<PAGE>

                                                                     EXHIBIT 4.4

--------------------------------------------------------------------------------

                       MASTER SALE AND SERVICING AGREEMENT

                                      among

                       HOUSEHOLD AUTOMOTIVE TRUST ______,

                     HOUSEHOLD AUTO RECEIVABLES CORPORATION,
                                     Seller,

                         HOUSEHOLD FINANCE CORPORATION,
                                 Master Servicer

                                       and

                          [NAME OF INDENTURE TRUSTEE],
                                Indenture Trustee

                          Dated as of _________________

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
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                                                                                    Page
                                                                                    ----

                                    ARTICLE I

                                   Definitions
<S>                                                                                  <C>
SECTION 1.1.  Definitions.............................................................1
SECTION 1.2.  Other Interpretive Provisions..........................................19
SECTION 1.3.  Usage of Terms.........................................................19
SECTION 1.4.  Certain References.....................................................20
SECTION 1.5.  No Recourse............................................................20
SECTION 1.6.  Action by or Consent of Noteholders....................................20

                                   ARTICLE II

                            Conveyance of Receivables

SECTION 2.1.  Conveyance of Receivables..............................................20
SECTION 2.2.  Further Encumbrance of Series Trust Estate.............................24

                                   ARTICLE III

                                 The Receivables

SECTION 3.1.  Representations and Warranties of Seller...............................25
SECTION 3.2.  Repurchase upon Breach.................................................25
SECTION 3.3.  Custody of Receivables Files...........................................26

                                   ARTICLE IV

                   Administration and Servicing of Receivables

SECTION 4.1.  Duties of the Master Servicer..........................................27
SECTION 4.2.  Collection of Receivable Payments; Modifications of Receivables........28
SECTION 4.3.  Realization Upon Receivables...........................................30
SECTION 4.4.  Insurance..............................................................31
SECTION 4.5.  Maintenance of Security Interests in Vehicles..........................31
SECTION 4.6.  Covenants, Representations, and Warranties of Master Servicer..........32
SECTION 4.7.  Repurchase of Receivables Upon Breach of Covenant......................33
SECTION 4.8.  Total Servicing Fee; Payment of Certain Expenses by Master Servicer....34
SECTION 4.9.  Master Servicer's Certificate..........................................34
SECTION 4.10.  Annual Statement as to Compliance, Notice of Master Servicer
                 Termination Event...................................................34
SECTION 4.11.  Annual Independent Accountants' Report................................35


                                       i
<PAGE>

SECTION 4.12.  Access to Certain Documentation and Information Regarding
                 Receivables.........................................................36
SECTION 4.13.  Fidelity Bond and Errors and Omissions Policy.........................36

                                    ARTICLE V

                         Trust Accounts; Distributions;
                Statements to Certificateholders and Noteholders

SECTION 5.1.  Establishment of Trust Accounts........................................36
SECTION 5.2.  Certain Reimbursements to the Master Servicer..........................38
SECTION 5.3.  Application of Collections.............................................38
SECTION 5.4.  Additional Deposits....................................................39
SECTION 5.5.  Distributions..........................................................39

                                   ARTICLE VI

                                    RESERVED

                                   ARTICLE VII

                                    RESERVED

                                  ARTICLE VIII

                                   The Seller

SECTION 8.1.  Representations of Seller..............................................39
SECTION 8.2.  Corporate Existence....................................................41
SECTION 8.3.  Liability of Seller; Indemnities.......................................42
SECTION 8.4.  Merger or Consolidation of, or Assumption of the Obligations
                of, Seller...........................................................43
SECTION 8.5.  Limitation on Liability of Seller and Others...........................44
SECTION 8.6.  Seller May Own Certificates or Notes...................................44

                                   ARTICLE IX

                               The Master Servicer

SECTION 9.1.  Representations of Master Servicer.....................................45
SECTION 9.2.  Liability of Master Servicer; Indemnities..............................47
SECTION 9.3.  Merger or Consolidation of, or Assumption of the Obligations
                of the Master Servicer...............................................48
SECTION 9.4.  Limitation on Liability of Master Servicer and Others..................49
SECTION 9.5.  Delegation of Duties...................................................50
SECTION 9.6.  Master Servicer Not to Resign..........................................50


                                       ii
<PAGE>

SECTION 9.7.  Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.....51
SECTION 9.8.  Successor Sub-Servicers................................................51

                                    ARTICLE X

                                     Default

SECTION 10.1.  Master Servicer Termination Event.....................................51
SECTION 10.2.  Consequences of a Master Servicer Termination Event...................53
SECTION 10.3.  Appointment of Successor..............................................54
SECTION 10.4.  Notification to Noteholders and Certificateholders....................55
SECTION 10.5.  Waiver of Past Defaults...............................................55
SECTION 10.6.  Successor to Master Servicer..........................................55

                                   ARTICLE XI

                                   Termination

SECTION 11.1.  Optional Purchase of All Receivables..................................56

                                   ARTICLE XII

                  Administrative Duties of the Master Servicer

SECTION 12.1.  Administrative Duties.................................................57
SECTION 12.2.  Records ..............................................................59
SECTION 12.3.  Additional Information to be Furnished to the Issuer..................59

                                  ARTICLE XIII

                            Miscellaneous Provisions

SECTION 13.1.  Amendments............................................................59
SECTION 13.2.  Protection of Title to Trust..........................................61
SECTION 13.3.  Notices ..............................................................63
SECTION 13.4.  Assignment............................................................63
SECTION 13.5.  Limitations on Rights of Others.......................................63
SECTION 13.6.  Severability..........................................................64
SECTION 13.7.  Separate Counterparts.................................................64
SECTION 13.8.  Headings .............................................................64
SECTION 13.9.  Governing Law.........................................................64
SECTION 13.10.  Assignment to Indenture Trustee......................................64
SECTION 13.11.  Nonpetition Covenants................................................64
SECTION 13.12.  Limitation of Liability of Owner Trustee.............................65
SECTION 13.13.  Independence of the Master Servicer..................................65
SECTION 13.14.  No Joint Venture.....................................................65
</TABLE>


                                      iii
<PAGE>

                                    EXHIBITS

Exhibit A - Form of Master Servicer's Certificate
Exhibit B - Form of Transfer Agreement


                                       iv
<PAGE>

            MASTER SALE AND SERVICING AGREEMENT dated as of _________________,
among HOUSEHOLD AUTOMOTIVE TRUST ______, a Delaware business trust (the
"Issuer"), HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada corporation (the
"Seller"), HOUSEHOLD FINANCE CORPORATION, a Delaware corporation (the "Master
Servicer") and [NAME OF INDENTURE TRUSTEE], a [national banking association], in
its capacity as Indenture Trustee.

            WHEREAS the Issuer desires to purchase from time to time Receivables
arising in connection with motor vehicle retail installment sale contracts
acquired by Household Automotive Finance Corporation ("HAFC") or any of its
predecessors or Affiliates, including, but not limited to, Household Bank,
f.s.b. ("Household Bank");

            WHEREAS the Seller will purchase from time to time Receivables from
HAFC or one or more of its Affiliates, including, but not limited to, Household
Bank, and is willing to sell Receivables to the Issuer;

            WHEREAS the Master Servicer is willing to service all such
receivables;

            NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto agree as follows:

                                   ARTICLE I

                                   Definitions

            SECTION 1.1. Definitions. Whenever used in this Agreement, the
following words and phrases shall have the following meanings:

            "Accountants' Report" means the report of a firm of nationally
recognized independent accountants described in Section 4.11.

            "Accounting Date" means, with respect to a Distribution Date, the
last day of the Collection Period immediately preceding such Distribution Date.

            "Actuarial Method" means the method of allocating a fixed level
monthly payment on an obligation between principal and interest, pursuant to
which the portion of such payment that is allocated to interest is equal to the
product of (a) 1/12, (b) the fixed annual rate of interest on such obligation
and (c) the outstanding principal balance of such obligation.

            "Actuarial Receivable" means a Receivable under which the portion of
the payment allocated to interest and the portion allocable to principal is
determined in accordance with the Actuarial Method.

<PAGE>

            "Addition Notice" means, with respect to any transfer of Receivables
to the Trust pursuant to Section 2.1 of this Agreement, notice of the Seller's
election to transfer Receivables to the Trust, such notice to designate the
related Transfer Date, the related Series Trust Estate, if any, and the
approximate principal amount of Receivables to be transferred on such Transfer
Date.

            "Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

            "Aggregate Principal Balance" means, with respect to any date of
determination, the sum of the Principal Balances for all Receivables (other than
(i) any Receivable that has become a Liquidated Receivable and (ii) any
Receivable that has become a Repurchased Receivable as of the date of
determination).

            "Agreement" means this Master Sale and Servicing Agreement, as the
same may be amended and supplemented from time to time.

            "Amount Financed" means, with respect to a Receivable, the aggregate
amount advanced under such Receivable toward the purchase price of the Financed
Vehicle and any related costs, including amounts advanced in respect of
accessories, insurance premiums, service and warranty contracts, other items
customarily financed as part of retail automobile installment sale contracts or
promissory notes, and related costs.

            "Annual Percentage Rate" or "APR" of a Receivable means the annual
percentage rate of finance charges or service charges, as stated in the related
Contract.

            "Basic Documents" means this Agreement, the Certificate of Trust,
the Trust Agreement, the Indenture, the Master Receivables Purchase Agreements
and other documents and certificates delivered in connection therewith.

            "Business Day" means a day other than a Saturday, a Sunday or other
day on which commercial banks located in the states of [Illinois and New York]
are authorized or obligated to be closed.

            "Certificate" has the meaning assigned to such term in the Trust
Agreement and, with respect to a Series, the meaning specified in the relevant
Series Supplement.

            "Certificateholder" has the meaning assigned to such term in the
Trust Agreement.

            "Class" means a class of Notes or Certificates, as the context
requires.


                                       2
<PAGE>

            "Collected Funds" means, with respect to any Collection Period, the
amount of funds in the Collection Account representing collections (including
all administrative fees, expenses and charges actually paid by or on behalf of
Obligors, including late fees, payment fees and liquidation fees but excluding
taxes, assessments, credit insurance charges or similar items) on the
Receivables during such Collection Period, including all Net Liquidation
Proceeds collected during such Collection Period (but excluding any Repurchase
Amounts).

            "Collection Period" means, for each Series, with respect to the
first Distribution Date in such Series, the period beginning on the opening of
business on the related Cutoff Date and ending on the close of business on the
last day of the calendar month preceding such Distribution Date. With respect to
each subsequent Distribution Date, the preceding calendar month. Any amount
stated "as of the close of business of the last day of a Collection Period"
shall give effect to all applications of collections on such day.

            "Collection Records" means all manually prepared or computer
generated records relating to collection efforts or payment histories with
respect to the Receivables.

            "Contract" means a motor vehicle retail installment sale contract.

            "Corporate Trust Office" means (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which at the
time of execution of this agreement is [address], Attention:
___________________, and (ii) with respect to the Indenture Trustee, the
corporate trust office of [Name of Indenture Trustee], which at the time of
execution of this agreement is [address], Attention: _______________.

            "Covenant Receivable" means, with respect to any Collection Period,
a Receivable which the Master Servicer is required to purchase pursuant to
Section 4.7.

            "Cram Down Loss" means, with respect to a Receivable, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued a final
order reducing the amount owed on a Receivable or otherwise modifying or
restructuring the scheduled payments to be made on a Receivable, an amount equal
to (i) the excess of the Principal Balance of such Receivable immediately prior
to such order over the Principal Balance of such Receivable as so reduced and/or
(ii) if such court shall have issued an order reducing the effective rate of
interest on such Receivable, the excess of the Principal Balance of such
Receivable immediately prior to such order over the net present value (using as
the discount rate the higher of the APR on such Receivable or the rate of
interest, if any, specified by the court in such order) of the scheduled
payments as so modified or restructured. A "Cram Down Loss" shall be deemed to
have occurred on the date of issuance of such order.

            "Cutoff Date" means, with respect to a Receivable and (i) the
Transfer Date as of which such Receivable is transferred to the Trust, (a) the
Accounting Date immediately preceding such Transfer Date or (b) if such
Receivable is originated in the


                                       3
<PAGE>

month of the related Transfer Date, the date of origination or (ii) the date
designated in the related Series Supplement as the Cutoff Date for such Series.

            "Dealer" means a dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable, directly or indirectly, to
HAFC or one of its Affiliates under a Dealer Agreement or pursuant to a Dealer
Assignment.

            "Dealer Agreement" means any agreement between HAFC or one of its
Affiliates and a Dealer relating to the acquisition of Receivables from a Dealer
by HAFC or one of its Affiliates.

            "Dealer Assignment" means, with respect to a Receivable, the
executed assignment executed by a Dealer conveying such Receivable to HAFC or
one of its Affiliates.

            "Dealer Underwriting Guide" means either, (i) the underwriting
guidelines used by or on behalf of HAFC or one of its Affiliates in the
origination and purchase of Receivables as amended from time to time or (ii) the
underwriting guidelines used in the origination of Receivables as reviewed by
HAFC or one of its Affiliates prior to the purchase of Receivables by HAFC or
such Affiliate.

            "Delivery" means with respect to the Trust Account Property:

      (1) the perfection and priority of a security interest in which is
governed by the law of a jurisdiction which has adopted the 1978 Revision to
Article Eight of the UCC:

            (a) with respect to bankers' acceptances, commercial paper,
      negotiable certificates of deposit and other obligations that constitute
      "instruments" within the meaning of Section 9-105(1)(i) of the UCC (other
      than certificated securities) and are susceptible of physical delivery,
      transfer thereof to the Indenture Trustee by physical delivery to the
      Indenture Trustee, endorsed to, or registered in the name of, the
      Indenture Trustee or its nominee or endorsed in blank and such additional
      or alternative procedures as may hereafter become appropriate to effect
      the complete transfer of ownership of any such Collateral to the Indenture
      Trustee free and clear of any adverse claims, consistent with changes in
      applicable law or regulations or the interpretation thereof;

            (b) with respect to a "certificated security" (as defined in Section
      8-102(1)(a) of the UCC), transfer thereof:

                  (i) by physical delivery of such certificated security to the
            Indenture Trustee, provided that if the certificated security is in
            registered form, it shall be endorsed to, or registered in the name
            of, the Indenture Trustee or endorsed in blank;

                  (ii) by physical delivery of such certificated security to a
            "financial intermediary" (as defined in Section 8-313(4) of the UCC)
            of


                                       4
<PAGE>

            the Indenture Trustee specially endorsed to or issued in the name of
            the Indenture Trustee;

                  (iii) by the sending by a financial intermediary, not a
            "clearing corporation" (as defined in Section 8-102(3) of the UCC),
            of a confirmation of the purchase and the making by such financial
            intermediary of entries on its books and records identifying as
            belonging to the Indenture Trustee of (A) a specific certificated
            security in the financial intermediary's possession, (B) a quantity
            of securities that constitute or are part of a fungible bulk of
            certificated securities in the financial intermediary's possession,
            or (C) a quantity of securities that constitute or are part of a
            fungible bulk of securities shown on the account of the financial
            intermediary on the books of another financial intermediary; or

                  (iv) by the making by a clearing corporation of appropriate
            entries on its books reducing the appropriate securities account of
            the transferor and increasing the appropriate securities account of
            the Indenture Trustee or a Person designated by the Indenture
            Trustee by the amount of such certificated security, provided that
            in each case: (A) the clearing corporation identifies such
            certificated security for the sole and exclusive account of the
            Indenture Trustee or the Person designated by the Indenture Trustee,
            (B) such certificated security shall be subject to the clearing
            corporation's exclusive control, (C) such certificated security is
            in bearer form or endorsed in blank or registered in the name of the
            clearing corporation or custodian bank or a nominee of either of
            them, (D) custody of such certificated security shall be maintained
            by such clearing corporation or a "custodian bank" (as defined in
            Section 8-102(4) of the UCC) or the nominee of either subject to the
            control of the clearing corporation and (E) such certificated
            security is shown on the account of the transferor thereof on the
            books of the clearing corporation prior to the making of such
            entries; and such additional or alternative procedures as may
            hereafter become appropriate to effect the complete transfer of
            ownership of any such Collateral to the Indenture Trustee free and
            clear of any adverse claims, consistent with changes in applicable
            law or regulations or the interpretation thereof;

            (c) with respect to any security issued by the U.S. Treasury, the
      Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
      Association that is a book-entry security held through the Federal Reserve
      System pursuant to Federal book entry regulations, the following
      procedures, all in accordance with applicable law, including applicable
      Federal regulations and Articles 8 and 9 of the UCC: book-entry
      registration of such property to an appropriate book-entry account
      maintained with a Federal Reserve Bank by a financial intermediary which
      is also a "depositary" pursuant to applicable Federal regulations and
      issuance by such financial intermediary of a deposit advice or other
      written confirmation of such book-entry registration to the Indenture
      Trustee


                                       5
<PAGE>

      of the purchase by the financial intermediary on behalf of the Indenture
      Trustee of such book-entry security; the making by such financial
      intermediary of entries in its books and records identifying such
      book-entry security held through the Federal Reserve System pursuant to
      Federal book-entry regulations as belonging to the Indenture Trustee and
      indicating that such financial intermediary holds such book-entry security
      solely an agent for the Indenture Trustee; and such additional or
      alternative procedures as may hereafter become appropriate to effect
      complete transfer of ownership of any such Collateral to the Indenture
      Trustee free of any adverse claims, consistent with changes in applicable
      law or regulations or the interpretation thereof;

            (d) with respect to any Trust Account Property that is an
      "uncertificated security" (as defined in Section 8-102(1)(b) of the UCC)
      and that is not governed by clause (c) above, transfer thereof:

                  (i) by registration of the transfer thereof to the Indenture
            Trustee, on the books and records of the issuer thereof;

                  (ii) by the sending of a confirmation by a financial
            intermediary of the purchase, and the making by such financial
            intermediary of entries on its books and records identifying as
            belonging to the Indenture Trustee (A) a quantity of securities
            which constitute or are part of a fungible bulk of uncertificated
            securities registered in the name of the financial intermediary or
            (B) a quantity of securities which constitute or are part of a
            fungible bulk of securities shown on the account of the financial
            intermediary on the books of another financial intermediary; or

                  (iii) by the making by a clearing corporation of appropriate
            entries on its books reducing the appropriate account of the
            transferor and increasing the account of the Indenture Trustee or a
            person designated by the Indenture Trustee by the amount of such
            uncertificated security, provided that in each case: (A) the
            clearing corporation identifies such uncertificated security for the
            sole and exclusive use of the Indenture Trustee or the Person
            designated by the Indenture Trustee, (B) such uncertificated
            security is registered in the name of the clearing corporation or a
            custodian bank or a nominee of either, and (C) such uncertificated
            security is shown on the account of the transferor on the books of
            the clearing corporation prior to the making of such entries; and

            (e) in each case of delivery contemplated herein, the Indenture
      Trustee shall make appropriate notations on its records, and shall cause
      same to be made of the records of its nominees, indicating that such
      securities are held in trust pursuant to and as provided in this
      Agreement.

      (2) the perfection and priority of a security interest in which is
governed by the law of a jurisdiction which has adopted the 1994 Revision to
Article 8 of the UCC:


                                       6
<PAGE>

            (a) with respect to bankers' acceptances, commercial paper,
      negotiable certificates of deposit and other obligations that constitute
      "instruments" within the meaning of Section 9-105(1)(i) of the UCC (other
      than certificated securities) and are susceptible of physical delivery,
      transfer thereof to the Indenture Trustee by physical delivery to the
      Indenture Trustee, endorsed to, or registered in the name of, the
      Indenture Trustee or its nominee or endorsed in blank and such additional
      or alternative procedures as may hereafter become appropriate to effect
      the complete transfer of ownership of any such Collateral to the Indenture
      Trustee free and clear of any adverse claims, consistent with changes in
      applicable law or regulations or the interpretation thereof;

            (b) with respect to a "certificated security" (as defined in Section
      8-102(a)(4) of the UCC), transfer thereof:

                  (i) by physical delivery of such certificated security to the
            Indenture Trustee, provided that if the certificated security is in
            registered form, it shall be endorsed to, or registered in the name
            of, the Indenture Trustee or endorsed in blank;

                  (ii) by physical delivery of such certificated security in
            registered form to a "securities intermediary" (as defined in
            Section 8-102(a)(14) of the UCC) acting on behalf of the Indenture
            Trustee if the certificated security has been specially endorsed to
            the Indenture Trustee by an effective endorsement.

