Loans. As used herein,
"Prospectus Information" shall mean any information in the
Prospectus other than Underwriter Information (as defined in Section
9(b)).
(ii) The prospectus filed as part of the Registration Statement
as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424(b) under the 1933 Act, complied when so filed
in all material respects with the 1933 Act Regulations and the
Prospectus delivered to the Underwriters for use in connection with
this offering was, in all material respects, identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(iii) Since the respective dates as of which information is
given in the Prospectus, or the Prospectus as amended and
supplemented at the Closing Time, there has not been any material
adverse change in the general affairs, management, financial
condition, or results of operations of any of the Sellers or the
Depositor or of their subsidiaries, otherwise than as set forth or
contemplated in the Prospectus or the Prospectus as amended and
supplemented at the Closing Time.
(iv) Each of the Sellers and the Depositor has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of
incorporation, with the full right, power and authority (corporate
and other) to own, lease and operate its properties and conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Sale and Servicing
Agreement, the Transfer Agreement and the Home Equity Loan Purchase
Agreement, as applicable, and to cause the Securities to be issued;
each of the Sellers and the Depositor is duly qualified as a foreign
corporation to transact business and is in good
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standing in each jurisdiction which requires such qualification,
except where failure to be so qualified would not have a material
adverse effect on the business or consolidated financial condition
of any such Seller or the Depositor or the transactions contemplated
by this Agreement; and each Seller is duly authorized under the
statutes that regulate the business of making loans or of financing
the sale of goods (commonly called "small loan laws," "consumer
finance laws," or "sales finance laws"), or is permitted under the
general interest statutes and related laws and court decisions, to
conduct in the various jurisdictions in which any of them do
business the businesses as currently conducted therein by any of
them.
(v) There are no legal or governmental proceedings pending to
which any Seller or the Depositor is a party or of which any
property of any Seller or the Depositor is the subject, other than
proceedings which are not reasonably expected, individually or in
the aggregate, to have a material adverse effect on the financial
position, shareholders' equity or results of operations of such
Seller or the Depositor, and to the best knowledge of the Depositor,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(vi) This Agreement has been duly authorized, executed and
delivered by the Depositor, and the Sale and Servicing Agreement,
the Trust Agreement, the Insurance Agreement and the Home Equity
Loan Purchase Agreement, when executed and delivered as contemplated
hereby and thereby, will have been duly authorized, executed and
delivered by the Depositor, and the Home Equity Loan Purchase
Agreement and the Transfer Agreement when executed and delivered as
contemplated hereby and thereby, will have been duly authorized,
executed and delivered by each Seller. This Agreement constitutes,
and the Sale and Servicing Agreement, the Trust Agreement, the
Insurance Agreement, the Transfer Agreement and the Home Equity Loan
Purchase Agreement when executed and delivered as contemplated
herein and therein will constitute, legal, valid and binding
instruments enforceable against the Depositor or the Sellers, as
applicable, 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 and
the Insurance Agreement, to limitations of public policy under
applicable securities laws.
(vii) The issuance and delivery of the Securities, the
consummation of any other of the transactions contemplated herein or
in the Sale and Servicing Agreement, the Trust Agreement, the
Indenture, the Insurance Agreement, the Transfer Agreement and the
Home Equity Loan Purchase Agreement, and the fulfillment of the
terms of this Agreement, the Home Equity Loan Purchase Agreement,
the Transfer Agreement, the Sale and Servicing Agreement, the Trust
Agreement and the Insurance Agreement do not and will not conflict
with or violate any term or provision of the Certificate or Articles
of Incorporation or Bylaws of any of the Sellers or the Depositor,
as applicable, any statute, order or regulation applicable to any of
the Sellers or the Depositor, as applicable, of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over any of the Sellers or the Depositor, as
applicable, and do not and will not conflict
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with, result in a breach or violation or the acceleration of, or
constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the property or
assets of any of the Sellers or the Depositor, as applicable,
pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which any of the
Sellers or the Depositor is a party or by which any of the Sellers
or the Depositor may be bound or to which any of the property or
assets of any of the Sellers or the Depositor may be subject, except
for conflicts, violations, breaches, accelerations and defaults
which would not, individually or in the aggregate, be materially
adverse to any of the Sellers or the Depositor or materially adverse
to the transactions contemplated by this Agreement.
(viii) [ ] is an independent public accountant with respect to
the Sellers and the Depositor as required by the 1933 Act and 1933
Act Regulations.
(ix) The Class A Notes are duly and validly authorized and,
when executed, authenticated and delivered in accordance with the
Indenture and the Sale and Servicing Agreement, and issued and
delivered to and paid for by the Underwriters, as contemplated
hereby, will be entitled to the benefits provided by the Indenture
and the Sale and Servicing Agreement.
(x) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
of the United States is required for the issuance or sale of the
Class A Notes, or the consummation by any of the Sellers or the
Depositor of the other transactions contemplated by this Agreement,
the Sale and Servicing Agreement, the Transfer Agreement, the Home
Equity Loan Purchase Agreement, the Trust Agreement, the Indenture
and the Insurance Agreement, as applicable, except for (A) the
registration under the 1933 Act of the Class A Notes, (B) such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been obtained or as may
be required under the State securities or Blue Sky laws in
connection with the issuance of the Class A Notes and the subsequent
purchase and distribution of the Class A 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 Depositor or any
of the Sellers or the transactions contemplated by such agreements.
(xi) Each of the Sellers and the Depositor possesses all
material licenses, certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct the business now conducted by it and as
described in the Prospectus, and none of the Sellers or the
Depositor has received notice of proceedings relating to the
revocation or modification of any such license, certificate,
authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would
materially and adversely affect the conduct of its business,
operations or financial condition or the transactions contemplated
by this Agreement.
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(xii) At the time of execution and delivery of the Home Equity
Loan Purchase Agreement and the Transfer Agreement each Seller (A)
will have good and marketable title to the unpaid principal balance
of the Home Equity Loans and the Transferred Assets being
transferred by it to the Depositor or Trustee, as the case may be,
free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively "Liens"), (B)
will not have assigned to any person any of its right, title or
interest in or to the unpaid principal balance of the Home Equity
Loans under the Home Equity Loan Purchase Agreement or the
Transferred Assets under the Transfer Agreement, and (C) will have
the power and authority to sell the unpaid principal balance of the
Home Equity Loans to the Depositor and transfer and assign the
Transferred Assets to the Trust; and upon the consummation of the
sale, transfer and assignment provided for pursuant to the terms of
the Home Equity Loan Purchase Agreement, the Depositor will have
acquired beneficial ownership of all the related Seller's right,
title and interest in and to the unpaid principal balance of the
Home Equity Loans.
