DRAFT OF MAY 28, 1999
MASTER RECEIVABLES PURCHASE AGREEMENT
BETWEEN
HOUSEHOLD AUTOMOTIVE FINANCE CORPORATION
SELLER
AND
HOUSEHOLD AUTO RECEIVABLES CORPORATION
PURCHASER
DATED AS OF
JUNE 1, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1 General . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2 Specific Terms. . . . . . . . . . . . . . . . . . . .1
SECTION 1.3 Other Definitional Provisions.. . . . . . . . . . . .2
SECTION 1.4 Certain References. . . . . . . . . . . . . . . . . .2
SECTION 1.5 No Recourse . . . . . . . . . . . . . . . . . . . . .2
ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY . .3
SECTION 2.1 Purchase. . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .5
SECTION 3.1 Representations and Warranties of Seller. . . . . . .5
SECTION 3.2 Representations and Warranties of HARC. . . . . . . .6
ARTICLE IV COVENANTS OF SELLER . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.1 Seller's Covenants. . . . . . . . . . . . . . . . . .8
ARTICLE V REPURCHASES . . . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 5.1 Repurchase of Receivables Upon Breach of Warranty . .9
SECTION 5.2 Reassignment of Repurchased Receivables . . . . . . .9
SECTION 5.3 Waivers . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.1 Liability of Seller . . . . . . . . . . . . . . . . 10
SECTION 6.2 Amendment . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.3 GOVERNING LAW . . . . . . . . . . . . . . . . . . . 10
SECTION 6.4 Notices . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.5 Severability of Provisions. . . . . . . . . . . . . 11
SECTION 6.6 Assignment. . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.7 Acknowledgment and Agreement of each Seller . . . . 11
SECTION 6.8 Further Assurances. . . . . . . . . . . . . . . . . 11
SECTION 6.9 No Waiver; Cumulative Remedies. . . . . . . . . . . 12
SECTION 6.10 Counterparts. . . . . . . . . . . . . . . . . . . . 12
SECTION 6.11 Binding Effect; Third-Party Beneficiaries . . . . . 12
SECTION 6.12 Merger and Integration. . . . . . . . . . . . . . . 12
SECTION 6.13 Heading . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 6.14 Schedules and Exhibits. . . . . . . . . . . . . . . 12
SECTION 6.15 Survival of Representations and Warranties. . . . . 12
SECTION 6.16 Nonpetition Covenant. . . . . . . . . . . . . . . . 12
i
EXHIBITS
EXHIBIT A Form of Purchase Agreement Supplement
SCHEDULE A Schedule of Receivables
ii
MASTER RECEIVABLES PURCHASE AGREEMENT
THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as of June 1, 1999,
executed between Household Auto Receivables Corporation, a Nevada corporation,
as purchaser ("HARC") and Household Automotive Finance Corporation, a Delaware
corporation, as seller ("Seller").
W I T N E S S E T H :
WHEREAS, HARC has agreed to purchase from time to time from Seller,
and Seller, pursuant to this Agreement, has agreed to transfer from time to time
to HARC the Receivables and the Other Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, HARC and Seller, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 GENERAL. Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
Master Sale and Servicing Agreement dated as of June 1, 1999, by and among
Household Automotive Trust III, as Issuer, HARC, as Seller, Household Finance
Corporation, as Master Servicer, and The Chase Manhattan Bank, as Trustee.
Section 1.2 SPECIFIC TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Agreement" means this Master Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"Closing Date" means June __, 1999.
"Conveyance" shall have the meaning specified in Section 2.1.
"Conveyance Papers" shall have the meaning specified in Section 3.1.
"Cutoff Date" shall have the meaning assigned to such term in the
applicable Receivables Purchase Agreement Supplement.
"Other Conveyed Property" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the
Indenture (including all property and interests granted to the Trustee),
including all proceeds thereof, other than the Receivables.
"Purchase Date" means, with respect to Receivables, any date, on which
Receivables are to be purchased by HARC pursuant to this Agreement and a
Purchase Agreement Supplement is executed and delivered by the Seller and HARC.