            (c) with respect to any security issued by the U.S. Treasury, the
      Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
      Association that is a book-entry security held through the Federal Reserve
      System pursuant to Federal book entry regulations, the following
      procedures, all in accordance with applicable law, including applicable
      federal regulations and Articles 8 and 9 of the UCC: book-entry
      registration of such property to an appropriate book-entry account
      maintained with a Federal Reserve Bank by a securities intermediary which
      is also a "depositary" pursuant to applicable federal regulations and
      issuance by such securities intermediary of a deposit advice or other
      written confirmation of such book-entry registration to the Indenture
      Trustee of the purchase by the securities intermediary on behalf of the
      Indenture Trustee of such book-entry security; the making by such
      securities intermediary of entries in its books and records identifying
      such book-entry security held through the Federal Reserve System pursuant
      to Federal book-entry regulations as belonging to the Indenture Trustee
      and indicating that such securities intermediary holds such book-entry
      security solely as agent for the Indenture Trustee; and such additional or
      alternative procedures as may hereafter become appropriate to effect
      complete transfer of ownership of any such Collateral to the Indenture
      Trustee free of any adverse claims, consistent with changes in applicable
      law or regulations or the interpretation thereof;


                                       7
<PAGE>

            (d) with respect to any Trust Account Property that is an
      "uncertificated security" (as defined in Section 8-102(a)(18) of the UCC)
      and that is not governed by clause (c) above, transfer thereof:

                  (i) (A) by registration to the Indenture Trustee as the
            registered owner thereof, on the books and records of the issuer
            thereof.

                        (B) by another Person (not a securities intermediary)
            either becomes the registered owner of the uncertificated security
            on behalf of the Indenture Trustee, or having become the registered
            owner acknowledges that it holds for the Indenture Trustee.

                  (ii) the issuer thereof has agreed that it will comply with
            instructions originated by the Indenture Trustee without further
            consent of the registered owner thereof.

            (e) in each case of delivery contemplated herein, the Indenture
      Trustee shall make appropriate notations on its records, and shall cause
      same to be made of the records of its nominees, indicating that securities
      are held in trust pursuant to and as provided in this Agreement.

            (f) with respect to a "security entitlement" (as defined in Section
      8-102(a)(17) of the UCC)

                  (i) if a securities intermediary (A) indicates by book entry
that a "financial asset" (as defined in Section 8-102(a)(9) of the UCC) has been
credited to be the Indenture Trustee's "securities account" (as defined in
Section 8-501(a) of the UCC), (B) receives a financial asset (as so defined)
from the Indenture Trustee or acquires a financial asset for the Indenture
Trustee, and in either case, accepts it for credit to the Indenture Trustee's
securities account (as so defined), (C) becomes obligated under other law,
regulation or rule to credit a financial asset to the Indenture Trustee's
securities account, or (D) has agreed that it will comply with "entitlement
orders" (as defined in Section 8-102(a)(8) of the UCC) originated by the
Indenture Trustee without further consent by the "entitlement holder" (as
defined in Section 8-102(a)(7) of the UCC), of a confirmation of the purchase
and the making by such securities intermediary of entries on its books and
records identifying as belonging to the Indenture Trustee or (I) specific
certificated security in the securities intermediary's possession, (II) a
quantity of securities that constitute or are part of a fungible bulk of
certificated securities in the securities intermediary's possession, or (III) a
quantity of securities that constitute or are part of a fungible bulk of
securities shown on the account of the securities intermediary on the books of
another securities intermediary.

            "Depositor" shall mean the Seller in its capacity as Depositor under
the Trust Agreement.

            "Determination Date" means, unless otherwise provided in a Series
Supplement, the earlier of the fifth calendar day (or if such day is not a
Business Day, the


                                       8
<PAGE>

next preceding Business Day) or the third Business Day preceding each
Distribution Date.

            "Distribution Date" means, unless otherwise provided in a Series
Supplement, with respect to each Collection Period, the seventeenth day of the
following calendar month, or if such day is not a Business Day, the immediately
following Business Day.

            "Eligibility Criteria" means with respect to a Series, the criteria
set forth in the related Schedule of Eligibility Criteria.

            "Eligible Bank" means, except as otherwise provided in a Series
Supplement, any depository institution (which shall initially be the Indenture
Trustee) organized under the laws of the United States of America or any one of
the states thereof or the District of Columbia (or any United States branch or
agency of a foreign bank), which is subject to supervision and examination by
federal or state banking authorities and which at all times (a) has a net worth
in excess of $50,000,000 and (b) has either (i) a rating of P-1 from Moody's and
A-1 from Standard & Poor's with respect to short-term deposit obligations, or
such other lower ratings acceptable to the Rating Agency, or (ii) if such
institution has issued long-term unsecured debt obligations, a rating acceptable
to the Rating Agency with respect to long-term unsecured debt obligations.

            "Eligible Deposit Account" means, except as otherwise provided in a
Series Supplement, either (a) a segregated account with an Eligible Bank or (b)
a segregated trust account with the corporate trust department of a depository
institution with corporate trust powers organized under the laws of the United
States of America or any state thereof or the District of Columbia (or any
United States branch or agency of a foreign bank), provided that such
institution also must have a rating of Baa3 or higher from Moody's and a rating
of BBB- or higher from Standard & Poor's with respect to long-term deposit
obligations, or such other lower ratings acceptable to the Rating Agency.

            "Eligible Investments" shall mean, except as otherwise provided in a
Series Supplement, negotiable instruments or securities represented by
instruments in bearer or registered form, or, in the case of deposits described
below, deposit accounts held in the name of the Indenture Trustee in trust for
the benefit of the Holders of the Securities of the relevant Series, subject to
the exclusive custody and control of the Indenture Trustee and for which the
Indenture Trustee has sole signature authority, which evidence:

            (a) direct obligations of, or obligations fully guaranteed as to
timely payment by, the United States of America;

            (b) demand deposits, time deposits or certificates of deposit
(having original maturities of no more than 365 days) of depositary institutions
or trust companies incorporated under the laws of the United States of America
or any state thereof (or domestic branches of foreign banks) and subject to
supervision and examination by


                                       9
<PAGE>

federal or state banking or depositary institution authorities; provided, that
at the time of the Trust's investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or trust
company shall be satisfactory to the Rating Agency;

            (c) commercial paper (having original or remaining maturities of not
more than 30 days) having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating satisfactory to the Rating Agency;

            (d) investments in money market funds having, at the time of the
Trust's investment therein, a rating acceptable to the Rating Agency;

            (e) demand deposits, time deposits and certificates of deposit which
are fully insured by the FDIC having, at the time of the Trust's investment
therein, a rating satisfactory to the Rating Agency;

            (f) bankers' acceptances (having original maturities of no more than
365 days) issued by a depository institution or trust company referred to in (b)
above;

            (g) (x) time deposits (having maturities not later than the
succeeding Distribution Date) other than as referred to in clause (e) above,
with a Person the commercial paper of which has a credit rating satisfactory to
the Rating Agency or (y) notes which are payable on demand issued by Household;
provided such notes will constitute Eligible Investments only if the commercial
paper of Household has, at the time of the Trust's investment in such notes, a
rating satisfactory to the Rating Agency; or

            (h) any other investment of a type or rating that is acceptable to
the Rating Agency.

            Any of the foregoing Eligible Investments may be purchased on or
through the Indenture Trustee or through any of its Affiliates.

            "Eligible Servicer" means Household Finance Corporation or any
Person which at the time of its appointment as Master Servicer, (i) is servicing
a portfolio of motor vehicle retail installment sales contracts and/or motor
vehicle installment loans, (ii) is legally qualified and has the capacity to
service the Receivables, (iii) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle installment loans similar to the Receivables with
reasonable skill and care, (iv) is qualified and entitled to use, pursuant to a
license or other written agreement, and agrees to maintain the confidentiality
of, the software which the Master Servicer uses in connection with performing
its duties and responsibilities under this Agreement or otherwise has available
software which is adequate to perform its duties and responsibilities under this
Agreement and (v) has a net worth of at least $50,000,000.

            "Eligible Sub-Servicer" means Household Automotive Finance
Corporation or any wholly owned subsidiary of Household or any Person which at
the time of its appointment as Sub-Servicer, (i) is servicing a portfolio of
motor vehicle retail


                                       10
<PAGE>

installment sales contracts and/or motor vehicle installment loans, (ii) is
legally qualified and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sales contracts and/or motor vehicle
installment loans similar to the Receivables with reasonable skill and care, and
(iv) is qualified and entitled to use, pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software which the
Master Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has available software which
is adequate to perform its duties and responsibilities under this Agreement.

            "Financed Vehicle" means a new or used automobile, light-duty truck
or van securing an Obligor's indebtedness under the respective Receivable.

            "HAFC" means Household Automotive Finance Corporation.

            "HAFC Purchase Agreement" means the Master Receivables Purchase
Agreement between the Seller and HAFC, dated as of _______________, as such
agreement may be further amended or supplemented from time to time.

            "Household Bank" means Household Bank, f.s.b., a federal savings
bank. For the avoidance of doubt, Household Bank is an Affiliate of HAFC.

            "Household Bank Purchase Agreement" means the Master Receivables
Purchase Agreement between the Seller and Household Bank, dated as of
_____________, as such agreement may be amended or supplemented from time to
time.

            "Indenture" means the indenture dated as of _________________
between the Issuer and [Name of Indenture Trustee], as indenture trustee, as
supplemented by the Series ______ Supplement.

            "Indenture Trustee" means the Person acting as trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.

            "Indenture Trustee Fee" means the fees due to the Indenture Trustee
as may be set forth in that certain fee agreement dated as of the date hereof
between the Master Servicer and [Name of Indenture Trustee].

            "Insolvency Event" means, with respect to a specified Person, (a)
the filing of a petition against such Person or the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief


                                       11
<PAGE>

in an involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by, a receiver, liquidator, assignee,
custodian, trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.

            "Insurance Policy" means, with respect to a Receivable, any
insurance policy (including the insurance policies described in Section 4.4
hereof) benefiting the holder of the Receivable providing loss or physical
damage, credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Vehicle or the Obligor.

            "Interest Period" for any Class or Series of Notes or Certificates,
the meaning set forth in the related Series Supplement.

            "Issuer" means Household Automotive Trust ______, together with each
other Trust designated as an Issuer hereunder pursuant to a Series Supplement,
in each case so long as such Trust has not been terminated in accordance with
the terms of the related Trust Agreements.

            "Lien" means a security interest, lien, charge, pledge, equity, or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of any
act or omission by the related Obligor, provided that, any assignment permitted
by Section 2.1 hereof and the lien created by this Agreement or the Indenture
shall not be deemed to constitute a Lien.

            "Lien Certificate" means, with respect to a Financed Vehicle, an
original certificate of title, certificate of lien or other notification issued
by the Registrar of Titles of the applicable state to a secured party which
indicates that the lien of the secured party on the Financed Vehicle is recorded
on the original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.

            "Liquidated Receivable" means, with respect to any Collection
Period, upon the earliest of each of the following to occur, a Receivable as to
which (i) such Receivable has been liquidated by the Master Servicer through the
sale of the Financed Vehicle, (ii) 90 days have elapsed since the Master
Servicer repossessed the Financed Vehicle, (iii) proceeds have been received in
respect of such Receivable which, in the Master Servicer's reasonable judgment,
constitute the final amounts recoverable in respect of such Receivable or (iv)
10% or more of a Scheduled Payment shall have become 150 or more days delinquent
(or, in the case where the Obligor of such Receivable is subject to an
Insolvency Event, 10% or more of a Scheduled Payment shall have become 210 or
more days delinquent). Any Receivable that becomes a Repurchased Receivable on
or before the related Accounting Date shall not be a Liquidated Receivable.


                                       12
<PAGE>

            "Master Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.1.

            "Master Receivables Purchase Agreement" means either (i) the HAFC
Purchase Agreement or (ii) the Household Bank Purchase Agreement, and "Master
Receivables Purchase Agreements" means such agreements collectively.

            "Master Servicer" means Household Finance Corporation, as the
servicer of the Receivables, and each successor Master Servicer pursuant to
Section 10.3.

            "Master Servicer Credit Facility" means the credit facility
maintained by the Master Servicer with a Master Servicer Credit Facility Issuer
pursuant to Section 4.2(d).

            "Master Servicer Credit Facility Issuer" means a depository
institution or insurance company that qualifies pursuant to Section 4.2(d).

            "Master Servicer Termination Event" means an event specified in
Section 10.1.

            "Master Servicer's Certificate" means an Officers' Certificate of
the Master Servicer delivered pursuant to Section 4.9, substantially in the form
of Exhibit A hereto.

            "Master Succession and Assumption Agreement" means the Master
Succession and Assumption Agreement dated as of September 1, 1999 among the
Master Servicer, Household Automotive Funding Trust 1999-A, the Seller, Credit
Suisse First Boston, New York Branch, as agent and purchaser, Alpine
Securitization Corp., Gramercy Capital Corporation, The Chase Manhattan Bank, as
indenture trustee, and the Owner Trustee, as such agreement may be amended or
supplemented from time to time.

            "Monthly Extension Rate" means, with respect to any Accounting Date,
the fraction, expressed as a percentage, the numerator of which is the aggregate
Principal Balance of Receivables whose payments were extended during the
Collection Period ended on such Accounting Date and the denominator of which is
the Aggregate Principal Balance as of the Accounting Date on which such
Collection Period began.

            "Monthly Records" means all records and data maintained by the
Master Servicer with respect to the Receivables, including the following with
respect to each Receivable: the account number; the originating Dealer; Obligor
name; Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment date;
final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount of Scheduled
Payment; current Insurance Policy expiration date; and past due late charges.

            "Moody's" means Moody's Investors Service, Inc., or its successor.


                                       13
<PAGE>

            "Net Liquidation Proceeds" means, with respect to a Liquidated
Receivable, all amounts realized with respect to such Receivable (other than
amounts withdrawn or received from any Series Support) net of (i) reasonable
expenses, which expenses shall not include any deficiency balances or
post-disposition recoveries collected, incurred by the Master Servicer in
connection with the collection of such Receivable and the repossession and
disposition of the Financed Vehicle and (ii) amounts that are required to be
refunded to the Obligor on such Receivable; provided, however, that the Net
Liquidation Proceeds with respect to any Receivable shall in no event be less
than zero; provided, further, that, so long as amounts cannot be traced to
specific Receivables the Master Servicer shall reasonably estimate, on or prior
to each Accounting Date, the amount of Net Liquidation Proceeds attributable to
each Series Trust Estate.

            "Noteholder" means the Person in whose name a Note is registered on
the Note Register.

            "Notes" has the meaning assigned to such term in the Indenture.

            "Obligor" on a Receivable means the purchaser or co-purchasers of
the Financed Vehicle and any other Person who owes payments under the
Receivable.

            "Officers' Certificate" means a certificate signed by the chairman
of the board, the president, any executive vice president or any vice president,
any treasurer, assistant treasurer, secretary or assistant secretary of the
Seller or the Master Servicer, as appropriate.

            "Opinion of Counsel" means an opinion of counsel who may be counsel
to the Master Servicer or the Seller, acceptable to the Indenture Trustee.

            "Other Conveyed Property" means all property conveyed by the Seller
to the Trust pursuant to Section 2.1(a)(ii) through (xii) of this Agreement.

            "Outstanding" has the meaning assigned to such term in the
Indenture.

            "Outstanding Amount" means, with respect to any Series, the
aggregate principal amount of all Notes of such Series which are Outstanding at
the date of determination after giving effect to all distributions of principal
on such date of determination.

            "Owner Trust Estate" has the meaning assigned to such term in the
Trust Agreement.

            "Owner Trustee" means [Name of Owner Trustee], not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, its
successors-in-interest or any successor Owner Trustee under the Trust Agreement.

            "Payment Record" means the record maintained by the Master Servicer
for the Trust as provided in Section 4.2(d) hereof.


                                       14
<PAGE>

            "Person" means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.

            "Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.

            "Principal Balance" means, with respect to any Receivable, as of any
date, the Amount Financed minus (i) that portion of all amounts received on or
prior to such date and allocable to principal in accordance with the Actuarial
Method, or the Simple Interest Method, as appropriate, and (ii) any Cram Down
Loss in respect of such Receivable. The "Principal Balance" of a Repurchased
Receivable or Liquidated Receivable shall be deemed to be zero.

            "Rating Agency" means, with respect to any outstanding Series or
Class, each Rating Agency specified in the Series Supplement.

            "Rating Agency Condition" means, with respect to any action with
respect to a Series, that each Rating Agency shall have received prior notice
thereof and that each Rating Agency shall have notified the Master Servicer in
writing (who shall then immediately notify the Seller, the Owner Trustee and the
Indenture Trustee in writing) that such action will not result in a reduction or
withdrawal of the then current rating of any Class of Notes.

            "Receivable" means any Contract listed on Schedule II to the Series
Supplement or Schedule A to a Transfer Agreement (which Schedule may be in an
acceptable electronic format), except Liquidated Receivables and Receivables
released from the Owner Trust Estate.

            "Receivable Files" means the documents specified in Section 3.3.

            "Receivables Purchase Agreement Supplement" means any Receivables
Purchase Agreement Supplement to any Master Receivables Purchase Agreement.

            "Record Date" with respect to each Distribution Date means the
Business Day immediately preceding such Distribution Date, unless otherwise
specified in the applicable Series Supplement.

            "Registrar of Titles" means, with respect to any state, the
governmental agency or body responsible for the registration of, and the
issuance of certificates of title relating to, motor vehicles and liens thereon.

            "Repurchase Amount" means, with respect to a Receivable, the
Principal Balance and all accrued and unpaid interest on the Receivable, after
giving effect to the receipt of any moneys collected (from whatever source) on
such Receivable, if any, as of the date of purchase, provided that, reductions
in the Principal Balance resulting from such Receivable becoming a Liquidated
Receivable shall be disregarded.


                                       15
<PAGE>

            "Repurchased Receivable" means a Receivable purchased by the Master
Servicer pursuant to Section 4.7 or repurchased by the Seller pursuant to
Section 3.2 or the Seller or Master Servicer pursuant to Section 11.1(a).

            "Schedule of Eligibility Criteria" means the Schedule of Eligibility
Criteria attached as Schedule I to a Series Supplement.

            "Schedules of Receivables" means, with respect to each Series Trust
Estate, the schedule of all retail installment sales contracts and promissory
notes originally held as part of the Trust which are attached as Schedule II to
the Series Supplement or Schedule A to the Transfer Agreements relating to such
Series Trust Estate.

            "Scheduled Payment" means, with respect to any Collection Period for
any Receivable, the amount set forth in such Receivable as required to be paid
by the Obligor in such Collection Period. If after the Series Closing Date, the
Obligor's obligation under a Receivable with respect to a Collection Period has
been modified so as to differ from the amount specified in such Receivable as a
result of (i) the order of a court in an insolvency proceeding involving the
Obligor, (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended, or (iii) modifications or extensions of the Receivable permitted by
Sections 4.2(b) and (c), the Scheduled Payment with respect to such Collection
Period shall refer to the Obligor's payment obligation with respect to such
Collection Period as so modified.

            "Securities" means the Notes and the Certificates.

            "Securityholders" means the Noteholders and the Certificateholders.

            "Seller" means Household Auto Receivables Corporation, a Nevada
corporation, and its successors in interest to the extent permitted hereunder.

