Exhibit
10.4


Execution Copy


 


MASTER RECEIVABLES
PURCHASE AGREEMENT


 


between


 


HOUSEHOLD
AUTOMOTIVE FINANCE CORPORATION,


as Seller


 


and


 


HOUSEHOLD AUTO
RECEIVABLES CORPORATION,


as Purchaser


 


dated as of


 


November 18, 2002

















 


TABLE OF CONTENTS


 


	
  ARTICLE I DEFINITIONS

  
	
   

  
	
  SECTION 1.1

  	
  General

  
	
  SECTION 1.2

  	
  Specific
  Terms

  
	
  SECTION 1.3

  	
  Other
  Definitional Provisions.

  
	
  SECTION 1.4

  	
  Certain
  References

  
	
  SECTION 1.5

  	
  No Recourse

  
	
   

  	
   

  
	
  ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER
  CONVEYED PROPERTY

  
	
   

  
	
  SECTION 2.1

  	
  Purchase

  
	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES

  
	
   

  
	
  SECTION 3.1

  	
  Representations
  and Warranties of Seller

  
	
  SECTION 3.2

  	
  Representations
  and Warranties of HARC

  
	
   

  	
   

  
	
  ARTICLE IV COVENANTS OF SELLER

  
	
   

  
	
  SECTION 4.1

  	
  Seller’s
  Covenants

  
	
   

  	
   

  
	
  ARTICLE V REPURCHASES

  
	
   

  
	
  SECTION 5.1

  	
  Repurchase of
  Receivables Upon Breach of Warranty

  
	
  SECTION 5.2

  	
  Reassignment
  of Repurchased Receivables

  
	
  SECTION 5.3

  	
  Waivers

  
	
   

  	
   

  
	
  ARTICLE VI MISCELLANEOUS

  
	
   

  
	
  SECTION 6.1

  	
  Liability of
  Seller

  
	
  SECTION 6.2

  	
  Amendment

  
	
  SECTION 6.3

  	
  GOVERNING LAW

  
	
  SECTION 6.4

  	
  Notices

  
	
  SECTION 6.5

  	
  Severability
  of Provisions

  
	
  SECTION 6.6

  	
  Assignment

  
	
  SECTION 6.7

  	
  Acknowledgment
  and Agreement of Seller

  
	
  SECTION 6.8

  	
  Further
  Assurances

  
	
  SECTION 6.9

  	
  No Waiver;
  Cumulative Remedies

  
	
  SECTION
  6.10

  	
  Counterparts

  
	
  SECTION
  6.11

  	
  Binding
  Effect; Third-Party Beneficiaries

  
	
  SECTION
  6.12

  	
  Merger and
  Integration

  
	
  SECTION
  6.13

  	
  Heading

  
	
  SECTION
  6.14

  	
  Schedules
  and Exhibits

  
	
  SECTION
  6.15

  	
  Survival of
  Representations and Warranties

  
	
  SECTION
  6.16

  	
  Nonpetition
  Covenant

  
				



 


i

















 


EXHIBITS


 


EXHIBIT A                     Form of
Receivables Purchase Agreement Supplement


 


SCHEDULE A                 Schedule
of Related Master Sale and Servicing Agreements


 


ii

















 


THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as
of November 18, 2002, executed between Household Auto Receivables Corporation,
a Nevada corporation, as purchaser (“HARC”) and Household Automotive
Finance Corporation, a Delaware corporation, as seller (“Seller”).


 


W I T
N E S S E T H :


 


WHEREAS, HARC has agreed to purchase from time to time
from Seller, and Seller, pursuant to this Agreement, has agreed to transfer
from time to time to HARC the Receivables and the Other Conveyed Property.


 


WHEREAS, HARC intends from time to time to transfer
Receivables and Other Conveyed Property to different Delaware business trusts,
each of which will issue notes and certificates secured by the Receivables and
Other Conveyed Property.


 


NOW, THEREFORE, in consideration of the premises and
the mutual agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is acknowledged, HARC and Seller, intending
to be legally bound, hereby agree as follows:


 


ARTICLE I


 


DEFINITIONS


 


SECTION 1.1         General.  Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
related Master Sale and Servicing Agreement.


 


SECTION 1.2         Specific
Terms.  Whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:


 


“Agreement” means
this Master Receivables Purchase Agreement and all amendments hereof and
supplements hereto.


 


“Conveyance” shall
have the meaning specified in Section 2.1.