"Receivables" means the Receivables listed on the Schedules of
Receivables attached to each Receivables Purchase Agreement Supplement as
Schedule A.
"Receivables Purchase Agreement Supplement" means the agreement
between HARC and the Seller, substantially in the form of Exhibit A hereto.
"Repurchase Event" means a determination pursuant to Section 3.2 of
the Master Sale and Servicing Agreement that HARC is required to repurchase a
Receivable.
"Schedule of Receivables" means the schedule of Receivables sold and
transferred pursuant to this Agreement and the related Receivables Purchase
Agreement Supplement which is attached as Schedule A to the related Receivables
Purchase Agreement Supplement.
Section 1.3 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other documents, or Conveyance Paper made
or delivered pursuant hereto unless otherwise defined herein.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Master Sale and Servicing Agreement and all applicable Series Supplements.
Section 1.4 CERTAIN REFERENCES. All references to the Principal
Balance of a Receivable as of any date of determination shall refer to the
close of business on such day, or as of the first day of a Collection Period
shall refer to the opening of business on such day. All references to the
last day of a Collection Period shall refer to the close of business on such
day.
Section 1.5 NO RECOURSE. Without limiting the obligations of
Seller hereunder, no recourse may be taken, directly or indirectly, under
this Agreement or any certificate or
2
other writing delivered in connection herewith or therewith, against any
stockholder, officer or director, as such, of Seller, or of any predecessor or
successor of Seller.
ARTICLE II
CONVEYANCE OF THE RECEIVABLES
AND THE OTHER CONVEYED PROPERTY
Section 2.1 PURCHASE.
(a) By execution of this Agreement and subject to the terms and
conditions of this Agreement and simultaneously with the execution and delivery
of the related Receivables Purchase Agreement Supplement, the Seller shall sell,
transfer, assign, and otherwise convey to HARC (collectively, the "Conveyance")
without recourse (but without limitation of its obligations in this Agreement),
and HARC shall purchase, all right, title and interest of Seller in and to:
(i) each and every Receivable listed on Schedule A to the related
Receivables Purchase Agreement Supplement and all monies paid or payable
thereon or in respect thereof on or after the related Cutoff Date
(including amounts due on or before the related Cutoff Date but received by
the Seller on or after such date);
(ii) the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Receivables and any other interest of
the Seller in such Financed Vehicles;
(iii) all rights of the Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with respect to
such Receivables repurchased by a Dealer, pursuant to a Dealer Agreement,
as a result of a breach of representation or warranty in the related Dealer
Agreement;
(v) all rights of Seller under any Service Contracts on the
related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with respect to
the related Receivables from claims on any physical damage, loss, credit
life or disability insurance policies, if any, covering Financed Vehicles
or Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such Receivables;
(vii) all items contained in the Receivables Files with respect to
such Receivables and any and all other documents that Seller or Master
Servicer keeps
3
on file in accordance with its customary procedures relating to the related
Receivables, or the related Financed Vehicles or Obligor;
(viii) property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that has
been acquired by or on behalf of HARC pursuant to liquidation of such
Receivable;
(ix) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
(b) Simultaneously with the conveyance of the Receivables and the
Other Conveyed Property to HARC by Seller, HARC has paid or caused to be paid to
or upon the order of Seller an amount equal to 100% of the Principal Balance of
the Receivables on the books and records of Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, pay down rates, yield and such other factors as
may be mutually agreed upon between Seller and HARC, by wire transfer of
immediately available funds.
(c) In connection with such Conveyance, Seller further agrees that
it will, at its own expense, on or prior to the Purchase Date (i) indicate in
its computer files or microfiche lists that the Receivables have been conveyed
to HARC in accordance with this Agreement and have been conveyed by HARC to the
Trustee pursuant to the Master Sale and Servicing Agreement for the benefit of
the Noteholders by including in such computer files and microfiche lists the
code identifying each such Receivable and (ii) deliver to HARC (or to the
Trustee if HARC so directs) a computer file or microfiche list containing a true
and complete list of all such Receivables specifying for each such Receivable,
as of the Cutoff Date (A) its account number and (B) the outstanding balance of
such Receivable. Such computer files or microfiche lists shall be delivered to
HARC (or to the Trustee if so directed by HARC) and marked as proprietary and
confidential. Seller further agrees not to alter the code referenced in clause
(i) of this paragraph with respect to any Receivable during the term of this
Agreement.
