<PAGE>

                                                                    EXHIBIT 10.3


________________________________________________________________________________


                        RECEIVABLES PURCHASE AGREEMENT

                                    between

                         HOUSEHOLD BANK (NEVADA), N.A.

                                      and

                    HOUSEHOLD RECEIVABLES FUNDING, INC. III

                            Dated as of  [.], 2000


________________________________________________________________________________
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                       Page
<S>                                                                                                    <C>
ARTICLE I    DEFINITIONS...............................................................................   1
Section 1.01.  Definitions.............................................................................   1
Section 1.02.  Other Definitional Provisions...........................................................   4
ARTICLE II   PURCHASE AND CONVEYANCE OF RECEIVABLES....................................................   5
Section 2.01.  Purchase................................................................................   5
Section 2.02.  Addition of Aggregate Addition Accounts.................................................   6
Section 2.03.  Addition of New Accounts................................................................   7
Section 2.04   Representations and Warranties..........................................................   7
Section 2.05.  Delivery of Documents...................................................................   8
ARTICLE III  CONSIDERATION AND PAYMENT.................................................................   9
Section 3.01.  Purchase Price..........................................................................   9
Section 3.02.  Adjustments to Purchase Price...........................................................   9
ARTICLE IV   REPRESENTATIONS AND WARRANTIES............................................................  10
Section 4.01.  Representations and Warranties of the Bank Relating to the Bank.........................  10
Section 4.02.  Representations and Warranties of the Bank Relating to the Agreement and
               the Receivables.........................................................................  11
Section 4.03.  Representations and Warranties of HRF...................................................  12
ARTICLE V    COVENANTS.................................................................................  14
Section 5.01.  Covenants of the Bank...................................................................  14
ARTICLE VI   REPURCHASE OBLIGATION.....................................................................  16
Section 6.01.  Reassignment of Ineligible Receivables..................................................  16
Section 6.02.  Reassignment of Noteholders' Collateral in Trust Portfolio..............................  16
ARTICLE VII  CONDITIONS PRECEDENT......................................................................  17
Section 7.01.  Conditions to HRF's Obligations Regarding Initial Receivables...........................  17
Section 7.02.  Conditions Precedent to the Bank's Obligations..........................................  17
ARTICLE VIII TERM AND PURCHASE TERMINATION.............................................................  19
Section 8.01  Term.....................................................................................  19
Section 8.02. Purchase Termination.....................................................................  19
ARTICLE IX   MISCELLANEOUS PROVISIONS..................................................................  20
Section 9.01. Amendment................................................................................  20
Section 9.02. Governing Law............................................................................  20
Section 9.03. Notices..................................................................................  20
Section 9.04. Severability of Provisions...............................................................  20
Section 9.05. Assignment...............................................................................  20
</TABLE>

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                                                                                                     <C>
Section 9.06. Acknowledgement and Agreement of the Bank...............................................   21
Section 9.07. Further Assurances......................................................................   21
Section 9.08. No Waiver; Cumulative Remedies..........................................................   21
Section 9.09. Counterparts............................................................................   21
Section 9.10. Binding; Third-Party Beneficiaries......................................................   21
Section 9.11. Merger and Integration..................................................................   21
Section 9.12. Headings................................................................................   22
Section 9.13. Schedules and Exhibits..................................................................   22
Section 9.14. Survival of Representations and Warranties..............................................   22
Section 9.15. Nonpetition Covenant....................................................................   22
EXHIBIT A.............................................................................................  A-1
FORM OF SUPPLEMENTAL CONVEYANCE
Schedule I............................................................................................. I-1
LIST OF ACCOUNTS
</TABLE>

                                     -ii-
<PAGE>

          RECEIVABLES PURCHASE AGREEMENT, dated as of [.], 2000, by and between
HOUSEHOLD RECEIVABLES FUNDING, INC. III, a Delaware corporation ("HRF"), and
                                                                  ---
HOUSEHOLD BANK (NEVADA), N.A., a national banking association (the "Bank").
                                                                    ----

                             W I T N E S S E T H:

          WHEREAS, HRF desires to purchase, from time to time, certain
Receivables (hereinafter defined) arising under certain revolving credit
accounts of the Bank;

          WHEREAS, HRF may in the future desire to purchase, from time to time,
certain Receivables sold to the Bank by another Account Owner (hereinafter
defined) and arising under certain revolving credit accounts of such Account
Owner;

          WHEREAS, the Bank desires to sell from time to time and assign certain
Receivables to HRF upon the terms and conditions hereinafter set forth;

          WHEREAS, it is contemplated that the Receivables purchased hereunder
will be transferred by HRF to the Trust (hereinafter defined) in connection with
the issuance of certain Securities (hereinafter defined); and

          WHEREAS, the Bank agrees that all representations, warranties,
covenants and agreements made by the Bank herein with respect to the Accounts
(hereinafter defined) and Receivables shall also be for the benefit of the Owner
Trustee (hereinafter defined), the Indenture Trustee (hereinafter defined) and
all beneficiaries of the Trust, including the holders of the Securities.

          NOW, THEREFORE, it is hereby agreed by and between HRF and the Bank as
follows:

                                   ARTICLE I

                                  DEFINITIONS

          Section 1.01.  Definitions.  All capitalized terms used herein or in
                         -----------
any certificate, document, or Conveyance Paper made or delivered pursuant
hereto, and not defined herein or therein, shall have the meaning ascribed
thereto in the Transfer and Servicing Agreement; in addition, the following
words and phrases shall have the following meanings:

          "Account" shall mean (a) each Initial Account, (b) each Additional
           -------
Account (but only from and after the Addition Date with respect thereto), (c)
each Related Account, and (d) each account into which an Account shall be
transferred (a "Transferred Account") provided that (i) such transfer was made
                -------------------
in accordance with the Credit Guidelines and (ii) such account can be traced or
identified as an account into which an Account has been transferred, but shall
exclude (e) any Account that (x) after the Removal Date, the newly generated
Receivables in which shall not be assigned to HRF hereunder, (y) the right,
title and interest of HRF in the Receivables in which are reassigned to the Bank
pursuant to Section 6.01 or (z) the right, title and interest of the Trust in
the Receivables in which are assigned and transferred to the Servicer pursuant
to Section 3.03 of the Transfer and Servicing Agreement.

          "Account Owner" shall mean the Bank, or any other entity which is the
           -------------
issuer of the revolving credit relating to an Account pursuant to a Credit
Agreement and/or a seller of Receivables to HRF.

                                       1
<PAGE>

          "Additional Cut-Off Date" shall mean (a) with respect to Aggregate
           -----------------------
Addition Accounts, the date specified as such in the notice delivered with
respect thereto pursuant to Section 2.02, and (b) with respect to New Accounts,
the later of the dates on which such New Accounts are originated or designated
pursuant to Section 2.03.

          "Addition Date" shall mean (a) with respect to Aggregate Addition
           -------------
Accounts, the date from and after which such Aggregate Addition Accounts are to
be included as Accounts pursuant to Section 2.02 and (b) with respect to New
Accounts, the first Distribution Date following the calendar month in which such
New Accounts are originated.

          "Addition Notice Date" shall have the meaning specified in Section
           --------------------
2.02 of this Agreement.

          "Additional Account" shall mean each New Account and each Aggregate
           ------------------
Addition Account.

          "Aggregate Addition Account" shall mean each Eligible Account that is
           --------------------------
designated pursuant to Section 2.02 to be included as an Account and is
identified in the computer file or microfiche list delivered to HRF by the Bank
pursuant to Sections 2.01 and 2.05.

          "Agreement" shall mean this Receivables Purchase Agreement and all
           ---------
amendments hereof and supplements hereto.

          "Bank" shall mean Household Bank (Nevada), N.A., a national banking
           ----
association, and its successors and permitted assigns.

          "Closing Date" shall mean [.], 2000.
           ------------

          "Conveyance" shall have the meaning specified in subsection 2.01(a).
           ----------

          "Conveyance Papers" shall have the meaning specified in subsection
           -----------------
4.01(c).