 


“Conveyance Papers”
shall have the meaning specified in Section 3.1.


 


“Cutoff Date” shall
have the meaning assigned to such term in the applicable Series Supplement or
Receivables Purchase Agreement Supplement.


 


“Master Sale and
Servicing Agreement” means each agreement so entitled set forth on Schedule
A among HARC, Household Finance Corporation, as Master Servicer, the indenture
trustee named therein and the issuer named therein, each as supplemented by a
related series supplement among HARC, Household Finance 


 


1

















 


Corporation, as Master Servicer,
the indenture trustee named therein, the issuer named therein and the owner
trustee named therein, pursuant to which Receivables are conveyed by HARC to
such issuer.


 


“Other Conveyed
Property” means all money, instruments, rights and other property that are
subject or intended to be subject to the lien and security interest of the
related Indenture (including all property and interests granted to the related
Indenture Trustee), including all proceeds thereof, other than the Receivables.


 


“Purchase Date” means, with respect to
Receivables, any date, on which Receivables are to be purchased by HARC
pursuant to this Agreement and a Receivables Purchase Agreement Supplement is
executed and delivered by Seller and HARC.


 


“Receivables” means the Receivables listed on
the Schedules of Receivables attached to a Receivables Purchase Agreement
Supplement as Schedule A.


 


“Receivables Purchase Agreement Supplement”
means an agreement between HARC and Seller in connection with a Series,
substantially in the form of Exhibit A hereto.


 


“Repurchase Event” means a determination
pursuant to Section 3.2 of the related Master Sale and Servicing Agreement that
HARC is required to repurchase a Receivable.


 


“Schedule of Receivables” means a schedule of
Receivables sold and transferred pursuant to this Agreement and a related
Receivables Purchase Agreement Supplement, which is attached as Schedule A to
such related Receivables Purchase Agreement Supplement.


 


SECTION 1.3         Other
Definitional Provisions.


 


(a)   All terms defined in this Agreement shall
have the defined meanings when used in any certificate, other documents, or
Conveyance Paper made or delivered pursuant hereto unless otherwise defined
herein.


 


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


 


(c)   All determinations of the principal or
finance charge balance of any Receivable, and of any collections thereof, shall
be made in accordance with the related Master Sale and Servicing 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


 


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business on such day, or as of the first day of a
Collection Period shall refer to the opening of business on such day.  All references to the last day of a
Collection Period shall refer to the close of business on such day.


 


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


 


ARTICLE II


 


CONVEYANCE OF THE RECEIVABLES


AND THE OTHER CONVEYED PROPERTY


 


SECTION 2.1         Purchase.


 


(a)   By execution of this Agreement and subject to
the terms and conditions of this Agreement, on a Purchase Date with respect to
a Receivables Purchase Agreement Supplement, Seller shall sell, transfer,
assign, and otherwise convey to HARC (each, a “Conveyance”) without
recourse (but without limitation of its obligations in this Agreement), and
HARC shall purchase, all right, title and interest of Seller in and to:


 


(i)            each
and every Receivable listed from time to time on Schedule A to such related
Receivables Purchase Agreement Supplement and all monies paid or payable
thereon or in respect thereof on or after the related Cutoff Date (including
amounts due on or before the related Cutoff Date but received by Seller after
such date);


 


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


 


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


 


(iv)          any
proceeds and the right to receive proceeds with respect to such Receivables
repurchased by a Dealer pursuant to a Dealer Agreement;


 


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


 


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


 


3

















 


the Receivables and any proceeds from the liquidation
of such Receivables;


 


(vii)         all
items contained in the Receivables Files with respect to such Receivables and
any and all other documents that Seller or Master Servicer keeps on file in
accordance with its customary procedures relating to the related Receivables,
or the related Financed Vehicles or Obligor;


 


(viii)        all
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 the liquidation of such Receivable; and


 


(ix)           all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.


 


(b)   Simultaneously with each Conveyance, HARC
will pay or cause to be paid to or upon the order of Seller an amount equal to
100% of the Principal Balance of the related Receivables on the books and
records of Seller, plus the present value of anticipated excess spread on such
Receivables, discounted to take into account any uncertainty as to future
performance matching historical performance, servicing fees, delinquencies, pay
down rates, yield and such other factors as may be mutually agreed upon between
Seller and HARC, by wire transfer of immediately available funds.


