Exhibit
4.4


Execution
Copy


 


 




 





HOUSEHOLD FINANCE
CORPORATION,


as Master
Servicer,


 


HOUSEHOLD
AUTOMOTIVE TRUST 2004-1,


as Issuer,


 


HOUSEHOLD AUTO
RECEIVABLES CORPORATION,


as Seller,


 


U.S. BANK NATIONAL
ASSOCIATION,


as Indenture
Trustee,


 


WILMINGTON TRUST
COMPANY,


as Owner Trustee,


 


HSBC BANK USA, NATIONAL ASSOCIATION,


as Administrator




 





 


SERIES SUPPLEMENT


 


Dated as of
July 28, 2004


to the


 


INDENTURE


 


Dated as of
July 28, 2004


 


MASTER SALE AND
SERVICING AGREEMENT


 


Dated as of
July 28, 2004


 


and to the


 


AMENDED AND
RESTATED TRUST AGREEMENT


 


Dated as of
July 28, 2004




 





 
















 


TABLE OF
CONTENTS


 


	
  ARTICLE I CREATION OF
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DESIGNATION.

  	
   

  
	
  SECTION 1.02.

  	
  PLEDGE OF SERIES TRUST
  ESTATE.

  	
   

  
	
  SECTION 1.03.

  	
  PAYMENTS AND COMPUTATIONS.

  	
   

  
	
  SECTION 1.04.

  	
  DENOMINATIONS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  DEFINITIONS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  DISTRIBUTIONS AND STATEMENTS TO NOTEHOLDERS; SERIES SPECIFIC COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  TRUST ACCOUNTS.

  	
   

  
	
  SECTION 3.02.

  	
  RESERVE ACCOUNT.

  	
   

  
	
  SECTION 3.03.

  	
  DISTRIBUTIONS.

  	
   

  
	
  SECTION 3.04.

  	
  STATEMENTS TO NOTEHOLDERS.

  	
   

  
	
  SECTION 3.05.

  	
  REPORTING REQUIREMENTS.

  	
   

  
	
  SECTION 3.06.

  	
  COMPLIANCE
  WITH WITHHOLDING REQUIREMENTS.

  	
   

  
	
  SECTION 3.07.

  	
  SPECIAL
  COVENANTS AND ACKNOWLEDGEMENTS.

  	
   

  
	
  SECTION 3.08.

  	
  TAX CHARACTERIZATION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV EVENTS OF
  DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  EVENTS OF DEFAULT.

  	
   

  
	
  SECTION 4.02.

  	
  RIGHTS UPON EVENT OF DEFAULT.

  	
   

  
	
  SECTION 4.03.

  	
  REMEDIES.

  	
   

  
	
  SECTION 4.04.

  	
  PRIORITIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V PREPAYMENT,
  REDEMPTION AND SUBSTITUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  OPTIONAL “CLEAN-UP”
  REDEMPTION.

  	
   

  
	
  SECTION 5.02.

  	
  OPTIONAL SUBSTITUTION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  RATIFICATION OF BASIC
  DOCUMENTS.

  	
   

  
	
  SECTION 6.02.

  	
  COUNTERPARTS.

  	
   

  
	
  SECTION 6.03.

  	
  GOVERNING LAW.

  	
   

  
	
  SECTION 6.04.

  	
  AMENDMENTS
  WITHOUT CONSENT OF NOTEHOLDERS.

  	
   

  
	
  SECTION 6.05.

  	
  AMENDMENTS
  WITH CONSENT OF THE NOTEHOLDERS.

  	
   

  
	
  SECTION 6.06.

  	
  AUTHORITY
  TO REGISTER NOTES AND FILE REPORTS.

  	
   

  
	
  SECTION 6.07.

  	
  AUTHORITY TO
  PERFORM DUTIES OF THE ISSUER.

  	
   

  
	
  SECTION 6.08.

  	
  NOTICES.

  	
   

  



 


	
  Schedule I

  	
   

  	
  Eligibility Criteria

  
	
  Schedule II

  	
   

  	
  Schedule of Receivables

  
	
  Exhibit A

  	
   

  	
  Form of Master Servicer’s Certificate

  
	
  Exhibit B

  	
   

  	
  Forms of Notes

  



 
















 


This
Series Supplement, dated as of July 28, 2004, is by and among Household
Finance Corporation, a Delaware corporation, as Master Servicer (the “Master
Servicer”), Household Automotive Trust 2004-1, a Delaware statutory trust,
as Issuer (the “Issuer” or the “Trust”), Household Auto
Receivables Corporation, a Nevada corporation, as Seller (the “Seller”),
U.S. Bank National Association, a national banking association, as trustee for
the Noteholders (the “Indenture Trustee”), Wilmington Trust Company, a
Delaware banking corporation, as owner trustee for the Certificateholders (the
“Owner Trustee”), and HSBC Bank USA, National Association, a national
banking association, as administrator (the “Administrator”).


 


RECITALS


 


This
Series Supplement is executed and delivered by the parties hereto pursuant to
Section 9.3 of the Indenture (the “Indenture”) dated as of
July 28, 2004 among the Issuer, the Indenture Trustee and the
Administrator and pursuant to Section 3.2 of the Amended and Restated
Trust Agreement  (the “Trust Agreement”)
dated as of July 28, 2004 between the Seller and the Owner Trustee.  In the event that any term or provision
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture or the Trust Agreement, the terms and
provisions of this Series Supplement shall govern.


 


ARTICLE I

CREATION OF THE NOTES


 


SECTION 1.01.                 Designation.


 


(a)                                  There
is hereby created a series of Notes, substantially in the form of Exhibit B
hereto, to be issued pursuant to the Indenture and this Series Supplement to be
known as “Household Automotive Trust 2004-1, Series 2004-1 Notes” (as used
herein, the “Notes”).  The Notes
shall be issued in four classes (each, a “Class”):  Class A-1 Notes in an aggregate initial
principal amount of $225,000,000 (the “Class A-1 Notes”), Class A-2
Notes in an aggregate initial principal amount of $179,000,000 (the “Class
A-2 Notes”), Class A-3 Notes in an aggregate initial principal amount of
$190,000,000 (the “Class A-3 Notes”), and Class A-4 Notes in an
aggregate initial principal amount of $156,000,000 (the “Class A-4 Notes”
and, together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the “Class A Notes”).


 


(b)                                 There
is hereby created a series of Certificates to be issued pursuant to the Trust
Agreement and this Series Supplement to be known as the “Household Automotive
Trust 2004-1, Series 2004-1 Certificates” (as used herein, the “Certificates”).


 


SECTION 1.02.                 Pledge of Series Trust Estate.


 


The
Issuer hereby Grants to the Indenture Trustee, for the benefit of the Secured
Parties, all of the Issuer’s right, title and interest (but none of its obligations)
in and to all personal property, whether now owned or hereafter acquired and
whether general intangibles, accounts, chattel paper, claims and causes of
action, deposit accounts, documents, goods, instruments, investment property,
letter-of-credit rights, letters of credit, money, minerals before extraction
or constituting other personal property of any nature whatsoever, including,
without


 
















 


limitation:  (a)
each and every Receivable listed as a Receivable on the Schedule of
Receivables attached hereto as Schedule II and all monies paid or payable
thereon or in respect thereof after the applicable Cutoff Date (including
amounts due on or before the applicable Cutoff Date but received by HAFC or any
Affiliate of HAFC that is the seller under a Master Receivables Purchase
Agreement, HFC, the Seller, the Master Servicer or the Issuer after the
applicable Cutoff Date); (b) all security interests in the related Financed
Vehicles granted by Obligors pursuant to such Receivables and any other
interest of the Issuer in the related Financed Vehicles; (c) all rights of HAFC
or any Affiliate of HAFC that is the seller under a Master Receivables Purchase
Agreement against Dealers pursuant to Dealer Agreements or Dealer Assignments
related to such Receivables; (d) any proceeds and the right to receive proceeds
with respect to such Receivables repurchased by a Dealer pursuant to a Dealer
Agreement; (e) all rights under any Service Contracts on the related Financed
Vehicles; (f) any proceeds and the right to receive proceeds with respect to
such Receivables from claims under any physical damage, loss, credit life or
disability insurance policies covering the related Financed Vehicles or
Obligors, including rebates of insurance premiums relating to such Receivables;
(g) all funds on deposit from time to time in the Trust Accounts (including all
investments and proceeds thereof); (h) all rights of the Seller in and to the
Master Receivables Purchase Agreements and related Receivables Purchase
Agreement Supplements, including all delivery requirements and representations
and warranties and the cure and repurchase obligations of HAFC or any Affiliate
of HAFC that is the seller under a Master Receivables Purchase Agreement or
HFC, as applicable, under the Master Receivables Purchase Agreements and such
Receivables Purchase Agreement Supplements; (i) all property (including the
right to receive future Net Liquidation Proceeds) that secures such Receivables
and that has been, or at any time is, acquired by or on behalf of the Issuer
pursuant to liquidation of such Receivables; (j) all items contained in the
Receivable Files with respect to such Receivables and any and all other
documents that the Master Servicer, the Seller, HAFC or any Affiliate of HAFC
that is the seller under a Master Receivables Purchase Agreement keeps on file
in accordance with its customary procedures relating to such Receivables, the
related Financed Vehicles or Obligors; (k) all rights of the Issuer in and to
the Master Sale and Servicing Agreement and the Transfer Agreement or Transfer
Agreements (including all rights of the Seller under the Master Receivables
Purchase Agreements and related Receivables Purchase Agreement Supplements
assigned to the Issuer pursuant to the Master Sale and Servicing Agreement and
the related Transfer Agreement or Transfer Agreements); (l) one share of the
Class SV Preferred Stock of the Seller together with the exclusive right to
vote such share; and (m) all present and future (i) claims, demands, causes and
choses in action in respect of any or all of the foregoing, and (ii) 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
thereof, whether voluntary or involuntary, into cash or other liquid property,
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, investment property, 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 (collectively, the “Series Trust Estate”).