            "Series" means, with respect to any Notes, Notes issued pursuant to
the same Series Supplement and with respect to any Certificates, Certificates
issued pursuant to the same Series Supplement, or the Notes and Certificates
issued pursuant to the same Series Supplement, as the context may require.

            "Series Closing Date" means, with respect to any Series, the date
designated in the related Series Supplement as the closing date for such Series.

            "Series Collection Account" means, with respect to any Series, the
collection account designated in the related Series Supplement.

            "Series of Certificates" means the Certificates issued in connection
with a Series of Notes.

            "Series Related Documents" with respect to a Series, has the meaning
specified therefor in the related Series Supplement.


                                       16
<PAGE>

            "Series Supplement" means, with respect to any Series, a Series
Supplement to the Indenture and the Trust Agreement, executed and delivered in
connection with the original issuance of the Notes and Certificates of such
Series, and all amendments thereof and supplements thereto.

            "Series Support" means the rights and benefits provided to the
Indenture Trustee or the Noteholders of any Series or Class pursuant to any
letter of credit, surety bond, cash collateral account, spread account,
guaranteed rate agreement, maturity liquidity facility, interest rate swap
agreement, tax protection agreement or other similar arrangement. The
subordination of any Series or Class to another Series or Class shall be deemed
to be a Series Support. Notwithstanding that such Series Support may be held by
or in favor of the Indenture Trustee for the benefit of any Series or Class,
only those Series or Classes to which such Series Support relates shall have any
rights with respect thereto and all payments thereunder received by the
Indenture Trustee shall be distributed exclusively as prescribed in the Series
Supplement relating to such Series or Class.

            "Series Support Provider" means the Person, if any, designated in
the related Series Supplement, as providing any Series Support, other than
Household Finance Corporation or any of its Affiliates or the Noteholders of any
Series or Class which is subordinated to another Class or Series.

            "Series Trust Accounts" has the meaning with respect to each Series
specified in the related Series Supplement.

            "Series Trust Estate" has the meaning with respect to each Series
specified in the related Series Supplement.

            "Service Contract" means, with respect to a Financed Vehicle, the
agreement, if any, financed under the related Receivable that provides for the
repair of such Financed Vehicle.

            "Servicing Fee" means, with respect to each Series Trust Estate and
with respect to any Collection Period, the fee payable to the Master Servicer
for services rendered during such Collection Period, which, unless otherwise
specified in the related Series Supplement, shall be equal to one-twelfth of the
Servicing Fee Rate multiplied by the Aggregate Principal Balance for such Series
Trust Estate determined as of the Accounting Date immediately preceding such
Collection Period. For the avoidance of doubt, the Servicing Fee does not
include any administrative fees, expenses or charges paid by or on behalf of
Obligors during any Collection Period.

            "Servicing Fee Rate" means [2.25]% per annum unless otherwise
specified in a Series Supplement with respect to the related Series Trust
Estate.

            "Simple Interest Method" means the method of allocating a fixed
level payment on an obligation between principal and interest, pursuant to which
the portion of such payment that is allocated to interest is equal to the
product of the fixed rate of interest on such obligation multiplied by the
period of time (expressed as a fraction of a


                                       17
<PAGE>

year, based on the actual number of days in the calendar month and 365 days in
the calendar year) elapsed since the preceding payment under the obligation was
made.

            "Simple Interest Receivable" means a Receivable under which the
portion of the payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.

            "Standard & Poor's" means Standard & Poor's, a division of the
McGraw Hill Companies, Inc., or its successor.

            "Sub-Servicer" means any Eligible Sub-Servicer with whom the Master
Servicer has entered into an agreement relating to subservicing the Receivables.
Initially, the Sub-Servicer will be HAFC.

            "Support Default" shall mean a default relating to the Insolvency or
performance of a Series Support Provider.

            "Transfer Agreement" means the agreement among the Issuer, the
Seller and the Master Servicer, substantially in the form of Exhibit B.

            "Transfer Date" means, with respect to Receivables, any date on
which Receivables are to be transferred to a Trust pursuant to this Agreement
and a related Transfer Agreement.

            "Trust" means the respective Issuers, individually.

            "Trust Account Property" means the Trust Accounts and each Series
Trust Account, all amounts and investments held from time to time in any Trust
Account and each Series Trust Account (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated securities or
otherwise), and all proceeds of the foregoing.

            "Trust Accounts" has the meaning assigned thereto in Section 5.1.

            "Trust Agreement" means the Trust Agreement, dated as of
___________, between the Seller and the Owner Trustee, [as amended and restated
as of ___________ and] as supplemented by the Series ______ Supplement, and as
the same may be amended and further supplemented from time to time.

            "Trust Officer" means, (i) in the case of the Indenture Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, assistant vice-president or managing director,
the secretary, any assistant secretary or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter and having direct responsibility for the Administration
of this Agreement, and (ii) in the case of the Owner Trustee, any officer in the
corporate trust office of the Owner Trustee or any agent of the Owner Trustee
under a power of


                                       18
<PAGE>

attorney with direct responsibility for the administration of this Agreement or
any of the Basic Documents or Series Related Documents on behalf of the Owner
Trustee.

            "UCC" means the Uniform Commercial Code as in effect in the relevant
jurisdiction on the date of the Agreement.

            "Warranty Receivable" With respect to any Collection Period, a
Receivable which the Seller has become obligated to repurchase pursuant to
Section 3.2.

            SECTION 1.2. Other Interpretive Provisions. (a) Capitalized terms
used herein and not otherwise defined herein have the meanings assigned to them
in the Indenture, or, if not defined therein, in the Trust Agreement. Cross
referenced definitions may include a Series designation.

                  (b) All terms defined in this Agreement shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant hereto unless otherwise defined
therein.

                  (c) As used in this Agreement, in any instrument governed
hereby and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in this Agreement or in any such
instrument, certificate or other document, and accounting terms partly defined
in this Agreement or in any such instrument, certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such instrument, certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such instrument, certificate
or other document shall control.

                  (d) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein.

                  (e) Any term defined herein, which is otherwise defined in a
Series Supplement, shall have the meaning with respect to such Series specified
therefor in such Series Supplement, whether or not the definition in this
Agreement includes a phrase to the effect that such term may be otherwise
defined in a Series Supplement.

                  (f) In the event that with respect to a Series there is no
Series Support Provider, any references herein or in any other of the Basic
Documents to the consent of, or acceptability to, the Series Support Provider
shall be deemed to be deleted.

            SECTION 1.3. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural includes the
singular; words


                                       19
<PAGE>

importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; the terms "include" or
"including" mean "include without limitation" or "including without limitation;"
the words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of Schedules and Exhibits to
this Agreement.

            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 an Interest Period shall
refer to the opening of business on such day. All references to the last day of
an Interest Period shall refer to the close of business on such day.

            SECTION 1.5. No Recourse. Without limiting the obligations of the
Master Servicer or Seller hereunder, no recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer or
director, as such, of the Master Servicer or Seller, or of any of their
respective Affiliates, predecessors or successors.

            SECTION 1.6. Action by or Consent of Noteholders. Whenever any
provision of this Agreement refers to action to be taken, or consented to, by
Noteholders, such provision shall be deemed to refer to the Noteholders of
record as of the Record Date immediately preceding the date on which such action
is to be taken, or consent given, by Noteholders. Solely for the purposes of any
action to be taken, or consented to, by Noteholders, any Note registered in the
name of HAFC or any Affiliate thereof shall be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action or consent, only
Notes which the Trust Officer of the Indenture Trustee actually knows to be so
owned shall be so disregarded.

                                   ARTICLE II

                            Conveyance of Receivables

            SECTION 2.1. Conveyance of Receivables. (a) Subject to the
conditions set forth in paragraph (b) below, in consideration of the Issuer's
delivery to or upon the order of the Seller on the Series Closing Date or a
Transfer Date of the net proceeds from the sale of a Series of Notes thereunder
and the other amounts to be distributed from time to time to the Seller in
accordance with the terms of this Agreement and the related Series Supplement,
the Seller shall, from time to time, sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations set
forth herein), all right, title and interest of the Seller in and to:


                                       20
<PAGE>

                  (i) each and every Receivables listed on Schedule II to the
            Series Supplement and Schedule A to the related Transfer Agreement,
            if any, and all monies paid or payable thereon or in respect thereof
            after the Series Closing Date or the related Transfer Date
            (including amounts due on or before the Cutoff Date but received by
            HAFC or Household Bank, as applicable, the Seller or the Issuer on
            or after the Cutoff Date);

                  (ii) the security interests in the related Financed Vehicles
            granted by Obligors pursuant to the related Receivables and any
            other interest of the Seller in such Financed Vehicles;

                  (iii) all rights of the Seller against the Dealers pursuant to
            Dealer Agreements;

                  (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 under any Service Contracts on the related
            Financed Vehicles:

                  (vi) any proceeds and the right to receive proceeds with
            respect to such Receivables from claims on any physical damage,
            credit life or disability insurance policies covering the related
            Financed Vehicles or Obligors, including rebates of insurance
            premiums relating to the Receivables;

                  (vii) all items contained in the related Receivables Files
            with respect to the Receivables; and any and all other documents
            that HAFC or Household Bank, as applicable, keeps on file in
            accordance with its customary procedures relating to the related
            Receivables, the Obligors or the Financed Vehicles;

                  (viii) all funds on deposit from time to time in the Trust
            Accounts (including all investments and proceeds thereof);

                  (ix) property (including the right to receive future Net
            Liquidation Proceeds) that secures a Receivable and that has been
            acquired by or on behalf of the Trust pursuant to liquidation of
            such Receivable;

                  (x) all of the Seller's right, title and interest in its
            rights and benefits, but none of its obligations or burdens, under
            each of the Master Receivables Purchase Agreements and the
            Receivables Purchase Agreement Supplements, including the delivery
            requirements, representations and warranties and the cure and


                                       21
<PAGE>

            repurchase obligations of or Household Bank, as applicable, under
            the HAFC Purchase Agreement or the Household Bank Purchase
            Agreement, respectively, and the related Receivables Purchase
            Agreement Supplements, on or after the related Cutoff Date;

                  (xi) one share of Class SV Preferred Stock of the Seller; and

                  (xii) 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.

                  (b) The Seller shall transfer to the Issuer the Receivables
and the other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions on or prior
to the Series Closing Date or the related Transfer Date:

                  (i) if the transfer is not on the Closing Date, the Seller
            shall have provided the Indenture Trustee and the Owner Trustee with
            an Addition Notice not later than five days prior to such Transfer
            Date (which Addition Notice will designate the Series Trust Estate
            which the Receivables will be a part of, if any) and shall have
            provided any information reasonably requested by any of the
            foregoing with respect to the related Receivables;

                  (ii) the Seller shall have delivered to the Owner Trustee and
            the Indenture Trustee a duly executed Transfer Agreement or Series
            Supplement which shall include a schedule (which may be in
            electronic format), listing the Receivables to be transferred;

                  (iii) the Seller shall, to the extent required by Section 4.2,
            have deposited in the Master Collection Account all collections
            received after the related Cutoff Date in respect of the Receivables
            to be transferred;

                  (iv) as of the Series Closing Date and each Transfer Date, (A)
            the Seller shall not be insolvent and shall not become insolvent as
            a result of the transfer of Receivables on such date, (B) the Seller
            shall not intend to incur or believe that it shall incur debts that


                                       22
<PAGE>

            would be beyond its ability to pay as such debts mature, (C) such
            transfer shall not have been made with actual intent to hinder,
            delay or defraud any Person and (D) the assets of the Seller shall
            not constitute unreasonably small capital to carry out its business
            as conducted;

                  (v) each of the representations and warranties made by the
            Seller pursuant to Section 3.1 with respect to the Receivables to be
            transferred on the Series Closing Date or the related Transfer Date
            shall be true and correct as of the Series Closing Date or the
            related Transfer Date, and the Seller shall have performed all
            obligations to be performed by it hereunder on or prior to such
            Transfer Date;

                  (vi) the Seller shall, at its own expense, on or prior to the
            Series Closing Date or the related Transfer Date indicate in its
            computer files that the Receivables identified in the Schedule to
            the Series Supplement or to the related Transfer Agreement have been
            sold to the Trust pursuant to this Agreement;

                  (vii) the Seller shall have taken any action necessary or, if
            required by the Indenture Trustee, advisable to maintain the first
            priority perfected ownership interest of the Trust in the Owner
            Trust Estate and the first perfected security interest of the
            Indenture Trustee in the Series Trust Estate;

                  (viii) no selection procedures adverse to the interests of the
            related Series shall have been utilized in selecting the related
            Receivables;

                  (ix) the addition of any such Receivables shall not result in
            a material adverse tax consequence to the Trust or the Noteholders;

                  (x) if required by any of the related Series Related
            Documents, the Seller shall simultaneously transfer to the Indenture
            Trustee any amounts required to be deposited in the related Trust
            Accounts with respect to the Receivables transferred on such Series
            Closing Date or Transfer Date; and

                  (xi) the Seller shall have delivered to the Indenture Trustee
            an Officers' Certificate confirming the satisfaction of each
            condition precedent specified in this paragraph (b).

            The Seller covenants that in the event any of the foregoing
conditions precedent are not satisfied with respect to any Receivable on the
date required as specified above, the Seller will immediately repurchase such
Receivable from the Trust, at a price equal to the Repurchase Amount thereof.


                                       23
<PAGE>

            It is the intention of the Seller that the transfer and assignment
contemplated by this Agreement and each related Transfer Agreement shall
constitute a sale of the related Series Trust Estate from the Seller to the
Issuer and the beneficial interest in and title to the related Series Trust
Estate shall not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. In the
event that, notwithstanding the intent of the Seller, the transfer and
assignment contemplated hereby and thereby is held not to be a sale, this
Agreement and the related Transfer Agreement shall constitute a grant of a
security interest in the property referred to in this Section 2.1 for the
benefit of the Noteholders.

            SECTION 2.2. Further Encumbrance of Series Trust Estate. (a)
Immediately upon the conveyance to the Trust by the Seller of any item of the
related Series Trust Estate pursuant to Section 2.1, all right, title and
interest of the Seller in and to such Series Trust Estate shall terminate, and
all such right, title and interest shall vest in the Issuer, in accordance with
the Trust Agreement and Sections 3802 and 3805 of the Business Trust Statute (as
defined in the Trust Agreement).

                  (b) Immediately upon the vesting of the related Series Trust
Estate in the Trust, the Trust shall have the sole right to pledge or otherwise
encumber, such related Series Trust Estate. Pursuant to the Indenture and a
Series Supplement, the Trust will grant a security interest in the Series Trust
Estate to secure the repayment of a related Series of Notes. The related Series
of Certificates shall represent the beneficial ownership interest in the related
Series Trust Estate, and the related Series of Certificateholders shall be
entitled to receive distributions with respect thereto as set forth in the
related Series Supplement.

                  (c) The Indenture Trustee shall hold the related Series Trust
Estate for the benefit of the related Series Securityholders. Following the
payment in full of the related Series of Notes and the release and discharge of
the Indenture and the related Series Supplement, all covenants of the Issuer
under Article III of the Indenture and the related Series Supplement shall,
until payment in full of the Certificates, remain as covenants of the Issuer for
the benefit of the related Series of Certificateholders, enforceable by the
related Series of Certificateholders to the same extent as such covenants were
enforceable by the related Series of Noteholders prior to the discharge of the
Indenture. Any rights of the Indenture Trustee under Article III of the
Indenture and the related Series Supplement, following the discharge of the
Indenture and the related Series Supplement, shall vest in related Series of
Certificateholders.

                  (d) The Indenture Trustee shall, at such time as there are no
Securities of a Series outstanding and all sums due to the Indenture Trustee or
any agent or counsel thereof pursuant to the Indenture as supplemented by the
related Series Supplement, have been paid, pursuant to Section 4.1 of the
Indenture, and subject to satisfaction of the conditions set forth therein,
release the Lien of the related Series Supplement and the Indenture with respect
to the related Series Trust Estate.


                                       24
<PAGE>

                                  ARTICLE III

                                 The Receivables

            SECTION 3.1. Representations and Warranties of Seller. The Seller
represents and warrants as to the related Receivables that the representations
and warranties set forth on the Schedule of Eligibility Criteria with respect to
a Series are, or will be, true and correct as of the respective dates specified
in such Schedule. The Issuer is deemed to have relied on such representations
and warranties in acquiring the related Receivables and the related
Securityholders shall be deemed to rely on such representations and warranties
in purchasing the Notes. Such representations and warranties shall survive the
sale, transfer and assignment of the related Series Trust Estate to the Issuer
and any pledge thereof to the Indenture Trustee pursuant to the Indenture and
the related Series Supplement.

            SECTION 3.2. Repurchase upon Breach. (a) The Seller, the Master
Servicer, any Trust Officer of the Indenture Trustee or the Owner Trustee, as
the case may be, shall inform each of the other parties to this Agreement
promptly, in writing, upon the discovery of any breach of the Seller's
representations and warranties made pursuant to Section 3.1; provided, however,
that the failure to give any such notice shall not derogate from any obligations
of the Seller under this Section 3.2. As of the last day of the second (or, if
the Seller so elects, the first, or with respect to any exceptions appearing on
any exception report delivered by the Indenture Trustee, the first) month
following the discovery by the Seller or receipt by the Seller of notice of such
breach (or such longer period not in excess of 120 days, as may be agreed upon
by the Indenture Trustee and the Master Servicer), unless such breach is cured
by such date, the Seller shall have an obligation to repurchase or cause HAFC or
Household Bank, as applicable, to repurchase any Receivable in which the
interests of the related Series Securityholders are materially and adversely
affected by any such breach. In consideration of and simultaneously with the
repurchase of the Receivables, the Seller shall remit, or cause HAFC or
Household Bank, as applicable, to remit, to the related Series Collection
Account, the Repurchase Amount in the manner specified in Section 5.4 and the
Issuer shall execute such assignments and other documents reasonably requested
by such person in order to effect such repurchase. The sole remedy of the
Issuer, the Owner Trustee, the Indenture Trustee and the related Series
Securityholders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be the
repurchase of the Receivables pursuant to this Section, subject to the
conditions contained herein or to enforce the obligation of HAFC or Household
Bank, as applicable, to the Seller to repurchase such Receivables pursuant to
the HAFC Purchase Agreement or the Household Bank Purchase Agreement,
respectively. Neither the Owner Trustee nor the Indenture Trustee shall have a
duty to conduct any affirmative investigation as to the occurrence of any
conditions requiring the repurchase of any Receivable pursuant to this Section.

                  (b) Pursuant to Section 2.1 of this Agreement and pursuant to
the related Transfer Agreement, the Seller conveyed to the Trust all of the
Seller's right, title and interest in its rights and benefits, but none of its
obligations or burdens, under the


                                       25
<PAGE>

Master Receivables Purchase Agreements and the related Receivables Purchase
Agreement Supplements, including the Seller's rights under the Master
Receivables Purchase Agreements and the related Receivables Purchase Agreement
Supplements and the delivery requirements, representations and warranties and
the cure or repurchase obligations of HAFC and Household Bank, as applicable,
under the HAFC Purchase Agreement and the Household Bank Purchase Agreement,
respectively. The Seller hereby represents and warrants to the Trust that such
assignment is valid, enforceable and effective to permit the Trust to enforce
such obligations of HAFC and Household Bank, as applicable, under the HAFC
Purchase Agreement and the Household Bank Purchase Agreement, respectively.