 


(c)   In connection with each Conveyance, Seller
further agrees that it will, at its own expense, on or prior to the related
Purchase Date (i) indicate in its computer files or microfiche lists that the
related Receivables have been conveyed to HARC in accordance with this
Agreement and the related Receivables Purchase Agreement Supplement, and have
been conveyed by HARC to the related Indenture Trustee pursuant to the related
Master Sale and Servicing Agreement for the benefit of the related Secured
Parties by including in such computer files and microfiche lists the code
identifying each such Receivable and (ii) deliver to HARC (or to the related
Indenture Trustee if HARC so directs) a computer file or microfiche list
containing a true and complete list of all such Receivables specifying for each
such Receivable, as of the Cutoff Date (A) its account number and (B) the
outstanding balance of such Receivable. 
Such computer files or microfiche lists shall be delivered to HARC (or
to the related Indenture Trustee if so directed by HARC) and marked as
proprietary and confidential.  Seller
further agrees not 


 


4

















 


to alter the code referenced in clause (i) of this
paragraph with respect to any Receivable during the term of this Agreement.


 


(d)   The parties hereto intend that each
Conveyance shall constitute a sale of the Seller’s right, title and interest in
and to the related Receivables and Other Conveyed Property, conveying good
title free and clear of any liens, claims, encumbrances or rights of others
from Seller to HARC and that the such Receivables and Other Conveyed Property
subject to such Conveyance shall not be part of Seller’s estate in the event of
the insolvency of Seller or a conservatorship, receivership or similar event
with respect to Seller.  It is the
intention of the parties hereto that the arrangements with respect to each
Conveyance of Receivables and Other Conveyed Property shall constitute a
purchase and sale of such Receivables and Other Conveyed Property and not a
loan.  In the event, however, that a
court of competent jurisdiction were to hold that the transactions evidenced
hereby constitute a loan and not a purchase and sale, it is the intention of
the parties hereto that this Agreement shall constitute a security agreement
under applicable law, and that Seller shall be deemed to have granted to HARC a
first priority perfected security interest in all of such Seller’s right, title
and interest in and to the Receivables and Other Conveyed Property.


 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES


 


SECTION 3.1         Representations and Warranties of
Seller.  Seller makes the
representations and warranties set forth in Section 3.1(b) through (h) as
of  each Purchase Date on which HARC
relies in purchasing the Receivables and the Other Conveyed Property subject to
the related Conveyance and in transferring the Receivables and the Other
Conveyed Property to the Issuer under the related Master Sale and Servicing
Agreement.  The representations set
forth in Section 3.1(a), on which HARC relies in purchasing the Receivables and
the Other Conveyed Property subject to the related Conveyance and in
transferring the Receivables and the Other Conveyed Property to the Issuer
under the related Master Sale and Servicing Agreement, are made with respect to
Receivables and Other Conveyed Property conveyed hereunder, as of the execution
and delivery of the related Receivables Purchase Agreement Supplement, but shall,
together with the representations and warranties set forth in Section 3.1(b)
through (h), survive the sale, transfer and assignment of the Receivables and
the Other Conveyed Property hereunder, and the sale, transfer and assignment
thereof by HARC to the Issuer under each Master Sale and Servicing
Agreement.  Seller and HARC agree that
HARC will assign to Issuer all HARC’s rights under this Agreement and each
Receivables Purchase Agreement Supplement and that the Indenture Trustee will
thereafter be entitled to enforce this Agreement and each Receivables Purchase
Agreement Supplement against Seller in the Indenture Trustee’s own name on
behalf of the Securityholders.


 


(a)   Eligibility Criteria.  Each of the Receivables which is to be
pledged as collateral for a Series of Notes will satisfy the applicable
Eligibility Criteria set forth in, or to be set forth in, Schedule I to the
Series Supplement establishing such Series.


 


5

















 


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


 


(c)   Due Obligation.  Seller is duly qualified to do business and
is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Receivable unenforceable by Seller, HARC or any
Trust and (ii) have a material adverse effect on any Secured Parties.


 


(d)   Due Authorization.  The execution, delivery and performance of
this Agreement and any other document or instrument delivered pursuant hereto
(such other documents and instruments, including, but not limited to, the
Receivables Purchase Agreement Supplement collectively, the “Conveyance
Papers”) and the consummation of the transactions provided for in this
Agreement or any other Conveyance Papers have been duly authorized by all
necessary corporate action on the part of Seller and constitute or will
constitute the legal, valid and binding obligation of Seller, enforceable in
accordance with their terms.