 


The
foregoing Grant is made in trust to the Indenture Trustee for the benefit of
the Secured Parties.  The Indenture
Trustee hereby acknowledges such Grant, accepts the trust under the Indenture
and this Series Supplement in accordance with the provisions of the Indenture
and this Series Supplement and agrees to perform its duties required in the
Indenture and in this


 


2
















 


Series Supplement in accordance with the provisions
hereof and of the Indenture to the best of its ability to the end that the
interests of such parties, recognizing the priorities of their respective
interests, may be adequately and effectively protected.


 


SECTION 1.03.                 Payments and Computations.


 


All
amounts to be paid or deposited by any Person hereunder shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (New
York City time) on the day when due in immediately available funds.  Notwithstanding the foregoing, any amounts
required to be paid by the Indenture Trustee or the Administrator hereunder
shall be paid in accordance with the terms hereof no later than 3:00 p.m. (New
York City time) on the day when due, in immediately available funds.


 


SECTION 1.04.                 Denominations.


 


The
Notes of each Class shall be issued in denominations of $100,000 and integral
multiples of $1,000 in excess thereof, except that one Note of each Class may
be issued in a denomination other than an integral multiple of $1,000.


 


ARTICLE II

DEFINITIONS


 


SECTION 2.01.                 Definitions.


 


(a)                                  Whenever
used in this Series Supplement and when used in the Related Documents, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.  Unless otherwise
defined in this Series Supplement, terms defined in the Basic Documents are
used herein as therein defined.  References
to sections, unless otherwise indicated, are to sections of this Series Supplement.  References to any Basic Document, or to any
other agreement, document or other record defined herein, shall mean such Basic
Document or other record as from time to time amended or supplemented.


 


“Aggregate
Note Principal Balance” means, (i) with respect to all of the Notes, as of any
date, the aggregate outstanding principal amount of all of the Notes on such
date and (ii) with respect to any Class of the Notes, as of any date, the
aggregate outstanding principal amount of all of the Notes of such Class on
such date.


 


“Aggregate
Optimal Note Principal Balance” means, with respect to any Distribution Date,
the product of (x) 53% and (y) the Pool Balance as of the close of
business on the last day of the prior Collection Period.


 


“Available
Funds” means, with respect to any Distribution Date and the related Collection
Period, the sum of (i) the Collected Funds for such Collection Period, (ii)
investment earnings realized on the Collection Account and the Reserve Account
during such Collection Period, (iii) all Repurchase Amounts deposited in the
Collection Account during such Collection Period and (iv) all proceeds of
any liquidation, in whole or in part, of the assets of the Trust.


 


3
















 


“Basic
Documents” means this Series Supplement, the Master Sale and Servicing
Agreement, the Certificate of Trust, the Trust Agreement, the Indenture, the
Control Agreement, the Master Receivables Purchase Agreements, each Transfer
Agreement related to the Owner Trust Estate and all other documents and
certificates delivered therewith or pursuant thereto in connection with the
Notes or the Certificates.


 


“Business
Day” means a day other than a Saturday, a Sunday or other day on which
commercial banks located in the states of Illinois or New York are authorized
or obligated by law to be closed.


 


“Certificate
of Trust” shall mean the Certificate of Trust filed for the Trust.


 


“Certificateholders”
means the holders of the Certificates.


 


“Class
A Interest Carryover Shortfall” means, with respect to any Distribution Date,
the sum of:  (i) the excess of (a) the
related Class A Interest Distributable Amount for the preceding Distribution
Date, over (b) the amount actually paid as interest to the Class A Noteholders
on such preceding Distribution Date (under the Indenture), plus
(ii) interest on such excess, to the extent permitted by law, at a rate per
annum equal to the related Note Rate with respect to the Class A Notes from
such preceding Distribution Date to but excluding the current Distribution
Date.


 


“Class
A Interest Distributable Amount” means, with respect to any Distribution Date
and each class of Class A Notes, an amount equal to the sum of:  (i) the aggregate amount of interest accrued
on the Class A Notes at the related Note Rate from and including the preceding
Distribution Date (or, in the case of the initial Distribution Date, from and
including the Closing Date) to but excluding the current Distribution Date plus (ii) the related Class A Interest Carryover Shortfall
for the current Distribution Date.


 


“Class
A Noteholders” means the Holders of the Class A Notes.


 


“Class
A Additional Principal Distributable Amount” means, with respect to a
Distribution Date, the positive excess, if any, of (i) the Aggregate Note Principal
Balance after giving effect to distribution of the Class A Minimum Principal
Distributable Amount on such Distribution Date pursuant to
Section 3.03(a)(iv) over (ii) the Aggregate Optimal Note Principal Balance
for such Distribution Date.


 


“Class
A Minimum Principal Distributable Amount” means, with respect to any
Distribution Date, the greatest of (i) the lesser of (A) the Optimal
Principal Distributable Amount for such Distribution Date, (B) the excess
of the aggregate of the Principal Balances of the Receivables as of the last
day of the second preceding Collection Period, over the aggregate of the
Principal Balances of the Receivables as of the last day of the immediately
preceding Collection Period, and (C) the Aggregate Note Principal Balance, (ii)
on the Scheduled Maturity Date for any Class of the Notes, the amount necessary
to reduce the Aggregate Note Principal Balance of such Class to zero and (iii)
the positive excess, if any, of the Aggregate Note Principal Balance prior to
making any distribution on such Distribution Date over the Pool Balance as of
the last day of the preceding Collection Period.


 


4
















 


“Class
A-1 Noteholders” means the Holders of the Class A-1 Notes.


 


“Class
A-1 Scheduled Maturity Date” means July 18, 2005.


 


“Class
A-2 Noteholders” means the Holders of the Class A-2 Notes.


 


“Class
A-2 Scheduled Maturity Date” means December 17, 2007.


 


“Class
A-3 Noteholders” means the Holders of the Class A-3 Notes.


 


“Class
A-3 Scheduled Maturity Date” means May 18, 2009.


 


“Class
A-4 Noteholders” means the Holders of the Class A-4 Notes.


 


“Class
A-4 Scheduled Maturity Date” means July 18, 2011.


 


“Closing
Date” means July 28, 2004.


 


“Collection
Account” means the Eligible Account created pursuant to Section 3.01,
which shall be account no. 10-878656, reference Household Auto 2004-1
Collection Account at the Administrator, ABA No. 021001088.


 


“Collected
Funds” has the meaning assigned to such term in the Master Sale and Servicing
Agreement.


 


“Control
Agreement” means the deposit account control agreement dated as of
July 28, 2004 among the Issuer, the Indenture Trustee, HSBC Bank USA,
National Association and the Administrator.


 


“Controlling
Party” means the Indenture Trustee for the benefit of and acting solely at the
direction of the Holders of a majority of the Outstanding Amount of the Notes.


 


“Corporate
Trust Office” means, (i) with respect to the Owner Trustee, the principal
corporate trust office of the Owner Trustee, which at the time of execution of
this Series Supplement is Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Capital Markets, (ii) with
respect to the Indenture Trustee, the corporate trust office of the Indenture
Trustee, which at the time of execution of this Series Supplement is 209 South
LaSalle Street, Suite 300, Chicago, Illinois 60604 and (iii) with respect to
the Administrator, the corporate trust office of the Administrator, which at
the time of execution of this Series Supplement is 452 Fifth Avenue, New York,
New York 10018.


 


“Cutoff
Date” means, with respect to the Receivables transferred and assigned to the
Issuer on the Closing Date, the close of business on July 18, 2004.


 


“Definitive
Notes” means the Notes that have been certificated and fully registered in
accordance with Section 2.12 of the Indenture.


 


“Determination
Date” has the meaning assigned to such term in the Master Sale and Servicing
Agreement.


 


5
















 


“Distribution
Date” means, with respect to each Collection Period, the seventeenth day of the
calendar month next commencing after the last day of such Collection Period, or
if such day is not a Business Day, the immediately following Business Day,
commencing in August 2004.


 


“Eligibility
Criteria” means the criteria for eligibility for Eligible Receivables set forth
on Schedule I hereto.


 


“Eligible
Investments” means, with respect to funds in the Collection Account and Reserve
Account, “Eligible Investments” as defined in the Master Sale and Servicing
Agreement, except that (i) all references in such definition to “rating
satisfactory to the Rating Agency” or words of similar import shall mean
ratings of not less than “A-1+” or “AAA” by Standard & Poor’s, “P-1” or “Aaa”
by Moody’s Investors Service, “F1” or “AAA” by Fitch, Inc., or the equivalent
such ratings by another Rating Agency (whichever is applicable), and (ii)
unless otherwise agreed in writing by the Rating Agencies, all such investments
shall have maturities at the time of the acquisition thereof occurring no later
than the Business Day immediately preceding the Distribution Date following
such date of acquisition.