          "Credit Adjustment" shall have the meaning specified in Section 3.02.
           -----------------

          "Debtor Relief Laws" shall mean (a) the Bankruptcy Code of the United
           ------------------
States of America and (b) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, any state or any foreign country from
time to time in effect affecting the rights of creditors generally.

          "Finance Charge and Administrative Receivables" shall mean all
           ---------------------------------------------
Receivables in the Accounts which would be treated as "Finance Charge and
Administrative Receivables" in accordance with the definition for such term in
the Transfer and Servicing Agreement.

          "HRF" shall mean Household Receivables Funding, Inc. III, a Delaware
           ---
corporation, and its permitted successors and assigns.

          "Indenture" shall mean the Master Indenture between the Trust and
           ---------
Wells Fargo Bank Minnesota, N.A., as Indenture Trustee, dated as of [.], 2000,
as supplemented by Indenture Supplements applicable to any Series that may be
issued from time to time.

                                       2
<PAGE>

          "Indenture Supplement" shall mean the indenture supplement pursuant to
           --------------------
which a Series is issued.

          "Indenture Trustee" shall mean Wells Fargo Bank Minnesota, N.A. in its
           -----------------
capacity as indenture trustee, or any successor indenture trustee.

          "Initial Account" shall mean any Account designated as an "Account"
           ---------------
hereunder and as an "Account" under the Transfer and Servicing Agreement on the
Closing Date.

          "Initial Cut-Off Date" shall mean the close of business on [.], 2000.
           --------------------

          "Insolvency Event" shall have the meaning specified in Section 8.02.
           ----------------

          "New Account" shall mean each MasterCard(R) and VISA(R) consumer
           -----------
revolving credit card account established pursuant to a Credit Agreement, which
account is designated pursuant to Section 2.03 to be included as an Account and
is identified in the computer file or microfiche list delivered to HRF by the
Bank pursuant to Sections 2.01 and 2.05.

          "New Principal Receivables" shall have the meaning set forth in
           -------------------------
Section 3.01.

          "Obligor" shall mean, with respect to each Account, each person that
           -------
would be treated as an "Obligor" in accordance with the definition for such term
in the Transfer and Servicing Agreement.

          "Owner Trustee" shall mean Wilmington Trust Company, a Delaware
           -------------
banking corporation, the institution executing the Trust Agreement as and acting
in the capacity of Owner Trustee thereunder, or its successor in interest, or
any successor trustee appointed as provided in the Trust Agreement.

          "Principal Receivables" shall mean all Receivables other than Finance
           ---------------------
Charge and Administrative Receivables.

          "Purchase Price" shall have the meaning set forth in Section 3.01.
           --------------

          "Purchased Assets" shall have the meaning set forth in Section 2.01.
           ----------------

          "Receivables" shall mean all amounts shown on the Bank's records as
           -----------
amounts payable by Obligors on any Account from time to time, including amounts
payable for Principal Receivables and Finance Charge and Administrative
Receivables.  Receivables that become Defaulted Receivables will cease to be
included as Receivables as of the day on which they become Defaulted
Receivables.  Unless the context otherwise requires (whether or not there is a
specific reference to the underlying receivable), any reference in this
Agreement or any Supplemental Conveyance to a Receivable (including any
Principal Receivable, Finance Charge and Administration Receivable or Defaulted
Receivable) and any Collections thereon or other amounts recoverable with
respect thereto shall refer to only the fractional undivided interest that is
transferred from an Account Owner to the Bank in the amounts paid or payable by
Obligors on the Accounts, which fractional interest may be less than a 100%
undivided interest therein.  Any reference in this Agreement to the "underlying
receivable" with respect to a Receivable shall refer to the receivable in which
such Receivable represents an undivided interest.

          "Removed Account" shall mean an Account hereunder that is a "Removed
           ---------------
Account" (as such term is defined in the Transfer and Servicing Agreement) that
is designated for removal pursuant to Section 2.10 of the Transfer and Servicing
Agreement.

                                       3
<PAGE>

          "Securities" shall mean any one of the Notes (as such term is defined
           ----------
in the Indenture), the Transferor Certificates or the Ownership Interest
Certificate (as such term is defined in the Trust Agreement).

          "Supplemental Conveyance" shall have the meaning set forth in Section
           -----------------------
2.05.

          "Transfer and Servicing Agreement" shall mean the Transfer and
           --------------------------------
Servicing Agreement, dated as of [.], 2000, among the Household Finance
Corporation, as Servicer, HRF, as Transferor, and the Trust, and all amendments
and supplements thereto.

          "Trust" shall mean the trust created by the Trust Agreement.
           -----

          "Trust Agreement" shall mean the Household Credit Card Master Note
           ---------------
Trust I Trust Agreement, dated as of [.], 2000, between HRF, as Transferor, and
Wilmington Trust Company, as Owner Trustee.

          Section 1.02.  Other Definitional Provisions.
                         -----------------------------

          All terms defined in this Agreement shall have the defined meanings
when used in any certificate, other document, or Conveyance Paper made or
delivered pursuant hereto unless otherwise defined therein.

          The words "hereof," "herein" and "hereunder" and words of similar
                     ------    ------       ---------
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.

          All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Transfer and Servicing Agreement and the Indenture.

          All capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Indenture or the Transfer and
Servicing Agreement.

                              [END OF ARTICLE I]

                                       4
<PAGE>

                                  ARTICLE II

                    PURCHASE AND CONVEYANCE OF RECEIVABLES

          Section 2.01.  Purchase.
                         --------

          (a)  By execution of this Agreement, the Bank does hereby sell,
transfer, assign, set over and otherwise convey to HRF (collectively, the
"Conveyance"), without recourse except as provided herein, all its right, title
 ----------
and interest in, to and under (i) the Receivables existing at the close of
business on the Closing Date, in the case of Receivables arising in the Initial
Accounts, and on each Addition Date, in the case of Receivables arising in the
Additional Accounts, and in each case thereafter created from time to time until
the termination of this Agreement pursuant to Article VIII hereof and all monies
due and or to become due and all amounts received with respect thereto and all
proceeds (including, without limitation, "proceeds" as defined in the UCC)
thereof and (ii) the right to receive Interchange and Recoveries with respect to
such Receivables (the "Purchased Assets").
                       ----------------

          (b)  In connection with such Conveyance, the Bank agrees (i) to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables now existing and hereafter created, meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect, and maintain perfection of, the Conveyance of such
Purchased Assets from the Bank to HRF, (ii) that such financing statements shall
name the Bank, as seller, and HRF, as purchaser, of the Receivables and (iii) to
deliver a file-stamped copy of such financing statements or other evidence of
such filings (excluding such continuation statements, which shall be delivered
as filed) to HRF as soon as is practicable after filing.

          (c)  In connection with such Conveyance, the Bank further agrees that
it will, at its own expense, (i) on or prior to (A) the Closing Date, in the
case of Initial Accounts, (B) the applicable Addition Date, in the case of
Additional Accounts, and (C) the applicable Removal Date, in the case of Removed
Accounts, indicate in its computer files that, in the case of the Initial
Accounts or the Additional Accounts, Receivables created in connection with such
Accounts have been conveyed to HRF in accordance with this Agreement and have
been conveyed by HRF to the Trust pursuant to the Transfer and Servicing
Agreement and have been pledged by the Trust to the Indenture Trustee pursuant
to the Indenture for the benefit of the Noteholders by including (or deleting,
in the case of newly originated Receivables in Removed Accounts) in such
computer files the code that identifies each such Account [and (ii) on or prior
to (A) the Closing Date, in the case of the Initial Accounts, (B) the date that
is five Business Days after the applicable Addition Date, in the case of
designation of Aggregate Addition Accounts, (C) the date that is 30 days after
the applicable Addition Date, in the case of New Accounts, and (D) the date that
is five Business Days after the applicable Removal Date, in the case of Removed
Accounts, to deliver to HRF a computer file or microfiche list containing a true
and complete list of all such Accounts specifying for each such Account, as of
the Initial Cut-Off Date, in the case of the Initial Accounts, the applicable
Addition Cut-off Date, in the case of Additional Accounts, and the applicable
Removal Date, in the case of Removed Accounts, (1) its account number, (2) the
aggregate amount outstanding in such Account and (3) the aggregate amount of
Principal Receivables in such Account.  Each such computer file or microfiche
list, as supplemented from time to time to reflect Additional Accounts or
Removed Accounts, shall be marked as Schedule I to this Agreement, shall be
                                     ----------
delivered to HRF, and is hereby incorporated into and made a part of this
Agreement.  The Bank further agrees not to alter the code referenced in clause
(i) of this paragraph with respect to any Account during the term of this
Agreement unless and until such Account becomes a Removed Account.]