 


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


 


(f)    No Violation.  The execution, delivery and performance of
this Agreement and the Conveyance Papers and the fulfillment of the terms
contemplated herein and therein applicable to Seller will not conflict with or
violate any requirements of law applicable to Seller.


 


(g)   No Proceedings.  There are no proceedings or investigations
pending or, to the best knowledge of Seller, threatened against Seller, before
any court, regulatory body, administrative agency or other tribunal or governmental  instrumentality (i) asserting the invalidity
of this Agreement or the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or the
Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of Seller, would materially and adversely affect the
performance by Seller of its obligations under this Agreement or the Conveyance
Papers, (iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or the Conveyance
Papers or (v) seeking to affect adversely the income tax attributes of any
Trust under United States Federal, Nevada or California income tax systems.


 


6

















 


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


 


SECTION 3.2         Representations and Warranties of
HARC.  HARC makes the
representations and warranties set forth in Section 3.2 (a) through (f) as of
each Purchase Date, on which Seller relies in selling, assigning, transferring
and conveying the Receivables and the Other Conveyed Property subject to the
related conveyance to HARC hereunder. 
The representations are made with respect to Receivables and Other
Conveyed Property conveyed hereunder, as of the execution and delivery of the
related Receivables Purchase Agreement Supplement, but shall survive the sale,
transfer and assignment of the Receivables and the Other Conveyed Property
hereunder and the sale, transfer and assignment thereof by HARC to the related
Issuer under each Master Sale and Servicing Agreement.


 


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


 


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


 


(c)   No Conflict.  The execution and delivery of this Agreement and the Conveyance
Papers, the performance of the transactions contemplated by this Agreement and
the Conveyance Papers, and the fulfillment of the terms hereof and thereof,
will not 


conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which HARC is a party
or by which it or its properties is bound.


 


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


 


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


 


7

















 


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


 


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


 


In the event of any breach of a representation and
warranty made by HARC hereunder, Seller covenants and agrees that it will not
take any action to pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes and Certificates issued by any Trust have been paid in full.  Seller and HARC agree that damages will not
be an adequate remedy for such breach and that this covenant may be
specifically enforced by HARC, the related Issuer or by the related Indenture
Trustee on behalf of the related Secured Parties and the related Owner Trustee
on behalf of the related Certificateholders. 
Seller agrees that with respect to its obligations in connection with a
Repurchase Event it will exercise no rights of offset with respect to any
claims it may have against HARC.


 


ARTICLE IV


 


COVENANTS OF SELLER


 


SECTION 4.1         Seller’s
Covenants.  Seller hereby covenants
and agrees with HARC as follows:


 


(a)   Receivables Not To Be Evidenced by
Promissory Notes.  Seller will take
no action to cause any Receivable to be evidenced by any instrument (as defined
in the UCC).


 


(b)   Security Interests.  Except for the conveyances hereunder or as
otherwise provide herein, Seller will not sell, pledge, assign or transfer to
any other Person, or take any other action inconsistent with HARC’s ownership
of the Receivables and Other Conveyed Property or grant, create, incur, assume or
suffer to exist any Lien on any Receivable or any Other Conveyed Property,
whether now existing or hereafter created, or any interest therein, and Seller
shall not claim any ownership interest in the Receivables or any Other Conveyed
Property and shall defend the right, title and interest of HARC in and to the
Receivables and Other Conveyed Property, whether now existing or hereafter
created, against all claims of third parties claiming through or under Seller.


 


8

















 


(c)   Security’s Interest.  Except for the conveyances hereunder and in
connection with any transaction permitted pursuant to Section 6.6, Seller
hereby agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the Receivables or any
Other Conveyed Property and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.


 


(d)   Delivery of Collections or Recoveries.  In the event that Seller receives
collections or recoveries with respect to the Receivables, Seller agrees to pay
to HARC (or to the Master Servicer if HARC so directs) all such collections and
recoveries to the extent such amounts are payable to HARC as soon as
practicable after receipt thereof.


 


(e)   Notice of Liens.  Seller shall notify HARC promptly after
becoming aware of any Lien on any Receivable or any Other Conveyed Property
other than the conveyances hereunder.


 


(f)    Documentation of Transfer.  Seller shall undertake to file the documents
which would be necessary to perfect and maintain the transfer of the security
interest in and to the Receivables and Other Conveyed Property.