(xiii) At the time of execution and delivery of the Sale and
Servicing Agreement, the Depositor (A) will have good and marketable
title to the unpaid principal balance of the Home Equity Loans being
transferred by it to the Trust pursuant to the Sale and Servicing
Agreement, free and clear of Liens, (B) will not have assigned to
any person any of its right, title or interest in or to the unpaid
principal balance of the Home Equity Loans under the Home Equity
Loan Purchase Agreement, the Trust Agreement, the Sale and Servicing
Agreement or the Class A Notes and (C) will have the power and
authority to sell the unpaid principal balance of the Home Equity
Loans to the Trust and to sell the Class A Notes to the
Underwriters; and upon execution and delivery of the Sale and
Servicing Agreement and the Trust Agreement by the Trust, the Trust
will have acquired beneficial ownership of all of the Depositor's
right, title and interest in and to the unpaid principal balance of
the Home Equity Loans; and upon delivery to the Underwriters of the
Class A Notes in return for the agreed upon consideration the
Underwriters will have good and marketable title to the Class A
Notes, in each case free of Liens, except to the extent disclosed in
the Prospectus.
(xiv) As of the Cut-Off Date, each of the Home Equity Loans
will meet the eligibility criteria described in the Prospectus and
as of the related Cut-Off Date for any Eligible Substitute Home
Equity Loan, the Eligible Substitute Home Equity Loan will meet the
eligibility criteria applicable thereto described in the Sale and
Servicing Agreement.
(xv) None of the Sellers, the Depositor or the Trust will
conduct their operations while any of the Class A Notes are
outstanding in a manner that would require any Seller, the Depositor
or the Trust 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.
(xvi) At the Closing Time, the Class A Notes, the Sale and
Servicing Agreement, the Indenture and the Trust Agreement will
conform in all material respects to the descriptions thereof
contained in the Prospectus.
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(xvii) At the Closing Time, each class of the Class A Notes
shall have been rated in the applicable rating category described in
the Prospectus.
(xviii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this
Agreement, the Sale and Servicing Agreement, the Trust Agreement,
the Indenture, the Transfer Agreement, the Home Equity Loan Purchase
Agreement and the Securities have been paid or will be paid at or
prior to the Closing Time.
(xix) At the Closing Time, each of the representations and
warranties of the Depositor with respect to the Home Equity Loans
set forth in the Sale and Servicing Agreement will be true and
correct in all material aspects.
(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 or the transactions
contemplated by this Agreement.
(ii) HFC is not in violation of its restated articles of
incorporation or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument material to the business HFC and its subsidiaries, taken
as a whole, 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.
(iii) The execution, delivery and performance by HFC of this
Agreement, the Sale 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
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 charter 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 business or
consolidated financial condition of HFC or the transactions
contemplated by this Agreement.
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(iv) This Agreement, the Sale and Servicing Agreement and the
Trust Agreement have been duly executed and delivered by HFC; and
this Agreement and the Sale and Servicing 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) Except as set forth in or contemplated in reports filed by
HFC with the Commission pursuant to the 1934 Act and the 1934 Act
Regulations, there has been no material adverse change in the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole since the respective dates as of which
any information relating to HFC is given in the Prospectus.
(vi) There are no legal or governmental 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 financial position of HFC and its subsidiaries taken as
a whole or which would have a material adverse effect upon the
transactions contemplated by 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 Sale and Servicing Agreement and the Trust Agreement,
except for (A) the registration under the 1933 Act of the Class A
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 issuance of the Class A Notes and
the subsequent purchase and distribution of the Class A 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) [ ] is an independent public accountant
with respect to HFC.
(c) Any certificates signed by an officer of the Depositor or HFC and
delivered to you or your counsel in connection with the offering of the Class
A 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.
(d) Each Underwriter represents and warrants to, and agrees with, the
Depositor and HFC as of the date hereof and as of the Closing Time that it has
complied and will comply with
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all of its obligations arising hereunder and, with respect to the
Computational Materials and Structural Term Sheets provided by it, such
Computational Materials and Structural Term Sheets are accurate in all
material respects (taking into account the assumptions explicitly set forth in
the Computational Materials and Structural Term Sheets, except for any errors
therein attributable to errors or mistakes in the Pool Information or
Prospectus Information). Each Underwriter represents and warrants that the
Computational Materials and Structural Term Sheets provided by it to the
Depositor constitute a complete set of all Computational Materials and
Structural Term Sheets required to be filed with the Commission pursuant to
the No-Action Letters.
SECTION 2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the covenants, representations and warranties herein set
forth, the Depositor agrees to sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Depositor the principal amount of Class A Notes at the purchase price set
forth opposite such Underwriter's name in Schedule I pursuant to the terms of
this Agreement.
SECTION 3. Delivery and Payment. Payment of the purchase price for,
and delivery of, the Class A Notes to be purchased by the Underwriters shall
be made at the offices of [Sidley Xxxxxx Xxxxx & Xxxx LLP], 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon by
you, the Depositor and HFC, at 10:00 A.M. New York City time on [ ], which
date, time or place may be postponed or changed by agreement between you, the
Depositor and HFC (such date and time of delivery and payment for the Class A
Notes being herein referred to as the "Closing Time"). Delivery of one or more
global certificates representing the Class A Notes shall be made to the
accounts of the several Underwriters against payment by them of the purchase
price therefor, to or upon the order of the Depositor by one or more wire
transfers in immediately available funds. The global certificates 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
Class A Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive Notes representing the Class A Notes
will be available only under limited circumstances as described in the
Indenture.
SECTION 4. Offering by the Underwriters. It is understood that the
Underwriters propose to offer the Class A Notes for sale to the public as set
forth in the Prospectus.
SECTION 5. Covenants of the Depositor. The Depositor covenants with
each of the Underwriters as follows:
(a) The Depositor will notify the Underwriters immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission with respect to the Prospectus,
(iii) of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or of the
suspension of the qualification of the Class A Notes for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes.
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The Depositor will promptly effect the filings necessary pursuant to Rule
424(b) and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Depositor will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) The Depositor will give the Underwriters notice of its intention
to file or prepare any amendment to the Registration Statement or any
amendment, supplement or revision to either the Basic Prospectus or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise (other
than reports to be filed pursuant to the 1934 Act), will furnish the
Representatives with copies of any such documents (other than Computational
Materials and Structural Term Sheets) a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or use any
such document to which the Representatives or counsel for the Underwriters
shall object.
(c) The Depositor has furnished or will deliver to the Underwriters
and counsel for the Underwriters, without charge, conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
conformed copies of all consents and certificates of experts. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical, in all material respects, to the
electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(d) The Depositor will furnish to the Underwriters, without charge,
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended
or supplemented) as the Underwriters may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters will
be identical, in all material respects, to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(e) The Depositor will comply with the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Class A Notes as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required
by the 1933 Act to be delivered in connection with sales of the Class A Notes,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the
Depositor, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the
Depositor will, at its expense, promptly prepare and file with the Commission,
subject to Section 5(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make
11
the Registration Statement or the Prospectus comply with such requirements,
and the Depositor will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably request.
(f) Upon the request of and in cooperation with the Underwriters, the
Depositor will use its best efforts to qualify the Class A Notes for offering
and sale under the applicable securities laws of such states and other
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for as long as may be required for the distribution
of the Class A Notes; provided, however, that the Depositor or the Trust shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise
so subject. Upon the request of and in cooperation with the Underwriters, the
Depositor will also supply the Representatives with such information as is
reasonably necessary for the determination of the legality of the Class A
Notes for investment under the laws of such jurisdictions as the Underwriters
may request.