                                       5
<PAGE>

          (d)  The parties hereto intend that the conveyance of the Bank's
right, title and interest in and to the Receivables shall constitute an absolute
sale, conveying good title free and clear of any liens, claims, encumbrances or
rights of others from the Bank to HRF. It is the intention of the parties hereto
that the arrangements with respect to the Receivables shall constitute a
purchase and sale of such Receivables and not a loan. In the event, however,
that it were to be determined that the transactions evidenced hereby constitute
a loan and not a [contribution to capital or a] purchase and sale, it is the
intention of the parties hereto that this Agreement shall constitute a security
agreement under applicable law, and that the Bank shall be deemed to have
granted and does hereby grant to HRF a first priority perfected security
interest, in all of the Bank's right, title and interest, whether now owned or
hereafter acquired, in, to and under the Receivables and other Purchased Assets
to secure the rights of HRF hereunder and the obligations of the Bank hereunder.

          Section 2.02.  Addition of Aggregate Addition Accounts.
                         ---------------------------------------

          (a)  If, from time to time, HRF becomes obligated to designate
Aggregate Addition Accounts (as such term is defined in the Transfer and
Servicing Agreement) pursuant to subsection 2.09(a) of the Transfer and
Servicing Agreement, then HRF may, at its option, give the Bank written notice
thereof on or before the fifth Business Day (the "Addition Notice Date") prior
                                                  --------------------
to the Addition Date therefor, and upon receipt of such notice the Bank shall on
or before the Addition Date, designate sufficient Eligible Accounts to be
included as Additional Accounts so that after the inclusion thereof HRF will be
in compliance with the requirements of said subsection 2.09(a).  Additionally,
subject to subsections 2.09(b) and (c) of the Transfer and Servicing Agreement
and subsection 2.02(b), from time to time Eligible Accounts may be designated to
be included as Aggregate Addition Accounts, upon the mutual agreement of HRF and
the Bank.  In either event, the Bank shall have sole responsibility for
selecting the Aggregate Addition Accounts.

          (b)  On the Addition Date with respect to any designation of Aggregate
Addition Accounts, HRF shall purchase the Bank's right, title and interest in,
to and under the Receivables in Aggregate Addition Accounts (and such Aggregate
Addition Accounts shall be deemed to be Accounts for purposes of this
Agreement), subject to the satisfaction of the following conditions:

               (i)   any Aggregate Addition Accounts shall all be Eligible
     Accounts;

               (ii)  the Bank shall have delivered to HRF copies of UCC-1
     financing statements covering such Aggregate Addition Accounts, if
     necessary to perfect HRF's undivided interest in the Receivables arising
     therein;

               (iii) to the extent required of HRF by Section 2.09(c) of the
     Transfer and Servicing Agreement, the Bank shall have deposited in the
     Collection Account (as such term is defined in the Indenture) all
     Collections with respect to such Aggregate Addition Accounts since the
     Addition Cut-Off Date;

               (iv)  as of each of the Addition Cut-Off Date and the Addition
     Date, no Insolvency Event with respect to the Bank or other Account Owner,
     as the case may be, shall have occurred nor shall the transfer of the
     Receivables arising in the Aggregate Addition Accounts to HRF have been
     made in contemplation of the occurrence thereof;

               (v)   solely with respect to Aggregate Addition Accounts
     designated pursuant to the second sentence of subsection 2.02(a), the
     Rating Agency Condition shall have been satisfied;

                                       6
<PAGE>

               (vi)  the Bank shall have delivered to HRF an Officer's
     Certificate, dated the Addition Date, confirming, to the extent applicable,
     the items set forth in clauses (i) through (v) above; and

               (vii) the transfer of the Receivables arising in the Aggregate
     Addition Accounts to HRF and by HRF to the Trust will not result in an
     Adverse Effect and, in the case of Aggregate Addition Accounts, the Bank
     shall have delivered to HRF an Officer's Certificate, dated the Addition
     Date, stating that the Bank reasonably believes that the addition of the
     Receivables arising in the Aggregate Addition Accounts to HRF and by HRF to
     the Trust will not have an Adverse Effect.

          Section 2.03.  Addition of New Accounts.
                         ------------------------

          (a)  Upon the mutual agreement of HRF and the Bank, subject to
compliance by HRF with the conditions specified in subsections 2.09(d) and (e)
of the Transfer and Servicing Agreement and compliance by the Bank with
subsection 2.03(b), the Bank may designate newly originated Eligible Accounts to
be included as New Accounts.  Upon such designation, such New Accounts shall be
deemed to be Accounts hereunder.  The Bank shall take all actions necessary to
comply, or to enable HRF to comply, with the requirements of Section 2.09 of the
Transfer and Servicing Agreement and shall cooperate with HRF to enable it to
perform with respect to the Receivables in such New Accounts all actions
specified in subsections 2.09(d) and (e) of the Transfer and Servicing
Agreement.

          (b)  On the Addition Date with respect to any New Accounts, HRF shall
purchase the Bank's right, title and interest in, to and under the Receivables
in New Accounts (and such New Accounts shall be deemed to be Accounts for
purposes of this Agreement) as of the close of business on the applicable
Addition Cut-Off Date, subject to the satisfaction of the following conditions:

               (i)   the New Accounts shall all be Eligible Accounts;

               (ii)  the Bank shall have delivered to HRF copies of UCC-1
     financing statements covering such New Accounts, if necessary to perfect
     HRF's interest in the Receivables arising therein;

               (iii) to the extent required of HRF by Section 2.09(e) of the
     Transfer and Servicing Agreement, the Bank shall have deposited in the
     Collection Account all Collections with respect to such New Accounts since
     the Addition Cut-Off Date;

               (iv)  as of each of the Addition Cut-Off Date and the Addition
     Date, no Insolvency Event with respect to the Bank or other Account Owner,
     as applicable, shall have occurred nor shall the transfer of the
     Receivables arising in the New Accounts to HRF have been made in
     contemplation of the occurrence thereof; and

               (v)   the transfer of the Receivables arising in the New Accounts
     to HRF and by HRF to the Trust will not result in the occurrence of an
     Amortization Event or a Reinvestment Event.

          Section 2.04  Representations and Warranties.  The Bank hereby
                        ------------------------------
represents and warrants to HRF as of the related Addition Date as to the matters
set forth in subsections 2.02(b)(ii) and 2.03(b)(ii) above and that, in the case
of Additional Accounts, the list delivered pursuant to Section 2.05 below is, as
of the applicable Addition Cut-Off Date, true and complete in all material
respects.

                                       7
<PAGE>

          Section 2.05.  Delivery of Documents.  In the case of the designation
                         ---------------------
of Additional Accounts, the Bank shall deliver to HRF (i) the computer file or
microfiche list required to be delivered pursuant to Section 2.01 with respect
                                                     ------------
to such Additional Accounts on the date such file or list is required to be
delivered pursuant to Section 2.01 (the "Document Delivery Date") and (ii) a
                                         ----------------------
duly executed, written assignment (including an acceptance by HRF),
substantially in the form of Exhibit A (the "Supplemental Conveyance"), on the
                             ---------       -----------------------
Document Delivery Date.  In addition, in the case of the designation of New
Accounts, the Bank shall deliver to HRF on the Document Delivery Date an
Officer's Certificate confirming, to the extent applicable, the items set forth
in clause (i) through (v) of subsection 2.03(b) above.