            SECTION 3.3. Custody of Receivables Files. In connection with the
sale, transfer and assignment of the Receivables, if any, to the Trust pursuant
to this Agreement and pursuant to the related Transfer Agreement, the Master
Servicer shall act as custodian for the benefit of the Indenture Trustee of the
following documents or instruments with respect to each Receivable:

                  (i) The fully executed original of the Receivable (together
            with any agreements modifying the Receivable, including, without
            limitation, any extension agreements);

                  (ii) The original credit application, or a copy thereof, of
            each Obligor, fully executed by each such Obligor on HAFC's, an
            Affiliate of HAFC's or the Dealer's customary form, or on a form
            approved by HAFC or an Affiliate of HAFC, as applicable, for such
            application; and

                  (iii) The original certificate of title (when received) and
            otherwise such documents, if any, that HAFC or an Affiliate of HAFC,
            as applicable, keeps on file in accordance with its customary
            procedures indicating that the Financed Vehicle is owned by the
            Obligor and subject to the interest of (x) HAFC (or any predecessor
            corporation to HAFC, or any Affiliate of HAFC or such predecessor
            corporation) as first lienholder or secured party (including any
            Lien Certificate received by HAFC or an Affiliate of HAFC, as
            applicable), or, (y) a Dealer as first lienholder or secured party
            or, if such original certificate of title has not yet been received,
            a copy of the application therefor, showing either HAFC (or any
            predecessor corporation to HAFC, or any Affiliate of HAFC or such
            predecessor corporation), or a Dealer as secured party; and

                  (iv) Documents evidencing or relating to any Insurance Policy,
            to the extent such documents are maintained by or on behalf of the
            Seller HAFC or an Affiliate of HAFC.


                                       26
<PAGE>

Notwithstanding the foregoing, the Master Servicer may appoint a Sub-Servicer as
subcustodian, which subcustodian may hold physical possession of some or all of
the Receivable Files. The Indenture Trustee shall have no liability for the acts
or omissions of any such custodian or subcustodian.

                                   ARTICLE IV

                   Administration and Servicing of Receivables

            SECTION 4.1. Duties of the Master Servicer. The Master Servicer is
hereby authorized to act as agent for the Trust (and also on behalf of the
Indenture Trustee and the Noteholders) and in such capacity shall manage,
service, administer and make collections on the Receivables, and perform the
other actions required by the Master Servicer under this Agreement. The Master
Servicer agrees that its servicing of the Receivables shall be carried out in
accordance with customary and usual procedures of institutions which service
motor vehicles retail installment sales contracts and, to the extent more
exacting, the degree of skill and attention that the Master Servicer exercises
with respect to all comparable motor vehicle receivables that it services for
itself or others. In performing such duties, so long as Household Finance
Corporation is the Master Servicer, it shall comply with the standard and
customary procedures for servicing all of its comparable motor vehicle
receivables. The Master Servicer's duties shall include, without limitation,
collection and posting of all payments, responding to inquiries of Obligors on
the Receivables, investigating delinquencies, sending payment statements to
Obligors, reporting any required tax information to Obligors, accounting for
collections and furnishing monthly and annual statements to the Indenture
Trustee with respect to distributions, monitoring the status of Insurance
Policies with respect to the Financed Vehicles and performing the other duties
specified herein. The Master Servicer shall also administer and enforce all
rights and responsibilities of the holder of the Receivables provided for in the
Dealer Agreements (and Household Finance Corporation shall make efforts to
obtain possession of the Dealer Agreements, to the extent it is necessary to do
so), the Dealer Assignments and the Insurance Policies, to the extent that such
Dealer Agreements, Dealer Assignments and Insurance Policies relate to the
Receivables, the Financed Vehicles or the Obligors. To the extent consistent
with the standards, policies and procedures otherwise required hereby, the
Master Servicer shall follow its customary standards, policies, and procedures
and shall have full power and authority, acting alone, to do any and all things
in connection with such managing, servicing, administration and collection that
it may deem necessary or desirable. Without limiting the generality of the
foregoing, the Master Servicer is hereby authorized and empowered by the Trust
to execute and deliver, on behalf of the Trust, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and with
respect to the Financed Vehicles. The Master Servicer is hereby authorized to
commence, in it's own name or in the name of the Trust, a legal proceeding to
enforce a Receivable pursuant to Section 4.3 or to commence or participate in
any other legal proceeding (including, without limitation, a bankruptcy
proceeding) relating to or involving a Receivable, an Obligor or a Financed
Vehicle. If the Master Servicer commences or participates in such


                                       27
<PAGE>

a legal proceeding in its own name, the Trust shall thereupon be deemed to have
automatically assigned such Receivable to the Master Servicer solely for
purposes of commencing or participating in any such proceeding as a party or
claimant, and the Master Servicer is authorized and empowered by the Trust to
execute and deliver in the Master Servicer's name any notices, demands, claims,
complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. The Indenture Trustee and the Owner Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents which the Master Servicer may reasonably request and which the Master
Servicer deems necessary or appropriate and take any other steps which the
Master Servicer may deem reasonably necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this
Agreement.

            SECTION 4.2. Collection of Receivable Payments; Modifications of
Receivables. (a) Consistent with the standards, policies and procedures required
by this Agreement, the Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all comparable automobile receivables that it
services for itself or others and otherwise act with respect to the Receivables,
the Dealer Agreements, the Dealer Assignments, the Insurance Policies and the
Other Conveyed Property in such manner as will, in the reasonable judgment of
the Master Servicer, maximize the amount to be received by the Trust with
respect thereto. Consistent with the foregoing, the Master Servicer may, if it
determines in its reasonable judgement that such action would maximize the
amount to be received by the Trust, arrange for the sale by the Trust of
Liquidated Receivables with respect to which the related Financed Vehicle has
been sold, and the proceeds of such sale shall be included in Net Liquidation
Proceeds. The Master Servicer is authorized in its discretion to waive any
prepayment charge, late payment charge or any other similar fees that may be
collected in the ordinary course of servicing any Receivable.

                  (b) The Master Servicer may at any time agree to a
modification or amendment of a Receivable in order to (i) change the Obligor's
regular due date to a date within 30 days of when such due date occurs;
provided, however, that no modification of a Receivable in connection with a due
date change pursuant to this clause (i) shall be considered an extension for
purposes of Section 4.2(c) below and therefore shall not be subject to the
restrictions on extensions, modifications or amendments specified in Section
4.2(c) below or (ii) re-amortize the Scheduled Payments on the Receivable
following a partial prepayment of principal; provided, however, that no
re-amortization permitted by this clause (ii) shall extend the maturity date of
any Receivable.

                  (c) The Master Servicer may grant payment extensions on, or
other modifications or amendments to, a Receivable in accordance with its
customary procedures if the Master Servicer believes in good faith that such
extension, modification or amendment is necessary to avoid a default on such
Receivable, will maximize the amount to be received with respect to such
Receivable, and is otherwise in the best interests of the Trust; provided,
however, that unless otherwise specified in any Series Supplement:


                                       28
<PAGE>

                  (i) The aggregate period of all extensions on a Receivable
            shall not exceed six months; provided, however, that not more than
            three months can be in any consecutive twelve month period;

                  (ii) In no event may a Receivable be extended by the Master
            Servicer beyond the Collection Period immediately preceding the
            Final Scheduled Distribution Date of the Notes with respect to the
            related Series; and

                  (iii) The average Monthly Extension Rate for any three
            consecutive calendar months shall not exceed [4]%.

                  (d) Except as otherwise provided below, the Master Servicer
shall deposit collections on or with respect to Receivables into the Master
Collection Account or the related Series Trust Account, as applicable, as
promptly as possible after the date of processing of such collections, but in no
event later than the second Business Day following the date of processing.
Subject to the express terms of any Series Supplement, but notwithstanding
anything else in this Agreement to the contrary, for so long as (i) Household
remains the Master Servicer and maintains a commercial paper rating of not less
than A-1 by Standard & Poor's and P-1 by Moody's (or such other rating below A-1
or P-1, as the case may be, which is satisfactory to the Rating Agency) and for
five Business Days following any reduction of any such rating or (ii) a Master
Servicer Credit Facility is maintained in effect by the Master Servicer
acceptable in form and substance to the Rating Agency (such acceptability to be
evidenced in writing by the Rating Agency to the effect that failure to make the
aforementioned deposit on the basis of the maintenance of the Master Servicer
Credit Facility will not adversely affect the then current rating of the Notes),
issued by a depository institution or insurance having a rating on its (A)
short-term obligations of at least P-1 by Moody's and A-1 by Standard & Poor's
and (B) long term obligations of at least A2 by Moody's and A by Standard &
Poor's or other ratings approved by the Rating Agency, the Master Servicer shall
not be required to make deposits of collections on or with respect to
Receivables as provided in the preceding sentence, but may make one or more
deposits of such collections with respect to a Collection Period into the Master
Collection Account or the related Series Trust Account, as applicable, in
immediately available funds not later than 1:00 P.M., Central time, on the
Business Day immediately preceding the related Distribution Date. In the event
that a Master Servicer Credit Facility is maintained, the Master Servicer shall
within two Business Days of the date of processing of collections on or with
respect to Receivables notify the Indenture Trustee and the Master Servicer
Credit Facility Issuer in writing of the amounts that would otherwise be
deposited in the Collection Account. The Master Servicer shall establish and
maintain for the Trust a Payment Record in which the payments on or with respect
to the Receivables shall be credited and the Master Servicer shall notify the
Indenture Trustee and the Master Servicer Credit Facility Issuer in writing as
promptly as practicable (but in any event prior to the Determination Date for
the following Distribution Date) of the amounts so credited on or with respect
to the Receivables that are to be included in Collected Funds for the related
Distribution Date and of the amounts so credited which will constitute a part of
Collected Funds for the second following Distribution Date. The Payment Record
shall be made available for


                                       29
<PAGE>

inspection during normal business hours of the Master Servicer upon request of
the Indenture Trustee, or any Master Servicer Credit Facility Issuer. The Master
Servicer shall give written notice to the Indenture Trustee if it is required to
deposit funds in accordance with the first sentence of this paragraph.

            SECTION 4.3. Realization Upon Receivables. (a) Consistent with the
standards, policies and procedures required by this Agreement, the Master
Servicer shall use its best efforts to repossess (or otherwise comparably
convert the ownership of) and liquidate any Financed Vehicle securing a
Receivable with respect to which the Master Servicer has determined that
payments thereunder are not likely to be resumed, as soon as is practicable
after default on such Receivable but in no event later than the date on which
10% or more of a Scheduled Payment has become 150 days delinquent (other than in
the case of Financed Vehicles where neither the Financed Vehicle nor the Obligor
can be physically located by the Master Servicer (using procedures consistent
with the standards, policies and procedures of the Master Servicer required by
this Agreement) and other than in the case of an Obligor who is subject to a
bankruptcy proceeding); provided, however, that the Master Servicer may elect
not to repossess a Financed Vehicle within such time period if in its good faith
judgment it determines that the proceeds ultimately recoverable with respect to
such Receivable would be increased by forbearance. The Master Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
4.1, which practices and procedures may include reasonable efforts to realize
upon any recourse to Dealers, the sale of the related Financed Vehicle at public
or private sale, the submission of claims under an Insurance Policy and other
actions, including, without limitation, entering into settlements with Obligors,
by the Master Servicer in order to realize upon such a Receivable. The foregoing
is subject to the provision that, in any case in which the Financed Vehicle
shall have suffered damage, the Master Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or repossession
shall increase the proceeds of liquidation of the related Receivable by an
amount greater than the amount of such expenses. The Master Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle but only from the liquidation
proceeds of the vehicle or under the related Dealer Agreement. The Master
Servicer shall recover such reasonable expenses based on the information
contained in the Master Servicer's Certificate delivered on the related
Determination Date. The Master Servicer shall pay on behalf of the Trust any
personal property taxes assessed on repossessed Financed Vehicles. The Master
Servicer shall be entitled to reimbursement of any such tax from Net Liquidation
Proceeds with respect to such Receivable.

                  (b) If the Master Servicer elects to commence a legal
proceeding to enforce a Dealer Agreement or Dealer Assignment, the act of
commencement shall be deemed to be an automatic assignment from the Trust to the
Master Servicer of the rights under such Dealer Agreement and Dealer Assignment
for purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Master Servicer may not enforce a Dealer
Agreement or Dealer Assignment on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer Agreement or Dealer


                                       30
<PAGE>

Assignment, the Owner Trustee, at the Master Servicer's written direction and
expense, or the Seller, at the Seller's expense, shall take such steps as the
Master Servicer deems reasonably necessary to enforce the Dealer Agreement or
Dealer Assignment, including bringing suit in its name or the name of the Seller
or of the Trust and the Owner Trustee for the benefit of the Securityholders.
All amounts recovered shall be remitted directly by the Master Servicer as
provided in Section 4.2(d).

                  (c) The Master Servicer agrees that prior to delivering any
repossessed Finance Vehicle for sale to any dealer, it shall make such filings
and effect such notices as are necessary under Section 9-114(1) of the UCC to
preserve the Trust's ownership interest (or security interest, as the case may
be) in such repossessed Financed Vehicle.

            SECTION 4.4. Insurance. (a) The Master Servicer shall require, in
accordance with its customary servicing policies and procedures, that each
Financed Vehicle be insured by the related Obligor under an insurance policy
covering physical loss and damage to the related Financed Vehicle and shall
monitor the status of such physical loss and damage insurance coverage
thereafter, in accordance with its customary servicing procedures. Each
Receivable requires the Obligor to obtain such physical loss and damage
insurance, naming HAFC or an Affiliate of HAFC, as applicable, and its
successors and assigns as loss payee, and with respect to liability coverage,
additional insureds, and permits the holder of such Receivable to obtain
physical loss and damage insurance at the expense of the Obligor if the Obligor
fails to maintain such insurance. If the Master Servicer shall determine that an
Obligor has failed to obtain or maintain a physical loss and damage Insurance
Policy covering the related Financed Vehicle which satisfies the conditions set
forth in the related Eligibility Criteria (including, without limitation, during
the repossession of such Financed Vehicle) the Master Servicer shall be diligent
in carrying out its customary servicing procedures to enforce the rights of the
holder of the Receivable under the Receivable to require the Obligor to obtain
such physical loss and damage insurance in accordance with its customary
servicing policies and procedures.

                  (b) The Master Servicer may sue to enforce or collect upon the
Insurance Policies, in its own name, if possible, or as agent of the Trust. If
the Master Servicer elects to commence a legal proceeding to enforce an
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Trust under such Insurance Policy to the Master
Servicer for purposes of collection only. If, however, in any enforcement suit
or legal proceeding it is held that the Master Servicer may not enforce an
Insurance Policy on the grounds that it is not a real party in interest or a
holder entitled to enforce the Insurance Policy, the Owner Trustee, at the
Master Servicer's written direction and expense, or the Seller, at the Seller's
expense, shall take such steps as the Master Servicer deems reasonably necessary
to enforce such Insurance Policy, including bringing suit in its name or the
name of the Trust and the Owner Trustee for the benefit of the Noteholders.

            SECTION 4.5. Maintenance of Security Interests in Vehicles.
Consistent with the policies and procedures required by this Agreement, the
Master


                                       31
<PAGE>

Servicer shall take such steps on behalf of the Trust as are necessary to
maintain perfection of the security interest created by each Receivable in the
related Financed Vehicle on behalf of the Trust as the Indenture Trustee shall
reasonably request, including, but not limited to, obtaining the execution by
the Obligors and the recording, registering, filing, re-recording, re-filing,
and re-registering of all security agreements, financing statements and
continuation statements as are necessary to maintain the security interest
granted by the Obligors under the respective Receivables. The Owner Trustee, on
behalf of the Trust, hereby authorizes the Master Servicer, and the Master
Servicer agrees, to take any and all steps necessary to re-perfect such security
interest on behalf of the Trust as necessary because of the relocation of a
Financed Vehicle or for any other reason. In the event that the assignment of a
Receivable to the Trust is insufficient, without a notation on the related
Financed Vehicle's certificate of title, or without fulfilling any additional
administrative requirements under the laws of the state in which the Financed
Vehicle is located, to perfect a security interest in the related Financed
Vehicle in favor of the Trust, HAFC hereby agrees that the designation of any
predecessor company to HAFC, or any Affiliate of any of the foregoing as the
secured party on the certificate of title is in its capacity as agent of the
Trust for such limited purpose.

            SECTION 4.6. Covenants, Representations, and Warranties of Master
Servicer. By its execution and delivery of this Agreement, the Master Servicer
makes the following representations, warranties and covenants on which the
Indenture Trustee relies in accepting the related Receivables, on which the
Indenture Trustee relies in authenticating each Series of Notes, on which the
Noteholders rely on in purchasing a Series of Notes and on which the Owner
Trustee relies in executing each Series of Certificates.

            The Master Servicer covenants as follows:

                  (i) Liens in Force. The Financed Vehicle securing each
            Receivable shall not be released in whole or in part from the
            security interest granted by the Receivable, except upon payment in
            full of the Receivable or as otherwise contemplated herein;

                  (ii) No Impairment. The Master Servicer shall do nothing to
            impair the rights of the Trust or the related Series of Noteholders
            in the Receivables, the Dealer Agreements, the Dealer Assignments,
            the Insurance Policies or the Other Conveyed Property;

                  (iii) No Amendments. The Master Servicer shall not extend or
            otherwise amend the terms of any Receivable, except in accordance
            with Section 4.2;

                  (iv) Restrictions on Liens. The Master Servicer shall not (i)
            create, incur or suffer to exist, or agree to create, incur or
            suffer to exist, or consent to cause or permit in the future (upon
            the


                                       32
<PAGE>

            happening of a contingency or otherwise) the creation, incurrence or
            existence of any Lien or restriction on transferability of the
            Receivables except for the Lien in favor of the Indenture Trustee
            for the benefit of the related Series Securityholders, and the
            restrictions on transferability imposed by this Agreement or (ii)
            sign or file under the Uniform Commercial Code of any jurisdiction
            any financing statement which names HAFC or Household Bank, as
            applicable, the Master Servicer or any Affiliate thereof as a
            debtor, or sign any security agreement authorizing any secured party
            thereunder to file such financing statement, with respect to the
            Receivables, except in each case any such instrument solely securing
            the rights and preserving the Lien of the Indenture Trustee;

                  (v) Servicing of Receivables. The Master Servicer shall
            service the Receivables as required by the terms of this Agreement
            and in material compliance with its standard and customary
            procedures for servicing all its other comparable motor vehicle
            receivables and in compliance with applicable law; and

                  (vi) Relocation of Office. The Master Servicer shall notify
            the Indenture Trustee of any relocation of the Master Servicer's
            principal office set forth in Section 13.3 hereof and all
            Receivables Files shall be maintained by the Master Servicer in the
            United States.

            SECTION 4.7. Repurchase of Receivables Upon Breach of Covenant. Upon
discovery by any of the Master Servicer, the Seller, a Trust Officer of the
Owner Trustee or of the Indenture Trustee of a breach of any of the covenants
set forth in Sections 4.5 or 4.6, the party discovering such breach shall give
prompt written notice to the others; provided, however, that the failure to give
any such notice shall not affect any obligation of the Master Servicer under
this Section 4.7. As of the second Accounting Date following its discovery or
receipt of notice of any breach of any covenant set forth in Sections 4.5 or 4.6
which materially and adversely affects the interests of the related Series
Securityholders in any Receivable (including any Liquidated Receivable) (or, at
the Master Servicer's election, the first Accounting Date so following) or the
related Financed Vehicle, the Master Servicer shall, unless such breach shall
have been cured in all material respects, repurchase from the Trust the
Receivable affected by such breach and, on the date specified in Section 5.4,
the Master Servicer shall pay the related Repurchase Amount and deposit such
Repurchase Amounts into the Master Collection Account in accordance with Section
5.3 hereof. It is understood and agreed that the obligation of the Master
Servicer to repurchase any Receivable (including any Liquidated Receivable) with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Master Servicer
for such breach.