 


“Eligible
Receivable” means a Receivable that satisfies the Eligibility Criteria.


 


“Eligible
Substitute Receivable” means a Receivable substituted by the Master Servicer or
HAFC pursuant to Section 5.02, which on the date of such substitution
must:


 


(i)
have a Principal Balance not substantially greater or less than the Principal
Balance of such elected substituted Receivable;


 


(ii)
have a current Annual Percentage Rate of not less than the Annual Percentage
Rate of such elected substituted Receivable and not substantially greater than
the Annual Percentage Rate of such elected substituted Receivable;


 


(iii)
have a (A) remaining term to maturity not more than six months earlier or later
than the remaining term to maturity of such elected substituted Receivable and
(B) maturity date not later than the last day of the Collection Period
immediately preceding the month in which the Final Scheduled Distribution Date
occurs;


 


(iv)
satisfy the Eligibility Criteria, to the extent such criteria do not pertain
exclusively to the Receivables transferred on the Closing Date; and


 


(v) be
the obligation of an Obligor whose credit profile is substantially similar to
that of the Obligor under the elected substituted Receivable;


 


provided, however, that with respect to (i) through (v) above, an
auto loan may qualify as an Eligible Substitute Receivable if each of the Rating
Agencies confirms such substitution.


 


“Event
of Default” shall have the meaning assigned to such term in Section 4.01.


 


“Final
Scheduled Distribution Date” means July 18, 2011.


 


6
















 


“HACC”
means Household Automotive Credit Corporation, a Delaware corporation.  For the avoidance of doubt, HACC is an
Affiliate of HAFC.


 


“HAFC”
means Household Automotive Finance Corporation, a Delaware corporation.


 


“HFC”
means Household Finance Corporation.


 


“Indenture”
means the indenture dated as of July 28, 2004 among the Issuer, the
Indenture Trustee and the Administrator, as supplemented by this Series
Supplement.


 


“Initial
Reserve Account Deposit” means 1% of the Pool Balance as of the Cutoff Date.


 


“Interest
Period” means, with respect to any Distribution Date, the period from and
including the prior Distribution Date (or, in the case of the first Interest
Period, from and including the Closing Date) through (and including) the day
preceding such Distribution Date.


 


“Master
Receivables Purchase Agreements” means, collectively, (i) the Master
Receivables Purchase Agreement dated as of December 18, 2001, between HAFC
and the Seller, as such agreement may be amended or supplemented from time to
time, and (ii) the Master Receivables Purchase Agreement dated as of
June 24, 2002, between HACC and the Seller, as such agreement may be
amended or supplemented from time to time.


 


“Master
Sale and Servicing Agreement” means the Master Sale and Servicing Agreement
dated as of July 28, 2004, among the Issuer, the Seller, the Master
Servicer, the Indenture Trustee and the Administrator, as such agreement may be
amended or supplemented from time to time.


 


“Master
Servicer’s Certificate” means, with respect to the Notes and Certificates, a
report in substantially the form of Exhibit A hereto (appropriately
completed), furnished by the Master Servicer to the Administrator, the
Indenture Trustee and the Owner Trustee pursuant to the Master Sale and
Servicing Agreement.


 


“Note
Rate” means the per annum rate of interest due with respect to each Class of
Notes as set forth below for the respective Class of Notes:


 


Class A-1 Notes:  1.6932%


Class A-2 Notes:  2.52%


Class A-3 Notes:  3.30%


Class A-4 Notes:  3.93%


 


Interest on the Class A-1 Notes will be calculated on
the basis of a 360-day year and the actual number of days elapsed in an
applicable Interest Period.  Interest on
the Class A-2, Class A-3 and Class A-4 Notes will be calculated on the basis of
a 360-day year consisting of twelve 30-day months.


 


7
















 


“Notes”
or “Class A Notes” means, collectively, the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes.


 


“Optimal
Principal Distributable Amount” means, with respect to any Distribution Date,
the excess, if any, of (i) the Aggregate Note Principal Balance
immediately prior to such Distribution Date over (ii) the Aggregate
Optimal Note Principal Balance for such Distribution Date.


 


“Original
Pool Balance” means the aggregate of the Principal Balances of the Receivables
as of the Cutoff Date.


 


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


 


“Owner
Trustee” means Wilmington Trust Company, not in its individual capacity but
solely as trustee under the Trust Agreement, its successors-in-interest or any
successor Owner Trustee under the Trust Agreement.


 


“Pledge”
means the Grant by the Issuer hereunder to the Indenture Trustee for the
benefit of the Secured Parties in accordance with Section 1.02 in and to
the Series Trust Estate.


 


“Pool
Balance” means, as of any date of determination, the aggregate of the
outstanding Principal Balances of the Receivables, unless otherwise specified,
as of the close of business on the preceding Business Day.


 


“Principal
Balance Shortfall” means, (i) with respect to a Distribution Date, the positive
excess, if any, of the Aggregate Note Principal Balance (after giving effect to
the distribution pursuant to Section 3.03(a)(iv) on such Distribution Date
and prior to making any distribution pursuant to Section 3.03(b) on such
Distribution Date) over the Pool Balance as of the close of business on the
last day of the preceding Collection Period and (ii) with respect to the
Scheduled Maturity Date for any Class of the Notes, the outstanding principal
balance of such Class of the Notes (after giving effect to the distribution
pursuant to Section 3.03(a)(iv)).


 


“Rating
Agencies” means Standard & Poor’s, Moody’s Investors Service and Fitch,
Inc.  If any such organization or a
successor does not maintain a rating on the Notes, “Rating Agency” shall be a
nationally recognized statistical rating organization or other comparable
Person designated by the Seller, notice of which designation shall be given to
the Administrator, the Indenture Trustee, the Owner Trustee and the Master
Servicer.


 


“Rating
Agency Condition” means, with respect to any action, written confirmation from
each Rating Agency rating the Notes that such action will not result in a
reduction or withdrawal of its then current rating of the Notes.


 


“Receivables”
means each receivable listed on the Schedule of Receivables, which (a) has
not been released from the Series Trust Estate as provided herein or in the
Indenture and (b) is not a Liquidated Receivable.


 


“Redemption
Price” has the meaning specified in Section 5.01.


 


8
















 


“Related
Documents” means the Basic Documents and the Revolving Credit Agreement.


 


“Reserve
Account” means the Reserve Account, which shall be an Eligible Account created
pursuant to Section 3.01 and which shall be account no. 10-878657,
reference Household Auto 2004-1 Reserve Account at the Administrator, ABA No.
021001088.


 


“Reserve
Account Balance” means, with respect to a Distribution Date, the amount on
deposit in the Reserve Account as of the close of business on the Business Day
immediately preceding such Distribution Date; provided, however,
that such determination shall be made immediately after the deposit to the
Collection Account effected pursuant to Section 5.1(c) of the Master Sale
and Servicing Agreement.


 


“Reserve
Account Shortfall Amount” means, with respect to any Distribution Date, the
excess of:  (x) the Targeted Reserve
Account Balance for such Distribution Date over (y) the Reserve Account Balance
for such Distribution Date.


 


“Revolving
Credit Agreement” means the Revolving Credit Agreement, dated as of
March 1, 1998, between Household Finance Corporation and the Seller.


 


“Scheduled
Maturity Date” means, with respect to the Class A-1 Notes, the Class A-1
Scheduled Maturity Date, with respect to the Class A-2 Notes, the Class A-2
Scheduled Maturity Date, with respect to the Class A-3 Notes, the Class A-3
Scheduled Maturity Date and, with respect to the Class A-4 Notes, the Class A-4
Scheduled Maturity Date.


 


“Schedule of
Receivables” means, as to any date, the schedule of all retail installment
sales contracts held as part of the Series Trust Estate on such date.  The initial Schedule of Receivables is
attached hereto as Schedule II.  The
Schedule of Receivables will be amended from time to time to reflect the
removal of Receivables and the addition of any Eligible Substitute Receivables
to the Series Trust Estate.


 


“Secured
Parties” means, collectively, the Holders from time to time of the Notes.


 


“Securities”
means the Notes and the Certificates.


 


“Series
Supplement” means this Series Supplement to the Indenture, Master Sale and
Servicing Agreement and the Trust Agreement.


 


“Series
Support” means, with respect to the Notes, the Certificates and the Reserve
Account.


 


“Series
Trust Estate” means the property Granted to the Indenture Trustee pursuant to
Section 1.02.


 


“Servicing
Fee” means, (i) with respect to the initial Collection Period, the fee payable to the Master Servicer for servicing rendered
during such Collection Period, which shall be equal to $936,184.41, and (ii)
with respect to any other Collection Period, the fee payable to the Master
Servicer for services rendered during such Collection Period, which shall be
equal to


 


9
















 


one-twelfth of the
Servicing Fee Rate multiplied by the Aggregate Principal Balances of the
Receivables determined as of the Accounting Date immediately preceding such
Collection Period.  For the avoidance of
doubt, the Servicing Fee does not include any administrative fees, expenses or
charges paid by or on behalf of Obligors during any Collection Period.


 


“Servicing
Fee Rate” means 2.25% per annum.