                              [END OF ARTICLE II]

                                       8
<PAGE>

                                  ARTICLE III

                           CONSIDERATION AND PAYMENT

          Section 3.01.  Purchase Price.
                         --------------

          (a)  The "Purchase Price" for the Receivables in the Initial Accounts
                    --------------
as of the Initial Cut-Off Date conveyed to HRF under this Agreement shall be
payable on the Closing Date and shall be an amount equal to 100% of the
aggregate balance of Principal Receivables in those Accounts as of the Initial
Cut-Off Date, plus the present value of anticipated excess spread, including
Interchange computed by taking into account factors such as historical losses
(and discounted to take into account any uncertainty as to future performance
matching historical performance), servicing fees, delinquencies and paydown
rates, yield and  such other factors as the Bank and HRF mutually agree will
result in a Purchase Price determined to be the fair market value of such
Receivables.  This computation of initial purchase price should assume no
reinvestment in new Receivables.  The Purchase Price for the Receivables
(including Receivables in Additional Accounts) to be conveyed to HRF under this
Agreement which come into existence after the Closing Date, shall be payable on
the Distribution Date following the Due Period in which such Receivables are
conveyed by the Bank to HRF in an amount equal to 100% of the aggregate balance
of the Principal Receivables so conveyed (the "New Principal Receivables"), plus
                                               -------------------------
the present value of anticipated excess spread, including Interchange computed
by taking into account factors such as historical losses (and discounted to take
into account any uncertainty as to future performance matching historical
performance), servicing fees, delinquencies and paydown rates, yield and  such
other factors as the Bank and HRF mutually agree will result in a Purchase Price
determined to be the fair market value of such New Principal Receivables.

          (b)  The Purchase Price to be paid by HRF on the Closing Date and on
each Distribution Date following a Due Period during which New Principal
Receivables are conveyed to HRF shall be paid in cash.

          Section 3.02.  Adjustments to Purchase Price.  The Purchase Price
                         -----------------------------
shall be adjusted on each Distribution Date (a "Credit Adjustment") with respect
                                                -----------------
to any Receivable previously conveyed to HRF by the Bank which has since been
reversed by the Bank or the Servicer because of a rebate, refund, unauthorized
charge or billing error to a cardholder because such Receivable was created in
respect of merchandise which was refused or returned by a cardholder or due to
the occurrence of any other event referred to in Section 3.09 of the Transfer
and Servicing Agreement.  The amount of such adjustment shall equal (x) the
reduction in the principal balance of such Receivable resulting from the
occurrence of such event multiplied by (y) the quotient (expressed as a
percentage) of (i) the Purchase Price for Principal Receivables payable on such
Distribution Date computed in accordance with Section 3.01 (a) divided by (ii)
the Principal Receivables paid for on such date pursuant to such Section.  In
the event that an adjustment pursuant to this Section 3.02 causes the Purchase
Price to be a negative number, the Bank agrees that, not later than 1:00 P.M.
New York City time on such Distribution Date, the Bank shall pay to HRF an
amount equal to the amount by which the Purchase Price minus the Credit
Adjustment would be reduced below zero.

                             [END OF ARTICLE III]

                                       9
<PAGE>

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

          Section 4.01.  Representations and Warranties of the Bank Relating to
                         ------------------------------------------------------
the Bank.  The Bank hereby represents and warrants to, and agrees with, HRF as
--------
of the Closing Date and on each Addition Date, that:

          (a)  Organization and Good Standing.  The Bank is a national bank duly
               ------------------------------
organized and validly existing in good standing under the laws of the United
States and has, in all material respects, full power and authority to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.

          (b)  Due Qualification.  The Bank is duly qualified to do business and
               -----------------
is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Credit Agreement relating to an Account or any
Receivable unenforceable by the Bank, HRF or the Trust and (ii) have a material
adverse effect on the Noteholders.

          (c)  Due Authorization.  The execution, delivery and performance of
               -----------------
this Agreement and any other document or instrument delivered pursuant hereto,
including any Supplemental Conveyance (such other documents or instruments,
collectively, the "Conveyance Papers"), and the consummation of the transactions
                   -----------------
provided for in this Agreement and the Conveyance Papers have been duly
authorized by the Bank by all necessary corporate action on the part of the
Bank.

          (d)  No Conflict.  The execution and delivery of this Agreement and
               -----------
the Conveyance Papers by the Bank, the performance of the transactions
contemplated by this Agreement and the Conveyance Papers, and the fulfillment of
the terms of this Agreement and the Conveyance Papers applicable to the Bank
will not conflict with, violate or result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Bank is a party or by which it
or any of its properties are bound .

          (e)  No Violation.  The execution, delivery and performance of this
               ------------
Agreement and the Conveyance Papers by the Bank and the fulfillment of the terms
contemplated herein and therein applicable to the Bank will not conflict with or
violate any Requirements of Law applicable to the Bank.

          (f)  No Proceedings.  There are no proceedings or investigations
               --------------
pending or, to the best knowledge of the Bank, threatened against the Bank,
before any Governmental Authority (i) asserting the invalidity of this Agreement
or the Conveyance Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance Papers, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Bank, would materially and adversely affect the performance by the Bank of its
obligations under this Agreement or the Conveyance Papers, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Conveyance Papers or (v) seeking to
affect adversely the income tax attributes of the Trust under the United States
Federal or Delaware income tax systems.

          (g)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of or registrations or declarations with any Governmental Authority required to
be obtained, effected or given by the Bank in connection with the execution and
delivery by the Bank of this Agreement and the Conveyance Papers

                                      10
<PAGE>

and the performance of the transactions contemplated by this Agreement or the
Conveyance Papers by the Bank have been duly obtained, effected or given and are
in full force and effect.

          The representations and warranties set forth in this Section 4.01
shall survive the transfer and assignment of the Receivables to HRF.  Upon
discovery by the Bank or HRF of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give written notice to
the other party, the Owner Trustee and the Indenture Trustee within three
Business Days following such discovery.

          Section 4.02.  Representations and Warranties of the Bank Relating to
                         ------------------------------------------------------
the Agreement and the Receivables.
---------------------------------

          (a)  Representations and Warranties.  The Bank hereby represents and
               ------------------------------
warrants to HRF as of the date of this Agreement, as of the Closing Date and,
with respect to Additional Accounts, as of the related Addition Date that:

               (i)   this Agreement and, in the case of Additional Accounts, the
     related Supplemental Conveyance, each constitutes a legal, valid and
     binding obligation of the Bank enforceable against the Bank in accordance
     with its terms, except as such enforceability may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting creditors' rights generally from time to time in effect or
     general principles of equity;

               (ii)  as of the Initial Cut-Off Date, and as of the related
     Addition Cut-Off Date with respect to Additional Accounts, Schedule I to
                                                                ----------
     this Agreement, as supplemented to such date, is an accurate and complete
     listing in all material respects of all the Accounts as of the Initial Cut-
     Off Date or such Addition Cut-Off Date, as the case may be, and the
     information contained therein with respect to the identity of such Accounts
     and the Receivables existing thereunder is true and correct in all material
     respects as of the Initial Cut-Off Date or such applicable Addition Cut-Off
     Date, as the case may be, and as of the Initial Cut-Off Date, the aggregate
     amount of Receivables in all the Initial Accounts was $[.], of which $[.]
     were Principal Receivables;

               (iii) each Receivable has been conveyed to HRF free and clear of
     any Lien and each underlying receivable is free and clear of all Liens;