                                       33
<PAGE>

            SECTION 4.8. Total Servicing Fee; Payment of Certain Expenses by
Master Servicer. So long as: (i) the Master Servicer is not required in
accordance with Section 4.2(d) hereof to make deposits of collections with
respect to a Collection Period into the Collection Account until the Business
Day immediately preceding the related Distribution Date and (ii) the Master
Servicer's Certificate delivered with respect to such Distribution Date
indicates that Available Funds with respect to such Distribution Date are
sufficient to make the distributions required to be made on such Distribution
Date in respect of the Servicing Fee (and all other distributions required to be
made on such Distribution Date having a higher priority than the distribution of
the Servicing Fee), then the Master Servicer shall be entitled to retain out of
amounts otherwise to be deposited in the Master Collection Account with respect
to a Collection Period, the Servicing Fee for each Series for such Collection
Period. The Master Servicer shall be required to pay all expenses incurred by it
in connection with its activities under this Agreement (including taxes imposed
on the Master Servicer, expenses incurred in connection with distributions and
reports made by the Master Servicer to Securityholders and all fees and expenses
of the Owner Trustee or the Indenture Trustee), except taxes levied or assessed
against the Trust, and claims against the Trust in respect of indemnification,
which taxes and claims in respect of indemnification against the Trust are
expressly stated to be for the account of Household Finance Corporation. The
Master Servicer shall be liable for the fees, charges and expenses of the Owner
Trustee, the Indenture Trustee, any Sub-Servicer and their respective agents.

            SECTION 4.9. Master Servicer's Certificate. No later than 10:00 a.m.
Central time on each Determination Date, the Master Servicer shall deliver, or
cause to be delivered via access to an affiliate's web-site address or
otherwise, to the Indenture Trustee and the Owner Trustee, a Master Servicer's
Certificate and, in the case of such delivery to the Indenture Trustee only,
executed by a responsible officer or agent of the Master Servicer containing
among other things, all information necessary to enable the Indenture Trustee to
make the allocations required by Section 5.5 and the distributions with respect
to such Distribution Date pursuant to each Series Supplement. Upon request, the
Master Servicer will also provide a listing of all Warranty Receivables and
Covenant Receivables repurchased as of the related Determination Date,
identifying the Receivables so purchased. Such list will identify Receivables
repurchased by the Master Servicer or by the Seller on the related Determination
Date and each Receivable which became a Liquidated Receivable or which was paid
in full during the related Collection Period by account number. In addition to
the information set forth in the preceding sentence, the Master Servicer's
Certificate shall also contain the information required by any Series
Supplement.

            SECTION 4.10. Annual Statement as to Compliance, Notice of Master
Servicer Termination Event. (a) The Master Servicer shall deliver or cause to be
delivered to the Indenture Trustee and the Owner Trustee on or before April 30
(or 120 days after the end of the Master Servicer's fiscal year, if other than
December 31) of each year, beginning on April 30, ____, an Officer's Certificate
signed by any responsible officer of the Master Servicer, or such Eligible
Sub-Servicer who is performing the servicing duties of the Master Servicer,
dated as of December 31 (or other applicable date) of the immediately preceding
year, stating that (i) a review of the activities of the


                                       34
<PAGE>

Master Servicer, or such Eligible Sub-Servicer who is performing the servicing
duties of the Master Servicer, during the preceding 12-month period and of its
performance under this Agreement has been made under such officer's supervision,
and (ii) to such officer's knowledge, based on such review, the Master Servicer,
or such Eligible Sub-Servicer who is performing the servicing duties of the
Master Servicer, has in all material respects fulfilled all its obligations
under this Agreement throughout such period, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof.

                  (b) The Master Servicer, or such Eligible Sub-Servicer who is
performing the servicing duties of the Master Servicer, shall deliver to the
Indenture Trustee and the Owner Trustee and, in the event that such notice is
delivered by the Sub-Servicer, to the Master Servicer, promptly after having
obtained knowledge thereof, but in no event later than two (2) Business Days
thereafter, written notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become a Master Servicer
Termination Event under Section 10.1(a). The Seller or the Master Servicer shall
deliver to the Indenture Trustee, the Owner Trustee, the Master Servicer or the
Seller (as applicable) promptly after having obtained knowledge thereof, but in
no event later than two (2) Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Master Servicer Termination Event under any other
clause of Section 10.1.

            SECTION 4.11. Annual Independent Accountants' Report. (a) The Master
Servicer shall cause a firm of nationally recognized independent certified
public accountants (the "Independent Accountants"), who may also render other
services to the Master Servicer or to the Seller, to deliver to the Indenture
Trustee and the Owner Trustee on or before April 30 (or 120 days after the end
of the Master Servicer's fiscal year, if other than December 31) of each year,
beginning on April 30, ____, with respect to the twelve months ended the
immediately preceding December 31 (or other applicable date), a report to the
effect that they have examined certain documents and records relating to the
servicing of Receivables under this Agreement and each Series Supplement,
compared the information contained in the Master Servicer's Certificates
delivered pursuant to Section 4.9 during the period covered by such report with
such documents and records and that, on the basis of such examination, such
accountants are of the opinion that the servicing has been conducted in
compliance with the terms and conditions as set forth in Articles IV and V of
this Agreement and the applicable provisions of each Series Supplement, except
for such exceptions as they believe to be immaterial and such other exceptions
as shall be set forth in such statement. Such report shall acknowledge that the
Indenture Trustee shall be a "non-participating party" with respect to such
report, or words to similar effect. The Indenture Trustee shall have no duty to
make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency of such procedures.

                  (b) On or before April 30 of each calendar year, beginning
with April 30, ____, the Master Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services to
the Master Servicer or Seller) to furnish a report to the Indenture Trustee, the
Master Servicer and


                                       35
<PAGE>

each Rating Agency to the effect that they have compared the mathematical
calculations of each amount set forth in the Master Servicer's Certificates
delivered pursuant to Section 4.9 during the period covered by such report with
the Master Servicer's computer reports which were the source of such amounts and
that on the basis of such comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement.
Such report shall acknowledge that the Indenture Trustee shall be a
"non-participating party" with respect to such report, or words to similar
effect. The Indenture Trustee shall have no duty to make any independent inquiry
or investigation as to, and shall have no obligation or liability in respect of,
the sufficiency of such procedures.

            SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables. The Master Servicer shall provide to representatives of
the Indenture Trustee and the Owner Trustee reasonable access to the
documentation regarding the Receivables. In each case, such access shall be
afforded without charge but only upon reasonable request and during normal
business hours. Nothing in this Section shall derogate from the obligation of
the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors, and the failure of the Master Servicer to
provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.

            SECTION 4.13. Fidelity Bond and Errors and Omissions Policy. The
Master Servicer or such Eligible Sub-Servicer that is performing the servicing
duties of the Master Servicer, has obtained, and shall continue to maintain in
full force and effect, a Fidelity Bond and Errors and Omissions Policy of a type
and in such amount as is customary for servicers engaged in the business of
servicing automobile receivables.

                                   ARTICLE V

                         Trust Accounts; Distributions;
                Statements to Certificateholders and Noteholders

            SECTION 5.1. Establishment of Trust Accounts. (a) (i) Except as
otherwise provided with respect to a Series in the related Series Supplement,
the Master Servicer, on behalf of the Noteholders with respect to each Series,
the holders of the Series Trust Certificates of each Series and the holders of
the Owner Trust Certificates, shall establish and maintain in the name of the
Indenture Trustee, a trust account which is an Eligible Deposit Account (the
"Master Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series Noteholders with
respect to the Household Automotive Trusts, holders of the Series Trust
Certificates of each Series and the holders of the Owner Trust Certificates. The
Master Collection Account shall initially be established with the Indenture
Trustee. The Indenture Trustee shall possess all right, title and interest in
all funds on deposit from time to time in, and shall have sole dominion and
control with respect to, the Master Collection Account and in all proceeds
thereof for the benefit of the Series Noteholders, the holders of the Series
Trust Certificates of each Series and the holders of the Owner


                                       36
<PAGE>

Trust Certificates. Except as expressly provided in this Agreement, the Master
Servicer agrees that it shall have no right of setoff or banker's lien against,
and no right to otherwise deduct from, any funds held in the Master Collection
Account for any amount owed to it by the Trust.

            (ii) With respect to each Series, the Indenture Trustee shall
establish and maintain the Series Trust Accounts required to be established and
maintained pursuant to the related Series Supplement.

                  (b) Funds on deposit in the Master Collection Account and any
Series Trust Accounts (collectively, the "Trust Accounts") shall be invested by
the Indenture Trustee (or any custodian with respect to funds on deposit in any
such account) in Eligible Investments selected in writing by the Master Servicer
(pursuant to standing instructions or otherwise) which absent any instruction
shall be the investments specified in clause (d) of the definition of Eligible
Investments set forth herein. Funds on deposit in any Trust Account shall be
invested in Eligible Investments that will mature so that such funds will be
available at the close of business on the Business Day immediately preceding the
Distribution Date. Funds deposited in any Trust Account on the day immediately
preceding a Distribution Date and representing the proceeds of Eligible
Investments are required to be held overnight in an interest bearing Eligible
Deposit Account and the earnings on such overnight deposits shall be included in
Available Funds (as defined in the related Series Supplement) for the succeeding
Distribution Date. All Eligible Investments will be held to maturity.

                  (c) All investment earnings of monies deposited in the Trust
Accounts shall be deposited (or caused to be deposited) by the Indenture Trustee
in the Master Collection Account or the related Series Collection Account no
later than the close of business on the Business Day immediately preceding the
related Distribution Date, and any loss resulting from such investments shall be
charged to the Master Collection Account. The Master Servicer will not direct
the Indenture Trustee to make any investment of any funds held in any of the
Trust Accounts unless the security interest granted and perfected in such
account will continue to be perfected in such investment, in either case without
any further action by any Person, and, in connection with any direction to the
Indenture Trustee to make any such investment, if necessary, the Master Servicer
shall deliver to the Indenture Trustee an Opinion of Counsel to such effect.

                  (d) The Indenture Trustee shall not in any way be held liable
by reason of any insufficiency in any of the Trust Accounts resulting from any
loss on any Eligible Investment included therein except for losses attributable
to the Indenture Trustee's negligence or bad faith or its failure to make
payments on such Eligible Investments issued by the Indenture Trustee in its
commercial capacity as principal obligor and not as Indenture Trustee in
accordance with their terms.

                  (e) If (i) the Master Servicer shall have failed to give
investment directions for any funds on deposit in the Trust Accounts to the
Indenture Trustee by 2:00 p.m. Eastern Time (or such other time as may be agreed
by the Issuer and the Indenture Trustee) on any Business Day; or (ii) an Event
of Default shall have occurred and be


                                       37
<PAGE>

continuing with respect to a Series of Notes, the Indenture Trustee shall, to
the fullest extent practicable, invest and reinvest funds in the Trust Accounts
in one or more Eligible Investments in accordance with paragraph (b) above;
provided that, if following an Event of Default amounts are to be distributed to
Securityholders other than on a Distribution Date, investments shall mature on
the Business Day preceding any such proposed date of distribution.

                  (f) The Indenture Trustee, in its respective capacities with
respect to the various Series shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof and all such funds, investments, proceeds and income shall be part of
the Owner Trust Estate. Except as otherwise provided herein, the Trust Accounts
shall be under the sole dominion and control of the Indenture Trustee for the
benefit of the related Noteholders. If, at any time, any of the Trust Accounts
ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Master
Servicer on its behalf) shall within five Business Days (or such longer period
as to which each Rating Agency may consent) establish a new Trust Account as an
Eligible Deposit Account and shall transfer any cash and/or any investments to
such new Trust Account. In connection with the foregoing, the Master Servicer
agrees that, in the event that any of the Trust Accounts are not accounts with
the Indenture Trustee, the Master Servicer shall notify the Indenture Trustee in
writing promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account. Pursuant to the authority granted to the Master Servicer under
this Agreement, the Master Servicer shall have the revocable power, granted by
the Indenture Trustee to make withdrawals and payments from the Master
Collection Account and to instruct the Indenture Trustee to make withdrawals and
payments from the Master Collection Account for the purposes of carrying out the
Master Servicer's duties hereunder. The Master Servicer may net against any
deposits required to be made to the Master Collection Account on the Business
Day before any Determination Date amounts that the Seller, as Certificateholder
or otherwise, is entitled to receive as distributions directly or indirectly
from the Master Collection Account on such Determination Date.

            SECTION 5.2. Certain Reimbursements to the Master Servicer. The
Master Servicer shall be entitled to withhold from amounts otherwise required to
be remitted to the Master Collection Account with respect to a Collection Period
an amount in respect of funds deposited with respect to prior Collection Periods
in the Master Collection Account but later determined by the Master Servicer to
have resulted from mistaken deposits or postings or checks returned for
insufficient funds; provided, that, such withholding may be made only following
certification by the Master Servicer of such amounts and the provision of such
information to the Indenture Trustee, as may be necessary in the opinion of the
Indenture Trustee to verify the accuracy of such certification.

            SECTION 5.3. Application of Collections. All collections for the
Collection Period shall be applied by the Master Servicer as follows:

            With respect to each Simple Interest Receivable (other than a
Repurchased Receivable), payments by or on behalf of the Obligor (other than
amounts, if any,

                                       38
<PAGE>

collected with respect to administrative fees, including late fees, prepayment
fees and liquidation fees collected on the Receivable) shall be applied to
interest and principal in accordance with the Simple Interest Method. With
respect to each Actuarial Receivable, (other than a Repurchased Receivable),
payments by or on behalf of the Obligor (other than amounts, if any, collected
with respect to administrative fees, including late fees, prepayment fees and
liquidation fees collected on the Receivable) shall be applied to interest and
principal in accordance with the Actuarial Method.

            SECTION 5.4. Additional Deposits. HAFC, Household Bank and the
Seller, as applicable, shall deposit or cause to be deposited in the Master
Collection Account for distribution to the appropriate Series Collection Account
on the Business Day preceding the Determination Date following the date on which
such obligations are due the aggregate Repurchase Amount with respect to
Repurchased Receivables.

            SECTION 5.5. Distributions. (a) If, with respect to a Series,
Collected Funds are deposited in the Master Collection Account, on each
Distribution Date, the Indenture Trustee shall transfer Collected Funds with
respect to such Series Trust Estate in the respective amounts set forth in the
Master Servicer's Certificates with respect to such Series from the Master
Collection Account to the related Series Collection Account for further
application and distribution as set forth in the related Series Supplement.

                  (b) In the event that the Master Collection Account is
maintained with an institution other than the Indenture Trustee, the Master
Servicer shall instruct and cause such institution to make all deposits and
distributions pursuant to Section 5.5(a) on the related Distribution Date.

                                   ARTICLE VI

                                    RESERVED

                                  ARTICLE VII

                                    RESERVED

                                  ARTICLE VIII

                                   The Seller

            SECTION 8.1. Representations of Seller. The Seller makes the
following representations on which each Series Support Provider shall be deemed
to have relied in providing the Series Support and on which the Issuer is deemed
to have relied in acquiring the Receivables and on which the Noteholders are
deemed to have relied on in the purchasing of Notes. The representations speak
as of the execution and delivery of this Agreement and each Transfer Agreement
and as of each Transfer Date and each Series Closing Date and shall survive each
sale of the Receivables to the Issuer and each


                                       39
<PAGE>

pledge thereof to the Indenture Trustee pursuant to the Indenture and each
Series Supplement.

                  (a) Schedule of Representations. The representations and
warranties set forth on the Schedule of Eligibility Criteria attached as
Schedule I to the Series Supplement are true and correct.

                  (b) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Nevada, with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is currently conducted, and had at all relevant times, and now has, power,
authority and legal right to acquire, own and sell each Series Trust Estate
transferred to the Trust.

                  (c) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing and has obtained all
necessary licenses and approvals in all jurisdictions where the failure to do so
would materially and adversely affect Seller's ability to transfer the
Receivables and the Other Conveyed Property to the Trust pursuant to this
Agreement, or the validity or enforceability of the Series Trust Estate or to
perform Seller's obligations hereunder and under the Basic Documents to which
the Seller is a party.

                  (d) Power and Authority. The Seller has the power and
authority to execute and deliver this Agreement and its Basic Documents and to
carry out its terms and their terms, respectively; the Seller has full power and
authority to sell and assign each Series Trust Estate to be sold and assigned to
and deposited with the Trust by it and has duly authorized such sale and
assignment to the Trust by all necessary corporate action; and the execution,
delivery and performance of this Agreement and the Basic Documents to which the
Seller is a party have been duly authorized by the Seller by all necessary
corporate action.

                  (e) Valid Sale, Binding Obligations. This Agreement and each
related Transfer Agreement effects a valid sale, transfer and assignment of the
related Series Trust Estate, enforceable against the Seller and creditors of and
purchasers from the Seller; and this Agreement and the Basic Documents to which
the Seller is a party, when duly executed and delivered, shall constitute legal,
valid and binding obligations of the Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.

                  (f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Basic Documents and the fulfillment of
the terms of this Agreement and the Basic Documents shall not conflict with,
result in any breach of any of the terms and provisions of or constitute (with
or without notice, lapse of time or both) a material default under the
certificate of incorporation or by-laws of the


                                       40
<PAGE>

Seller, or any indenture, agreement, mortgage, deed of trust or other instrument
to which the Seller is a party or by which it is bound, or result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than this Agreement, or violate any law, order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or any of its properties.

                  (g) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller, before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Seller or its properties (A)
asserting the invalidity of this Agreement or any of the Basic Documents, (B)
seeking to prevent the issuance of any Securities or the consummation of any of
the transactions contemplated by this Agreement or any of the Basic Documents,
(C) seeking any determination or ruling that might materially and adversely
affect the performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement or any of the Basic Documents, or (D)
seeking to adversely affect the federal income tax or other federal, state or
local tax attributes of the Securities.

                  (h) Approvals. All approvals, authorizations, consents, orders
or other actions of any person, corporation or other organization, or of any
court, governmental agency or body or official, required in connection with the
execution and delivery by the Seller of this Agreement and the consummation of
the transactions contemplated hereby have been or will be taken or obtained on
or prior to each Series Closing Date and each Transfer Date.

                  (i) No Consents. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or authorization,
or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement which has not already been obtained.

                  (j) Chief Executive Office. The chief executive office of the
Seller is at 1111 Town Center Drive, Las Vegas, Nevada 89134.

            SECTION 8.2. Corporate Existence. (a) During the term of this
Agreement, the Seller will keep in full force and effect its existence, rights
and franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic Documents
and each other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.

                  (b) During the term of this Agreement, the Seller shall
observe the applicable legal requirements for the recognition of the Seller as a
legal entity separate and apart from its Affiliates, including as follows:


                                       41
<PAGE>

                  (i) the Seller shall not engage in any other business other
            than as provided in Article THIRD of Seller's Articles of
            Incorporation;

                  (ii) the Seller shall maintain corporate records and books of
            account separate from those of its Affiliates;

                  (iii) except as otherwise provided in this Agreement, the
            Seller shall not commingle its assets and funds with those of its
            Affiliates;

                  (iv) the Seller shall hold such appropriate meetings of its
            Board of Directors as are necessary to authorize all the Seller's
            corporate actions required by law to be authorized by the Board of
            Directors, shall keep minutes of such meetings and of meetings of
            its stockholder(s) and observe all other customary corporate
            formalities (and any successor Seller not a corporation shall
            observe similar procedures in accordance with its governing
            documents and applicable law);

                  (v) the Seller shall at all times hold itself out to the
            public under the Seller's own name as a legal entity separate and
            distinct from its Affiliates;

                  (vi) the Seller shall not become involved in the day-to-day
            management of any other Person;

                  (vii) the Seller shall not guarantee any other Person's
            obligations or advance funds to any other Person for the payment of
            expenses or otherwise;

                  (viii) the Seller shall not act as an agent of any other
            Person in any capacity;

                  (ix) the Seller shall not dissolve or liquidate, in whole or
            in part; and

                  (x) all transactions and dealings between the Seller and its
            Affiliates will be conducted on an arm's-length basis.

                  (c) During the term of this Agreement, the Seller will comply
with the limitations on its business and activities, as set forth in its
Certificate of Incorporation, and will not incur indebtedness other than
pursuant to or as expressly permitted by the Basic Documents or the Series
Related Documents with respect to each Series.

            SECTION 8.3. Liability of Seller; Indemnities. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken


                                       42
<PAGE>

under this Agreement by the Seller and the representations made by the Seller
under this Agreement.