 


“Substitution Adjustment Amount” means, as to any Receivable
for which the Master Servicer elects to substitute pursuant to
Section 5.02(a) and the date on which a substitution thereof occurs
pursuant to Section 5.02, the sum of:


 


(i)
the excess, if any, of (a) the Principal Balance of such elected Receivable plus any amounts charged off by the Master Servicer with
respect to such elected Receivable as of the end of the related Collection
Period preceding the date of substitution (after the application of any
principal payments received on such elected Receivable on or before the date of
the substitution of the applicable Eligible Substitute Receivable or
Receivables) over (b) the aggregate Principal Balance of the applicable
Eligible Substitute Receivable or Receivables, plus


 


(ii) accrued and unpaid interest to the end of such
Collection Period computed on a daily basis at the Annual Percentage Rate on
the Principal Balance of such elected Receivable outstanding from time to time.


 


“Targeted
Reserve Account Balance” means, with respect to any Distribution Date, the
lesser of: (i) the greater of (a) 3% of the outstanding Pool Balance as of the
end of the related Collection Period, and (b) $23,812,690.52 (2% of the Pool
Balance as of the Cutoff Date) and (ii) the Aggregate Note Principal Balance.


 


“Trust
Accounts” means the Collection Account and the Reserve Account.


 


“Trust
Agreement” means the Trust Agreement, dated as of July 13, 2004, between
the Seller and the Owner Trustee, as amended and restated as of July 28,
2004 and as supplemented by this Series Supplement.


 


“Underwriter”
means J.P. Morgan Securities Inc., as representative of the underwriters named
in the Underwriting Agreement.


 


ARTICLE III

DISTRIBUTIONS AND STATEMENTS TO

NOTEHOLDERS; SERIES SPECIFIC COVENANTS


 


SECTION 3.01.                 Trust Accounts.


 


(a)                                  The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Collection Account”) as a segregated trust
account in the Administrator’s corporate trust department, identified as the
“Collection Account for Household Automotive Trust 2004-1, in trust for the
Secured Parties.”  The Administrator
shall make or permit withdrawals from the Collection Account only as provided
in this Series Supplement.


 


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(b)                                 The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Reserve Account”) as a segregated trust
account in the Administrator ‘s corporate trust department, identified as the
“Reserve Account for Household Automotive Trust 2004-1, in trust for the
Secured Parties.”  The Administrator
shall make or permit withdrawals from the Reserve Account only as provided in
this Series Supplement.  On the Closing
Date, the Reserve Account will be funded with the Initial Reserve Account Deposit.


 


(c)                                  In
the event that any Trust Account ceases to be an Eligible Account, the
Administrator, as applicable, within five Business Days, shall establish such
Trust Account as a new account which is an Eligible Account.  No withdrawals may be made of funds in any
Trust Account except as provided in this Series Supplement.  Except as specifically provided in this
Series Supplement, funds in the Trust Accounts shall not be commingled with any
other moneys.  All moneys deposited from
time to time in each of the Trust Accounts shall be invested and reinvested by
the Administrator in Eligible Investments selected in writing by the Master
Servicer (pursuant to standing instructions or otherwise) which, absent any
instruction, shall be investments of the type specified in clause (d) of the
definition of Eligible Investments.  The
provisions of Section 5.1 of the Master Sale and Servicing Agreement shall
apply to the investment of funds in the Trust Accounts to the same extent as
they apply to the Collection Account.


 


SECTION 3.02.                 Reserve Account.


 


On the
earlier of (x) the maturity date of the Notes (whether by acceleration or
otherwise), and (y) the Final Scheduled Distribution Date, the amount on
deposit in the Reserve Account shall be withdrawn from the Reserve Account and
distributed in accordance with Section 4.04.


 


SECTION 3.03.                 Distributions.


 


(a)                                  On
each Distribution Date, the Administrator shall (based solely on the
information contained in the Master Servicer’s Certificate delivered with
respect to such Distribution Date) distribute the following amounts from and,
to the extent of, Available Funds with respect to the Collection Period
immediately preceding such Distribution Date, in the following order of
priority:


 


(i)                                     to
the Master Servicer, if HFC is no longer acting as Master Servicer, the
Servicing Fee for the related Collection Period;


 


(ii)                                  to
the Administrator, the Indenture Trustee and the Owner Trustee, any accrued and
unpaid fees and any unreimbursed costs and expenses (including to any successor
Master Servicer, reasonable transition expenses in an amount not to exceed
$100,000 per servicing transfer) (in each case, to the extent such fees have
not been previously paid by the Master Servicer);


 


(iii)                               to
the Class A Noteholders, the Class A Interest Distributable Amount;


 


11
















 


(iv)                              to
the Class A Noteholders, the Class A Minimum Principal Distributable Amount;


 


(v)                                 to
the Reserve Account, the Reserve Account Shortfall Amount, if any;


 


(vi)                              to
the Class A Noteholders, the Class A Additional Principal Distributable Amount;


 


(vii)                           if
HFC is acting as the Master Servicer, the Servicing Fee for the related
Collection Period (unless the Master Servicer has retained such amount in
accordance with Section 4.8 of the Master Sale and Servicing Agreement) or
if a successor Master Servicer has been appointed, reasonable transition
expenses in excess of the amounts paid in priority (i) above; and


 


(viii)                        to
the holders of the Certificates, any remaining Available Funds.


 


Amounts to be
distributed in reduction of the outstanding principal balance of the Class A
Notes pursuant to Section 3.03(a)(iv) or (vi) or Section 3.03(b)
shall be distributed in reduction of the outstanding principal balance of the
Class A-1 Notes until the principal balance of the Class A-1 Notes is
reduced to zero; thereafter such amount shall be distributed in reduction of
the outstanding principal balance of the Class A-2 Notes until the
principal balance of the Class A-2 Notes is reduced to zero; thereafter
such amount shall be distributed in reduction of the outstanding principal
balance of the Class A-3 Notes until the principal balance of the
Class A-3 Notes is reduced to zero; and thereafter such amount shall be
distributed in reduction of the outstanding principal balance of the
Class A-4 Notes until the principal balance of the Class A-4 Notes is
reduced to zero.


 


(b)                                 If
on a Determination Date, the Master Servicer’s Certificate delivered with
respect to the related Distribution Date indicates that (i) the amount of
Available Funds with respect to such Distribution Date is not sufficient, when
distributed in accordance with Section 3.03(a), to cause the amounts
specified in Section 3.03(a)(i), (ii) and (iii) with respect to such
Distribution Date to be paid in full; or (ii) if after giving effect to the
distribution of Available Funds pursuant to Section 3.03(a)(iv) on a
Distribution Date there exists a Principal Balance Shortfall, the Administrator
shall withdraw from the Reserve Account and distribute as follows an amount up
to the amount which when distributed, first in
accordance with Section 3.03(a)(i), (ii) and (iii); and second, in reduction of the outstanding principal balance of
the Class A Notes, but only to the extent necessary to eliminate the Principal
Balance Shortfall, shall cause the amounts specified in
Section 3.03(a)(i), (ii) and (iii) to be paid in full and such Principal
Balance Shortfall to be eliminated.


 


(c)                                  Each
Certificateholder, by its acceptance of its Certificate will be deemed to have
consented to the provisions of paragraph (a) above relating to the priority of
distributions, and will be further deemed to have acknowledged that no property
rights in any amount or the proceeds of any such amount shall vest in such
Certificateholder until such amounts have been distributed to such
Certificateholder in accordance with the terms of the Trust Agreement and this
Series Supplement; provided, that the foregoing shall not
restrict the right of


 


12
















 


any Certificateholder,
upon compliance with the provisions hereof, from seeking to compel the
performance of the provisions hereof by the parties hereto.  Each Certificateholder, by acceptance of its
Certificate, further specifically acknowledges that it has no right to or
interest in any monies at any time held in the Reserve Account, such monies
being held in trust for the benefit of the Secured Parties.


 


(d)                                 Amounts
on deposit in the Reserve Account on any Distribution Date (after giving effect
to all distributions made on such Distribution Date) in excess of the Targeted
Reserve Account Balance for such Distribution Date shall be released first, to
the Master Servicer for any Servicing Fees then due and unpaid pursuant to Section 3.03(a)(vii),
and any remainder shall be paid to the holders of the Certificates.


 


(e)                                  In
the event that the Reserve Account is maintained with an institution other than
the Administrator, the Master Servicer shall instruct and cause such
institution to transfer the amounts to be distributed therefrom in accordance
with Section 3.03(b) to the Administrator for distribution pursuant to
Section 3.03(a) one Business Day prior to the related Distribution Date.


 


(f)                                    Unless
Definitive Notes are issued pursuant to Section 2.12 of the Indenture,
with respect to Notes registered on the related Record Date in the name of a
nominee of the Clearing Agency, payment will be made by wire transfer to an
account designated by such nominee, without presentation or surrender of the
Notes or the making of any notation thereon.


 


(g)                                 If
not theretofore paid in full, all amounts outstanding with respect to the Class
A-1 Notes shall be due and payable on the Class A-1 Scheduled Maturity Date; if
not theretofore paid in full, all amounts outstanding with respect to the Class
A-2 Notes shall be due and payable on the Class A-2 Scheduled Maturity Date; if
not theretofore paid in full, all amounts outstanding with respect to the Class
A-3 Notes shall be due and payable on the Class A-3 Scheduled Maturity Date;
and if not theretofore paid in full, all amounts outstanding with respect to
the Class A-4 Notes shall be due and payable on the Class A-4 Scheduled
Maturity Date.