               (iv)  all authorizations, consents, orders or approvals of or
     registrations or declarations with any Governmental Authority required to
     be obtained, effected or given by the Bank in connection with the
     conveyance of Receivables to HRF have been duly obtained, effected or given
     and are in full force and effect;

               (v)   this Agreement or, in the case of Additional Accounts, the
     related Supplemental Conveyance constitutes a valid sale, transfer and
     assignment to HRF of all right, title and interest of the Bank in the
     Receivables and the proceeds thereof and the Interchange payable pursuant
     to this Agreement and the Recoveries payable pursuant to this Agreement;

               (vi)  on the Initial Cut-Off Date, each Account is an Eligible
     Account and, in the case of Additional Accounts, on the Addition Cut-Off
     Date, each related Additional Account is an Eligible Account;

                                      11
<PAGE>

               (vii)  on the Initial Cut-Off Date, each Receivable then existing
     60is an Eligible Receivable, and in the case of Additional Accounts, on the
     applicable Addition Cut-Off Date, each Receivable generated thereunder is
     an Eligible Receivable;

               (viii) as of the date of the creation of any new Receivable,
     such Receivable is an Eligible Receivable; and

               (ix)   no selection procedures believed by the Bank to be
     materially adverse to the interests of HRF or the Noteholders have been
     used in selecting such Accounts.

          (b)  Notice of Breach.  The representations and warranties set forth
               ----------------
in this Section 4.02 shall survive the transfer and assignment of the
Receivables to HRF. Upon discovery by either the Bank or HRF of a breach of any
of the representations and warranties set forth in this Section 4.02, the party
discovering such breach shall give written notice to the other party and the
Trustee within three Business Days following such discovery; provided that the
failure to give notice within three Business Days does not preclude subsequent
notice. The Bank hereby acknowledges that HRF intends to rely on the
representations hereunder in connection with representations made by HRF to
secured parties, assignees or subsequent transferees including but not limited
to transfers made by HRF to the Trust pursuant to the Transfer and Servicing
Agreement and by the Trust to the Indenture Trustee pursuant to the Indenture
and that the Owner Trustee and the Indenture Trustee may enforce such
representations directly against the Bank.

          Section 4.03.  Representations and Warranties of HRF.  As of the
                         -------------------------------------
Closing Date, HRF hereby represents and warrants to, and agrees with, the Bank
that:

          (a)  Organization and Good Standing.  HRF is a corporation duly
               ------------------------------
organized and validly existing under the laws of the State of Delaware and has,
in all material respects, full power and authority to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted and to execute, deliver and perform its obligations under
this Agreement.

          (b)  Due Authorization.  The execution and delivery of this Agreement
               -----------------
and the Conveyance Papers and the consummation of the transactions provided for
in this Agreement and the Conveyance Papers have been duly authorized by HRF by
all necessary corporate action on the part of HRF.

          (c)  No Conflict.  The execution and delivery of this Agreement and
               -----------
the Conveyance Papers by HRF, the performance of the transactions contemplated
by this Agreement and the Conveyance Papers, and the fulfillment of the terms of
this Agreement and the Conveyance Papers applicable to HRF, will not conflict
with, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material default
under, any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which HRF is a party or by which it or any of its properties are
bound.

          (d)  No Violation.  The execution, delivery and performance of this
               ------------
Agreement and the Conveyance Papers by HRF and the fulfillment of the terms
contemplated herein and therein applicable to HRF will not conflict with or
violate any Requirements of Law applicable to HRF.

          (e)  No Proceedings.  There are no proceedings or investigations
               --------------
pending or, to the best knowledge of HRF, threatened against HRF, before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or the Conveyance
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated

                                      12
<PAGE>

by this Agreement or the Conveyance Papers, (iii) seeking any determination or
ruling that, in the reasonable judgment of HRF, would materially and adversely
affect the performance by HRF of its obligations under this Agreement or the
Conveyance Papers or (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this Agreement
or the Conveyance Papers.

          (f)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of or registrations or declarations with any Governmental Authority required to
be obtained, effected or given by HRF in connection with the execution and
delivery by HRF of this Agreement and the Conveyance Papers and the performance
of the transactions contemplated by this Agreement and the Conveyance Papers
have been duly obtained, effected or given and are in full force and effect.

          The representations and warranties set forth in this Section 4.03
shall survive the Conveyance of the Receivables to HRF.  Upon discovery by HRF
or the Bank of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the other
party.

                              [END OF ARTICLE IV]

                                      13
<PAGE>

                                   ARTICLE V

                                   COVENANTS

          Section 5.01.  Covenants of the Bank.  The Bank hereby covenants and
                         ---------------------
agrees with HRF as follows:

          (a)  Receivables Not To Be Evidenced by Promissory Notes.  Except in
               ---------------------------------------------------
connection with its enforcement or collection of an Account, the Bank will take
no action to cause any Receivable (or underlying receivable) to be evidenced by
any instrument (as defined in the UCC) and if any Receivable (or underlying
receivable) is so evidenced as a result of any action by the Bank it shall be
deemed to be an ineligible Receivable in accordance with Section 6.01(a) and
shall be reassigned to the Bank in accordance with Section 6.01(b)

          (b)  Security Interests.  Except for the conveyances hereunder, the
               ------------------
Bank will not sell, pledge, assign or transfer to any other Person, or take any
other action inconsistent with HRF's ownership of the Receivables or grant,
create, incur, assume or suffer to exist any Lien on, any Receivable (or the
underlying receivable), whether now existing or hereafter created, or any
interest therein, and the Bank shall not claim any ownership interest in the
Receivables and shall defend the right, title and interest of HRF in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Bank.

          (c)  Account Allocations.  In the event that the Bank is unable for
               -------------------
any reason to transfer Receivables to HRF in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application of
the provisions of Section 8.02 or any order of any Governmental Authority),
then, in any such event, the Bank agrees (except as prohibited by any such
order) to allocate and pay to HRF, after the date of such inability, all amounts
in the manner by which HRF will allocate and pay to the Trust after such
inability by HRF pursuant to Section 2.11 of the Transfer and Servicing
Agreement.

          (d)  Delivery of Collections or Recoveries.  In the event that the
               -------------------------------------
Bank receives Collections or Recoveries, the Bank agrees to pay to HRF (or to
the Servicer if HRF so directs) all such Collections and Recoveries to HRF as
soon as practicable after receipt thereof.

          (e)  Notice of Liens.  The Bank shall notify HRF promptly after
               ---------------
becoming aware of any Lien on any Receivable (or on the underlying receivable)
other than the conveyances hereunder, under the Transfer and Servicing Agreement
and under the Indenture.

          (f)  Interchange.  Not later than 1:00 p.m., New York City time, on
               -----------
each Transfer Date, the Bank shall deposit into the Collection Account, in
immediately available funds, (i) the amount of Interchange to be included as
Collections of Finance Charge and Administrative Receivables with respect to the
preceding Due Period or (ii) if at any time the Bank cannot identify the amount
of such Interchange, the amount reasonably estimated by the Bank as the amount
of such Interchange.

          (g)  Documentation of Transfer.  The Bank shall undertake to file the
               -------------------------
documents which would be necessary to perfect and maintain the transfer of the
Purchased Assets to HRF.

          (h)  Periodic Rate Finance Charges.  (i) Except (A) as otherwise
               -----------------------------
required by any Requirements of Law or (B) as is deemed by the Bank or other
Account Owner, as the case may be, to be necessary in order for it to maintain
its credit card business or a program operated by such credit card business on a
competitive basis based on a good faith assessment by it of the nature of the
competition

                                      14
<PAGE>

with respect to the credit card business or such program, it shall not at any
time take any action which would have the effect of reducing the Portfolio Yield
to a level that could be reasonably expected to cause any Series to experience
any Amortization Event, Reinvestment Event or Event of Default based on the
insufficiency of the Portfolio Yield or any similar test and (ii) except as
otherwise required by any Requirements of Law, it shall not take any action
which would have the effect of reducing the Portfolio Yield to be less than the
highest Average Rate for any Group.