 


(g)   Approval of Office Records.  Seller shall cause this Agreement to be duly
approved by Seller’s Board of Directors, and Seller shall maintain this
Agreement as a part of the official records of Seller for the term of this
Agreement.


 


(h)   Maintenance of Security Interests in
Vehicles.  In the event that the
assignment of a Receivable to HARC or any assignee thereof 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 HARC or any assignee
thereof, Seller hereby agrees that the designation of Seller or any Affiliate
of Seller as the secured party on the certificate of title is in its capacity
as agent of HARC or the agent of any assignee of HARC for such limited purpose.


 


ARTICLE V


 


REPURCHASES


 


SECTION 5.1         Repurchase
of Receivables Upon Breach of Warranty. 
Upon the occurrence of a Repurchase Event, Seller shall, unless the
breach which is the subject of such Repurchase Event shall have been cured in
all material respects, repurchase the Receivable relating thereto from the
related Issuer under the related Master Sale and Servicing Agreement by the
last day of the first full calendar month following the discovery of such
breach by Seller or receipt by Seller of notice of such breach from any of the
Master Servicer, HARC, a Trust Officer of the related Indenture Trustee or the
related Owner Trustee and, simultaneously with the repurchase of the
Receivable, Seller shall deposit the Repurchase Amount in full, without
deduction or offset, in the Collection Account, pursuant to Section 3.2 of the
related Master Sale and 


 


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Servicing Agreement. 
It is understood and agreed that, except as set forth in Section 6.1
hereof, the obligation of Seller to repurchase any Receivable, as to which a
breach occurred and is continuing, shall, if such obligation is fulfilled,
constitute the sole remedy against Seller for such breach available to HARC,
the related Issuer, the related Secured Parties, the related
Certificateholders, the related Indenture Trustee on behalf of the related
Noteholders or the related Owner Trustee on behalf of the related
Certificateholders.  The provisions of
this Section 5.1 are intended to grant the related Indenture Trustee or the
related Issuer a direct right against Seller to demand performance hereunder,
and in connection therewith, Seller waives any requirement of prior demand
against HARC with respect to such repurchase obligation.  Any such repurchase shall take place in the
manner specified in Section 3.2 of the related Master Sale and Servicing
Agreement.  Notwithstanding any other
provision of this Agreement or the related Master Sale and Servicing Agreement
to the contrary, the obligation of Seller under this Section shall not
terminate upon a termination of Household Finance Corporation as Master
Servicer under the related Master Sale and Servicing Agreement and shall be
performed in accordance with the terms hereof notwithstanding the failure of
the Master Servicer or HARC to perform any of their respective obligations with
respect to such Receivable under the related Master Sale and Servicing
Agreement.


 


SECTION 5.2         Reassignment
of Repurchased Receivables.  Upon
deposit in the Collection Account of the Repurchase Amount of any Receivable
repurchased by Seller under Section 5.1 hereof, HARC and the related Issuer
shall take such steps as may be reasonably requested by Seller in order to
assign to Seller all of HARC’s and the related Issuer’s right, title and
interest in and to such Receivable and all security and documents and all Other
Conveyed Property conveyed to HARC and the related Issuer directly relating
thereto, without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of HARC or the related Issuer.  Such
assignment shall be a sale and assignment outright, and not for security.  If, following the reassignment of a
Repurchased Receivable, in any enforcement suit or legal proceeding, it is held
that Seller may not enforce any such Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable, HARC
and the related Issuer shall, at the expense of Seller, take such steps as
Seller deems reasonably necessary to enforce the Receivable, including bringing
suit in HARC’s or in the related Issuer’s name.


 


SECTION 5.3         Waivers.  No failure or delay on the part of HARC, or
the related Issuer as assignee of HARC, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other or future exercise thereof or the exercise of any other power, right or
remedy.


 


10

















 


ARTICLE VI


 


MISCELLANEOUS


 


SECTION 6.1         Liability
of Seller.  Seller shall be liable
in accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by Seller and the representations and warranties of
Seller.


 


SECTION 6.2         Amendment.  This Agreement and any Conveyance Papers and
the rights and obligations of the parties hereunder may not be changed orally,
but only by an instrument in writing signed by HARC and Seller in accordance
with this Section 6.2.  This Agreement
and any Conveyance Papers may be amended from time to time by HARC and Seller
only with the prior written consent of all of the Secured Parties.


 


SECTION 6.3         GOVERNING
LAW.  THIS AGREEMENT AND THE
CONVEYANCE PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.