(g) The Depositor, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
(h) The Depositor will, at the expense of the Underwriters, file the
Computational Materials and Structural Term Sheets provided to it by the
Representatives under Section 6 with the Commission pursuant to a Current
Report on Form 8-K not later than 5:00 p.m. on the day the Prospectus is
delivered to the Underwriters; provided, however, that as a condition to the
filing of the Computational Materials and Structural Term Sheets by the
Depositor, the Depositor must receive a letter from a firm of independent
certified public accountants reasonably acceptable to the Depositor, which
letter shall be satisfactory in form and substance to the Depositor, HFC and
their counsel, to the effect that such accountants have performed certain
specified procedures, all of which have been agreed to by the Depositor, as a
result of which they have determined the accuracy in all material respects of
the numerical and financial information included in the Computational
Materials and Structural Term Sheets provided by the Representatives to the
Depositors for filing with the Commission.
(i) The Depositor shall take all reasonable action necessary to
enable [ ] and [ ] (the "Rating Agencies") to provide their respective credit
ratings of the Class A Notes as described in the Prospectus.
(j) The Depositor will not, without your prior written consent,
publicly offer or sell in the United States any home equity loan pass-through
certificates, home equity loan pass-through notes or collateralized home
equity loan mortgage obligations or other similar securities representing
interests in or secured by primarily non-conforming second mortgage-related
assets originated or owned by the Depositor or HFC for a period of thirty days
following the commencement of the offering of the Class A Notes to the public.
12
(k) The Depositor will cooperate with the Underwriters and use its
best efforts to permit the Class A Notes to be eligible for clearance and
settlement through the facilities of DTC.
(l) If, between the date hereof and the Closing Time, to the
knowledge of the Depositor there are any legal or governmental proceedings
instituted or threatened against HFC or the Depositor, other than proceedings
which are not reasonably expected, individually or in the aggregate, to have a
material adverse effect on the financial condition, shareholders' equity or
results of operations of HFC or the Depositor or the transactions contemplated
by this Agreement, the Depositor will give prompt written notice thereof to
the Underwriters.
(m) So long as the Class A Notes shall be outstanding, to deliver to
the Underwriters as soon as such statements are furnished to the Indenture
Trustee: (i) the annual statement as to compliance delivered to the Indenture
Trustee pursuant to Section 3.10 of the Sale and Servicing Agreement; (ii) the
annual statement of a firm of independent public accountants furnished to the
Indenture Trustee pursuant to Section 3.11 of the Sale and Servicing
Agreement; and (iii) the Monthly Statement furnished to the Noteholders
pursuant to Section 5.03 of the Sale and Servicing Agreement.
(n) To apply the net proceeds from the sale of the Class A Notes in
the manner set forth in the Prospectus.
SECTION 6. Computational Materials and Structural Term Sheets. It is
understood that the Underwriters may prepare and provide to prospective
investors certain Computational Materials and Structural Term Sheets in
connection with their offering of the Class A Notes, subject to the following
conditions:
(a) The Underwriters shall comply with all applicable laws and
regulations in connection with the use of Computational Materials, including
the No-Action letter of May 20, 1994 issued by the Commission to Xxxxxx,
Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and
Xxxxxx Structured Asset Corporation 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"), as well as the PSA Letter referred to below. The Underwriters shall
comply with all applicable laws and regulations in connection with the use of
Collateral Term Sheets and Structural Term Sheets, including 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").
(b) As used herein, "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 and delivered to prospective
investors by or at the direction of the Underwriters. As used herein,
"Structural Term Sheets" shall have the meaning given such term in the PSA
Letter, but shall include only those Structural Term Sheets that have been
prepared and delivered to prospective investors by or at the direction of the
Underwriters.
13
(c) The Representatives shall provide to the Depositor copies (in
such format as required by the Depositor) of all Computational Materials and
Structural Term Sheets that are required to be filed with the Commission
pursuant to the No-Action Letters. The Representatives may provide to the
Depositor copies of the foregoing in a consolidated or aggregated form,
including all information required to be filed. All Computational Materials
and Structural Term Sheets must be provided to the Depositor by the
Representatives not later than 10:00 a.m. on the first business day prior to
the day on which the filing of such materials is to be made with the
Commission. The Underwriters shall be responsible for all costs and expenses
incurred by the Depositor in filing the Computational Materials and Structural
Term Sheets with the Commission, including the fees of the independent auditor
who provides the letter required by Section 5(h).
(d) All Computational Materials and Structural Term Sheets provided
to prospective investors by the Underwriters that are required to be filed
pursuant to the No-Action Letters shall bear a legend on each page
substantially in the following form:
"Recipients must read the information contained in the attached
statement. Do not use or rely on this information if you have not
received and reviewed the statement. If you have not received the
statement, call your [Underwriter] account executive for another
copy."
The statement referenced in the above paragraph shall be
substantially in the following form:
"The attached tables and other statistical analyses (the
"Computational Materials") are privileged and confidential and are
intended for use by the addressee only. These Computational Materials
are furnished to you solely by [Underwriter] ("[Underwriter]") and
not by the issuer of the securities or any of its affiliates. The
issuer of these securities has not prepared or taken part in the
preparation of these materials. Neither [Underwriter], the issuer of
the securities nor any of its affiliates makes any representation as
to the accuracy or completeness of the information herein. The
information herein is preliminary, and will be superseded by the
applicable Prospectus Supplement and by any other information
subsequently filed with the Securities and Exchange Commission. They
may not be provided to any third party other than the addressee's
legal, tax, financial and/or accounting advisors for the purposes of
evaluating said material.
Numerous assumptions were used in preparing the Computational
Materials which may or may not be stated therein. As such, no
assurance can be given as to the accuracy, appropriateness or
completeness of the Computational Materials in any particular
context; or as to whether the Computational Materials and/or the
assumptions upon which they are based reflect present market
conditions or future market performance. These Computational
Materials should not be construed as either projections or
predictions or as legal, tax, financial or accounting advice.
Any yields or weighted average lives shown in the Computational
Materials are based on prepayment assumptions and actual prepayment
experience may dramatically affect such yields or weighted average
lives. In addition, it is probable that prepayments on the
14
underlying assets will occur at rates slower or faster than the
rates assumed in the attached Computational Materials. Furthermore,
unless otherwise provided, the Computational Materials assume no
losses on the underlying assets and no interest shortfall. The
specific characteristics of the securities may differ from those
shown in the Computational Materials due to differences between the
actual underlying assets and the hypothetical assets used in
preparing the Computational Materials. The principal amount and
structure of any security described in the Computational Materials
are subject to change prior to issuance.