          (i)  Credit Agreements and Guidelines.  Subject to compliance with all
               --------------------------------
Requirements of Law and paragraph (h) above, the Bank or other Account Owner, as
the case may be, may change the terms and provisions of the applicable Credit
Agreements (including the Periodic Rate Finance Charges to be assessed thereon),
and the Servicer, the Bank or any other Account Owner, as the case may be, may
change the applicable Credit Guidelines in any respect (including the
calculation of the amount or the timing of charge-offs).   Notwithstanding the
above, unless required by Requirements of Law or as permitted by paragraph (h)
above, the Bank or other Account Owner, as the case may be, will not take any
action unless (i) at the time of such action, the Bank or other Account Owner,
as the case may be, reasonably believes that such action will not cause an
Amortization Event, Reinvestment Event or Event of Default to occur, and (ii)
such change is made applicable to the comparable segment of the revolving credit
card accounts owned by the Bank or other Account Owner which have
characteristics the same as, or substantially similar to, the Accounts that are
the subject of such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between the Bank or other Account Owner, as the
case may be, and an unrelated third party or by the terms of the Credit
Agreements.

                              [END OF ARTICLE V]

                                      15
<PAGE>

                                  ARTICLE VI

                             REPURCHASE OBLIGATION

          Section 6.01.  Reassignment of Ineligible Receivables.
                         --------------------------------------

          (a)  In the event any representation or warranty under Section
4.02(a)(ii), (iii), (iv), (vi), (vii) or (viii) is not true and correct in any
material respect as of the date specified therein with respect to any Receivable
or the related Account and as a result of such breach HRF is required to accept
reassignment of Ineligible Receivables previously sold by the Bank to HRF
pursuant to Section 2.05(a) of the Transfer and Servicing Agreement, the Bank
shall accept reassignment of HRF's interest in such Ineligible Receivables on
the terms and conditions set forth in Section 6.01(b).

          (b)  The Bank shall accept reassignment of any Ineligible Receivables
previously sold by the Bank to HRF from HRF on the date on which such
reassignment obligation arises, and shall pay for such reassigned Ineligible
Receivables by paying to HRF, not later than 3:00 p.m., New York City time on
such date, an amount equal to the unpaid principal balance of such Ineligible
Receivables plus accrued and unpaid finance charges at the annual percentage
rate applicable to such Receivables from the last date billed through the end of
the Due Period in which such reassignment obligation arises.  Upon reassignment
of such Ineligible Receivables, HRF shall automatically and without further
action be deemed to sell, transfer, assign, set-over and otherwise convey to the
Bank, without recourse, representation or warranty, all the right, title and
interest of HRF in and to such Ineligible Receivables, all monies due or to
become due with respect thereto and all proceeds thereof; and such reassigned
Ineligible Receivables shall be treated by HRF as collected in full as of the
date on which they were transferred.  HRF shall execute such documents and
instruments of transfer or assignment and take such other actions as shall
reasonably be requested by the Bank to effect the conveyance of such Ineligible
Receivables pursuant to this subsection.

          Section 6.02.  Reassignment of Noteholders' Collateral in Trust
                         ------------------------------------------------
Portfolio.  In the event any representation or warranty set forth in Section
---------
4.01(a), (c), (d), (f) or (g) or Section 4.02(a)(i), (a)(v) or (a)(ix) is not
true and correct in any material respect and as a result of such breach HRF is
required to accept a reassignment of the Noteholders' Collateral in the
Receivables previously sold by the Bank to HRF pursuant to Section 2.06 of the
Transfer and Servicing Agreement, the Bank shall be obligated to accept a
reassignment of HRF's interest in such Receivables on the terms set forth below.

          The Bank shall pay to HRF by depositing in the Collection Account in
immediately available funds, not later than 1:00 P.M. New York City time, on the
first Transfer Date following the Due Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the
amount specified in Section 2.06 of the Transfer and Servicing Agreement.

                              [END OF ARTICLE VI]

                                      16
<PAGE>

                                  ARTICLE VII

                             CONDITIONS PRECEDENT

          Section 7.01.  Conditions to HRF's Obligations Regarding Initial
                         -------------------------------------------------
Receivables.  The obligations of HRF to purchase the Receivables in the Initial
-----------
Accounts on the Closing Date shall be subject to the satisfaction of the
following conditions:

          (a)  All representations and warranties of the Bank contained in this
Agreement shall be true and correct on the Closing Date with the same effect as
though such representations and warranties had been made on such date;

          (b)  All information concerning the Initial Accounts provided to HRF
shall be true and correct as of the Initial Cut-Off Date in all material
respects;

          (c)  The Bank shall have (i) delivered to HRF a computer file or
microfiche list containing a true and complete list of all Initial Accounts
identified by account number and by the Receivables balance as of the Initial
Cut-Off Date and (ii) substantially performed all other obligations required to
be performed by the provisions of this Agreement;

          (d)  The Bank shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables (other than Receivables in
Additional Accounts) now existing and hereafter created for the transfer of
accounts and general intangibles (each as defined in Section 9-106 of the UCC)
meeting the requirements of applicable state law in such manner and in such
jurisdiction as would be necessary to perfect the sale of and security interest
in the Receivables from the Bank to HRF, and shall deliver a file-stamped copy
of such financing statements or other evidence of such filings to HRF;

          (e)  On or before the Closing Date, (i) HRF and the Owner Trustee
shall have entered into the Trust Agreement (ii) HRF, the Bank and the Trust
shall have entered into the Transfer and Servicing Agreement, (iii) the Trust,
the Bank and the Indenture Trustee shall have entered into the Indenture and
(iv) the closing under the Transfer and Servicing Agreement and the Indenture
shall take place simultaneously with the initial closing hereunder; and

          (f)  All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to HRF, and HRF shall have received from the
Bank copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as HRF
may reasonably have requested.

          Section 7.02.  Conditions Precedent to the Bank's Obligations.  The
                         ----------------------------------------------
obligations of the Bank to sell Receivables in the Initial Accounts on the
Closing Date shall be subject to the satisfaction of the following conditions:

          (a)  All representations and warranties of HRF contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;

          (b)  Payment or provision for payment of the Purchase Price in
accordance with the provision of Section 3.01 hereof shall have been made; and

                                      17
<PAGE>

          (c)  All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Bank, and the Bank shall have received
from HRF copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as the
Bank may reasonably have requested.

                             [END OF ARTICLE VII]

                                      18
<PAGE>

                                 ARTICLE VIII

                         TERM AND PURCHASE TERMINATION

          Section 8.01.  Term.  This Agreement shall commence as of the date of
                         ----
execution and delivery hereof and shall continue until the termination of the
Trust as provided in Article VIII of the Trust Agreement.

          Section 8.02.  Purchase Termination.  If the Bank shall fail generally
                         --------------------
to, or admit in writing its inability to, pay its debts as they become due; or
if a proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of the Bank in an
involuntary case under any Debtor Relief Law, or for the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of the Bank or for any substantial part of the Bank's
property, or for the winding-up or liquidation of the Bank's affairs and, if
instituted against the Bank, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of the
actions sought in such proceeding shall occur; or if the Bank shall commence a
voluntary case under any Debtor Relief Law, or if the Bank shall consent to the
entry of an order for relief in an involuntary case under any Debtor Relief Law,
or consent to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar
official of, or for, any substantial part of its property, or any general
assignment for the benefit of its creditors; or the Bank or any subsidiary of
the Bank shall have taken any corporate action in furtherance of any of the
foregoing actions (each an "Insolvency Event"); then the Bank shall immediately
                            ----------------
cease to transfer Principal Receivables to HRF and shall promptly give notice to
HRF, the Owner Trustee and the Indenture Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to HRF of additional Principal
Receivables, Principal Receivables transferred to HRF prior to the occurrence of
such Insolvency Event and Collections in respect of such Principal Receivables
and Finance Charge and Administrative Receivables whenever created, accrued in
respect of such Principal Receivables, shall continue to be property of HRF
available for transfer by HRF to the Trust pursuant to the Transfer and
Servicing Agreement.