(d) The parties hereto intend that the conveyance of the Seller's
right, title and interest in and to the Receivables and Other Conveyed Property
shall constitute a sale, conveying good title free and clear of any liens,
claims, encumbrances or rights of others from Seller to HARC and that the
Receivables and Other Conveyed Property shall not be part of Seller's estate in
the event of the insolvency of Seller or a conservatorship,
4
receivership or similar event with respect to Seller. It is the intention of
the parties hereto that the arrangements with respect to the Receivables and
Other Conveyed Property shall constitute a purchase and sale of such Receivables
and not a loan. In the event, however, that a court of competent jurisdiction
were to hold that the transactions evidenced hereby constitute a loan and not a
purchase and sale, it is the intention of the parties hereto that this Agreement
shall constitute a security agreement under applicable law, and that Seller
shall be deemed to have granted to HARC a first priority perfected security
interest in all of such Seller's right, title and interest in and to the
Receivables and Other Conveyed Property.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
makes the following representations and warranties as of the date hereof on
which HARC relies in purchasing the Receivables and the Other Conveyed
Property and in transferring the Receivables and the Other Conveyed Property
to the Issuer under the Master Sale and Servicing Agreement. Such
representations are made as of the execution and delivery of this Agreement
and as to Receivables and Other Conveyed Property conveyed thereunder, as of
the execution and delivery of each Receivables Purchase Agreement Supplement,
but shall survive the sale, transfer and assignment of the Receivables and
the Other Conveyed Property hereunder, and the sale, transfer and assignment
thereof by HARC to the Issuer under the Master Sale and Servicing Agreement.
Seller and HARC agree that HARC will assign to Issuer all HARC's rights under
this Agreement and each Receivables Purchase Agreement Supplement and that
the Trustee will thereafter be entitled to enforce this Agreement and each
Receivables Purchase Agreement Supplement against Seller in the Trustee's own
name on behalf of the Securityholders.
(a) ELIGIBILITY CRITERIA. Each of the Receivables which is to be
pledged as collateral for a Series of Notes satisfies the applicable Eligibility
Criteria set forth in, or to be set forth in, Schedule I to the Series
Supplement establishing such Series.
(b) ORGANIZATION AND GOOD STANDING. The Seller is a corporation
duly organized and validly existing in good standing under the laws of the State
of Delaware and has, in all material respects, full power and authority to own
its properties and conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver and perform
its obligations under this Agreement.
(c) DUE OBLIGATION. The Seller is duly qualified to do business
and is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Receivable unenforceable by the Seller, HARC or
the Trust and (ii) have a material adverse effect on the Noteholders.
5
(d) DUE AUTHORIZATION. The execution, delivery and performance of
this Agreement and any other document or instrument delivered pursuant hereto
(such other documents and instruments, including, but not limited to, the
Receivables Purchase Agreement Supplement collectively, the "CONVEYANCE PAPERS")
and the consummation of the transactions provided for in this Agreement or any
other Conveyance Papers have been duly authorized by all necessary corporate
action on the part of the Seller.
(e) NO CONFLICT. The execution and delivery of this Agreement and
the Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms of this
Agreement and the Conveyance Papers applicable to the Seller will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
material default under, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which the Seller is a party or by which it or any
of its properties are bound.
(f) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers and the fulfillment of the terms
contemplated herein and therein applicable to the Seller will not conflict with
or violate any requirements of law applicable to the Seller.
(g) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best knowledge of the Seller, threatened against the Seller,
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
the Conveyance Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance Papers, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Seller, would materially and adversely affect the performance by the Seller of
its obligations under this Agreement or the Conveyance Papers, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Conveyance Papers or (v) seeking to
affect adversely the income tax attributes of the Trust under United States
Federal, Nevada or California income tax systems.