Although a registration statement (including the prospectus) relating
to the securities discussed in this communication has been filed with
the Securities and Exchange Commission and is effective, the final
prospectus supplement relating to the securities discussed in this
communication has not been filed with the Securities and Exchange
Commission. This communication shall not constitute an offer to sell
or the solicitation of any offer to buy nor shall there be any sale
of the securities discussed in this communication in any state in
which such offer, solicitations or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state. Prospective purchasers are referred to the final prospectus
and prospectus supplement relating to the securities discussed in
this communication for definitive Computational Materials on any
matter discussed in this communication. The information contained in
these Computational Materials will be superseded by the description
of the mortgage loans and the other information contained in the
final prospectus supplement and prospectus relating to the securities
discussed in this communication. A final prospectus and prospectus
supplement may be obtained by contacting the [Underwriter] Trading
Desk at (212) ___ - ____.
Please be advised that asset-backed securities may not be appropriate
for all investors. Potential investors must be willing to assume,
among other things, market price volatility, prepayments, yield curve
and interest rate risk. Investors should fully consider the risk of
an investment in these securities.
If you have received this communication in error, please notify the
sending party immediately by telephone and return the original to
such party by mail."
Notwithstanding the foregoing legends, this subsection (d) shall be satisfied
if all Computational Materials and Structural Term Sheets bear a legend in the
form of the legend included in the Computational Materials dated [ ] or in
another form or forms previously approved in writing by the Depositor.
(e) The Depositor shall not be obligated to file any Computational
Materials or Structural Term Sheets that have been determined to contain any
material errors or omissions; provided, however, that, at the request of the
Representatives, the Depositor shall file Computational Materials or
Structural Term Sheets containing material errors or omissions if clearly
marked "superseded by materials dated _______________" and accompanied by
corrected Computational Materials or Structural Term Sheets that are marked
"these materials supersede and correct the materials dated ______________."
15
SECTION 7. Conditions to the Underwriters' Obligations. The
obligations of the Underwriters to purchase the Class A Notes pursuant to this
Agreement are subject to the accuracy on and as of the Closing Time of the
representations and warranties on the part of the Depositor and HFC herein
contained, to the material accuracy of the statements of officers of the
Depositor and HFC, respectively, made pursuant hereto, to the performance by
the Depositor and HFC of all of their respective obligations hereunder and to
the following conditions at the Closing Time:
(a) At the Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission,
and any request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters and (ii) the Prospectus shall have been filed with the Commission
no later than the time required by Rule 424(b) under the 0000 Xxx.
(b) All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Sale and Servicing
Agreement, the Trust Agreement, the Indenture, the Transfer Agreement, the
Home Equity Loan Purchase Agreement, the Securities, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be satisfactory in
all respects to counsel for the Underwriters.
(c) The Underwriters shall have received the favorable opinion, dated
the date of the Closing Time, of [Sidley Xxxxxx Xxxxx & Xxxx LLP], as special
counsel to the Depositor and HFC, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) Neither the Depositor nor the Trust is an "investment
company" or under the control of an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended
and the Trust is not required to be registered under the Investment
Company Act of 1940, as amended.
(ii) The statements in the Basic Prospectus under the headings
"Employee Benefit Plan Considerations", "State Tax Considerations"
and "Material Federal Income Tax Consequences", and the statements
in the Prospectus Supplement under the headings "Summary-Tax
Status", and "-Employee Benefit Considerations", "Material Federal
Income Tax Consequences", and "Employee Benefit Plan
Considerations", to the extent that they constitute matters of
federal law or legal conclusions with respect thereto, have been
reviewed by such counsel and are correct in all material respects
with respect to those consequences or aspects that are discussed.
(iii) The Sale and Servicing Agreement and the Trust Agreement
conform in all material respects to the descriptions thereof
contained in the Prospectus Supplement and are not required to be
qualified under the Trust Indenture Act of 1939, as amended. The
Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended.
16
(iv) The Class A Notes will, when issued, conform to the
description thereof contained in the Prospectus.
(v) With respect to the characterization of the Class A Notes
and the characterization of the Trust, (A) the Class A Notes will be
characterized as indebtedness for Federal income tax purposes, (B)
the Trust will not be classified as an "association" taxable as a
corporation for Federal income tax purposes, and (C) the Trust is
not a "taxable mortgage pool" for Federal income tax purposes.
Such opinion may express its reliance as to factual matters on the
representations and warranties made by the parties hereto, and on certificates
or other documents furnished by officers of such parties to the instruments
and documents referred to therein. No opinion need be expressed as to the
effect of the compliance or noncompliance of the Depositor, HFC or the Trustee
with any state or federal laws or regulations applicable to them because of
their legal or regulatory status or the nature of their respective businesses,
or to the due authorization, execution and delivery of this Agreement and the
Securities. As to such matters, such opinion may rely upon the opinion of Xxxx
X. Xxxxxx, Esq., Vice President - Corporate Law and Assistant Secretary of
Household International, Inc., delivered pursuant to Section 7(d) of this
Agreement, and such counsel need make no independent investigation of the
matters referred to in such opinion.
(d) The Underwriters shall have received the favorable opinion, dated
the date of the Closing Time, of Xxxx X. Xxxxxx, Esq., Vice President -
Corporate Law and Assistant Secretary of Household International, Inc., the
parent company of HFC, in form and substance satisfactory to the Underwriters,
to the effect that:
(i) HFC has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Delaware, with corporate power to own its properties, to conduct its
business as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Sale and Servicing
Agreement, the Trust Agreement and the Insurance Agreement.
(ii) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power to own its properties, to
conduct its business as described in the Prospectus and to enter
into and perform its obligations under this Agreement, the Sale and
Servicing Agreement, the Trust Agreement, the Home Equity Loan
Purchase Agreement and the Insurance Agreement.
(iii) Each of the Sellers has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with corporate power to own its
properties, to conduct its business as described in the Prospectus
and to enter into and perform its obligations under the Home Equity
Loan Purchase Agreement and the Transfer Agreement.
17
(iv) HFC has full corporate power and authority to serve in the
capacity of master servicer of the Home Equity Loans as contemplated
in the Sale and Servicing Agreement.
(v) Each of the Sellers, the Depositor and HFC is duly
authorized under relevant statutes, laws and court decisions, to
conduct in the various jurisdictions in which they do business the
respective businesses therein currently conducted by them, except
where failure to be so permitted or failure to be so authorized will
not have a material adverse effect on the business or financial
condition of the Sellers, the Depositor or HFC, and the Sellers are
duly authorized under the statutes which regulate the business of
making loans or of financing the sale of goods (commonly called
"small loan laws," "consumer finance laws" or "sales finance laws"),
or are permitted under the general interest statutes and related
laws and court decisions, to conduct in the various jurisdictions in
which any of them do business the businesses as currently conducted
therein by any of them.
(vi) None of the Sellers, the Depositor or HFC is in violation
of its Certificate or Articles of Incorporation or Bylaws or, to the
best of such counsel's knowledge, in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument known to such counsel which is
material to the business of the Sellers, the Depositor or HFC and to
which any of the Sellers, the Depositor or HFC is a party or by
which it or its properties may be bound.