 


SECTION 6.4         Notices.  All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of Seller, 5855 Copley Drive, San Diego, CA 92111,
Attention:  Chief Operating Officer,
with a copy to 2700 Sanders Road, Prospect Heights, Illinois 60070  Attention: 
Director-Asset Securitization, (b) in the case of HARC, 1111 Town Center
Drive, Las Vegas, Nevada 89134 Attention: 
Compliance Officer, with a copy to 2700 Sanders Road, Prospect Heights,
Illinois 60070,  Attention:  Treasurer; or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party.


 


SECTION 6.5         Severability
of Provisions.  If any one or more
of the covenants, agreements, provisions, or terms of this Agreement or
Conveyance Paper shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions, or terms shall be deemed severable from the
remaining covenants, agreements, provisions, and terms of this Agreement or any
Conveyance Paper and shall in no way affect the validity or enforceability of
the other provisions of this Agreement or of any Conveyance Paper.


 


SECTION 6.6         Assignment.  Notwithstanding anything to the contrary
contained herein, other than HARC’s assignment of its rights, title, and
interests in, to, and under this Agreement to the Issuer specified in a Master
Sale and Servicing Agreement (which Issuer shall assign such rights, title and
interest in and to this Agreement to the related Indenture Trustee for the
benefit of the related Secured Parties), as contemplated by the Master Sale and
Servicing Agreement and Section 6.7 hereof, the Receivables, the Other Conveyed
Property, this Agreement and all other Conveyance 


 


11

















 


Papers may not be assigned by the parties hereto; provided,
however, that Seller shall have the right to assign its rights, title
and interests, in to and under this Agreement to (i) any successor by merger or
consolidation, or any Person which acquires by conveyance, transfer or sale the
properties and assets of Seller or (ii) any Affiliate owned directly or
indirectly by Household International, Inc. 
The right granted in the foregoing proviso is subject to the further
condition that any such successor or other Person shall expressly assume by
written agreement, in form and substance satisfactory to HARC, the obligations
of Seller hereunder and under the Conveyance Papers.


 


SECTION 6.7         Acknowledgment
and Agreement of Seller.  By
execution below, Seller expressly acknowledges and agrees that all of HARC’s
right, title, and interest in, to, and under this Agreement, including, without
limitation, all of HARC’s right title, and interest in and to the Receivables
purchased pursuant to this Agreement, shall be assigned by HARC to an Issuer
specified in a Master Sale and Servicing Agreement and by such Issuer to the
related Indenture Trustee for the benefit of the related Secured Parties, and
Seller consents to such assignment. 
Additionally, Seller agrees for the benefit of such Indenture Trustee
that any amounts payable by Seller to HARC hereunder which are to be paid by
HARC to such Indenture Trustee for the benefit of the related Secured Parties
shall be paid by Seller, on behalf of HARC, directly to such Indenture
Trustee.  Any payment required to be
made on or before a specified date in same-day funds may be made on the prior
business day in next-day funds.


 


SECTION 6.8         Further
Assurances.  HARC and Seller agree
to do and perform, from time to time, any and all acts to authenticate any and
further records, to execute any and further instruments, in each case required
or reasonably requested by the other party more fully to effect the purposes of
this Agreement and the Conveyance Papers, including, without limitation, the
execution of any financing statements or continuation statements or equivalent
documents relating to the Receivables for filing under the provisions of the
UCC or other law of any applicable jurisdiction.


 


SECTION 6.9         No
Waiver; Cumulative Remedies.  No
failure to exercise and no delay in exercising, on the part of HARC or Seller,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.


 


SECTION 6.10       Counterparts.  This Agreement and all Conveyance Papers may
be executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.


 


SECTION 6.11       Binding
Effect; Third-Party Beneficiaries. 
This Agreement and the Conveyance Papers will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.  Each of the
Indenture Trustee and Issuer with respect to a Master Sale and Servicing
Agreement and 


 


12

















 


the related Owner Trustee shall be considered a
third-party beneficiary of this Agreement.


 


SECTION 6.12       Merger
and Integration.  Except as
specifically stated otherwise herein, this Agreement and the Conveyance Papers
set forth the entire understanding of the parties relating to the subject
matter hereof,  and all prior
understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers.  This Agreement  and the Conveyance Papers may not be
modified, amended, waived or supplemented except as provided herein.


 


SECTION 6.13       Heading.  The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.