(h) ALL CONSENTS. All authorizations, consents, orders,
approvals, registrations or declarations with, or of, any Governmental Authority
required to be obtained, effected or given by the Seller in connection with the
execution and delivery by the Seller of this Agreement or the Conveyance Papers
and the performance of the transactions contemplated by this Agreement or the
Conveyance Papers by the Seller have been duly obtained, effected or given and
are in full force and effect.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF HARC. HARC makes
the following representations and warranties, on which Seller relies in
selling, assigning, transferring and conveying the Receivables and the Other
Conveyed Property to HARC hereunder. Such representations are made as of the
execution and delivery of this Agreement and as to Receivables and Other
Conveyed Property conveyed thereunder, as of the execution
6
and delivery of each Receivables Purchase Agreement Supplement, but shall
survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property hereunder and the sale, transfer and assignment thereof by
HARC to the Issuer under the Master Sale and Servicing Agreement.
(a) ORGANIZATION AND GOOD STANDING. HARC is a corporation duly
organized and validly existing under the laws of the State of Nevada and has, in
all material respects, full power and authority to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations under
this Agreement and the Conveyance Papers.
(b) DUE AUTHORIZATION. The execution and delivery of this
Agreement and the Conveyance Papers and the consummation of the transactions
provided for in this Agreement and the Conveyance Papers have been duly
authorized by HARC by all necessary corporate action on the part of HARC .
(c) NO CONFLICT. The execution and delivery of this Agreement and
the Conveyance Papers, the performance of the transactions contemplated by this
Agreement and the Conveyance Papers, and the fulfillment of the terms hereof and
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which HARC is a party or by which it or its
properties is bound.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Conveyance Papers by HARC and the fulfillment of the terms
contemplated herein and therein applicable to HARC will not conflict with or
violate any requirements of law applicable to HARC.
(e) NO PROCEEDING. There are no proceedings or investigations
pending or, to the best knowledge of HARC, threatened against HARC, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of HARC, would
materially and adversely affect the performance by HARC of its obligations under
this Agreement or the Conveyance Papers or (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Agreement or the Conveyance Papers.
(f) ALL CONSENTS. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental Authority
required to be obtained, effected or given by HARC in connection with the
execution and delivery by HARC of this Agreement and the Conveyance Papers and
the performance of the transactions
7
contemplated by this Agreement and the Conveyance Papers or the fulfillment of
the terms of this Agreement and the Conveyance Papers by HARC have been duly
obtained.
In the event of any breach of a representation and warranty made by
HARC hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by the Trust, have been paid in full. Seller and HARC agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by HARC, Issuer or by the Trustee on
behalf of the Noteholders and Owner Trustee on behalf of the Certificateholders.
Seller agrees that with respect to its obligations in connection with a
Repurchase Event it will exercise no rights of offset with respect to any claims
it may have against HARC.
ARTICLE IV
COVENANTS OF SELLER
Section 4.1 SELLER'S COVENANTS. Seller hereby covenants and
agrees with HARC as follows:
(a) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES. Seller
will take no action to cause any Receivable to be evidenced by any instrument
(as defined in the UCC).
(b) SECURITY INTERESTS. Except for the conveyances hereunder or
as otherwise provide herein, Seller will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with HARC's ownership of
the Receivables or grant, create, incur, assume or suffer to exist any Lien on
any Receivable, whether now existing or hereafter created, or any interest
therein, and Seller shall not claim any ownership interest in the Receivables
and shall defend the right, title and interest of HARC in and to the
Receivables, whether now existing or hereafter created, against all claims of
third parties claiming through or under Seller.
(c) SECURITY'S INTEREST. Except for the conveyances hereunder and
in connection with any transaction permitted pursuant to Section 6.6, Seller
hereby agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the Receivables and any
such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation
or grant shall be void.