(vii) This Agreement, the Sale and Servicing Agreement, the
Trust Agreement and the Insurance Agreement have been duly
authorized, executed and delivered by the Depositor and HFC, as
applicable, and, assuming the due authorization, execution and
delivery of such agreements by the other parties thereto, such
agreements constitute the valid and binding obligation of each of
the Depositor and HFC, as applicable, enforceable against each of
the Depositor and HFC, as applicable, in accordance with their
respective terms, and the Home Equity Loan Purchase Agreement and
Transfer Agreement has been duly authorized, executed and delivered
by the Depositor and the Sellers, as the case may be, and such
agreements constitute the valid and binding obligation of each of
the Depositor and the Sellers, as applicable, enforceable against
the Depositor or the Sellers in accordance with its terms, except
that in each case as to enforceability (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (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) the enforceability as
to rights to indemnification under this Agreement may be subject to
limitations of public policy under applicable securities laws.
(viii) The issuance and delivery of the Securities, the
consummation of any other of the transactions contemplated herein,
in the Sale and Servicing Agreement, the Trust Agreement, the Home
Equity Loan Purchase Agreement and the Insurance Agreement, and the
fulfillment of the terms of this Agreement, the Sale and Servicing
18
Agreement, the Trust Agreement and the Insurance Agreement do not
and will not conflict with or violate any term or provision of the
Certificate or Articles of Incorporation or Bylaws of the Depositor
or, to the best of such counsel's knowledge, any statute, order or
regulation applicable to the Depositor of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over the Depositor and do not and will not conflict with, result in
a breach or violation or the acceleration of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of the
Depositor pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Depositor is a party or by which the Depositor
may be bound or to which any of the property or assets of the
Depositor may be subject except for conflicts, violations, breaches,
accelerations and defaults which would not, individually or in the
aggregate, be materially adverse to the Depositor or materially
adverse to the transactions contemplated by this Agreement.
(ix) The consummation of any of the transactions contemplated
in the Home Equity Loan Purchase Agreement and the Transfer
Agreement, and the fulfillment of the terms of the Home Equity Loan
Purchase Agreement and the Transfer Agreement, do not and will not
conflict with or violate any terms or provision of the Certificate
or Articles of Incorporation or Bylaws of any of the Sellers or, to
the best of such counsel's knowledge, any statute, order or
regulation applicable to any of the Sellers and do not and will not
conflict with, result in a breach or violation or the acceleration
of, or constitute a default under or result in the creation or
imposition of any lien, charge or encumbrance upon any of the
property or assets of any of the Sellers pursuant to the terms of,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which any of the
Sellers may be bound or to which any of the property or assets of
any of the Sellers may be subject except for conflicts, violations,
breaches, accelerations and defaults which would not, individually
or in the aggregate, be materially adverse to the applicable Sellers
or materially adverse to the transactions contemplated by this
Agreement.
(x) The consummation of any of the transactions contemplated
herein and in the Sale and Servicing Agreement, the Trust Agreement
and the Insurance Agreement, and the fulfillment of the terms of
this Agreement, the Sale and Servicing Agreement, the Trust
Agreement and the Insurance Agreement, do not and will not conflict
with or violate any term or provision of the Certificate or Articles
of Incorporation or Bylaws of HFC or, to the best of such counsel's
knowledge, any statute, order or regulation applicable to HFC, and
do not and will not conflict with, result in a breach or violation
or the acceleration of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of HFC pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which HFC is a
party or by which HFC may be bound or to which any of the property
or assets of HFC may be subject except for conflicts, violations,
breaches, accelerations and defaults which would not, individually
or in the aggregate, be materially adverse to HFC or materially
adverse to the transactions contemplated by this Agreement.
19
(xi) The Class A Notes are duly and validly authorized and,
when executed, authenticated and delivered in accordance with the
Indenture and the Sale and Servicing Agreement, and issued and
delivered to and paid for by the Underwriters, as contemplated
hereby, will be entitled to the benefits provided by the Indenture
and the Sale and Servicing Agreement.
(xii) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or
with any court or governmental agency or body of the United States
is required for the issuance of the Class A Notes and the sale of
the Class A Notes to the Underwriters, or the consummation by the
Sellers, the Depositor and HFC of the other transactions
contemplated by this Agreement, the Sale and Servicing Agreement,
the Transfer Agreement, the Home Equity Loan Purchase Agreement and
the Insurance Agreement, except the registration under the 1933 Act
of the Class A Notes and such consents, approvals, authorizations,
registrations or qualifications as have been obtained or as may be
required under State securities or Blue Sky laws in connection with
the issuance of the Class A Notes and the subsequent purchase and
distribution of the Class A Notes by the Underwriters.
(xiii) The Registration Statement and any amendments thereto
have become effective under the 1933 Act; to the best of such
counsel's knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued and not withdrawn and no
proceedings for that purpose have been instituted or threatened and
not terminated.
(xiv) The conditions to the use by the Depositor and the Trust
of a registration statement on Form S-3 under the 1933 Act, as set
forth in the General Instructions to Form S-3, have been satisfied
with respect to the Registration Statement and the Prospectus. To
the best of such counsel's knowledge, there are no material
contracts, indentures or other documents of a character required to
be described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto. The statements in the
Prospectus under the caption "Legal Aspects of Home Equity Loans and
Related Matters", to the extent that statements in such section
constitute matters of law or legal conclusions with respect thereto,
have been reviewed by attorneys under such counsel's supervision and
are complete and correct in all material respects.
(xv) There are no actions, proceedings or investigations
pending before or, to the best knowledge of such counsel, threatened
by any court, administrative agency or other tribunal to which any
of the Sellers, HFC or the Depositor is a party or of which any of
their respective properties is the subject (A) other than actions,
proceedings or investigations which are not reasonably expected to
have a material adverse effect on the business or financial
condition of any of the Sellers, HFC or the Depositor, (B) asserting
the invalidity of the Sale and Servicing Agreement, the Trust
Agreement, the Indenture, the Transfer Agreement, the Home Equity
Loan Purchase Agreement, the Insurance Agreement or the Securities,
(C) seeking to prevent the issuance of the Securities or the
consummation by any of the Sellers, HFC or the Depositor of any of
the transactions
20
contemplated by the Sale and Servicing Agreement, the Trust
Agreement, the Indenture, the Transfer Agreement and the Home Equity
Loan Purchase Agreement, the Insurance Agreement and this Agreement,
as the case may be, or (D) which might materially and adversely
affect the performance by any of the Sellers, HFC or the Depositor
of their respective obligations under, or the validity or
enforceability of, the Sale and Servicing Agreement, the Trust
Agreement, the Home Equity Loan Purchase Agreement, this Agreement,
the Insurance Agreement or the Securities.
(xvi) The Registration Statement, the Prospectus and each
amendment or supplement thereto, as of their respective effective or
issue dates complied as to form in all material respects with the
applicable requirements of the 1933 Act and the 1993 Act
Regulations.