 


SECTION 3.04.                 Statements to Noteholders.


 


(a)                                  On
or prior to each Determination Date, the Master Servicer shall deliver, and
cause to be delivered via access to its or its Affiliate’s web-site address, to
the Indenture Trustee and the Administrator (with a copy to the Rating
Agencies) for the Administrator to forward to each Noteholder of record, and to
each Certificateholder of record, a statement setting forth at least the
following information as to the Notes to the extent applicable:


 


(i)                                     the
amount of such distribution allocable to principal of each Class of Notes;


 


(ii)                                  the
amount of such distribution allocable to interest on or with respect to each
Class of Notes;


 


13
















 


(iii)                               the
aggregate outstanding principal amount of each Class of the Notes after giving
effect to payments allocated to principal reported under (i) above;


 


(iv)                              the
Class A Interest Carryover Shortfall, if any, and the change in such amount
from the preceding statement;


 


(v)                                 the
positive excess, if any, of the Aggregate Note Principal Balance over the Pool
Balance after giving effect to payments allocated to principal reported under
(i) above and the change in such amount from the preceding statement;


 


(vi)                              the
amount of the Servicing Fee paid to the Master Servicer with respect to such
Collection Period; and


 


(vii)                           the
Targeted Reserve Account Balance and the amount on deposit in the Reserve
Account at the end of such Distribution Date.


 


Each amount set
forth pursuant to paragraphs (i), (ii) and (iv) above shall be expressed as a
dollar amount per $1,000 of the initial principal balance of the applicable
Class of Notes.


 


(b)                                 The
Administrator may, but is not obligated to, make available to the parties
hereto and to each of the Noteholders, via the Administrator’s internet
website, all information referred to in this Section 3.04 available each
month and, with the consent or at the direction of the Seller, such other
information regarding the Notes and/or the Receivables as the Administrator may
have in its possession, but only with the use of a password provided by the
Administrator.


 


The
Administrator’s internet website, if applicable, shall be specified by the
Administrator from time to time in writing to the parties hereto and the
Noteholders.  In connection with
providing access to the Administrator’s internet website, the Administrator may
require registration and the acceptance of a disclaimer.  The Administrator shall not be liable for the
dissemination of information in accordance with this Series Supplement.


 


SECTION 3.05.                 Reporting Requirements.


 


(a)                                  The
Master Servicer’s Certificate shall be in the form attached as Exhibit A
hereto.


 


(b)                                 By
January 31 of each calendar year, commencing January 31, 2005, the
Master Servicer on behalf of the Issuer shall prepare and distribute to the
Administrator and the Indenture Trustee a statement containing such information
as is required to be provided by an issuer of indebtedness under the Code and
such other customary information as is necessary to enable the Noteholders to
prepare their tax returns.


 


(c)                                  If
an Event of Default occurs and is continuing and if it is either known by, or
written notice of the existence thereof has been delivered to, a Responsible
Officer of the Administrator or the Indenture Trustee, the Administrator or the
Indenture Trustee, as the case


 


14
















 


may be, shall mail to
each Noteholder notice of the Default within 30 days after such knowledge or
notice occurs.


 


SECTION 3.06.                 Compliance With Withholding
Requirements.


 


Notwithstanding
any other provisions of this Series Supplement or the Indenture to the
contrary, the Administrator and the Indenture Trustee shall comply with all
Federal withholding requirements respecting payments (or advances thereof) to
the Noteholders as may be applicable to instruments constituting indebtedness
for Federal income tax purposes.  Any
amounts so withheld shall be treated as having been paid to the applicable
Noteholders for all purposes of the Indenture. 
In no event shall the consent of any Noteholder be required for any such
withholding.


 


SECTION 3.07.                 Special Covenants and
Acknowledgements.


 


With
respect to the Notes, the Issuer hereby represents and warrants, as of the
Closing Date:


 


(i)                                     Valid
Pledge.  It is the intention of the
Issuer that the Pledge herein contemplated hereby constitutes the Grant of a
perfected, first priority security interest in the Series Trust Estate to the
Indenture Trustee for the benefit of the Secured Parties.


 


(ii)                                  Governmental
Authorization.  Other than the filing
of the financing statements required hereunder, no authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Issuer of this Series Supplement, the Indenture, and each Related Document
to which it is a party.


 


SECTION 3.08.                 Tax Characterization.


 


It is
the intent of the parties hereto that, for all Federal, state, local and
foreign taxes, the Notes will be evidence of indebtedness.  To the extent permitted by law, the parties
hereto, and each owner of a beneficial interest in the Notes by acceptance of
such interest, agrees to treat the Notes for purposes of all Federal, state,
local and foreign taxes as indebtedness secured by the Series Trust Estate.


 


ARTICLE IV

EVENTS OF DEFAULT; REMEDIES


 


SECTION 4.01.                 Events of Default.


 


“Event
of Default”, wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


15
















 


(i)                                     default
in the payment of any interest on any Note when the same becomes due and
payable, and such default shall continue for a period of five calendar days; or


 


(ii)                                  default
in the payment of the outstanding principal balance of any Class of Notes on
the related Scheduled Maturity Date, which default shall continue for a period
of five calendar days; or


 


(iii)                               the
Aggregate Note Principal Balance on any Distribution Date exceeds the Pool
Balance as of the last day of the prior Collection Period after the application
of all Available Funds and after making any distribution pursuant to
Section 3.03(b); or


 


(iv)                              default
in the observance or performance of any covenant or agreement of the Issuer
made in the Related Documents (other than a covenant or agreement, a default in
the observance or performance of which is elsewhere in this
Section specifically dealt with), or any representation or warranty of the
Issuer made in the Related Documents or in any certificate or other writing or
record delivered pursuant thereto or in connection therewith proving to have
been incorrect in any material respect as of the time when the same shall have
been made and has a material adverse effect on the Noteholders, and such
default shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not
have been eliminated or otherwise cured, for a period of 60 days after there
shall have been given, by registered or certified mail, to the Issuer by the
Indenture Trustee or the Administrator or to the Issuer and the Indenture
Trustee by the Holders of at least 25% of the Outstanding Amount of the Notes,
a written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is a
“Notice of Default” hereunder; or


 


(v)                                 the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Series Trust
Estate in an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Series Trust Estate,
or ordering the winding-up or liquidation of the Issuer’s affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or


 


(vi)                              the
commencement by the Issuer of a voluntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Series Trust Estate, or the making by the Issuer of any
general assignment for


 


16
















 


the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of any
of the foregoing.


 


SECTION 4.02.                 Rights Upon Event of Default.


 


(a)                                  If
an Event of Default shall have occurred and be continuing, the Indenture
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes
shall, declare by written notice to the Issuer that the Notes have become due
and payable, whereupon they shall become, immediately due and payable at 100%
of the outstanding principal balance of the Notes and accrued interest thereon
(together with interest accrued at the relevant Note Rate on such overdue
interest).


 


(b)                                 At
any time after such declaration of acceleration of maturity has been made and
before a judgment or decree for payment of the money due has been obtained by
the Indenture Trustee, the Controlling Party, by written notice to the Issuer
and the Master Servicer, may rescind and annul such declaration and its
consequences if:


 


(i)                                     the
Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay:


 


(A)                              all
payments of principal and interest on all Notes and all other amounts that
would then be due hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and


 


(B)                                all
sums paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel; and


 


(ii)                                  all
Events of Default, other than the nonpayment of the principal of the Notes that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.9 of the Indenture.


 


No such rescission
shall affect any subsequent default or impair any right consequent thereto.


 


SECTION 4.03.                 Remedies.


 


If an
Event of Default shall have occurred and be continuing, the Indenture Trustee,
subject to Section 11.17 of the Indenture, may exercise any of the
remedies specified in Article V of the Indenture and, in addition, may do
one or more of the following:


 


(i)                                     institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under the Indenture with
respect thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;


 


17
















 


(ii)                                  institute
Proceedings from time to time for the complete or partial foreclosure of the
Indenture with respect to the Series Trust Estate;


 


(iii)                               exercise
any remedies of a secured party under the UCC and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture Trustee
and the Holders of the Notes; and


 


(iv)                              sell
the Series Trust Estate or any portion thereof or rights or interest therein,
at one or more public or private sales called and conducted in any manner
permitted by law; provided, however, that the Indenture Trustee
may not sell or otherwise liquidate the Series Trust Estate following an Event
of Default unless:


 


(x)                                   the
proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such Notes
for principal and interest, or


 


(y)                                 the
Indenture Trustee determines that the Series Trust Estate will not continue to
provide sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Holders of
66-2/3% of the Outstanding Amount of the Notes, or


 


(z)                                   if
the provisions of neither subparagraph (x) nor subparagraph (y) are satisfied,
if the Indenture Trustee obtains the consent of the Holders of 100% of the
Outstanding Amount of the Notes.


 


In determining
such sufficiency or insufficiency with respect to clause (y), the Indenture
Trustee may, but need not, obtain and rely upon an opinion of an independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Series
Trust Estate for such purpose.  Any
reasonable costs and expenses incurred by the Indenture Trustee in obtaining
such opinion shall be costs and expenses of the Indenture Trustee pursuant to
Section 3.03(a)(ii) of this Series Supplement.


 


SECTION 4.04.                 Priorities.