                             [END OF ARTICLE VIII]

                                      19
<PAGE>

                                  ARTICLE IX

                           MISCELLANEOUS PROVISIONS

          Section 9.01.  Amendment.  This Agreement and any Conveyance Papers
                         ---------
and the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by HRF and the Bank in
accordance with this Section 9.01.  This Agreement and any Conveyance Papers may
be amended from time to time by HRF and the Bank (i) to cure any ambiguity, (ii)
to correct or supplement any provisions herein which may be inconsistent with
any other provisions herein or in any such other Conveyance Papers, (iii) to add
any other provisions with respect to matters or questions arising under this
Agreement or any Conveyance Papers which shall not be inconsistent with the
provisions of this Agreement or any Conveyance Papers, (iv) to change or modify
the Purchase Price and (v) to change, modify, delete or add any other obligation
of the Bank or HRF; provided, however that no amendment pursuant to clause (iv)
or (v) of this Section 9.01 shall be effective unless the Bank and HRF have been
notified in writing that the Rating Agency Condition has been satisfied;
provided, further, the Bank and HRF shall have delivered to the Indenture
Trustee an Officer's Certificate, dated the date of any such action, stating
that each of the Bank and HRF reasonably believes that such action will not have
an Adverse Effect, unless the Owner Trustee and the Indenture Trustee shall
consent thereto.  Any reconveyance executed in accordance with the provisions
hereof shall not be considered to be an amendment to this Agreement.  A copy of
any amendment to this Agreement shall be sent to the Rating Agency.

          Section 9.02.  Governing Law. THIS AGREEMENT AND THE CONVEYANCE PAPERS
                         -------------
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

          Section 9.03.  Notices.  All demands, notices and communications
                         -------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of the Bank, 1111 Town Center Drive, Las Vegas, Nevada 89134,
Attention: [.], (b) in the case of HRF, 1111 Town Center Drive, Las Vegas,
Nevada 89134, Attention: [.], (c) in the case of the Owner Trustee, Rodney
Square North, 1100 North Market Street, Wilmington, DE 19890-0001, (d) or in the
case of the Indenture Trustee, Wells Fargo Bank Minnesota, N.A., MAC N9311-161,
6th & Marquette, Minneapolis, MN 55479, Attention: Asset Backed Securities; or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.

          Section 9.04.  Severability of Provisions.  If any one or more of the
                         --------------------------
covenants, agreements, provisions or terms of this Agreement or any Conveyance
Paper shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement or any Conveyance
Paper and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of any Conveyance Paper.

          Section 9.05.  Assignment.  Notwithstanding anything to the contrary
                         ----------
contained herein, other than HRF's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trust and the Trust's
assignment of its rights, title and interests in, to and under this Agreement to
the Indenture Trustee for the benefit of the beneficiaries of the Trust,
including the Noteholders as contemplated by the Transfer and Servicing
Agreement, the Indenture and Section 9.06 hereof, this Agreement and all other
Conveyance Papers may not be assigned by the parties hereto; provided, however,
that the Bank shall

                                      20
<PAGE>

have the right to assign its rights, title and interests in, to and under this
Agreement to (a) any successor by merger assuming this Agreement (b) to any
affiliate owned directly or indirectly by Household International which assumes
the obligations of this Agreement or (c) to any entity provided that the Rating
Agency has advised HRF and the Bank that the Rating Agency Condition has been
satisfied.

          Section 9.06.  Acknowledgement and Agreement of the Bank.  By
                         -----------------------------------------
execution below, the Bank expressly acknowledges and agrees that all of HRF's
right, title, and interest in, to, and under this Agreement, including, without
limitation, all of HRF's right, title, and interest in and to the Receivables
purchased pursuant to this Agreement, shall be assigned by HRF to the Trust, and
shall be assigned by the Trust to the Indenture Trustee for the benefit of the
beneficiaries of the Trust, including the Noteholders, and the Bank consents to
such assignments.  The Bank further agrees that notwithstanding any claim,
counterclaim, right or setoff or defense which it may have against HRF, due to a
breach by HRF of this Agreement or for any other reason, and notwithstanding the
bankruptcy of HRF or any other event whatsoever, the Bank's sole remedy shall be
a claim against HRF for money damages, and then only to the extent of funds
received by HRF pursuant to the Transfer and Servicing Agreement, and in no
event shall the Bank assert any claim on or any interest in the Receivables or
any proceeds thereof or take any action which would reduce or delay receipt by
the Trust of collections with respect to the Receivables.  Additionally, the
Bank agrees for the benefit of the Trust that any amounts payable by the Bank to
HRF hereunder which are to be paid by HRF to the Trust for the benefit of the
Noteholders shall be paid by the Bank, on behalf of HRF, directly to the Trust.

          Section 9.07.  Further Assurances.  HRF and the Bank agree to do and
                         ------------------
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party, the Owner
Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement, the Conveyance Papers and the Transfer and Servicing Agreement,
including, without limitation, the execution of any financing statements or
continuation statements or equivalent documents relating to the Receivables for
filing under the provisions of the UCC or other law of any applicable
jurisdiction.

          Section 9.08.  No Waiver; Cumulative Remedies.  No failure to exercise
                         ------------------------------
and no delay in exercising, on the part of HRF or the Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.  Subject to Section 9.06, the rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.

          Section 9.09.  Counterparts.  This Agreement and all Conveyance Papers
                         ------------
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.

          Section 9.10.  Binding; Third-Party Beneficiaries.  This Agreement and
                         ----------------------------------
the Conveyance Papers will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.  The Trust
and the Indenture Trustee shall be considered third-party beneficiaries of this
Agreement.

          Section 9.11.  Merger and Integration.  Except as specifically stated
                         ----------------------
otherwise herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers.  This Agreement and the Conveyance Papers may not be
modified, amended, waived or supplemented except as provided herein.

                                      21
<PAGE>

          Section 9.12.  Headings.  The headings are for purposes of reference
                         --------
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

          Section 9.13.  Schedules and Exhibits.  The schedules and exhibits
                         ----------------------
attached hereto and referred to herein shall constitute a part of this Agreement
and are incorporated into this Agreement for all purposes.

          Section 9.14.  Survival of Representations and Warranties.  All
                         ------------------------------------------
representations, warranties and agreements contained in this Agreement or
contained in any Supplemental Conveyance, shall remain operative and in full
force and effect and shall survive conveyance of the Receivables by the Bank to
HRF and thereafter to the Trust pursuant to the Transfer and Servicing Agreement
and by the Trust and the Indenture Trustee pursuant to the Indenture.

          Section 9.15.  Nonpetition Covenant.  Notwithstanding any prior
                         --------------------
termination of this Agreement, the Bank shall not, prior to the date which is
one year and one day after the termination of this Agreement, acquiesce,
petition or otherwise invoke or cause HRF to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against HRF under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of HRF or any substantial part of its property or
ordering the winding-up or liquidation or the affairs of HRF.

                              [END OF ARTICLE IX]

                                      22
<PAGE>

          IN WITNESS WHEREOF, HRF and the Bank have caused this Receivables
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.

Dated:  [.], 2000                  HOUSEHOLD BANK (NEVADA), N.A.