(d) DELIVERY OF COLLECTIONS OR RECOVERIES. In the event that
Seller receives collections or recoveries with respect to the Receivables,
Seller agrees to pay to HARC (or to the Master Servicer if HARC so directs) all
such collections and recoveries to the extent such amounts are payable to HARC
as soon as practicable after receipt thereof.
8
(e) NOTICE OF LIENS. The Seller shall notify HARC promptly after
becoming aware of any Lien on any Receivable other than the conveyances
hereunder.
(f) DOCUMENTATION OF TRANSFER. The Seller shall undertake to file
the documents which would be necessary to perfect and maintain the transfer of
the security interest in and to the Receivables and Other Conveyed Assets.
(g) APPROVAL OF OFFICE RECORDS. Seller shall cause this Agreement
to be duly approved by Seller's Board of Directors, and Seller shall maintain
the Agreement as a part of the official records of Seller for the term of the
Agreement.
ARTICLE V
REPURCHASES
Section 5.1 REPURCHASE OF RECEIVABLES UPON BREACH OF WARRANTY.
Upon the occurrence of a Repurchase Event, Seller shall, unless the breach
which is the subject of such Repurchase Event shall have been cured in all
material respects, repurchase the Receivable relating thereto from the Issuer
by the last day of the first full calendar month following the discovery of
such breach by the Seller or receipt by the Seller of notice of such breach
from any of the Master Servicer, HARC, a Trust Officer of the Trustee or the
Owner Trustee and, simultaneously with the repurchase of the Receivable,
Seller shall deposit the Repurchase Amount in full, without deduction or
offset, in the Master Collection Account, pursuant to Section 3.2 of the
Master Sale and Servicing Agreement. It is understood and agreed that, except
as set forth in Section 6.1 hereof, the obligation of Seller to repurchase
any Receivable, as to which a breach occurred and is continuing, shall, if
such obligation is fulfilled, constitute the sole remedy against Seller for
such breach available to HARC, the Issuer, the Noteholders, the
Certificateholders, the Trustee, on behalf of the Noteholders or the Owner
Trustee on behalf of Certificateholders. The provisions of this Section 5.1
are intended to grant the Trustee or the Issuer a direct right against Seller
to demand performance hereunder, and in connection therewith, Seller waives
any requirement of prior demand against HARC with respect to such repurchase
obligation. Any such repurchase shall take place in the manner specified in
Section 3.2 of the Master Sale and Servicing Agreement. Notwithstanding any
other provision of this Agreement or the Master Sale and Servicing Agreement
to the contrary, the obligation of Seller under this Section shall not
terminate upon a termination of Household Finance Corporation as Master
Servicer under the Master Sale and Servicing Agreement and shall be performed
in accordance with the terms hereof notwithstanding the failure of the Master
Servicer or HARC to perform any of their respective obligations with respect
to such Recivable under the Master Sale and Servicing Agreement.
Section 5.2 REASSIGNMENT OF REPURCHASED RECEIVABLES. Upon
deposit in the Master Collection Account of the Repurchase Amount of any
Receivable repurchased by Seller under Section 5.1 hereof, HARC and the
Issuer shall take such steps as may be reasonably requested by Seller in
order to assign to Seller all of HARC's and the Issuer's
9
right, title and interest in and to such Receivable and all security and
documents and all Other Conveyed Property conveyed to HARC and the Issuer
directly relating thereto, without recourse, representation or warranty, except
as to the absence of liens, charges or encumbrances created by or arising as a
result of actions of HARC or the Issuer. Such assignment shall be a sale and
assignment outright, and not for security. If, following the reassignment of a
Repurchased Receivable, in any enforcement suit or legal proceeding, it is held
that Seller may not enforce any such Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable, HARC
and the Issuer shall, at the expense of Seller, take such steps as Seller deems
reasonably necessary to enforce the Receivable, including bringing suit in
HARC's or in the Issuer's name.
Section 5.3 WAIVERS. No failure or delay on the part of HARC,
or the Issuer as assignee of HARC, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude any other or
future exercise thereof or the exercise of any other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
Section 6.1 LIABILITY OF SELLER. Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.