 


(a)                                  On
and after the maturity date of the Notes (by acceleration or otherwise),
including, without limitation, on and after the Final Scheduled Distribution
Date, all Available Funds, all amounts on deposit in the Reserve Account withdrawn
in accordance with Section 3.02 and any proceeds of the liquidation of all
or any portion of the Series Trust Estate pursuant to Section 4.03(iv)
(which proceeds the Indenture Trustee shall remit to the Administrator), shall
be applied by the Administrator on the date of distribution in the following
order of priority:


 


FIRST:           amounts
due and owing and required to be distributed to the Master Servicer, if HFC is
no longer acting as Master Servicer, the Administrator, the Owner Trustee and
the Indenture Trustee, respectively, pursuant to priorities


 


18
















 


(i) and (ii) of
Section 3.03(a) and not previously distributed, in the order of such
priorities and without preference or priority of any kind within such
priorities;


 


SECOND:                                            to
Class A Noteholders for amounts due and unpaid on the Class A Notes for
interest, pro  rata, in accordance with the amounts due and
payable on the Class A Notes on the date of distribution for interest without
preference or priority of any kind;


 


THIRD:       to
the Class A Noteholders for amounts due and unpaid on the Class A Notes for
principal, pro  rata, in accordance with the respective aggregate
outstanding principal balance of each Class of Class A Notes without preference
or priority of any kind;


 


FOURTH:                                           to
the Master Servicer, if HFC is acting as Master Servicer, for any Servicing
Fees then due and unpaid; and


 


FIFTH:          to
the Certificateholders, any remaining Available Funds.


 


(b)                                 The
Administrator may fix a record date and distribution date for any payment to
Noteholders pursuant to this Section 4.04. 
At least 15 days before such record date, the Administrator shall mail
to the Noteholders a notice that states the record date, the distribution date
and the amount to be paid.


 


ARTICLE V

PREPAYMENT, REDEMPTION AND SUBSTITUTION


 


SECTION 5.01.                 Optional “Clean-Up” Redemption.


 


On any
Distribution Date occurring on or after the date upon which the Pool Balance
shall have been reduced to an amount which is less than or equal to 10% of the
Original Pool Balance, the Master Servicer and HAFC on behalf of the Issuer,
shall each have the option to redeem the outstanding Notes at a redemption
price (the “Redemption Price”) which is not less than the then Aggregate
Note Principal Balance, plus all accrued and unpaid interest thereon and all
fees and other amounts owing to the Administrator, the Indenture Trustee, the
Owner Trustee and the Master Servicer (if other than HFC) under the Related
Documents.  The Master Servicer and HAFC,
on behalf of the Issuer, shall give the Master Servicer (if other than HFC),
the Administrator, the Indenture Trustee, and the Owner Trustee at least 10
days irrevocable prior written notice of the date on which the Master Servicer
or HAFC, as applicable, intends to exercise such option to purchase.  Not later than 12:00 P.M., New York City
time, on the day prior to such Distribution Date, the Master Servicer or HAFC,
as applicable, shall deposit such amount in the Collection Account in
immediately available funds for distribution pursuant to Section 3.03
against the presentment of the Notes for cancellation.  Such purchase option is subject to payment in
full of the Redemption Price.


 


SECTION 5.02.                 Optional Substitution.


 


(a)                                  At
any time the Master Servicer and HAFC shall each have the right, in their
respective sole discretion, but not the obligation, to elect (by written notice
sent to the


 


19
















 


Indenture Trustee and the
Owner Trustee) to substitute in the place of any Receivable an Eligible
Substitute Receivable or Receivables; provided that the aggregate Principal
Balance of all Eligible Substitute Receivables substituted pursuant to this
Section shall not exceed 2% of the Pool Balance as of the initial Cutoff Date;
provided further that prior to any such substitution the Master Servicer shall
give written notice to each Rating Agency of any such substitution.


 


(b)                                 For
any Collection Period during which the Master Servicer or HAFC substitutes one
or more Eligible Substitute Receivables, the Master Servicer shall determine
the Substitution Adjustment Amount.  The
Master Servicer or HAFC, as applicable, shall deposit the Substitution
Adjustment Amount in the Collection Account no later than the Business Day
immediately preceding the Distribution Date in the month following the end of
the Collection Period in which such substitution occurs.  The Master Servicer shall amend the
Schedule of Receivables to reflect the removal of any Receivable for which
the Master Servicer or HAFC has made a substitution election pursuant to
Section 5.02(a) from the terms of this Agreement and the substitution of
the Eligible Substitute Receivable or Receivables.  Upon such substitution, the Eligible
Substitute Receivable or Receivables shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have represented
that each such Eligible Substitute Receivable or Receivables, as of the date of
substitution, satisfies the Eligibility Criteria, to the extent such criteria
do not pertain exclusively to the Receivables transferred on the Closing
Date.  The Indenture Trustee shall upon
satisfaction of the conditions in this Section 5.02(b) take any action
requested by the Master Servicer or HAFC, as the case may be, to effect the
reconveyance of such Receivable for which the Master Servicer or HAFC, as the
case may be, has made a substitution election so removed from the Series Trust
Estate to the Master Servicer or HAFC, as the case may be.  The procedures applied by the Master Servicer
or HAFC in selecting each Eligible Substitute Receivable shall not be adverse
to the interests of the Noteholders and shall be comparable to the selection
procedures applicable to the Receivables originally conveyed hereunder.


 


(c)                                  In
the case of a substitution pursuant to this Section, upon receipt by the
Indenture Trustee of (i) a Master Servicer’s Certificate to the effect that the
Substitution Adjustment Amount, if any, has been so deposited in the Collection
Account and (ii) an Officer’s Certificate reciting the transfer and assignment
of the Eligible Substitute Receivable(s) to the Indenture Trustee, the
Indenture Trustee shall execute and deliver such instrument of transfer or
assignment presented to it by the Master Servicer, in each case without
recourse, as shall be necessary to vest in the Master Servicer or HAFC, as
applicable, legal and beneficial ownership of such Receivable for which the
Master Servicer has made a substitution election (including any property
acquired in respect thereof or proceeds of any insurance policy with respect
thereto).


 


ARTICLE VI

MISCELLANEOUS


 


SECTION 6.01.                 Ratification of Basic Documents.


 


Each
of the Basic Documents (to the extent appropriate, as supplemented by this
Series Supplement) is in all respects ratified and confirmed and each of the
Basic Documents, as so supplemented by this Series Supplement shall be read,
taken and construed as one and the same instrument.


 


20
















 


SECTION 6.02.                 Counterparts.


 


This
Series Supplement may be executed in one or more counterparts, each of which so
executed shall be deemed to be an original, but all of which shall together
constitute but one and the same instrument.


 


SECTION 6.03.                 GOVERNING LAW.


 


THIS
SERIES SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS
PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


SECTION 6.04.                 Amendments Without Consent of
Noteholders.


 


(a)                                  Without
the consent of the Noteholders and with prior written notice to the Rating
Agencies, as evidenced to the Administrator, the Indenture Trustee and the
Issuer, when authorized by an Issuer Order, at any time and from time to time,
the parties hereto may enter into one or more amendments hereto, in form
satisfactory to the Administrator, the Indenture Trustee and the Owner Trustee,
for any of the following purposes:


 


(i)                                     to
correct or amplify the description of any property at any time subject to the
lien of the Indenture as supplemented by this Series Supplement, or better to
assure, convey and confirm unto the Indenture Trustee, if any, any property
subject or required to be subjected to the lien of the Indenture as
supplemented by this Series Supplement, or subject to the lien of the Indenture
as supplemented by this Series Supplement additional property;


 


(ii)                                  to
evidence the succession, in compliance with the applicable provisions hereof,
of another person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;


 


(iii)                               to
add to the covenants of the Issuer, for the benefit of the Noteholders, or to
surrender any right or power herein conferred upon the Issuer;


 


(iv)                              to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee, if any;


 


(v)                                 to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under the Indenture, the Trust
Agreement or in this Series Supplement; provided that such action shall
not adversely affect the interests of the Noteholders;


 


(vi)                              to
evidence and provide for the acceptance of the appointment hereunder and under
the Indenture by a successor indenture trustee with respect to


 


21
















 


the Notes and to
add to or change any of the provisions of the Indenture or of this Series
Supplement as shall be necessary to facilitate the administration of the trusts
hereunder by more than one indenture trustee, pursuant to the requirements of
Article V of the Indenture; or


 


(vii)                           to
modify, eliminate or add to the provisions of the Indenture or of this Series
Supplement to such extent as shall be necessary to effect the qualification of
the Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to the Indenture such other provisions as may be expressly
required by the TIA.


 


Each
of the Administrator, the Indenture Trustee and the Owner Trustee is hereby
authorized to join in the execution of any amendment and to make any further
appropriate agreements and stipulations that may be therein contained.


 


(b)                                 Except
as otherwise provided herein, the Issuer, the Indenture Trustee and the
Administrator, when authorized by an Issuer Order, may, also without the
consent of any of the Noteholders and with prior written notice to the Rating
Agencies by the Issuer, as evidenced to the Indenture Trustee and the
Administrator, enter into an amendment hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture or of this Series Supplement of modifying in any manner the
rights of the Noteholders under the Indenture or under this Series Supplement; provided,
however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.


 


SECTION 6.05.                 Amendments With Consent of the
Noteholders.