                  (a) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Trust and the Indenture Trustee from and against
any taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated in this Agreement and any of the Basic
Documents (except any income taxes arising out of fees paid to the Owner
Trustee, the Indenture Trustee and each Series Support Provider and except any
taxes to which the Owner Trustee or the Indenture Trustee may otherwise be
subject to), including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of the Issuer,
not including any taxes asserted with respect to, federal or other income taxes
arising out of distributions on the Certificates and the Notes) and costs and
expenses in defending against the same.

                  (b) The Seller shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee against any loss, liability
or expense incurred by reason of (i) the Seller's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement
and (ii) the Seller's or the Issuer's violation of Federal or state securities
laws in connection with the offering and sale of the Notes.

                  (c) The Seller shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against any and all costs, expenses,
losses, claims, damages and liabilities arising out of, or incurred in
connection with, the acceptance or performance of the trusts and duties set
forth herein and in the Basic Documents, except to the extent that such cost,
expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Person seeking indemnification.

            Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement or the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and other expenses of
litigation. If the Seller shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Seller, without interest.

            SECTION 8.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (a) into which the Seller may be merged or
consolidated, (b) which may result from any merger or consolidation to which the
Seller shall be a party or (c) which may succeed to the properties and assets of
the Seller substantially as a whole, which Person in any of the foregoing cases
(x) has a certificate of incorporation containing provisions relating to
limitations on business and other matters substantially identical to those
contained in the Seller's certificate of incorporation and (y) executes an
agreement of assumption to perform every obligation


                                       43
<PAGE>

of the Seller under this Agreement, the other Basic Documents and the applicable
Series Related Documents shall be the successor to the Seller hereunder without
the execution or filing of any document or any further act by any of the parties
to this Agreement; provided, however, that the Rating Agency Condition shall
have been satisfied with respect to such transaction.

            SECTION 8.5. Limitation on Liability of Seller and Others. (a) The
Seller and any director or officer or employee or agent of the Seller may rely
in good faith on the written advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any matters
arising under any Basic Document. The Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability. Except as provided in Section 8.3 hereof, neither
the Seller nor any of the directors, officers, employees or agents of the Seller
acting in such capacities shall be under any liability to the Trust, the
Securityholders, any Series Support Provider or any other Person for any action
taken or for refraining from the taking of any action in good faith in such
capacities pursuant to this Agreement; provided, however, that this provision
shall not protect the Seller or any such person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.

                  (b) All obligations of the Seller under this Agreement
(including, but not limited to, repurchase and indemnification obligations) and
under any of the Basic Documents shall be limited in recourse to property, if
any, which the Seller may hold from time to time, not subject to any Lien.

            SECTION 8.6. Seller May Own Certificates or Notes. The Seller and
any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Seller or an Affiliate thereof, except as expressly provided
herein or in any Basic Document. Notes or Certificates so owned by the Seller or
such Affiliate shall have an equal and proportionate benefit under the
provisions of the Basic Documents, without preference, priority, or distinction
as among all of the Notes or Certificates; provided, however, except in the
event that all outstanding Notes and Certificates are owned by the Seller and/or
any Affiliate thereof, that any Notes or Certificates owned by the Seller or any
Affiliate thereof, during the time such Notes or Certificates are owned by them,
shall be without voting rights for any purpose set forth in the Basic Documents
and any such Notes will not be entitled to the benefits of any financial
guaranty insurance policy. The Seller shall notify the Owner Trustee and the
Indenture Trustee promptly after it or any of its Affiliates become the owner or
pledgee of a Certificate or a Note.

                                   ARTICLE IX

                               The Master Servicer


                                       44
<PAGE>

            SECTION 9.1. Representations of Master Servicer. The Master Servicer
makes the following representations on which each Series Support Provider shall
be deemed to have relied in executing and delivering the Series Support and on
which the Issuer is deemed to have relied in acquiring the Receivables and on
which the Noteholders are deemed to have relied on in the purchasing of Notes.
The representations speak as of the execution and delivery of this Agreement and
each Series Supplement, each Series Closing Date and as of each Transfer Date
and shall survive each sale of the Series Trust Estate to the Issuer and each
pledge thereof to the Indenture Trustee pursuant to the Indenture.

                  (i) Organization and Good Standing. The Master Servicer has
            been duly organized and is validly existing and in good standing
            under the laws of its jurisdiction of organization, with power,
            authority and legal right to own its properties and to conduct its
            business as such properties are currently owned and such business is
            currently conducted, and had at all relevant times, and now has,
            power, authority and legal right to enter into and perform its
            obligations under this Agreement and the other Basic Documents to
            which it is a party;

                  (ii) Due Qualification. The Master Servicer is duly qualified
            to do business as a foreign corporation in good standing and has
            obtained all necessary licenses and approvals, in all jurisdictions
            in which the ownership or lease of property or the conduct of its
            business (including the servicing of the Receivables as required by
            this Agreement) requires or shall require such qualification; except
            where the failure to qualify or obtain licenses or approvals would
            not have a material adverse effect on its ability to perform its
            obligations as Master Servicer under this Agreement and the other
            Basic Documents to which it is a party;

                  (iii) Power and Authority. The Master Servicer has the power
            and authority to execute and deliver this Agreement and its Basic
            Documents and to carry out its terms and their terms, respectively,
            and the execution, delivery and performance of this Agreement and
            the Basic Documents to which the Master Servicer is a party have
            been duly authorized by the Master Servicer by all necessary
            corporate action;

                  (iv) Binding Obligation. This Agreement and the Basic
            Documents to which the Master Servicer is a party shall constitute
            legal, valid and binding obligations of the Master Servicer
            enforceable in accordance with their respective terms, except as
            enforceability may be limited by bankruptcy, insolvency,
            reorganization, or other similar laws affecting the enforcement of
            creditors' rights generally and by equitable limitations on the


                                       45
<PAGE>

            availability of specific remedies, regardless of whether such
            enforceability is considered in a proceeding in equity or at law;

                  (v) No Violation. The consummation of the transactions
            contemplated by this Agreement and the Basic Documents to which the
            Master Servicer is a party, and the fulfillment of the terms of this
            Agreement and the Basic Documents to which the Master Servicer is a
            party, shall not conflict with, result in any breach of any of the
            terms and provisions of, or constitute (with or without notice or
            lapse of time) a material default under, the articles of
            incorporation or bylaws of the Master Servicer, or any indenture,
            agreement, mortgage, deed of trust or other instrument to which the
            Master Servicer is a party or by which it is bound, or result in the
            creation or imposition of any Lien upon any of its properties
            pursuant to the terms of any such indenture, agreement, mortgage,
            deed of trust or other instrument, other than this Agreement, or
            violate any law, order, rule or regulation applicable to the Master
            Servicer of any court or of any federal or state regulatory body,
            administrative agency or other governmental instrumentality having
            jurisdiction over the Master Servicer or any of its properties, or
            any way materially adversely affect the interest of the Noteholders
            or the Trust in any Receivable or affect the Master Servicer's
            ability to perform its obligations under this Agreement;

                  (vi) No Proceedings. There are no proceedings or
            investigations pending or, to the Master Servicer's knowledge,
            threatened against the Master Servicer, before any court, regulatory
            body, administrative agency or other tribunal or governmental
            instrumentality having jurisdiction over the Master Servicer or its
            properties (A) asserting the invalidity of this Agreement or any of
            the Basic Documents, (B) seeking to prevent the issuance of the
            Securities or the consummation of any of the transactions
            contemplated by this Agreement or any of the Basic Documents, or (C)
            seeking any determination or ruling that might materially and
            adversely affect the performance by the Master Servicer of its
            obligations under, or the validity or enforceability of, this
            Agreement or any of the Basic Documents or (D) seeking to adversely
            affect the federal income tax or other federal, state or local tax
            attributes of the Securities;

                  (vii) Approvals. All approvals, authorizations, consents,
            orders or other actions of any person, corporation or other
            organization, or of any court, governmental agency or body or
            official, required in connection with the execution and delivery by
            the Master Servicer of this Agreement and the consummation of


                                       46
<PAGE>

            the transactions contemplated hereby have been or will be taken or
            obtained on or prior to the Series Closing Date.

                  (viii) No Consents. The Master Servicer is not required to
            obtain the consent of any other party or any consent, license,
            approval or authorization, or registration or declaration with, any
            governmental authority, bureau or agency in connection with the
            execution, delivery, performance, validity or enforceability of this
            Agreement which has not already been obtained.

                  (ix) Chief Executive Office. The chief executive office of the
            Master Servicer is located at 2700 Sanders Road, Prospect Heights,
            Illinois 60070.

            SECTION 9.2. Liability of Master Servicer; Indemnities. (a) The
Master Servicer (in its capacity as such) shall be liable hereunder only to the
extent of the obligations in this Agreement specifically undertaken by the
Master Servicer and the representations made by the Master Servicer.

                  (b) The Master Servicer shall defend, indemnify and hold
harmless the Trust, the Indenture Trustee, the Owner Trustee and their
respective officers, directors, agents and employees, from and against any and
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation arising out
of or resulting from the use, ownership or operation of, or lien on, any
Financed Vehicle;

                  (c) The Master Servicer (when the Master Servicer is Household
or an Affiliate of Household Finance Corporation) shall indemnify, defend and
hold harmless the Trust, the Indenture Trustee, the Owner Trustee and their
respective officers, directors, agents and employees and from and against any
taxes that may at any time be asserted against any of such parties with respect
to the transactions contemplated in this Agreement, including, without
limitation, any sales, gross receipts, tangible or intangible personal property,
privilege or license taxes (but not including any Federal or other income taxes,
including franchise taxes asserted with respect to, and as of the date of, the
sale of the Receivables and the Other Conveyed Property to the Trust or the
issuance and original sale of any Series of the Notes) and costs and expenses in
defending against the same, except to the extent that such costs, expenses,
losses, damages, claims and liabilities arise out of the negligence or willful
misconduct of such parties;

            The Master Servicer (when the Master Servicer is not Household
Finance Corporation) shall indemnify, defend and hold harmless the Trust, the
Indenture Trustee, the Owner Trustee and their respective officers, directors,
agents and employees from and against any taxes with respect to the sale of
Receivables in connection with servicing hereunder that may at any time be
asserted against any of such parties with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales, gross
receipts, tangible or intangible personal property, privilege or license taxes
(but not including any Federal or other income taxes, including franchise taxes
asserted with


                                       47
<PAGE>

respect to, and as of the date of, the sale of the Series Trust Estate to the
Trust or the issuance and original sale of the Securities) and costs and
expenses in defending against the same; and

                  (d) The Master Servicer shall indemnify, defend and hold
harmless the Trust, the Indenture Trustee, the Owner Trustee, each Series
Support Provider and their respective officers, directors, agents and employees
from and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Trust or the Indenture Trustee
by reason of the breach of this Agreement by the Master Servicer, the
negligence, misfeasance, or bad faith of the Master Servicer in the performance
of its duties under this Agreement or any Series Supplement or by reason of
reckless disregard of its obligations and duties under this Agreement or any
Series Supplement, except to the extent that such costs, expenses, losses,
damages, claims, and liabilities arise out of the negligence or willful
misconduct of the Person seeking indemnification.

                  (e) The Master Servicer (when the Master Servicer is Household
or an Affiliate of Household) shall indemnify, defend and hold harmless the
Trust, the Indenture Trustee, the Owner Trustee and their respective officers,
directors, agents and employees from and against any loss, liability or expense
incurred by reason of the violation by Master Servicer of Federal or state
securities laws in connection with the registration or the sale of the
Securities, except to the extent that such costs, expenses, losses, damages,
claims, and liabilities arise out of the negligence or willful misconduct of
such parties.

                  (f) Indemnification under this Article shall survive the
termination of this Agreement and will survive the early resignation or removal
of any of the parties hereto and shall include, without limitation, reasonable
fees and expenses of counsel and expenses of litigation. If the Master Servicer
has made any indemnity payments pursuant to this Article and the recipient
thereafter collects any of such amounts from others, the recipient shall
promptly repay such amounts collected to the Master Servicer, without interest.
Notwithstanding any other provision of this Agreement, the obligations of the
Master Servicer shall not terminate or be deemed released upon the resignation
or termination of Household Finance Corporation as the Master Servicer and shall
survive any termination of this Agreement.

            SECTION 9.3. Merger or Consolidation of, or Assumption of the
Obligations of the Master Servicer. (a) Any Person (i) into which the Master
Servicer may be merged or consolidated, (ii) resulting from any merger or
consolidation to which the Master Servicer shall be a party, (iii) which
acquires by conveyance, transfer, or lease substantially all of the assets of
the Master Servicer, or (iv) succeeding to the business of the Master Servicer,
in any of the foregoing cases shall execute an agreement of assumption to
perform every obligation of the Master Servicer under this Agreement and each
Basic Document and Series Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Master Servicer under this
Agreement and each Basic Document and Series Related Document without the


                                       48
<PAGE>

execution or filing of any paper or any further act on the part of any of the
parties to this Agreement and each Series Supplement, anything in this Agreement
and each Series Supplement to the contrary notwithstanding. Notwithstanding the
foregoing, the initial Master Servicer shall not merge or consolidate with any
other Person or permit any other Person to become a successor to the Master
Servicer's business, unless (x) the Master Servicer shall have delivered to the
Owner Trustee, the Rating Agencies and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
9.3(a) and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (y) the Rating Agency
Condition shall have been satisfied with respect to such assignment or
succession.

            SECTION 9.4. Limitation on Liability of Master Servicer and Others.
(a) Neither the Master Servicer, the Indenture Trustee nor any of the directors
or officers or employees or agents of the Master Servicer or the Indenture
Trustee shall be under any liability to the Trust, except as provided in this
Agreement and each Basic Document or Series Related Document, for any action
taken or for refraining from the taking of any action pursuant to this Agreement
and each Basic Document or Series Related Document; provided, however, that this
provision shall not protect the Master Servicer, the Indenture Trustee or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (excluding errors in judgment) in
the performance of duties (including negligence with respect to the Master
Servicer's indemnification obligations hereunder), by reason of reckless
disregard of obligations and duties under this Agreement and each Basic Document
or Series Related Document or any violation of law by the Master Servicer, the
Indenture Trustee or such person, as the case may be; provided, further, that
this provision shall not affect any liability to indemnify the Indenture Trustee
and the Owner Trustee for costs, taxes, expenses, claims, liabilities, losses or
damages paid by the Indenture Trustee and the Owner Trustee, in their individual
capacities. The Master Servicer, the Indenture Trustee and any director,
officer, employee or agent of the Master Servicer may rely in good faith on the
written advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement. The Indenture Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure of
risk of such funds or incurrence of financial liability.

                  (b) Notwithstanding anything herein to the contrary, the
Indenture Trustee shall not be liable for any obligation of the Master Servicer
contained in this Agreement and each Basic Document and Series Related Document,
and the Owner Trustee, the Seller and the Noteholders shall look only to the
Master Servicer to perform such obligations.

                  (c) The parties expressly acknowledge and consent to [Name of
Indenture Trustee] acting in the potential dual capacity of successor Master
Servicer and


                                       49
<PAGE>

in the capacity as Indenture Trustee. [Name of Indenture Trustee] may, in such
dual or other capacity, discharge its separate functions fully, without
hindrance or regard to conflict of interest principles, duty of loyalty
principles or other breach of fiduciary duties to the extent that any such
conflict or breach arises from the performance by [Name of Indenture Trustee] of
express duties set forth in this Agreement in any of such capacities, all of
which defenses, claims or assertions are hereby expressly waived by the other
parties hereto and the Noteholders except in the case of negligence and willful
misconduct by [Name of Indenture Trustee].

            SECTION 9.5. Delegation of Duties. In the ordinary course of
business, the Master Servicer at any time may delegate any of its duties
hereunder to any Person, including any of its Affiliates, who agrees to conduct
such duties in accordance with standards employed by the Master Servicer in
compliance with Section 4.1. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 9.6. The Master
Servicer shall provide each Rating Agency and the Indenture Trustee with written
notice prior to the delegation of any of its duties to any Person other than any
of the Master Servicer's Affiliates or their respective successors and assigns.

            SECTION 9.6. Master Servicer Not to Resign. Subject to the
provisions of Section 9.3, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon determination that
the performance of its obligations or duties hereunder are no longer permissible
under applicable law or are in material conflict by reason of applicable law
with any other activities carried on by it or its subsidiaries or Affiliates,
the other activities of the Master Servicer so causing such a conflict being of
a type and nature carried on by the Master Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Master Servicer has proposed a successor servicer
to the Indenture Trustee in writing and such proposed successor servicer is
reasonably acceptable to the Indenture Trustee; (b) the Rating Agency shall have
delivered a letter to the Indenture Trustee stating that the appointment of such
proposed successor servicer as Master Servicer hereunder will satisfy the Rating
Agency Condition; and (c) such proposed successor servicer has agreed in writing
to assume the obligations of Master Servicer hereunder and under each relevant
Basic Document and Series Related Document and (d) the Master Servicer has
delivered to the Indenture Trustee an Opinion of Counsel to the effect that all
conditions precedent to the resignation of the Master Servicer and the
appointment of and acceptance by the proposed successor servicer have been
satisfied; provided, however, that, in the case of clause (i) above, no such
resignation by the Master Servicer shall become effective until the Indenture
Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Indenture Trustee shall have designated a successor
servicer in accordance with Section 10.3 which shall have assumed such
responsibilities and obligations. Any such resignation shall not relieve the
Master Servicer of responsibility for any of the obligations specified in
Sections 10.1 and 10.3 as obligations that survive the resignation or
termination of the Master Servicer. Any such determination permitting the
resignation of the Master Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee.


                                       50
<PAGE>

            SECTION 9.7. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers. The Master Servicer may enter into agreements for any
subservicing and administration of Receivables with any institution which is an
Eligible Subservicer and is in compliance with the laws of each state necessary
to enable it to perform the obligations of the Master Servicer pursuant to this
Agreement. The Master Servicer initially appoints HAFC to subservice the
Receivables. For purposes of this Agreement and each Basic Document and Series
Related Document, the Master Servicer shall be deemed to have received payments
on Receivables when any Sub-Servicer has received such payments. Any such
agreement shall be consistent with and not violate the provisions of this
Agreement. The Master Servicer shall not be relieved of its obligations under
this Agreement and each Basic Document and Series Related Document
notwithstanding any agreement relating to subservicing and the Master Servicer
shall be obligated to the same extent and under the same terms and conditions as
if it alone were servicing and administering the Receivables. The Issuer shall
have no liability to the Master Servicer except for payment of the Servicing Fee
and reimbursement of repossession and liquidation expenses. The Issuer shall
have no obligation to indemnify the Master Servicer for costs or expenses,
except with respect to the preceding sentence. The parties hereto acknowledge
that with respect to statements or certificates required to be delivered by the
Master Servicer in accordance with this Agreement and each Series Supplement,
including, but not limited to, Sections 4.9, 4.10 and 4.11 hereof, that a
statement or certificate delivered by the Sub-Servicer shall be sufficient to
discharge the Master Servicer's obligation to deliver such certificate or
statement.

            SECTION 9.8. Successor Sub-Servicers. The Master Servicer may
terminate any Sub-Servicer and either directly service the related Receivables
itself or enter into an agreement with a successor Sub-Servicer that is an
Eligible Sub-Servicer. None of the Owner Trustee or the Indenture Trustee shall
have no duty or obligation to monitor or supervise the performance of any
Sub-Servicer.