(xvii) Such counsel has no reason to believe that (A) the
Registration Statement and the Prospectus, as of the date the
Registration Statement became effective, or the Registration
Statement (excluding the exhibits thereto) as of the date that the
most recent post-effective amendment thereto became effective,
contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading or (B) the Prospectus, as of its date and the date of
such opinion, contained or contains any untrue statement of a
material fact or omitted 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 (it
being understood that such counsel need express no opinion as to
information included in Computational Materials or Structural Term
Sheets and the financial statements or other financial and
statistical data contained or incorporated by reference in the
Registration Statement). Such opinion may express its reliance as to
factual matters on the representations and warranties made by the
parties hereto, and on certificates or other documents furnished by
public officials or officers of such parties to the instruments and
documents referred to therein. Such opinion may be qualified,
insofar as it concerns the enforceability of the documents referred
to therein, to the extent that such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights in general, or by
general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and no opinion
need be given as to the enforceability of Section 9 or the legends
set forth in Section 6 of this Agreement.
(e) The Underwriters shall have received the favorable opinion of
counsel to the Indenture Trustee, dated the Closing Date, addressed to the
Underwriters and the Depositor and in form and scope satisfactory to counsel
to the Underwriters, to the effect that:
(i) The Indenture Trustee is a national banking association
with trust powers, duly organized and validly existing in good
standing under the laws of the United States, and has all requisite
power and authority to enter into the Sale and Servicing Agreement,
the Indenture, the Administration Agreement and the Insurance
Agreement and perform its obligations thereunder.
21
(ii) The Sale and Servicing Agreement, the Indenture, the
Administration Agreement and the Insurance Agreement have been duly
authorized, executed and delivered by the Indenture Trustee and,
assuming the due authorization, execution and delivery thereof by
the other parties thereto, constitute the legal, valid and binding
obligations of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with their respective terms, subject
to bankruptcy laws and other similar laws of general application
affecting creditors' rights and subject to the application of the
rules of equity, including those respecting the availability of
specific performance.
(iii) No consent, approval, authorization or other action by,
or filing with, any court or governmental agency or authority having
jurisdiction over the banking or trust powers of the Indenture
Trustee is required in connection with its execution and delivery of
the Sale and Servicing Agreement, the Indenture, the Administration
Agreement and the Insurance Agreement, according to their respective
terms.
(iv) The execution, delivery and performance of the Sale and
Servicing Agreement, the Indenture, the Administration Agreement and
the Insurance Agreement do not result in a violation of (a) any law
or regulation of the United States governing the banking or trust
powers of the Indenture Trustee or any order, writ, judgment or
decree of any court, arbitrator or governmental authority applicable
to the Indenture Trustee or any of its assets or (b) the articles of
association or by-laws of the Indenture Trustee.
(v) The Class A Notes have been authenticated and delivered by
the Indenture Trustee in accordance with the Indenture.
(vi) There are no actions, proceedings or investigations
pending or threatened against or affecting the Indenture Trustee
before or by any court, arbitrator, administrative agency or other
governmental authority which, if decided adversely to the Indenture
Trustee, would materially and adversely affect the ability of the
Indenture Trustee to carry out the transactions contemplated in the
Sale and Servicing Agreement, the Indenture, the Administration
Agreement or the Insurance Agreement.
(f) The Underwriters shall have received the favorable opinion or
opinions, dated the date of the Closing Time, of [Mayer, Brown, Xxxx & Maw],
as counsel for the Underwriters, with respect to the issuance of the Class A
Notes and the sale of the Class A Notes to the Underwriters, the Registration
Statement, this Agreement, the Prospectus and such other related matters as
the Underwriters may require.
(g) The Underwriters shall have received the favorable opinion, dated
the Closing Date of [ ], counsel to the Owner Trustee, with respect to the
issue and sale of the Class A Notes and the Ownership Interests, the status of
the Trust, the Trust Agreement, perfections of applicable security interests
and such other matters as the Underwriters may reasonably require.
(h) The Underwriters shall have received the favorable opinion, dated
the Closing Date, of [ ] counsel to the Insurer ("Insurer Counsel") in form
and scope satisfactory to counsel for the Underwriters, to the effect that:
22
(i) The Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of [ ]
and is licensed and has the power and authority to issue the Policy
under the laws of the State of [ ].
(ii) The Policy has been duly authorized, executed and
delivered and is the valid and binding obligation of the Insurer
enforceable in accordance with its terms, except that the
enforcement of the Policy may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether the enforcement
of such remedies is considered in a proceeding in equity or at law).
(iii) The Insurer has the power and authority to perform its
obligations under the Insurance Agreement and the Indemnification
Agreement (as defined in the Insurance Agreement) and the Insurance
Agreement and the Indemnification Agreement have been duly executed
and are the valid and binding obligations of the Insurer, each
enforceable in accordance with its terms, except that the
enforcement of the Insurance Agreement and the Indemnification
Agreement may be limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws
affecting creditors' rights generally and by general principles of
equity and, in the case of the Indemnification Agreement, subject to
principles of public policy limiting the right to enforce the
indemnification provisions contained therein insofar as such
provisions relate to indemnification for liabilities arising under
the securities laws.
(iv) No consent, approval, authorization, filing or order of
any state or federal court or governmental agency or body is
required on the part of the Insurer the lack of which would
adversely affect the validity and enforceability of the Policy.
(v) The execution, delivery and performance by the Insurer of
its obligations under the Policy do not contravene any provision of
the charter or by-laws of the Insurer. The execution, delivery and
performance by the Insurer of its obligations under the Policy do
not, to the extent that either of the following would affect the
validity or enforceability of the Policy, (a) contravene any law or
government regulation or order presently binding on the Insurer or
(b) contravene any provision of or constitute a default under any
indenture, contract or other instrument to which the Insurer is a
party or by which it is bound.
(vi) To the extent that the Policy constitutes a security
within the meaning of Section 2(l) of the 1933 Act, it is a security
exempt from the registration requirements of the 0000 Xxx.
(vii) The description of the Policy in the Prospectus
Supplement under the headings ["The Insurer" and "Description of the
Notes--The Policy"] is, to the extent that such description
constitutes statements of matters of law or legal conclusions with
respect thereto, accurate in all material respects; provided,
however, that no opinion need be expressed as to the accuracy of any
financial statements or other financial or statistical data
contained in or omitted from the Prospectus Supplement, including
such statements
23
or other information included under such caption or in any appendix
to the Prospectus Supplement.
(i) The Underwriters shall have received an opinion, dated the date
of the Closing Time, of [Sidley Xxxxxx Xxxxx & Xxxx LLP], as special counsel
to the Depositor and HFC, addressed to the Depositor, and satisfactory to the
Insurer, the Rating Agencies and the Underwriters relating to the transfer of
the principal balance of the Home Equity Loans by the Sellers to the Depositor
and by the Depositor to the Trust, and such counsel shall have consented to
reliance by the Insurer, the Rating Agencies and the Underwriters on such
opinion as though such opinion had been addressed to each such party.