 


Except
as otherwise provided herein, the Issuer, the Indenture Trustee and the
Administrator, when authorized by an Issuer Order provided by the Master
Servicer, also may, with prior written notice to the Rating Agencies and with
the consent of the Holders of not less than a majority of the Outstanding
Amount of each Class of affected Notes, by Act of such Holders delivered to the
Issuer, the Indenture Trustee and the Administrator, enter into an amendment
hereto for the purpose of adding any provisions to, or changing in any manner
or eliminating any of the provisions of, this Series Supplement or of modifying
in any manner the rights of the Noteholders under the Indenture or under this
Series Supplement; provided, however, that no such amendment
shall, without the consent of the Holder of each Outstanding Note affected thereby:


 


(i)                                     change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon, change the
provision of the Indenture relating to the application of collections on, or
the proceeds of the sale of, all or any portion of any Series Trust Estate to
payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable;


 


22
















 


(ii)                                  impair
the right to institute suit for the enforcement of the provisions of the
Indenture requiring the application of funds available therefor, as provided in
Article V of the Indenture, to the payment of any such amount due on the
Notes on or after the respective due dates thereof;


 


(iii)                               reduce
the percentage of the Outstanding Amount of the Notes, the consent of the
Holders of which is required for this Series Supplement, or the consent of the
Holders of which is required for any waiver of compliance with certain
provisions of the Indenture or certain defaults hereunder and their
consequences provided for in the Indenture;


 


(iv)                              modify
or alter the provisions of the proviso to the definition of the term “Outstanding”;


 


(v)                                 reduce
the percentage of the Outstanding Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Series Trust
Estate pursuant to the Indenture;


 


(vi)                              modify
any provision of this Section except to increase any percentage specified
herein or to provide that certain additional provisions of the Indenture or the
Basic Documents cannot be modified or waived without the consent of the Holder
of each Outstanding Note affected thereby;


 


(vii)                           modify
any of the provisions of the Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory redemption
of the Notes contained herein; or


 


(viii)                        permit
the creation of any lien ranking prior to or on a parity with the lien of the
Indenture with respect to any part of the Series Trust Estate or, except as
otherwise permitted or contemplated herein or the Related Documents, terminate
the lien of the Indenture on any property at any time subject hereto or deprive
the Holder of any Note of the security provided by the lien of the Indenture.


 


It
shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of an amendment to this Series Supplement, but it
shall be sufficient if such Act shall approve the substance thereof.


 


Promptly
after the execution by the Issuer, the Indenture Trustee and the Administrator
of an amendment to this Series Supplement, the Administrator shall mail to the
Noteholders a notice setting forth in general terms the substance hereof.  Any failure of the Administrator to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any amendment to this Series Supplement.


 


23
















 


Prior
to the execution of any amendment to this Series Supplement, the Indenture
Trustee and the Administrator shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Series Supplement. 
The Indenture Trustee and the Administrator may, but shall not be
obligated to, enter into any such amendment which affects the Indenture
Trustee’s or the Administrator’s, as the case may be, own rights, duties or
immunities under this Series Supplement.


 


By its
acceptance of its interest in the Notes, each owner of a beneficial interest in
a Note shall be deemed to have agreed that prior to the date which is one year
and one day after the termination of the Indenture, such Person shall not
acquiesce, petition or otherwise invoke or cause the Issuer or the Seller to
invoke the process of any governmental authority for the purpose of commencing
or sustaining a case against the Seller or 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 or for
the Issuer or the Seller or any substantial part of its property or ordering
the winding-up or liquidation of the affairs of the Issuer or the Seller.


 


SECTION 6.06.                 Authority to Register Notes and
File Reports.


 


The
Issuer hereby authorizes the Seller to prepare and execute on behalf of the
Issuer, filings with the Securities and Exchange Commission and any applicable
state agencies of documents required to register or qualify the Notes for
public distribution and to file, on a periodic basis or as otherwise may be
required, such documents or records as may be required by rules and regulations
prescribed by such authorities.


 


SECTION 6.07.                 Authority to Perform Duties of
the Issuer.


 


(a)                                  The
Issuer hereby designates the Master Servicer its agent and attorney-in-fact to
execute or otherwise authenticate any financing statement, continuation
statement or other instrument or record required by the Indenture Trustee
pursuant to Section 3.5 of the Indenture; provided that such
designation shall not be deemed to create a duty in the Indenture Trustee to
monitor the compliance of the Master Servicer with respect to its duties under
Section 3.5 of the Indenture or the adequacy of any financing statement,
continuation statement or other instrument or record prepared by the Master
Servicer.


 


(b)                                 The
Issuer hereby appoints the Master Servicer to assist the Issuer in performing
its duties under the Related Documents, including, but not limited to,
Sections 2.13 and 3.9 of the Indenture, and the Master Servicer hereby
accepts such appointment.


 


SECTION 6.08.                 Notices.


 


All
demands, notices and communications upon or to the Seller, the Master Servicer,
the Owner Trustee, the Indenture Trustee or the Administrator shall be in
writing, personally delivered, or mailed by certified mail, or sent by
confirmed telecopier transmission and shall be deemed to have been duly given
upon receipt (a) in the case of the Seller, to Household Auto Receivables
Corporation, 1111 Town Center Drive, Las Vegas, Nevada 89134, with a copy to
Household Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois,
60070, Attention:  Treasurer, Telecopier
# (847) 205-7538, (b) in the case of the Master Servicer,


 


24
















 


if Household Finance Corporation is the Master
Servicer, to Household Finance Corporation, 2700 Sanders Road, Prospect
Heights, Illinois 60070,  Attention:
Treasurer, Telecopier # (847) 205-7538, (c) in the case of the Issuer or the
Owner Trustee, at the Corporate Trust Office of the Owner Trustee, Telecopier #
(302) 636-4140, (d) in the case of the Indenture Trustee, at the Corporate
Trust Office of the Indenture Trustee, Attention: Asset Backed Administration,
Telecopier # (312) 325-8905 and (e) in the case of the Administrator, at the
Corporate Trust Office of the Administrator, Attention: Corporate Trust/ABS
Group, Telecopier # (212) 525-1300.  Any
notice required or permitted to be mailed to a Noteholder or Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register or Note Register, as
applicable.  Any notice so mailed within
the time prescribed in the Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder or Noteholder shall
receive such notice.


 


25
















 


IN
WITNESS WHEREOF, the parties hereto have caused this Series Supplement to be
fully executed by their respective officers as of the day and year first above
written.


 


	
   

  	
  HOUSEHOLD
  FINANCE CORPORATION,

  
	
   

  	
  as Master Servicer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William H. Kesler

  	
   

  
	
   

  	
   

  	
  Name:  William H. Kesler

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD
  AUTOMOTIVE TRUST 2004-1,

  
	
   

  	
  as Issuer

  
	
   

  	
  by Wilmington Trust Company, not in its

  
	
   

  	
  individual capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rachel L. Simpson

  	
   

  
	
   

  	
   

  	
   Name: Rachel L. Simpson

  
	
   

  	
   

  	
   Title: Financial Services Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD
  AUTO RECEIVABLES CORPORATION,

  
	
   

  	
  as Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven H. Smith

  	
   

  
	
   

  	
   

  	
  Name:  Steven H. Smith

  
	
   

  	
   

  	
  Title:  Vice President and Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia M. Child

  	
   

  
	
   

  	
   

  	
  Name:
  Patricia M. Child

  
	
   

  	
   

  	
  Title:  Vice President

  



 
















 


	
   

  	
  WILMINGTON
  TRUST COMPANY,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rachel L. Simpson

  	
   

  
	
   

  	
   

  	
  Name:
  Rachel L. Simpson

  
	
   

  	
   

  	
  Title:
  Financial Services Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Wu

  	
   

  
	
   

  	
   

  	
  Name:
  Richard Wu

  
	
   

  	
   

  	
  Title:
  Vice President

  



 


[Signature Page
for Series Supplement]


 
















 


Schedule I


 


Eligibility Criteria


 


“Eligible
Receivable” means a Receivable with respect to which each of the following
is true as of the Closing Date:


 


(a)                                  that
(i) was originated directly by HAFC (or any predecessor or Affiliate of HAFC,
as applicable) with the consumer or was originated by a Dealer for the retail
sale of a Financed Vehicle in the ordinary course of such Dealer’s business and
(A) in the case of a receivable originated by HAFC (or any predecessor or
Affiliate of HAFC, as applicable), such entity had all necessary licenses and
permits to originate receivables in the state where such entity was located,
and, (B) in the case of a Dealer originated receivable, such Dealer had all
necessary licenses and permits to originate receivables in the state where such
Dealer was located, and such receivable was purchased by HAFC (or any
predecessor or Affiliate of HAFC, as applicable) from such Dealer under an
existing Dealer Agreement with HAFC (or any predecessor or Affiliate of HAFC,
as applicable), and (C) in the case of a Dealer originated receivable or a
receivable originated by HAFC (or any predecessor or Affiliate of HAFC, as
applicable) such receivable was purchased (x) by HARC pursuant to the
terms of the Master Receivables Purchase Agreements, (y) by the Issuer
pursuant to the Master Sale and Servicing Agreement; and each Receivable was
validly assigned (1) if Dealer originated, by such Dealer to HAFC (or any
predecessor or Affiliate of HAFC, as applicable), (2) by HAFC (or any
predecessor or Affiliate of HAFC, as applicable) to HARC pursuant to the terms
of the Master Receivables Purchase Agreements, (3) by
HARC to the Issuer pursuant to the Master Sale and Servicing Agreement and
(4) by the Issuer to the Indenture Trustee pursuant to the Indenture,
(ii) was fully and properly executed by the parties thereto,
(iii) contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for realization against the
collateral security, and (iv) is fully amortizing and provides for level
monthly payments (provided that the payment in the first Collection Period
and the final Collection Period of the term of the Receivable may be minimally
different from the level payment) which, if made when due, shall fully amortize
the Amount Financed over the original term;