                                   ARTICLE X

                                     Default

            SECTION 10.1. Master Servicer Termination Event. For purposes of
this Agreement, each of the following shall constitute a "Master Servicer
Termination Event", but shall only constitute a Master Servicer Termination
Event with respect to the Series and the related Series Trust Estates with
respect to which such event arose:

                  (a) Any failure by the Master Servicer to deliver, or cause to
be delivered, to the Indenture Trustee for distribution pursuant to the terms of
this Agreement any proceeds or payment required to be so delivered under the
terms of this Agreement (including deposits of the Repurchase Amount pursuant to
Section 3.2 and Section 4.7) that continues unremedied for a period of five
Business Days after written notice is received by the Master Servicer from the
Indenture Trustee or after discovery of such failure by a responsible Officer of
the Master Servicer (but in no event later than five Business Days after the
Master Servicer is required to make such delivery or deposit);


                                       51
<PAGE>

                  (b) Failure on the part of the Master Servicer duly to observe
or perform any other covenants or agreements of the Master Servicer set forth in
this Agreement and each Basic Document or Series Related Document, which failure
(i) materially and adversely affects the rights of Noteholders of a Series
(determined without regard to the availability of funds under any Series
Support) and (ii) continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Indenture Trustee;

                  (c) The entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Master Servicer in an
involuntary case under the federal bankruptcy laws, as now or hereafter in
effect, or another present or future, federal bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Master Servicer or of any
substantial part of its property or ordering the winding up or liquidation of
the affairs of the Master Servicer or the commencement of an involuntary case
under the federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law and
such case is not dismissed within 60 days; or

                  (d) The commencement by the Master Servicer of a voluntary
case under the Federal bankruptcy laws, as now or hereafter in effect, or any
other present or future, Federal or state, bankruptcy, insolvency or similar
law, or the consent by the Master Servicer to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Master Servicer or of any substantial part of
its property or the making by the Master Servicer of an assignment for the
benefit of creditors or the failure by the Master Servicer generally to pay its
debts as such debts become due or the taking of corporate action by the Master
Servicer in furtherance of any of the foregoing; or

                  (e) Any representation, warranty or certification of the
Master Servicer made in this Agreement or any Series Supplement or any
certificate, report or other writing delivered pursuant hereto or thereto shall
prove to be incorrect in any material respect as of the time when the same shall
have been made, and the incorrectness of such representation, warranty or
statement has a material adverse effect on the interests of the Trust in the
related Series Trust Estate and, within 60 days after written notice thereof
shall have been given to the Master Servicer by the Indenture Trustee the
circumstances or condition in respect of which such representation, warranty or
statement was incorrect shall not have been eliminated or otherwise cured; or

                  (f) Notwithstanding the foregoing, a delay in or failure of
performance under Section 10.1(a) for a period of five Business Days or under
Section 10.1(b) for a period of 60 days, shall not constitute a Master Servicer
Termination Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and such delay or
failure was caused by an act of God, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence


                                       52
<PAGE>

shall not relieve the Master Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of this Agreement,
and the Master Servicer shall provide the Indenture Trustee and the Seller with
an Officers' Certificate giving prompt notice of such failure or delay by it,
together with a description of its efforts to so perform its obligations.

            SECTION 10.2. Consequences of a Master Servicer Termination Event.
If a Master Servicer Termination Event shall occur and be continuing, the
Indenture Trustee (to the extent a Trust Officer of the Indenture Trustee has
actual knowledge thereof), by notice given in writing to the Master Servicer may
terminate all of the rights and obligations of the Master Servicer under this
Agreement and the other Basic Documents as they relate to a Series and a Series
Trust Estate out of which such Master Servicer Termination Event arose. On or
after the receipt by the Master Servicer of such written notice, all authority,
power, obligations and responsibilities of the Master Servicer under this
Agreement, whether with respect to the Notes or the Other Conveyed Property or
otherwise, automatically shall pass to, be vested in, and become obligations and
responsibilities, of the Indenture Trustee (or such other successor Master
Servicer appointed by Indenture Trustee pursuant to Section 10.3); provided,
however, that the successor Master Servicer shall (i) have no liability with
respect to any obligation which was required to be performed by the terminated
Master Servicer prior to the date that the successor Master Servicer becomes the
Master Servicer or any claim of a third party based on any alleged action or
inaction of the terminated Master Servicer, (ii) no obligation to perform any
repurchase or advancing obligations, if any, of the terminated Master Servicer,
(iii) no obligation to pay any of the fees and expenses of any other party
involved in this transaction not expressly assumed by the Master Servicer and
(iv) no liability or obligation with respect to any Master Servicer
indemnification obligations of any prior master servicer including the original
master servicer.

            Notwithstanding anything contained in this Agreement to the
contrary, [Name of Indenture Trustee] ("_________"), as successor Master
Servicer, is authorized to accept and rely on all of the accounting, records
(including computer records) and work of the prior Master Servicer relating to
the Receivables (collectively, the "Predecessor Servicer Work Product") without
any audit or other examination thereof, and "_________" shall have no duty,
responsibility, obligation or liability for the acts and omissions of the prior
Master Servicer. If any error, inaccuracy, omission or incorrect or non-standard
practice or procedure (collectively, "Errors") exist in any Predecessor Servicer
Work Product and such Errors make it materially more difficult to service or
should cause or materially contribute to "_________" making or continuing any
Errors (collectively, "Continued Errors"), "_________" shall have no duty,
responsibility, obligation or liability for such Continued Errors; provided,
however, that "_________" agrees to use its best efforts to prevent further
Continued Errors. In the event that "_________" becomes aware of Errors or
Continued Errors, "_________" shall, with the prior consent of the Noteholders
representing 66-2/3% of the outstanding Notes, use its best efforts to
reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors;
provided, however, that such Holders shall have offered to "______" reasonable


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<PAGE>

indemnity against the costs, expenses and liabilities to be incurred in
connection with such reconstruction and reconciliation.

            The successor Master Servicer is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated Master Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Series Trust Estate and related documents to
show the Trust as lienholder or secured party on the related Lien Certificates,
or otherwise. The terminated Master Servicer agrees to cooperate with the
successor Master Servicer in effecting the termination of the responsibilities
and rights of the terminated Master Servicer under this Agreement as they relate
to the Series Trust Estate with respect to which such termination has been
effected , including, without limitation, the transfer to the successor Master
Servicer for administration by it of all cash amounts that shall at the time be
held by the terminated Master Servicer for deposit, or have been deposited by
the terminated Master Servicer, in the Master Collection Account or thereafter
received with respect to the Receivables in the subject Series Trust Estate and
the delivery to the successor Master Servicer of all Receivable Files, Monthly
Records and Collection Records and a computer tape in readable form as of the
most recent Business Day containing all information necessary to enable the
successor Master Servicer to service such Series Trust Estate. If requested by
the Indenture Trustee, the successor Master Servicer shall direct the Obligors
to make all payments under the Receivables directly to the successor Master
Servicer (in which event the successor Master Servicer shall process such
payments in accordance with Section 4.2(d)). The terminated Master Servicer
shall grant the Indenture Trustee and the successor Master Servicer reasonable
access to the terminated Master Servicer's premises at the terminated Master
Servicer's expense.

            SECTION 10.3. Appointment of Successor. (a) On and after the time
the Master Servicer receives a notice of termination pursuant to Section 10.2 or
upon the resignation of the Master Servicer pursuant to Section 9.6, the Master
Servicer shall continue to perform all servicing functions under this Agreement
until the date specified in such termination notice or until such resignation
becomes effective or until a date mutually agreed upon by the Master Servicer
and the Indenture Trustee. The Indenture Trustee shall as promptly as possible
after such termination or resignation appoint an Eligible Servicer as a
successor servicer (the "Successor Master Servicer"), and such Successor Master
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Indenture Trustee. In the event that a Successor Master
Servicer has not been appointed or has not accepted its appointment at the time
when the Master Servicer ceases to act as Master Servicer, the Indenture Trustee
without further action shall automatically be appointed the Successor Master
Servicer. The Indenture Trustee may delegate any of its servicing obligations to
an Affiliate or agent in accordance with Section 9.5. Notwithstanding the
foregoing, the Indenture Trustee shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any established
institution qualifying as an Eligible Servicer as the Successor Master Servicer
hereunder. The Indenture Trustee shall give prompt notice to each Rating Agency
upon the appointment of a Successor Master Servicer. The Indenture Trustee or
the Successor


                                       54
<PAGE>

Master Servicer, as the case may be, shall be the successor in all respects to
the Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement, and shall be subject
to all the rights, responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Master Servicer by the
terms and provisions of this Agreement, except as otherwise stated herein. The
Indenture Trustee or the Successor Master Servicer, as the case may be, shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Successor Master Servicer shall be subject
to termination under Section 10.2 upon the occurrence of any Master Servicer
Termination Event applicable to it as Master Servicer.

                  (b) Subject to Section 9.6, no provision of this Agreement
shall be construed as relieving the Indenture Trustee of its obligation to
succeed as Successor Master Servicer upon the termination of the Master Servicer
pursuant to Section 10.2 or the resignation of the Master Servicer pursuant to
Section 9.6.

                  (c) Any Successor Master Servicer shall be entitled to such
compensation (whether payable out of the Master Collection Account or otherwise)
equal to the compensation the Master Servicer would have been entitled to under
this Agreement if the Master Servicer had not resigned or been terminated
hereunder. In addition, any Successor Master Servicer shall be entitled to
reasonable transition expenses incurred in acting as Successor Master Servicer
payable by the outgoing Master Servicer, and to the extent such transition
expenses have not been paid by the outgoing Master Servicer, such Successor
Master Servicer shall be entitled to reimbursement for such reasonable expenses
pursuant to the related Series Supplement.

            SECTION 10.4. Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Master Servicer
or the Indenture Trustee shall give prompt written notice thereof to each
Noteholder.

            SECTION 10.5. Waiver of Past Defaults. A majority of the Noteholders
may, on behalf of all Securityholders, waive any default by the Seller or the
Master Servicer in the performance of their obligations hereunder and its
consequences, except the failure to make any distributions required to be made
to Noteholders or to make any required deposits of any amounts to be so
distributed. Upon any such waiver of a past default, such default shall cease to
exist, and any default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.

            SECTION 10.6. Successor to Master Servicer. (a) The Indenture
Trustee, in its capacity as successor to the Master Servicer, shall perform such
duties and only such duties as are specifically set forth in this Agreement and
each Basic Document and Series Related Document with respect to the assumption
of any servicing duties and no implied covenants or obligations shall be read
into this Agreement against the Indenture Trustee.


                                       55
<PAGE>

                  (b) In the absence of bad faith or negligence on its part, the
Indenture Trustee may conclusively rely as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Indenture Trustee and conforming to the requirements of this
Agreement and each Series Supplement; but in the case of any such certificates
or opinions, which by any provision hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture Trustee shall be under a duty
to examine the same and to determine whether or not they conform to the
requirements of this Agreement and each Series Supplement.

                  (c) The Indenture Trustee shall have no liability for any
actions taken or omitted by the terminated Master Servicer.

                                   ARTICLE XI

                                   Termination

            SECTION 11.1. Optional Purchase of All Receivables. (a) To the
extent and under the circumstances provided in a Series Supplement, the Master
Servicer and the Seller each shall have the option to purchase the related
Series Trust Estate, other than the Trust Accounts; provided, however, that the
amount to be paid for such purchase shall be sufficient to pay the full amount
of principal and interest then due and payable on the Notes of such Series and
all other amounts due to the Series Securityholders, the Indenture Trustee and
Owner Trustee under the related Series Supplement. To exercise such option, the
Master Servicer or the Seller, as the case may be, shall deposit pursuant to
Section 5.3 in the Master Collection Account an amount equal to the aggregate
Repurchase Amount for the related Receivables, plus the appraised value of any
other property constituting such Series Trust Estate, such value to be
determined by an appraiser mutually agreed upon by the Master Servicer and the
Trust, and shall succeed to all interests in and to the related Series Trust
Estate.

                  (b) Upon any sale of the assets of the Trust pursuant to
Article IV of the Indenture , the Master Servicer shall instruct the Indenture
Trustee to deposit the proceeds from such sale after all payments and reserves
therefrom (including the expenses of such sale) have been made (the "Insolvency
Proceeds") in the Master Collection Account.

                  (c) Notice of any termination of the Trust shall be given by
the Master Servicer to the Owner Trustee, the Indenture Trustee and the Rating
Agencies as soon as practicable after the Master Servicer has received notice
thereof.

                  (d) Following the satisfaction and discharge of the Indenture,
the payment in full of the principal of and interest on the Notes, the
termination of any Series Support (as provided therein) and the surrender of any
Series Support to the Series Support Provider, the Certificateholders will
succeed to the rights of the Noteholders hereunder and the Owner Trustee will
succeed to the rights of, and assume the obligations of, the Indenture Trustee
pursuant to this Agreement.


                                       56
<PAGE>

                                   ARTICLE XII

                  Administrative Duties of the Master Servicer

            SECTION 12.1. Administrative Duties.

                  (a) Duties with Respect to the Indenture. The Master Servicer
shall perform all its duties and the duties of the Issuer under the Indenture.
In addition, the Master Servicer shall consult with the Owner Trustee as the
Master Servicer deems appropriate regarding the duties of the Issuer under the
Indenture. The Master Servicer shall monitor the performance of the Issuer and
shall advise the Owner Trustee when action is necessary to comply with the
Issuer's duties under the Indenture. The Master Servicer shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture. In furtherance of the foregoing, the Master Servicer
shall take all necessary action that is the duty of the Issuer to take pursuant
to the Indenture, including, without limitation, pursuant to Sections 2.7, 3.4,
3.5, 3.6, 3.7, 3.9, 3.10, 3.17, 5.1, 5.4, 7.3, 8.3, 9.2, 9.3, 11.1 and 11.15 of
the Indenture.

                  (b) Duties with Respect to the Issuer.

                        (i) In addition to the duties of the Master Servicer set
                  forth in this Agreement or any of the Basic Documents, the
                  Master Servicer shall perform such calculations and shall
                  prepare for execution by the Issuer or the Owner Trustee or
                  shall cause the preparation by other appropriate Persons of
                  all such documents, reports, filings, instruments,
                  certificates and opinions as it shall be the duty of the
                  Issuer or the Owner Trustee to prepare, file or deliver
                  pursuant to this Agreement or any of the Basic Documents or
                  under state and Federal tax and securities laws, and at the
                  request of the Owner Trustee shall take all appropriate action
                  that it is the duty of the Issuer to take pursuant to this
                  Agreement or any of the Basic Documents, including, without
                  limitation, pursuant to Sections 2.6 and 2.11 of the Trust
                  Agreement. In accordance with the directions of the Issuer or
                  the Owner Trustee, the Master Servicer shall administer,
                  perform or supervise the performance of such other activities
                  in connection with the Trust Property (including the Basic
                  Documents) as are not covered by any of the foregoing
                  provisions and as are expressly requested by the Issuer or the
                  Owner Trustee and are reasonably within the capability of the
                  Master Servicer.

                        (ii) Notwithstanding anything in this Agreement or any
                  of the Basic Documents to the contrary, the Master Servicer
                  shall be responsible for promptly notifying the Owner Trustee
                  and the Indenture Trustee in the event that any withholding
                  tax is imposed


                                       57
<PAGE>

                  on the Issuer's payments (or allocations of income) to a
                  Certificateholder (as defined in the Trust Agreement) as
                  contemplated by this Agreement. Any such notice shall be in
                  writing and specify the amount of any withholding tax required
                  to be withheld by the Owner Trustee and the Indenture Trustee
                  pursuant to such provision.

                        (iii) Notwithstanding anything in this Agreement or the
                  Basic Documents to the contrary, the Master Servicer shall be
                  responsible for performance of the duties of the Issuer or the
                  Seller set forth in Section 5.1(a), (b), (c) and (d) of the
                  Trust Agreement with respect to, among other things,
                  accounting and reports to Owners (as defined in the Trust
                  Agreement); provided, however, that once prepared by the
                  Master Servicer, the Depositor shall retain responsibility
                  under Section 5.1(b) of the Trust Agreement for the
                  distribution of the Schedule K-1s necessary to enable each
                  Certificateholder to prepare its Federal and state income tax
                  returns.

                        (iv) The Master Servicer shall perform the duties of the
                  Depositor specified in Section 10.2 of the Trust Agreement
                  required to be performed in connection with the resignation or
                  removal of the Owner Trustee, and any other duties expressly
                  required to be performed by the Master Servicer under this
                  Agreement or any of the Basic Documents.

                        (v) The Master Servicer, on behalf of the Seller, shall
                  direct the Issuer to request the tender of all or a portion of
                  the Notes of any Series in accordance with the Indenture or
                  any Series Supplement.

                        (vi) In carrying out the foregoing duties or any of its
                  other obligations under this Agreement, the Master Servicer
                  may enter into transactions with or otherwise deal with any of
                  its Affiliates; provided, however, that the terms of any such
                  transactions or dealings shall be in accordance with any
                  directions received from the Issuer and shall be, in the
                  Master Servicer's opinion, no less favorable to the Issuer in
                  any material respect.

                  (c) Tax Matters. The Master Servicer shall prepare and file,
or cause to be prepared and filed, on behalf of the Seller, all tax returns, tax
elections, financial statements and such annual or other reports of the Issuer
as are necessary for preparation of tax reports as provided in Article V of the
Trust Agreement, including without limitation forms 1099 and 1066. All tax
returns will be signed by the Seller.

                  (d) Non-Ministerial Matters. With respect to matters that in
the reasonable judgment of the Master Servicer are non-ministerial, the Master
Servicer shall


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<PAGE>

not take any action pursuant to this Article XII unless within a reasonable time
before the taking of such action, the Master Servicer shall have notified the
Owner Trustee and the Indenture Trustee of the proposed action and the Owner
Trustee and the Indenture Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:

      (A)   the initiation of any claim or lawsuit by the Issuer and the
            compromise of any action, claim or lawsuit brought by or against the
            Issuer (other than in connection with the collection of the
            Receivables);

      (B)   the appointment of successor Note Registrars, successor Note Paying
            Agents and successor Indenture Trustees pursuant to the Indenture or
            the consent to the assignment by the Note Registrar, Note Paying
            Agent or Indenture Trustee of its obligations under the Indenture;
            and

      (C)   the removal of the Indenture Trustee.

                  (e) Exceptions. Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Master Servicer, in its capacity hereunder, shall not be
obligated to, and shall not, (1) make any payments to the Noteholders or
Certificateholders under the Basic Documents, (2) sell any Trust Property
pursuant to Section 4.03 of the Series ______ Supplement, (3) take any other
action that the Issuer directs the Master Servicer not to take on its behalf or
(4) in connection with its duties hereunder assume any indemnification
obligation of any other Person.

                  (f) The Indenture Trustee shall not be responsible for any
obligations or duties of the Master Servicer under Section 12.1.

                  SECTION 12.2. Records. The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Agreement, which books of account and records shall be accessible for
inspection by the Issuer and the Indenture Trustee at any time during normal
business hours.

                  SECTION 12.3. Additional Information to be Furnished to the
Issuer. The Master Servicer shall furnish to the Issuer and the Indenture
Trustee from time to time such additional information regarding any Series Trust
Estate as the Issuer and the Indenture Trustee shall reasonably request.

                                  ARTICLE XIII

                            Miscellaneous Provisions

            SECTION 13.1. Amendments. (a) This Agreement may be amended by the
parties hereto at any time when no Series of Securities or commitment to
purchase a Series of Securities is outstanding without the requirement of any
consents or the satisfaction of any conditions set forth below.


                                       59
<PAGE>

                  (b) Except as otherwise provided with respect to a Series in a
Series Supplement, this Agreement may be amended from time to time by the
parties hereto, by a written instrument signed by each of the parties hereto,
without the consent of any of the Securityholders, provided that (i) an Opinion
of Counsel for the Seller (which Opinion of Counsel may, as to factual matters,
rely upon officers' certificates of the Seller or the Master Servicer) is
addressed and delivered to the Indenture Trustee, dated the date of any such
amendment, to the effect that the conditions precedent to any such amendment
have been satisfied and (ii) the Seller shall have delivered to the Indenture
Trustee and each Rating Agency, an Officer's Certificate dated the date of any
such Amendment, stating that the Seller reasonably believes that such amendment
will not have a material adverse effect on the rights of the Noteholders.