Section 6.2 AMENDMENT. This Agreement and any Conveyance
Papers and the rights and obligations of the parties hereunder may not be
changed orally, but only by an instrument in writing signed by HARC and the
Seller in accordance with this Section 6.2. This Agreement and any
Conveyance Papers may be amended from time to time by HARC and the Seller,
provided that HARC provides to the Seller (a) an Officer's Certificate to the
effect that HARC reasonably believes that such amendment will not have an
adverse effect upon the interest of the Noteholders or Certificateholders and
(b) an Opinion of Counsel addressed and delivered to the Seller, dated the
date of such amendment, to the effect that the conditions precedent to any
such amendment have been satisfied.
Section 6.3 GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 6.4 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt
requested, to (a) in the case of the Seller, 00000 Xx Xxxxxx Xxxx, Xxx Xxxxx,
XX. 00000, Attention: Chief Operating Officer, with a copy
10
to 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 Attention:
Director--Asset Securitization, (b) in the case of HARC, 0000 Xxxx Xxxxxx Xxxxx,
Xxx Xxxxx, Xxxxxx 00000 Attention: Compliance Officer, with a copy to 0000
Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000, Attention: Treasurer; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party.
Section 6.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement or
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from
the remaining covenants, agreements, provisions, and terms of this Agreement
or any Conveyance Paper and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Conveyance
Paper.
Section 6.6 ASSIGNMENT. Notwithstanding anything to the
contrary contained herein, other than HARC's assignment of its rights, title,
and interests in, to, and under this Agreement to the Trustee for the benefit
of the Noteholders, as contemplated by the Master Sale and Servicing
Agreement and Section 6.6 hereof, the Receivables, the Other Conveyed
Property, this Agreement and all other Conveyance Papers may not be assigned
by the parties hereto, PROVIDED, HOWEVER, that Seller shall have the right
to assign its rights, title and interests, in to and under this Agreement to
(i) any successor by merger or consolidation, or any Person which acquires by
conveyance, transfer or sale the properties and assets of Seller (ii) any
Affiliate owned directly or indirectly by Household International, Inc. or
(iii) to any entity provided that the Rating Agency has advised HARC and
Seller that the Rating Agency Condition has been satisfied. The right
granted in the foregoing proviso is subject to the further condition that any
such successor or other Person shall expressly assume by written agreement,
in form and substance satisfactory to HARC, the obligations of Seller
hereunder and under the Conveyance Papers.
Section 6.7 ACKNOWLEDGMENT AND AGREEMENT OF EACH SELLER. By
execution below, the Seller expressly acknowledges and agrees that all of
HARC's right, title, and interest in, to, and under this Agreement,
including, without limitation, all of HARC's right title, and interest in and
to the Receivables purchased pursuant to this Agreement, shall be assigned by
HARC to the Trustee for the benefit of the Noteholders, and Seller consents
to such assignment. Additionally, Seller agrees for the benefit of the
Trustee that any amounts payable by Seller to HARC hereunder which are to be
paid by HARC to the Trustee for the benefit of the Noteholders shall be paid
by Seller, on behalf of HARC, directly to the Trustee. Any payment required
to be made on or before a specified date in same-day funds may be made on the
prior business day in next-day funds.
Section 6.8 FURTHER ASSURANCES. HARC and Seller agree to do
and perform, from time to time, any and all acts and to execute any and
further instruments required or reasonably requested by the other party more
fully to effect the purposes of this Agreement and the Conveyance Papers,
including, without limitation, the execution of any financing statements or
continuation statements or equivalent documents relating to the Receivables
for filing under the provisions of the UCC or other law of any applicable
jurisdiction.
11
Section 6.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of HARC or Seller, any
right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
Section 6.10 COUNTERPARTS. This Agreement and all Conveyance
Papers may be executed in two or more counterparts (and by different parties
on separate counterparts), each of which shall be an original, but all of
which together shall constitute one and the same instrument.