 


SECTION 6.14       Schedules
and Exhibits.  The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.


 


SECTION 6.15       Survival
of Representations and Warranties. 
All representations, warranties and agreements contained in this
Agreement or contained in any Conveyance Paper, shall remain operative and in
full force and effect and shall survive conveyance of the Receivables by HARC
to the Issuer pursuant to the Master Sale and Servicing Agreement and the
pledge thereof by the Issuer to the Indenture Trustee pursuant to the related
Indenture and the related Series Supplement.


 


SECTION 6.16       Nonpetition
Covenant.  Until the date which is one
year and one day after payment in full of all the Notes of all Series, neither
HARC nor Seller shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
Seller or any 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 Seller or any Issuer or any
substantial part of their respective properties, or ordering the winding up or
liquidation of the affairs of Seller or any Issuer.  This provision shall survive the termination of this Agreement.


 


[Signature Page Follows]


 


13

















 


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


 


	
   

  	
  HOUSEHOLD AUTOMOTIVE
  FINANCE CORPORATION

  
	
   

  	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Timothy R. Condon

  
	
   

  	
   

  	
  Name: Timothy R. Condon

  	
   

  
	
   

  	
   

  	
  Title:  Executive Vice President & Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO
  RECEIVABLES CORPORATION,

  
	
   

  	
   

  	
  as Purchaser

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven H. Smith

  
	
   

  	
   

  	
  Name: Steven H. Smith

  	
   

  
	
   

  	
   

  	
  Title:  Vice President & Assistant Treasurer

  
						



 


14

















 


EXHIBIT A


 


FORM OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT


 


Transfer No.        of
Receivables, dated as of
                        ,
pursuant to a Master Receivables Purchase Agreement (the “Purchase Agreement”)
dated as of November 18, 2002, between Household Automotive Finance
Corporation, a Delaware corporation (“Seller”) and Household Auto
Receivables Corporation, a Nevada corporation (“HARC”).


 


W I T
N E S S E T H :


 


WHEREAS pursuant to the Purchase Agreement, Seller
wishes to convey Receivables and Other Conveyed Property to HARC; and


 


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


 


NOW, THEREFORE, Seller and HARC hereby agree as
follows:


 


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


 


“Cutoff Date” shall mean with respect to the
Receivables conveyed hereby, the close of business on
                     ,
200    .


 


“Master Sale and Servicing Agreement” means the
agreement dated as of
                      ,
                   
among HARC, Household Finance Corporation, as Master
Servicer,                               ,
as indenture trustee and                                  ,
as issuer.


 


“Purchase Date” shall mean with respect to the
Receivables conveyed hereby,
                           ,
200      .


 


“Purchase Price” shall mean 100% of the
Principal Balance of the Receivables on the books and records of Seller, plus
the present value of anticipated excess spread on such Receivables, discounted
to take into account any uncertainty as to future performance matching
historical performance, servicing fees, delinquencies, paydown rates, yield and
such other factors as may be mutually agreed upon by Seller and HARC.


 


“Transfer Date” means, with respect to
Receivables, the date on which Receivables and Other Conveyed Property are to
be transferred to the Trust pursuant to the Master Sale and Servicing
Agreement.


 


A-1

















 


2.             Schedule of Receivables.  Annexed as Schedule A hereto is a computer
file which reflects the Receivables that constitute the Receivables to be
conveyed pursuant to this Agreement on the Purchase Date.


 


3.             Conveyance of Receivables.  In consideration of HARC’s delivery to or
upon the order of Seller of the Purchase Price, Seller does hereby sell,
transfer, assign, set over and otherwise convey to HARC, without recourse
(except as expressly provided in the Purchase Agreement), all right, title and
interest of Seller in and to:


 


(i)    each and
every Receivable listed on Schedule A hereto and all monies paid or payable
thereon or in respect thereof on or after the Cutoff Date (including amounts
due on or before the Cutoff Date but received by Seller after such date);


 


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


 


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


 


(iv)  any
proceeds and the right to receive proceeds with respect to such Receivables
repurchased by a Dealer pursuant to a Dealer Agreement;


 


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


 


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


 


(vii) all items
contained in the Receivables Files with respect to such Receivables and any and
all other documents that Seller or the Master Servicer keeps on file in
accordance with its customary procedures relating to the related Receivables,
or the related Financed Vehicles or Obligor;


 


(viii)        all
property (including the right to receive future Net Liquidation Proceeds) that
secures each related Receivable and that has been acquired by or on behalf of
HARC pursuant to liquidation of such Receivable;


 


(ix)   all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and


 


A-2

















 


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.             Representationsand warranties of seller.  As
of the purchase date, seller hereby makes the representations and warranties to
harc that are set forth in section 3.1 of the purchase agreement with respect
to the conveyance effected hereby to the same extent as if set forth in full
herein.