(j) Each of the Depositor and HFC shall have furnished to the
Underwriters a certificate signed on behalf of the Depositor and HFC by an
accounting or financial officer thereof, dated the date of the Closing Time,
as to (A) the accuracy of the representations and warranties of the Depositor
and HFC herein at and as of the Closing Time, (B) there being no legal or
governmental proceedings pending, other than those, if any, referred to in the
Prospectus or the Prospectus as amended or supplemented or the 1934 Act
filings of HFC, as the case may be, to which any of the Depositor or HFC is a
party or of which any property of any of the Depositor or HFC is the subject,
which, in the judgment of any of the Depositor or HFC, as applicable, have a
reasonable likelihood of resulting in (i) a material adverse change in the
financial condition, shareholders' equity or results of operations of the
Depositor or HFC or (ii) a material adverse effect on the transactions
contemplated by this Agreement; and to the best knowledge of each of the
Depositor or HFC, as applicable, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, (C) the
performance by the Depositor and HFC of all of their respective obligations
hereunder to be performed at or prior to the Closing Time, and (D) such other
matters as you may reasonably request.
(k) The Indenture Trustee shall have furnished to the Underwriters
and the Transferor a certificate of the Indenture Trustee, signed by one or
more duly authorized officers of the Indenture Trustee, dated the Closing
Date, as to the due authorization, execution and delivery of the Sale and
Servicing Agreement, the Indenture and the Insurance Agreement by the
Indenture Trustee and the acceptance by the Indenture Trustee of the trusts
created thereby and the due authentication and delivery of the Class Notes by
the Indenture Trustee under the Indenture and such other matters as the
Underwriters shall reasonably request.
(l) The Policy shall have been issued by the Insurer and shall have
been duly authenticated by an authorized agent of the Insurer, if so required
under applicable state law or regulations.
(m) The Class A Notes shall have been rated [ ] by [ ] and [ ]
by [ ].
(n) Counsel and special counsel to HFC and the Depositor shall have
furnished to the Underwriters any opinions supplied to the Rating Agencies
relating to certain matters with respect to the Class A Notes.
24
(o) The Underwriters shall have received from [ ], or other
independent certified public accountants acceptable to the Underwriters, a
letter, dated as of the Closing Time in the form heretofore agreed to.
(p) Prior to the Closing Time, [Mayer, Brown, Xxxx & Maw], as counsel
for the Underwriters, shall have been furnished with such documents and
opinions as they may reasonably require for the purpose of enabling them to
pass upon the issuance of the Class A Notes and the sale of the Class A Notes
to the Underwriters as herein contemplated and related proceedings or in order
to evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Depositor and HFC in connection with the issuance
of the Class A Notes and the sale of the Class A Notes to the Underwriters as
herein contemplated shall be satisfactory in form and substance to the
Underwriters and [Mayer, Brown, Xxxx & Maw].
(q) Since the respective dates as of which information is given in
the Prospectus, there shall not have been any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial condition, stockholders equity or results of operations
of the Depositor, any of the Sellers or HFC otherwise than as set forth or
contemplated in the Prospectus, the effect of which is in the reasonable
judgment of the Underwriters, after consultation with the Depositor and HFC,
so material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Class A Notes on the terms and
in the manner contemplated in the Prospectus.
If any condition specified in this Section 7 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by you by notice to the Depositor at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except that in the event of any such termination, the
provisions of Section 8, the indemnity agreement set forth in Section 9, and
the provisions of Sections 10 and 15 shall remain in effect.
SECTION 8. Payment of Expenses. The Depositor and HFC jointly and
severally agree to pay all expenses incident to the performance of their
obligations under this Agreement, including without limitation those related
to (i) the filing of the Registration Statement and all amendments thereto,
(ii) the preparation, issuance and delivery of the Securities, (iii) the fees
and disbursements of [Sidley Xxxxxx Xxxxx & Xxxx LLP], as special counsel for
the Depositor and HFC, and [ ], accountants of the Depositor and HFC, (iv) any
qualification of the Class A Notes under state securities and Blue Sky laws
and the determination of the eligibility of the Class A Notes for investment
in accordance with the provisions of subsection 5(f) including filing fees,
and the fees and disbursements of [Mayer, Brown, Xxxx & Maw], as counsel for
the Underwriters (not to exceed $30,000), in connection therewith and in
connection with the preparation of any Blue Sky Survey, (v) the printing and
delivery to the Underwriters, in such quantities as you may reasonably
request, of copies of the Registration Statement and Prospectus and all
amendments and supplements thereto, and of any Blue Sky Survey, (vi) the
delivery to the Underwriters, in such quantities as you may reasonably
request, of copies of the Sale and Servicing Agreement, (vii) the fees charged
by nationally recognized statistical rating agencies for rating the Class A
Notes and (viii) the fees and expenses of the Indenture Trustee and the Owner
Trustee and each's respective counsel. It is understood that, except as
expressly provided
25
in this Section 8, the Underwriters will pay all of their own expenses,
including (i) the fees of counsel to the Underwriters, (ii) any expenses
incurred in connection with the preparation and filing with the Commission of
Computational Materials and Structural Term Sheets and (iii) expenses related
to the overnight delivery to the Underwriters of copies of the Prospectus.
If this Agreement is terminated by you in accordance with the
provisions of Section 7, the Depositor, the Sellers and HFC shall reimburse
you for all reasonable out-of-pocket expenses, including the fees and
disbursements of [Mayer, Brown, Xxxx & Maw], as counsel for the Underwriters.
SECTION 9. Indemnification. (a) HFC and the Depositor jointly and
severally agree to indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading, unless (A) such untrue statement or
omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information furnished
to the Depositor or HFC, or information electronically transmitted
to the Depositor or HFC, by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto) or (B) such
untrue statement or omission or alleged untrue statement or omission
relates to information in any Computational Materials or Structural
Term Sheets provided by the Underwriters (except to the extent that
such untrue statements or errors contained therein are Pool
Information or Prospectus Information);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Depositor; and
(iii) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you) as reasonably
incurred in investigating, preparing to defend or defending against
or appearing as a third party witness with respect to any
litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, as such expense is
incurred and to the extent that any such
26
expense is not paid under (i) or (ii) above. This indemnity
agreement will be in addition to any liability which the Depositor
may otherwise have.
(b) Each of the Underwriters severally agrees to indemnify and hold
harmless the Depositor, each of its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the
Depositor within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act (each, an "Indemnified Party") against any and all loss,
liability, claim, damage and expense, as incurred, described in the indemnity
contained in subsection (a) of this Section 9, but only with respect to (i)
untrue statements or alleged untrue statements of a material fact made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of material facts required to be stated therein or necessary to make the
statements therein not misleading, in each case in reliance upon and in
conformity with written information furnished to the Depositor or HFC by such
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) or (ii)
information in any Computational Materials or Structural Term Sheets provided
by such Underwriter (except to the extent that such untrue statements or
errors contained therein are Pool Information or Prospectus Information). The
parties hereto acknowledge that the only information supplied to the Depositor
or HFC by the Underwriters expressly for use in the Registration Statement or
the Prospectus is limited to the information set forth in the [ ] paragraph on
the cover page and the [ ] under the caption "Method of Distribution" in the
Prospectus Supplement (the "Underwriter Information"). This indemnity
agreement will be in addition to any liability that the Underwriters may
otherwise have.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it with respect to which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve it from any liability which it may have hereunder
unless it has been materially prejudiced by such failure to notify or from any
liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel for all indemnified parties
in connection with any one action or separate but similar or related actions
in the same jurisdiction arising out of the same general allegations or
circumstances, unless (i) if the defendants in any such action include one or
more of the indemnified parties and the indemnifying party, and one or more of
the indemnified parties shall have employed separate counsel after having
reasonably concluded that there may be legal defenses available to it or them
that are different from or additional to those available to the indemnifying
party or to one or more of the other indemnified parties or (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the commencement of the action.