Section 6.11 BINDING EFFECT; THIRD-PARTY BENEFICIARIES. This
Agreement and the Conveyance Papers will inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. Each of the Trustee and the Issuer shall be considered a
third-party beneficiary of this Agreement.
Section 6.12 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement and the Conveyance Papers set forth
the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by
this Agreement and the Conveyance Papers. This Agreement and the Conveyance
Papers may not be modified, amended, waived or supplemented except as
provided herein.
Section 6.13 HEADING. The headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 6.14 SCHEDULES AND EXHIBITS. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
Section 6.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and agreements contained in this Agreement or
contained in any Conveyance Paper, shall remain operative and in full force
and effect and shall survive conveyance of the Receivables by HARC to the
Trustee pursuant to the Master Sale and Servicing Agreement.
Section 6.16 NONPETITION COVENANT. Until the date which is one
year and one day after payment in full of all the Notes of all Series,
neither HARC nor Seller shall petition or otherwise invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against HARC, Seller or the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of HARC,
Seller or the Issuer or any substantial part of their respective properties,
or ordering the winding up or liquidation of the affairs of HARC, Seller or
the Issuer. This provision shall survive the termination of this Agreement.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the parties have caused this Master Purchase
Agreement to be duly executed by their respective officers as of the day and
year first above written.
HOUSEHOLD AUTOMOTIVE FINANCE
CORPORATION,
as Seller
By
--------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION,
as Purchaser
By
--------------------------------------
Name:
Title:
[Signature Page for Master Purchase Agreement]
13
EXHIBIT A
FORM OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT
Transfer No. ___ of Receivables, dated as of ___________________,
pursuant to a Master Receivables Purchase Agreement (the "Purchase Agreement")
dated as of ______, 1999, between Household Automotive Finance Corporation, a
Delaware corporation (the "Seller") and Household Auto Receivables Corporation,
a Nevada corporation ("HARC").
W I T N E S S E T H :
WHEREAS pursuant to the Purchase Agreement, the Seller wishes to
convey Receivables and Other Conveyed Property to HARC; and
WHEREAS, HARC is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, the Seller and HARC hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein shall have the
meanings ascribed to them in the Purchase Agreement unless otherwise defined
herein.
"Cutoff Date" shall mean with respect to the Receivables conveyed
hereby, __________________________.
"Purchase Date" shall mean with respect to the Receivables conveyed
hereby, ________________________.
"Purchase Price" shall mean 100% of the Principal Balance of the
Receivables on the books and records of the Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, paydown rates, yield and such other factors as
may be mutually agreed upon by Seller and HARC.
2. SCHEDULE OF RECEIVABLES. Annexed as Schedule A hereto is a
computer tape which reflects the Receivables that constitute the Receivables to
be conveyed pursuant to this Agreement on the Purchase Date.
3. CONVEYANCE OF RECEIVABLES. In consideration of HARC's
delivery to or upon the order of the Seller of the Purchase Price, the Seller
does hereby sell, transfer, assign, set over and otherwise convey to HARC,
without recourse (except as expressly provided in the Purchase Agreement), all
right, title and interest of the Seller in and to:
A-1
(i) each and every Receivable listed on Schedule A hereto and all
monies paid or payable thereon or in respect thereof on or after the
related Cutoff Date (including amounts due on or before the related Cutoff
Date but received by the Seller on or after such date);
(ii) the security interests in the related Financed Vehicles
granted by Obligors pursuant to such Receivables and any other interest of
the Seller in such Financed Vehicles;
(iii) all rights of the Seller against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;
(iv) any proceeds and the right to receive proceeds with respect to
such Receivables repurchased by a Dealer, pursuant to a Dealer Agreement,
as a result of a breach of representation or warranty in the related Dealer
Agreement;
(v) all rights of Seller under any Service Contracts on the
related Financed Vehicles;
(vi) any proceeds and the right to receive proceeds with respect to
the related Receivables from claims on any physical damage, loss, credit
life or disability insurance policies, if any, covering Financed Vehicles
or Obligors, including rebates of insurance premiums relating to the
Receivables and any proceeds from the liquidation of such Receivables;
(vii) all items contained in the Receivables Files with respect to
such Receivables and any and all other documents that Seller or Master
Servicer keeps on file in accordance with its customary procedures relating
to the related Receivables, or the related Financed Vehicles or Obligor;
(viii) property (including the right to receive future Net
Liquidation Proceeds) that secures each related Receivable and that has
been acquired by or on behalf of HARC pursuant to liquidation of such
Receivable;
(ix) all present and future claims, demands, causes and chooses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing.