                  (c) Except as otherwise provided with respect to a Series in a
Series Supplement, this Agreement may also be amended from time to time by the
Servicer, the Seller and the Indenture Trustee, with the consent of the
Noteholders evidencing in each case not less than a majority of the outstanding
principal amount of the Notes of each affected Series for which the Seller has
not delivered an Officer's Certificate stating that there is no adverse effect
on the rights of Noteholders of each Series, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Securityholders;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of or delay the timing of any distributions to be made to Securityholders
or deposits of amounts to be so distributed or the amount available under any
Series Support without the consent of each affected Securityholder, (ii) change
the definition of or the manner of calculating the interest of any
Securityholder without the consent of each affected Securityholder, (iii) reduce
the aforesaid percentage required to consent to any such amendment without the
consent of each Securityholder or (iv) adversely affect any rating of a Series
by each Rating Agency without the consent of the Noteholders evidencing not less
than a majority of the outstanding principal amount of the outstanding Notes of
such Series.

            Promptly after the execution of any such amendment or supplement,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or supplement to each Securityholder.

            It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents (and any other consents
of Noteholders or Certificateholders provided for in this Agreement) and of
evidencing the authorization of any action by Noteholders or Certificateholders
shall be subject to such reasonable requirements as the Indenture Trustee or the
Owner Trustee, as applicable, may prescribe, including the establishment of
record dates.

            The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any amendment which affects the Issuer's, the Owner
Trustee's or


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<PAGE>

the Indenture Trustee's, as applicable, own rights, duties or immunities under
this Agreement or otherwise.

            Prior to the execution of any amendment to this Agreement, the
Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement and that all conditions precedent to the execution and
delivery of such amendment have been satisfied.

            SECTION 13.2. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the interests of the Indenture Trustee on behalf of the related
Series Securityholders in the related Series Trust Estate and in the proceeds
thereof.

                  (b) Neither the Seller nor the Master Servicer shall change
its name, identity or corporate structure in any manner that would, could or
might make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the meaning of ss. 9-402(7)
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least thirty days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.

                  (c) Each of the Seller and the Master Servicer shall have an
obligation to give the Owner Trustee and the Indenture Trustee prompt notice of
any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall promptly file any such amendment. The Master
Servicer shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States of
America.

                  (d) The Master Servicer shall maintain accounts and records as
to each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Master Collection
Account in respect of such Receivable.

                  (e) The Master Servicer shall maintain or cause to be
maintained, a computer system so that, from and after the time of sale under
this Agreement and each Transfer Agreement of the Receivables to the Issuer,
such master computer records (including any backup archives) that refer to a
Receivable shall indicate clearly the interest of the Trust in such Receivable
and that such Receivable is owned by the Trust and to which Series Trust Estate
such Receivable has been pledged pursuant to the Indenture. Indication of the
Trust's interest in a Receivable shall be deleted from or


                                       61
<PAGE>

modified on such computer systems when, and only when, the related Receivable
shall have been paid in full or repurchased by HAFC or Household Bank, as
applicable, or the Seller.

                  (f) If at any time the Seller or HAFC or Household Bank, as
applicable, shall propose to sell, grant a security interest in or otherwise
transfer any interest in automotive receivables to any prospective purchaser,
lender or other transferee, the Master Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including any restored from backup archives) that, if they shall refer in any
manner whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Trust unless such Receivable has been paid in
full or repurchased by HAFC or Household Bank, as applicable, or the Seller.

                  (g) With respect to any Series Trust Estate, upon request, the
Master Servicer shall furnish or cause to be furnished to the related Series
Support Provider (only in the event that there is a Series Support Provider with
respect to such Series), the Owner Trustee or to the Indenture Trustee, within
five Business Days, a list of all Receivables (by contract number) then held as
part of the related Series Trust Estate, together with a reconciliation of such
list to the related Schedule of Receivables and to each of the Master Servicer's
Certificates furnished before such request indicating removal of Receivables
from the related Series Trust Estate. The Indenture Trustee shall hold any such
list and Schedule of Receivables for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination.

                  (h) The Master Servicer shall deliver to the Owner Trustee and
the Indenture Trustee:

            (1) simultaneously with the execution and delivery of the Agreement
      and, if required pursuant to Section 13.1, of each amendment, an Opinion
      of Counsel stating that, in the opinion of such Counsel, in form and
      substance reasonably satisfactory to the addressees of such Opinion,
      either (A) all financing statements and continuation statements have been
      executed and filed that are necessary fully to preserve and protect the
      interest of the Trust and the Indenture Trustee in the Receivables then
      held as part of the related Series Trust Estate, or (B) no such action
      shall be necessary to preserve and protect such interest or (C) any action
      which is necessary to preserve and protect such interest during the
      following 12-month period; and

            (2) within 90 days after the beginning of each calendar year
      beginning in ____, dated as of a date during such 90-day period, stating
      that, in the opinion of such counsel, either (A) all financing statements
      and continuation statements have been executed and filed that are
      necessary fully to preserve and protect the interest of the Trust and the
      Indenture Trustee in the Series Trust Estate or (B) no such action shall
      be necessary to preserve and protect such interest.


                                       62
<PAGE>

            Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.

            SECTION 13.3. Notices. All demands, notices and communications upon
or to the Seller, the Master Servicer, the Owner Trustee, the Indenture Trustee
or the Rating Agencies under this Agreement shall be in writing, personally
delivered, or mailed by certified mail, or sent by confirmed telecopier
transmission and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller to Household Auto Receivables Corporation, 1111 Town Center
Drive, Las Vegas, Nevada 89134, with a copy to Household International, Inc.,
2700 Sanders Road, Prospect Heights, Illinois, 60070, Attn: Treasurer
(Telecopier # (847) 205-7538), (b) in the case of the Master Servicer to
Household Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois
60070, Attention: Treasurer, Telecopier # (847) 205-7538, (c) in the case of the
Issuer or the Owner Trustee, at the Corporate Trust Office of the Owner Trustee,
Telecopier # _________, (d) in the case of the Indenture Trustee at the
Corporate Trust Office of the Indenture Trustee, Telecopier # _________, (e) in
the case of the Series Support Provider to the address set forth in the related
Series Supplement, and (f) in the case of any Rating Agency, to the address set
forth in the related Series Supplement. Any notice required or permitted to be
mailed to a Noteholder or Certificateholder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Certificate
Register or Note Register, as applicable. Any notice so mailed within the time
prescribed in the Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder or Noteholder shall receive such
notice.

            SECTION 13.4. Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
permitted assigns. Notwithstanding anything to the contrary contained herein,
except as provided in Sections 8.4 and 9.3 and as provided in the provisions of
this Agreement concerning the resignation of the Master Servicer, this Agreement
may not be assigned by the Seller or the Master Servicer without the prior
written consent of the Owner Trustee and the Indenture Trustee. In the event
that a successor Issuer with respect to a Series is formed as contemplated in
the related Series Supplement, such Issuer shall succeed to all of the rights
and obligations of the predecessor Issuer hereunder; and all references to the
Issuer hereunder shall thereafter be deemed to be references to such successor
Issuer.

            SECTION 13.5. Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the parties hereto and for the
benefit of the Certificateholders (including the Seller), the Owner Trustee and
the Indenture Trustee, as third-party beneficiaries. Each Series Support
Provider and its successors and assigns shall be a third-party beneficiary to
the provisions of this Agreement and to each Series Supplement with respect to
each Series for which they are providing Series Support, and shall be entitled
to rely upon and directly enforce such provisions of this Agreement and to each
Series Supplement with respect to each Series for which they are providing
Series Support, so long as no default with respect to such Series Support
Provider shall have occurred and be continuing. Nothing in this Agreement or in
any Series Supplement, whether express or implied, shall be construed to give to
any other Person any legal or


                                       63
<PAGE>

equitable right, remedy or claim in the Owner Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.

            SECTION 13.6. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

            SECTION 13.7. Separate Counterparts. This Agreement and each
Transfer Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.

            SECTION 13.8. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

            SECTION 13.9. Governing Law. THIS AGREEMENT AND EACH TRANSFER
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.

            SECTION 13.10. Assignment to Indenture Trustee. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture, as supplemented by a Series Supplement for the benefit of the related
Series Securityholders of all right, title and interest of the Issuer in, to and
under the applicable Series Trust Estate.

            SECTION 13.11. Nonpetition Covenants. (a) Notwithstanding any prior
termination of this Agreement or any Series Supplement, the Master Servicer and
the Seller shall not, prior to the date which is one year and one day after the
termination of this Agreement or any Series Supplement with respect to the
Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke
the process of any court or government authority for the purpose of commencing
or sustaining a case against 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 the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.

                  (b) Notwithstanding any prior termination of this Agreement or
any Series Supplement, the Master Servicer shall not, prior to the date that is
one year and one day after the termination of this Agreement or any Series
Supplement with respect to the Seller, acquiesce to, petition or otherwise
invoke or cause the Seller to invoke the process of any court or government
authority for the purpose of commencing


                                       64
<PAGE>

or sustaining a case against the Seller under any federal or state bankruptcy,
insolvency or similar law, appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.

            SECTION 13.12. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this Agreement and
each Series Supplement has been countersigned by [Name of Owner Trustee] not in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall [Name of Owner Trustee] in its individual capacity
or, except as expressly provided in the Trust Agreement, as Owner Trustee have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement and
each Series Supplement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.

            SECTION 13.13. Independence of the Master Servicer. For all purposes
of this Agreement, the Master Servicer shall be an independent contractor and
shall not be subject to the supervision of the Issuer, the Indenture Trustee or
the Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by this
Agreement or any Series Supplement, the Master Servicer shall have no authority
to act for or represent the Issuer or the Owner Trustee in any way and shall not
otherwise be deemed an agent of the Issuer or the Owner Trustee.

            SECTION 13.14. No Joint Venture. Nothing contained in this Agreement
or any Series Supplement (i) shall constitute the Master Servicer and either of
the Issuer or the Owner Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
shall be construed to impose any liability as such on any of them or (iii) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.


                                       65
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Master Sale
and Servicing Agreement to be duly executed and delivered by their respective
duly authorized officers as of the day and the year first above written.

                  HOUSEHOLD AUTOMOTIVE TRUST ______
                          by [Name of Owner Trustee], not in its individual
                          capacity but solely as Owner Trustee on behalf of
                          the Trust,

                          by
                             ---------------------------------------------------
                             Name:
                             Title:


                  HOUSEHOLD AUTO RECEIVABLES CORPORATION,
                          Seller,

                          by
                             ---------------------------------------------------
                             Name:  Steven H. Smith
                             Title: Vice President


                  HOUSEHOLD FINANCE CORPORATION,
                          as Master Servicer,

                          by
                             ---------------------------------------------------
                             Name:  B. B. Moss Jr.
                             Title: Vice President


                  [NAME OF INDENTURE TRUSTEE],
                          not in its individual capacity but solely as Indenture
                          Trustee,

                          by
                             ---------------------------------------------------
                             Name:
                             Title:

            [Signature Page for Master Sale and Servicing Agreement]


                                       66
<PAGE>

                                                                       EXHIBIT A

                      FORM OF MASTER SERVICER'S CERTIFICATE

<PAGE>

                                                                       EXHIBIT B

                           FORM OF TRANSFER AGREEMENT

            TRANSFER No. ________ of Receivables pursuant to the Master Sale and
Servicing Agreement dated as of __________________ (the "Sale and Servicing
Agreement"), among HOUSEHOLD AUTOMOTIVE TRUST ______, a Delaware business trust
(the "Issuer"), HOUSEHOLD AUTO RECEIVABLES CORPORATION, a Nevada corporation
(the "Seller"), HOUSEHOLD FINANCE CORPORATION, a Delaware corporation (the
"Master Servicer"), and [NAME OF INDENTURE TRUSTEE], a [national banking
association], in its capacity as Indenture Trustee (the "Indenture Trustee").

                              W I T N E S S E T H:

            WHEREAS pursuant to the Master Sale and Servicing Agreement, the
Seller wishes to convey the Receivables to the Issuer; and

            WHEREAS, the Issuer is willing to accept such conveyance subject to
the terms and conditions hereof.

            NOW, THEREFORE, the Issuer, the Seller, the Master Servicer and the
Indenture Trustee hereby agree as follows:

            1. Defined Terms. Capitalized terms used herein shall have the
meanings ascribed to them in the Sale and Servicing Agreement unless otherwise
defined herein.

            "Cutoff Date" shall mean, with respect to the Receivables conveyed
hereby, ______________.

            "Transfer Date" shall mean, with respect to the Receivables conveyed
hereby, ______________.

            2. Schedule of Receivables. Annexed hereto is a supplement to
Schedule II to the Series ______ Supplement listing the Receivables that
constitute the Receivables to be conveyed pursuant to this Agreement on the
Transfer Date. The Receivables conveyed pursuant to this Agreement shall be a
component of the Series ______ Trust Estate.

            3. Conveyance of Receivables. The Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Issuer, without recourse (except as
expressly provided in the Master Sale and Servicing Agreement), all right, title
and interest of the Seller in and to:

            (a) each and every Receivable listed on Schedule A to the related
      Receivables Purchase Agreement Supplement and all monies paid or payable

<PAGE>

      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);

            (b) 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;

            (c) all rights of the Seller against Dealers pursuant to Dealer
      Agreements or Dealer Assignments related to such Receivables;

            (d) 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;

            (e) all rights of Seller under any Service Contracts on the related
      Financed Vehicles;

            (f) any proceeds and the right to receive proceeds with respect to
      the related Receivables from claims on any physical damage, 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;

            (g) 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;

            (h) 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;

            (i) 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.

            4. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Issuer as of the date of this Agreement and as of
the Transfer Date that:


                                      B-2
<PAGE>

            (a) Organization and Good Standing. The Seller has been duly
      organized and is validly existing as a corporation in good standing under
      the laws of the State of Nevada, with power and authority to own its
      properties and to conduct its business as such properties are currently
      owned and such business is currently conducted, and had at all relevant
      times, and now has, power, authority and legal right to acquire, own and
      sell the Receivables and the Other Conveyed Property transferred to the
      Trust.

            (b) Due Qualification. The Seller is duly qualified to do business
      as a foreign corporation in good standing and has obtained all necessary
      licenses and approvals in all jurisdictions where the failure to do so
      would materially and adversely affect Seller's ability to transfer the
      Receivables and the Other Conveyed Property to the Trust pursuant to this
      Agreement, or the validity or enforceability of the Receivables and the
      Other Conveyed Property or to perform Seller's obligations hereunder and
      under the Seller's Basic Documents.

            (c) Power and Authority. The Seller has the power and authority to
      execute and deliver this Agreement and its Basic Documents and to carry
      out its terms and their terms, respectively; the Seller has full power and
      authority to sell and assign the Receivables and the Other Conveyed
      Property to be sold and assigned to and deposited with the Trust by it and
      has duly authorized such sale and assignment to the Trust by all necessary
      corporate action; and the execution, delivery and performance of this
      Agreement and the Seller's Basic Documents have been duly authorized by
      the Seller by all necessary corporate action.

            (d) Valid Sale, Binding Obligations. This Agreement effects a valid
      sale, transfer and assignment of the Receivables and the Other Conveyed
      Property, enforceable against the Seller and creditors of and purchasers
      from the Seller; and this Agreement and the Seller's Basic Documents, when
      duly executed and delivered, shall constitute legal, valid and binding
      obligations of the Seller enforceable in accordance with their respective
      terms, except as enforceability may be limited by bankruptcy, insolvency,
      reorganization or other similar laws affecting the enforcement of
      creditors' rights generally and by equitable limitations on the
      availability of specific remedies, regardless of whether such
      enforceability is considered in a proceeding in equity or at law.

            (e) No Violation. The consummation of the transactions contemplated
      by this Agreement and the Basic Documents and the fulfillment of the terms
      of this Agreement and the Basic Documents shall not conflict with, result
      in any breach of any of the terms and provisions of or constitute (with or
      without notice, lapse of time or both) a default under the certificate of
      incorporation or by-laws of the Seller, or any indenture, agreement,
      mortgage, deed of trust or other instrument to which the Seller is a party
      or by which it is bound, or result in the creation or imposition of any
      Lien upon any of its properties pursuant to the terms of any such
      indenture, agreement, mortgage, deed of trust or other instrument, other
      than this Agreement, or violate any law, order, rule or regulation
      applicable to the Seller of any court or of any federal or state
      regulatory body, administrative


                                      B-3
<PAGE>

      agency or other governmental instrumentality having jurisdiction over the
      Seller or any of its properties.

            (f) No Proceedings. There are no proceedings or investigations
      pending or, to the Seller's knowledge, threatened against the Seller,
      before any court, regulatory body, administrative agency or other tribunal
      or governmental instrumentality having jurisdiction over the Seller or its
      properties (A) asserting the invalidity of this Agreement or any of the
      Basic Documents, (B) seeking to prevent the issuance of the Securities or
      the consummation of any of the transactions contemplated by this Agreement
      or any of the Basic Documents, (C) seeking any determination or ruling
      that might materially and adversely affect the performance by the Seller
      of its obligations under, or the validity or enforceability of, this
      Agreement or any of the Basic Documents, or (D) seeking to adversely
      affect the federal income tax or other federal, state or local tax
      attributes of the Securities.

            (g) Approvals. All approvals, authorizations, consents, order or
      other actions of any person, corporation or other organization, or of any
      court, governmental agency or body or official, required in connection
      with the execution and delivery by the Seller of this Agreement and the
      consummation of the transactions contemplated hereby have been or will be
      taken or obtained on or prior to the Transfer Date.

            (h) No Consents. The Seller is not required to obtain the consent of
      any other party or any consent, license, approval or authorization, or
      registration or declaration with, any governmental authority, bureau or
      agency in connection with the execution, delivery, performance, validity
      or enforceability of this Agreement which has not already been obtained.

            (i) Chief Executive Office. The chief executive office of the Seller
      is at 1111 Town Center Drive, Las Vegas, Nevada 89134.

            (j) Principal Balance. The aggregate Principal Balance of the
      Receivables listed on the supplement to Schedule A annexed hereto and
      conveyed to the Issuer pursuant to this Agreement as of the Cutoff Date is
      $_____________.

            5. Conditions Precedent. The obligation of the Issuer to acquire the
Receivables hereunder is subject to the satisfaction, on or prior to the
Transfer 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 Sale and Servicing Agreement shall be true and correct
      as of the date of this Agreement and as of the Transfer Date.


                                      B-4
<PAGE>

            (b) Sale and Servicing Agreement Conditions. Each of the conditions
      set forth in Section 2.1(b) to the Sale and Servicing Agreement shall have
      been satisfied.

            (c) Additional Information. The Seller shall have delivered to the
      Issuer such information as was reasonably requested by the Issuer to
      satisfy itself as to (i) the accuracy of the representations and
      warranties set forth in Section 4 of this Agreement and in Section 6.1 of
      the Sale and Servicing Agreement and (ii) the satisfaction of the
      conditions set forth in this Section 5.

            6. Ratification of Agreement. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.

            7. 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.

            8. 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.


                                      B-5
<PAGE>

            IN WITNESS WHEREOF, the Issuer, the Seller and the Master Servicer
have caused this Agreement to be duly executed and delivered by their respective
duly authorized officers as of day and the year first above written.

                        HOUSEHOLD AUTOMOTIVE TRUST ______

                              by [Name of Owner Trustee],  not in its individual
                              capacity but solely as Owner Trustee on behalf of
                              the Trust,

                              by
                                 --------------------------------------
                                 Name:
                                 Title:


                        HOUSEHOLD AUTO RECEIVABLES CORPORATION, Seller,

                              by
                                 --------------------------------------
                                 Name:
                                 Title:


                        HOUSEHOLD FINANCE CORPORATION, Master Servicer,

                              by
                                 --------------------------------------
                                 Name:
                                 Title:

Acknowledged and Accepted:

[NAME OF INDENTURE TRUSTEE],
not in its individual
capacity but solely as Indenture Trustee


by
   --------------------------------------
   Name:
   Title:


                                      B-6