SECTION 10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 9 is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, HFC and the
Depositor on the one hand, and the Underwriters, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement incurred by the
Depositor and one or more of the Underwriters (i) in such
27
proportion as shall be appropriate to reflect the relative benefits to HFC and
the Depositor on the one hand and the Underwriters on the other hand from the
offering of the Class A Notes pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or
otherwise prohibited hereby, 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 HFC and the Depositor on the one hand and the Underwriters
or Underwriter, as applicable, on the other in connection with the actions,
statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
The relative benefits received by HFC and the Depositor on the one
hand and the Underwriters on the other hand in connection with the offering of
the Class A Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Class A Notes pursuant to this Agreement (before deducting expenses) received
by HFC and the Depositor and the total underwriting discount received by the
Underwriters, in each case as set forth in the Prospectus, bear to the
aggregate initial public offering price of the Class A Notes as set forth in
the Prospectus. The relative fault of HFC and the Depositor on the one hand
and the Underwriters on the other hand 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 HFC or the Depositor, on the one hand, or
the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission.
HFC, the Depositor and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 10 were to be
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 into account the equitable considerations referred to in the first
sentence of this Section 10. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in the first sentence of this Section 10 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, preparing to defend or defending
against any action or claim that is the subject of this Section 10.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Class A Notes underwritten by such Underwriter 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 in respect
of such losses, liabilities, claims, damages and expenses. The Underwriters'
obligations in this Section 10 to contribute are several in proportion to
their respective underwriting obligations and not joint. Each party entitled
to contribution agrees that upon the service of a summons or other initial
legal process upon it in any action instituted against it in respect to which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought for any obligation it
may have hereunder or otherwise (except as specifically provided in section 9
hereof). For purposes of this Section 10,
28
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as such Underwriter, and each respective director of
the Depositor, each respective officer of the Depositor who signed the
Registration Statement, and each person, if any, who controls the Depositor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Depositor.
SECTION 11. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Depositor or HFC
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriters or
controlling person thereof, or by or on behalf of the Depositor or HFC and
shall survive delivery of any Class A Notes to the Underwriters.
SECTION 12. Termination of Agreement. [Representative Underwriter]
and [Representative Underwriter], as Representatives, may terminate this
Agreement immediately upon notice to the Depositor and HFC, at any time at or
prior to the Closing Time (i) if there has been since the respective dates as
of which information is given in the Prospectus, any change, or any
development involving a prospective change, in or affecting the condition,
financial or otherwise, earnings, affairs or business of HFC or the Depositor,
whether or not arising in the ordinary course of business, which, in the
reasonable judgment of the Underwriters after consultation with HFC and the
Depositor, materially impairs the market for, or the investment quality of,
the Class A Notes, (ii) if there has been an outbreak or material escalation
of hostilities involving the United States of America, or the declaration by
the United States of America of a national emergency or war, if the effect of
any such event in the Underwriters' reasonable judgment makes it impracticable
or inadvisable to proceed with the public offering of the Class A Notes, (iii)
if trading in securities generally on the New York Stock Exchange has been
suspended or materially limited (other than normal trading restrictions
resulting from the total number of trades on the New York Stock Exchange), or
minimum prices have been established by the exchange or by order of the
Commission or any other governmental authority, or if a banking moratorium has
been declared by either federal or New York State authorities or (iv) if there
has been any material disruption of securities settlement, payment or
clearance services in the United States. In the event of any such termination,
the provisions of Section 8, the indemnity agreement set forth in Section 9,
and the provisions of Sections 10 and 15 shall remain in effect. If the
Agreement is terminated by you in accordance with the provisions of
Section12(i), the Depositor and HFC shall reimburse you for all reasonable
out-of-pocket expenses, including the fees and disbursements of [Mayer, Brown,
Xxxx & Maw], as counsel for the Underwriters.
SECTION 13. Default by One or More of the Underwriters. If one or
more of the Underwriters participating in the public offering of the Class A
Notes shall fail at the Closing Time to purchase the Class A Notes which it is
(or they are) obligated to purchase hereunder (the "Defaulted Notes"), then
such of the non-defaulting Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than
all, of the Defaulted Notes in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, you have not completed such arrangements
within such 24-hour period, then:
29
(i) if the aggregate principal amount of Defaulted Notes does
not exceed 10% of the aggregate principal amount of the Class A
Notes to be purchased pursuant to this Agreement, the non-defaulting
Underwriters named in this Agreement shall be obligated to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all such non-defaulting Underwriters, or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of the Class A Notes
to be purchased pursuant to this Agreement, this Agreement shall
terminate, without any liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section 13 shall relieve any
defaulting Underwriter from any liability with respect to any default of such
Underwriter under this Agreement.
In the event of a default by any Underwriters as set forth in this
Section 13, either you or the Depositor shall have the right to postpone the
Closing Time for a period not exceeding five (5) Business Days in order that
any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
SECTION 14. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at the addresses set
forth on the first page hereof, in the case of [Representative Underwriter]
(Fax: (212) ___-____), with a copy to [ ] (Fax: (212) ___-____) and in the
case of [Representative Underwriter] (Fax: (212) ___-____), with a copy to [
]. Notices to the Depositor or HFC shall be directed to Household Finance
Corporation, 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, to the
attention of the Secretary, with a copy to the Treasurer (Fax: (847)
000-0000).
SECTION 15. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Depositor and HFC, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended nor
shall it be construed to give any person, firm or corporation, other than the
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 9 and 10 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
with respect to this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the parties and their respective successors and
said controlling persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein) and except
as provided above for the benefit of no other person, firm or corporation. No
purchaser of Class A Notes from the Underwriters shall be deemed to be a
successor by reason merely of such purchase.
SECTION 16. Governing Law and Time. This Agreement shall be governed
by the law of the State of New York and shall be construed in accordance with
such law. Specified times of day refer to New York City time.
30
SECTION 17. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original of any party whose
signature appears on it, and all of which shall together constitute a single
instrument.
31
If the foregoing is in accordance with the Underwriters'
understanding of our agreement, please sign and return to us a counterpart
hereof, whereupon this instrument along with all counterparts will become a
binding agreement among the Underwriters, the Depositor and HFC in accordance
with its terms.
Very truly yours,
HFC REVOLVING CORPORATION
By:______________________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By:______________________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
[Representative Underwriter]
as Representative of the Underwriters
By:___________________________________
Name:
Title:
[Representative Underwriter]
as Representative of the Underwriters
By:___________________________________
Name:
Title:
32
Schedule I
CLASS A NOTES
Principal Amount Purchase Price
[Underwriter] $[ ] [ ]%
[Underwriter] $[ ] [ ]%
[Underwriter] $[ ] [ ]%
[Underwriter] $[ ] [ ]%
[Underwriter] $[ ] [ ]%
Total $[ ]
33