 


5.             Representations and Warranties of HARC.  As of the Purchase Date, HARC hereby makes
the representations and warranties to Seller that are set forth in Section 3.2
of the Purchase Agreement with respect to the Conveyance effected hereby to the
same extent as if set forth in full herein. 
In the event of any breach of a representation and warranty made by HARC
hereunder, Seller covenants and agrees that it will not take any action to
pursue any remedy that it may have hereunder, in law, in equity or otherwise,
until a year and a day have passed since the date on which all Notes and
Certificates issued by the Trust have been paid in full.  Seller and HARC agree that damages will not
be an adequate remedy for such breach and that this covenant may be
specifically enforced by HARC, the related Issuer or by the related Indenture
Trustee on behalf of the related Secured Parties and the related Owner Trustee
on behalf of the related Certificateholders.


 


6.             Conditions Precedent.  The obligation of HARC to acquire the Receivables hereunder is
subject to the satisfaction, on or prior to the Purchase Date, of the following
conditions precedent:


 


(a)           Representations
and Warranties.  Each of the
representations and warranties made by Seller in Section 4 of this Agreement
and in Section 3.1 of the Master Receivables Purchase Agreement shall be true
and correct as of the date of this Agreement and as of the Purchase Date.


 


(b)           Additional
Information.  Seller shall have
delivered to HARC such information as was reasonably requested by HARC to
satisfy itself as to (i) the accuracy of the representations and warranties set
forth in Section 4 of this Agreement and in Section 3.1 of the Purchase
Agreement and (ii) the satisfaction of the conditions set forth in this
Section.


 


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


 


8.             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.


 


A-3

















 


9.             Conveyance of the Receivables and the Other Conveyed
Property to the Issuer.  Seller
acknowledges that HARC intends, pursuant to the related Master Sale and
Servicing Agreement, to convey the Receivables and the Other Conveyed Property,
together with its rights under this Agreement, to the related Issuer on the
Transfer Date.  The Seller acknowledges
and consents to such conveyance and pledge and waives any further notice
thereof and covenants and agrees that the representations and warranties of the
Seller contained in this Agreement and the rights of HARC hereunder are
intended to benefit the related Issuer, the related Owner Trustee, the related
Indenture Trustee, the related Secured Parties and the related Certificateholders.  In furtherance of the foregoing, the Seller
covenants and agrees to perform its duties and obligations hereunder, in
accordance with the terms hereof for the benefit of the related Issuer, the
related Owner Trustee, the related Indenture Trustee and the related Secured
Parties and that, notwithstanding anything to the contrary in this Agreement,
the Seller shall be directly liable to the related Issuer, the related Owner
Trustee, the related Indenture Trustee and the related Secured Parties (notwithstanding
any failure by the Master Servicer or HARC to perform their respective duties
and obligations hereunder or under any Basic Document) and that the related
Indenture Trustee may enforce the duties and obligations of Seller under this
Agreement against Seller for the benefit of the related Secured Parties and the
related Owner Trustee.


 


10.           GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


A-4

















 


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


 


	
   

  	
  HOUSEHOLD AUTOMOTIVE
  FINANCE CORPORATION,

  
	
   

  	
   

  	
  as Seller

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  :

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO
  RECEIVABLES CORPORATION,

  
	
   

  	
   

  	
  as Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  :

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					



 


A-5

















 


SCHEDULE A


 


SCHEDULE OF RELATED
MASTER SALE AND SERVICING AGREEMENTS


 


(1) Master Sale and
Servicing Agreement dated as of November 18, 2002, among Household Finance
Corporation, as Master Servicer, Household Automotive Trust 2002-3, as Issuer,
Household Auto Receivables Corporation, as Seller and U.S. Bank National
Association, as Indenture Trustee.


 


(2) Master Sale and Servicing Agreement dated as of May 29, 2003, among
Household Finance Corporation, as Master Servicer, Household Automotive Trust
2003-1, as Issuer, Household Auto Receivables Corporation, as Seller and U.S.
Bank National Association, as Indenture Trustee.