A-2
1. REPRESENTATIONS AND WARRANTIES OF THE SELLER. As of the
Purchase Date, the Seller hereby makes the representations and warranties to
HARC that are set forth in Section 3.1 of the Purchase Agreement with respect to
the Conveyance effected hereby to the same extent as if set forth in full
herein.
2. REPRESENTATIONS AND WARRANTIES OF HARC. As of the Purchase
Date, HARC hereby makes the representations and warranties to the Seller that
are set forth in Section 3.2 of the Purchase Agreement with respect to the
Conveyance effected hereby to the same extent as if set forth in full herein.
In the event of any breach of a representation and warranty made by
HARC hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by the Trust have been paid in full. Seller and HARC agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by HARC, Issuer or by the Trustee on
behalf of the Noteholders and Owner Trustee on behalf of the Certificateholders.
3. CONDITIONS PRECEDENT. The obligation of HARC to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Purchase Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Seller in Section 4 of this Agreement and in Section
3.1 of the Master Receivables Purchase Agreement shall be true and correct as of
the date of this Agreement and as of the Purchase Date.
(b) ADDITIONAL INFORMATION. The Seller shall have delivered to
HARC such information as was reasonably requested by HARC to satisfy itself as
to (i) the accuracy of the representations and warranties set forth in Section 4
of this Agreement and in Section 3.1 of the Master Receivables Purchase
Agreement and (ii) the satisfaction of the conditions set forth in this Section.
4. RATIFICATION OF AGREEMENT. As supplemented by this Agreement,
the Master Receivables Purchase Agreement is in all respects ratified and
confirmed and the Master Receivables Purchase Agreement as so supplemented by
this Agreement shall be read, taken and construed as one and the same
instrument.
5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
6. CONVEYANCE OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY
TO THE ISSUER. Seller acknowledges that HARC intends, pursuant to the Master
Sale and Servicing Agreement, to convey the Receivables and the Other Conveyed
Property,
A-3
together with its rights under this Agreement, to the Issuer on the Transfer
Date. Seller acknowledges and consents to such conveyance and pledge and waives
any further notice thereof and covenants and agrees that the representations and
warranties of Seller contained in this Agreement and the rights of HARC
hereunder are intended to benefit the Issuer, the Owner Trustee, the Noteholders
and the Certificateholders. In furtherance of the foregoing, Seller covenants
and agrees to perform its duties and obligations hereunder, in accordance with
the terms hereof for the benefit of the Issuer, the Owner Trustee, the Trustee
and the Noteholders and that, notwithstanding anything to the contrary in this
Agreement, Seller shall be directly liable to the Issuer, the Owner Trustee, the
Trustee and the Noteholders (notwithstanding any failure by the Master Servicer
or HARC to perform their respective duties and obligations hereunder or under
Basic Documents) and that the Trustee may enforce the duties and obligations of
Seller under this Agreement against Seller for the benefit of the Noteholders
and the Owner Trustee.
7. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-4
IN WITNESS WHEREOF, the Seller and HARC have caused this Purchase
Agreement to be duly executed and delivered by their respective duly authorized
officers as of day and the year first above written.
HOUSEHOLD AUTOMOTIVE FINANCE
CORPORATION,
as Seller
By
--------------------------------------
Name:
Title:
HOUSEHOLD AUTO RECEIVABLES
CORPORATION,
as Purchaser
By
--------------------------------------
Name:
Title:
A-5
SCHEDULE A
SCHEDULE OF RECEIVABLES
(COMPUTER TAPE)