                                   By: _______________________________
                                       Name:
                                       Title:

                                   HOUSEHOLD RECEIVABLES FUNDING, INC. III

                                   By: _______________________________
                                       Name:
                                       Title:
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                        FORM OF SUPPLEMENTAL CONVEYANCE

                        (As required by Section 2.05 of
                      the Receivables Purchase Agreement)

          SUPPLEMENTAL CONVEYANCE No. ________ dated as of
________________________ ______, __________, by and between HOUSEHOLD BANK
(NEVADA), N.A. (the "Bank"), and HOUSEHOLD RECEIVABLES FUNDING, INC. III
                     ----
("HRF"), pursuant to the Receivables Purchase Agreement referred to below.
  ---

                                  WITNESSETH:
                                  ----------

          WHEREAS, the Bank and HRF are parties to a Receivables Purchase
Agreement, dated as of ____________________________ ____, 2000 (hereinafter as
such agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Receivables Purchase Agreement");
                            ------------------------------

          WHEREAS, pursuant to the Receivables Purchase Agreement, the Bank
wishes to designate Additional Accounts to be included as Accounts and the Bank
wishes to convey its right, title and interest in the Receivables of such
Additional Accounts, whether now existing or hereafter created, to HRF pursuant
to the Receivables Purchase Agreement (as each such term is defined in the
Receivables Purchase Agreement); and

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

          NOW, THEREFORE, the Bank and HRF hereby agree as follows:

          1.   Defined Terms.  All capitalized terms used herein shall have the
               -------------
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.

          "Addition Cut-Off Date" shall mean, with respect to the Additional
           ---------------------
Accounts designated hereby, ________________ ______, __________.

          "Addition Date" shall mean, with respect to the Additional Accounts
           -------------
designated hereby ______________ ______, __________.

          2.   Designation of Additional Accounts.  The Bank delivers herewith a
               ----------------------------------
computer file or microfiche list containing a true and complete schedule
identifying all such Additional Accounts and specifying for each such Account,
as of the Addition Cut-Off Date, its account number, the aggregate amount
outstanding in such Account and the aggregate amount of Principal Receivables in
such Account.  Such computer file, microfiche list or other documentation shall
be as of the date of this Supplemental Conveyance incorporated into and made
part of this Supplemental Conveyance and is marked as Schedule I to this
                                                      ----------
Supplemental Conveyance.

          3.   Conveyance of Receivables.
               -------------------------

          (a)  The Bank does hereby sell, transfer, assign, set over and
otherwise convey to HRF, without recourse except as provided in the Receivables
Purchase Agreement, all its right, title and interest

                                      A-1
<PAGE>

in, to and under (i) the Receivables generated by such Additional Accounts, now
existing at the close of business on the Addition Cut-Off Date and hereafter
created until termination of the Receivables Purchase Agreement, all monies due
or to become due and all amounts received with respect thereto and all
"proceeds" (including, without limitation, "proceeds" as defined in Article 9 of
the UCC) thereof and (ii) the right to receive Interchange and Recoveries with
respect to such Receivables.

          (b)  In connection with such sale, the Bank agrees to record and file,
at its own expense, one or more financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables, now existing and hereafter created, for the transfer
of accounts and general intangibles meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect the
sale and assignment of and the security interest in the Receivables to HRF, and
to deliver a file-stamped copy of such financing statement or other evidence of
such filing to HRF.

          (c)  In connection with such sale, the Bank further agrees, at its own
expense, on or prior to the date of this Supplemental Conveyance, to indicate in
the appropriate computer files or microfiche list that all Receivables created
in connection with the Additional Accounts designated hereby have been conveyed
to HRF pursuant to this Supplemental Conveyance.

          4.   Acceptance by HRF.  HRF hereby acknowledges its acceptance of all
               -----------------
right, title and interest to the property, now existing and hereafter created,
conveyed to HRF pursuant to Section 3(a) of this Supplemental Conveyance, and
declares that it shall maintain such right, title and interest.  HRF further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Supplemental Conveyance, the Bank delivered to HRF the computer file or
microfiche list described in Section 2 of this Supplemental Conveyance.

          5.   Representations and Warranties of the Bank.  The Bank hereby
               ------------------------------------------
represents and warrants to HRF as of the date of this Supplemental Conveyance
and as of the Addition Date that:

          (a)  Legal, Valid and Binding Obligation.  This Supplemental
               -----------------------------------
Conveyance constitutes a legal, valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally from time to time in effect or general principles of equity;

          (b)  Eligibility of Accounts.  On the Addition Cut-Off Date, each
               -----------------------
Additional Account designated hereby is an Eligible Account;

          (c)  No Liens.  Each Receivable in an Additional Account designated
               --------
hereby has been conveyed to HRF free and clear of any Lien and each underlying
receivable is free and clear of all Liens;

          (d)  Eligibility of Receivables.  On the Addition Cut-Off Date, each
               --------------------------
Receivable existing in an Additional Account designated hereby is an Eligible
Receivable and as of the date of creation of any Receivable in an Additional
Account designated hereby, such Receivable is an Eligible Receivable;

          (e)  Selection Procedures.  No selection procedure believed by the
               --------------------
Bank to be adverse to the interests of HRF or the Noteholders was utilized in
selecting the Additional Accounts;

          (f)  Transfer of Receivables.  This Supplemental Conveyance
               -----------------------
constitutes a valid sale, transfer and assignment to HRF of all right, title and
interest of the Bank in the Receivables arising in the Additional Accounts
designated hereby now existing or hereafter created, all monies due or to become
due

                                      A-2
<PAGE>

and all amounts received with respect thereto and the "proceeds" (including,
without limitation, "proceeds" as defined in Article 9 of the UCC) thereof and
the Interchange and the Recoveries with respect thereto;

          (g)  No Conflict.  The execution and delivery of this Supplemental
               -----------
Conveyance, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof, will not
conflict with, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Bank is a party or by which it or its properties
are bound;

          (h)  No Violation.  The execution and delivery of this Supplemental
               ------------
Conveyance by the Bank, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof applicable to
the Bank will not conflict with or violate any Requirements of Law applicable to
the Bank;

          (i)  No Proceedings.  There are no proceedings or investigations,
               --------------
pending or, to the best knowledge of the Bank, threatened against the Bank
before any Governmental Authority (i) asserting the invalidity of this
Supplemental Conveyance, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Supplemental Conveyance, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Bank, would
materially and adversely affect the performance by the Bank of its obligations
under this Supplemental Conveyance or (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability of
this Supplemental Conveyance; and

          (j)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of any court or other governmental authority required to be obtained by the Bank
in connection with the execution and delivery of this Supplemental Conveyance by
the Bank and the performance of the transactions contemplated by this
Supplemental Conveyance by the Bank, have been obtained.

          6.   Ratification of the Receivables Purchase Agreement.  The
               --------------------------------------------------
Receivables Purchase Agreement is hereby ratified, and all references to the
"Receivables Purchase Agreement," to "this Agreement" and "herein" shall be
--------------------------------      --------------       ------
deemed from and after the Addition Date to be a reference to the Receivables
Purchase Agreement as supplemented by this Supplemental Conveyance.  Except as
expressly amended hereby, all the representations, warranties, terms, covenants
and conditions of the Receivables Purchase Agreement shall remain unamended and
shall continue to be, and shall, remain, in full force and effect in accordance
with its terms and except as expressly provided herein shall not constitute or
be deemed to constitute a waiver of compliance with or consent to non-compliance
with any term or provision of the Receivables Purchase Agreement.

          7.   Counterparts.  This Supplemental Conveyance may be executed in
               ------------
any number of counterparts, all of which taken together shall constitute one and
the same instrument.

                                      A-3
<PAGE>

          IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly authorized
officers on the day and the year first above written.

Dated:  _______________ ___, 200_       HOUSEHOLD BANK (NEVADA), N.A.

                                        By: ___________________________________
                                            Name:
                                            Title:

                                        HOUSEHOLD RECEIVABLES FUNDING, INC. III

                                        By: ___________________________________
                                            Name:
                                            Title:

                                      A-4
<PAGE>

                                                                   Schedule I to
                                                                    Supplemental
                                                                    ------------
                                                                      Conveyance
                                                                      ----------

                              ADDITIONAL ACCOUNTS
                              -------------------

                                      I-1
<PAGE>

                                                                      Schedule I
                                                                      ----------
                                LIST OF ACCOUNTS
                                ----------------

                        DEEMED INCORPORATED BY REFERENCE