 


(b)                                 that
was originated without any fraud or material misrepresentation on the part of a
Dealer, the Obligor, HAFC or HACC, as applicable;


 


(c)                                  with
respect to which all requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation, usury laws, the
Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the
Federal Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil
Relief Act, as amended, and state adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code and other consumer credit laws and equal
credit opportunity and disclosure laws) in respect of all of the Receivables,
each and every sale of Financed Vehicles and the sale of any physical damage,
loss, credit life and credit accident and health insurance and any extended
service contracts, have been complied with in all material respects, and each
Receivable and the sale of the Financed Vehicle evidenced by each


 


SCH-I-1
















 


Receivable and the sale of any physical damage, loss,
credit life and credit accident and health insurance and any extended service
contracts complied at the time it was originated or made and now complies in
all material respects with all applicable legal requirements;


 


(d)                                 that
was originated in, and the related Obligor is a resident of, the United States
of America and, at the time of origination materially conformed to all
underwriting and funding guidelines of HAFC (or of any predecessor or Affiliate
of HAFC, as applicable) applicable thereto and that has been serviced in
material conformity with procedures applicable to receivables that are serviced
by the Master Servicer for its own account;


 


(e)                                  which
represents the genuine, legal, valid and binding payment obligation of the
Obligor thereon, enforceable by the holder thereof in accordance with its
terms, except (A) as enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors’ rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be modified by
the application of the Servicemembers Civil Relief Act, as amended; and all
parties thereto had full legal capacity to execute and deliver such Receivable and
all other documents related thereto and to grant the security interest
purported to be granted thereby;


 


(f)                                    which
is not due from the United States of America or any state or from any agency,
department, subdivision or instrumentality thereof;


 


(g)                                 which,
as of the Cutoff Date, (i) had an original term of not more than 72 months,
(ii) has a remaining term of not more than 72 months, (iii) had a remaining
Amount Financed of at least $3,000 and not more than $40,000, (iv) had an
Annual Percentage Rate of at least 10.50% and not more than 24.95%, (v) was not
more than 30 days contractually delinquent, (vi) no funds have been advanced by
the Issuer, the Master Servicer, HAFC, any predecessor or Affiliate of HAFC,
any Dealer, or anyone acting on behalf of any of them in order to cause such
Receivable to qualify under subclause (iv) of this clause (g) and
(vii) had no provision thereof waived, altered or modified in any respect since
its origination;


 


(h)                                 with
respect to which the information pertaining to such Receivable set forth in
each Schedule of Receivables is true and correct in all material respects;


 


(i)                                     with
respect to which HAFC (or any predecessor or Affiliate of HAFC, as applicable)
will have caused the portions of HAFC’s (or any HAFC predecessor’s or HAFC
Affiliate’s, as applicable) and the Master Servicer’s servicing records
relating to such Receivable to be clearly and unambiguously marked to show that
such Receivable has been transferred by HAFC (or any predecessor or Affiliate
of HAFC, as applicable) to HARC in accordance with the terms of the Master
Receivables Purchase Agreements and by HARC to the Issuer pursuant to the
Master Sale and Servicing Agreement, and by the Issuer to the Indenture Trustee
pursuant to the Indenture;


 


(j)                                     with
respect to which the computer tape or listing to be made available by HAFC (or
any predecessor or Affiliate of HAFC, as applicable) to HARC, the Master
Servicer or


 


SCH-I-2
















 


the Indenture Trustee is complete and accurate and
includes a description of the same Receivables that are, or will be, described
in the related Schedule of Receivables;


 


(k)                                  which
constitutes tangible chattel paper within the meaning of the UCC;


 


(l)                                     of
which there is only one original executed copy;


 


(m)                               with
respect to which there exists a Receivable File and such Receivable File
contains, without limitation, (a) a fully executed original of such Receivable,
(b) a certificate of insurance, application form for insurance signed by the
Obligor, or a signed representation letter from the relevant Obligor named
pursuant to which the Obligor has agreed to obtain physical damage insurance
for the related Financed Vehicle, (c) the original Lien Certificate or
application therefor showing HAFC (or any predecessor or Affiliate of HAFC, as
applicable) as first lienholder and (d) an original credit application signed
by the Obligor; and (x) each of the documents relating thereto which is
required to be signed by the Obligor has been signed by the Obligor in the
appropriate spaces and (y) all blanks on any form relating thereto to be
completed have been properly filled in and each form has otherwise been
correctly prepared; and, notwithstanding the above, with respect to which, a
copy of the complete Receivable File for such Receivable, which fulfills the
documentation requirements of HAFC (or any predecessor or Affiliate of HAFC, as
applicable) as in effect at the time of purchase is in the possession of the
Master Servicer or Subservicer;


 


(n)                                 which
has not been satisfied, subordinated or rescinded, and the Financed Vehicle
securing such Receivable has not been released from the lien of such Receivable
in whole or in part;


 


(o)                                 which
was not originated in, and is not subject to the laws of, any jurisdiction the
laws of which would make unlawful, void or voidable the sale, transfer and
assignment of such Receivable and with respect to which there is no agreement
with any account debtor that prohibits, restricts or conditions the assignment
of any portion of such Receivable;


 


(p)                                 which
has not been sold, transferred, assigned or pledged to any Person other than to
(i) HAFC (or any predecessor or Affiliate of HAFC, as applicable) by a
Dealer, (ii) HARC by HAFC (or any predecessor or Affiliate of HAFC, as
applicable) pursuant to the terms of the Master Receivables Purchase
Agreements, (iii) the Issuer by HARC pursuant to the terms of the Master
Sale and Servicing Agreement and (iv) the Indenture Trustee by the Issuer
pursuant to the terms of the Indenture. 
No Dealer has a participation in, or other right to receive, proceeds of
any Receivable.  Neither HAFC (nor any
predecessor or Affiliate of HAFC, as applicable), HARC nor the Issuer has taken
any action to convey any right to any Person that would result in such Person
having a right to payments received under the related Insurance Policy or the
related Dealer Agreement or Dealer Assignment or to payments due under such
Receivable;


 


(q)                                 which
creates a valid, binding and enforceable first priority security interest in
favor of HAFC (or any predecessor or Affiliate of HAFC, as applicable) in the
Financed Vehicle;


 


SCH-I-3
















 


(r)                                    which
is secured by an enforceable and perfected first priority security interest in
the Financed Vehicle in favor of HAFC (or any predecessor or Affiliate of HAFC,
as applicable), as secured party, which security interest is prior to all other
Liens upon and security interests in such Financed Vehicle which now exist or
may hereafter arise or be created (except, as to priority, for any Lien for
taxes, labor or materials affecting a Financed Vehicle); and, with respect to
which there are no Liens or claims for taxes, work, labor or materials
affecting the related Financed Vehicle which are or may be Liens prior or equal
to the lien of such Receivable;


 


(s)                                  as
to which the Seller has not authorized the filing of, and is not aware of any
financing statements against the Seller that include a description of the
collateral covering such Receivable, other than any financing statements (i)
relating to the sale of such Receivable by HARC to the Issuer pursuant to the
terms of the Master Sale and Servicing Agreement, or (ii) that have been
terminated;


 


(t)                                    as
to which all filings (including, without limitation, UCC filings) required to
be made by any Person and actions required to be taken or performed by any
Person in any jurisdiction to give the Indenture Trustee a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds thereof
have been made, taken or performed;


 


(u)                                 as
to which, immediately prior to the transfer and assignment of such Receivable
by the Seller pursuant to the Sale and Servicing Agreement, the Seller has good
and marketable title thereto, free and clear of any and all liens, claims or
encumbrances of any person;


 


(v)                                 as
to which HAFC (or any predecessor or Affiliate of HAFC, as applicable), HARC or
the Issuer has not done anything to convey any right to any Person that would
result in such Person having a right to payments due under such Receivable or
otherwise to impair the rights of the Indenture Trustee, the Noteholders or the
Certificateholders in such Receivable or the proceeds thereof;


 


(w)                               which
is not assumable by another Person in a manner which would release the Obligor
thereof from such Obligor’s obligations with respect to such Receivable;


 


(x)                                   which
is not subject to any right of rescission, setoff, counterclaim or defense and
no such right has been asserted or threatened with respect thereto;


 


(y)                                 as
to which there has been no default, breach, violation or event permitting
acceleration under the terms of such Receivable (other than payment
delinquencies permitted by clause (g)(iv) above) and no condition exists or
event has occurred and is continuing that with notice, the lapse of time or
both would constitute a default, breach, violation or event permitting
acceleration under the terms of such Receivable, and there has been no waiver
of any of the foregoing, and with respect to which the related Financed Vehicle
had not been repossessed;


 


(z)                                   at
the time of the origination of which, the related Financed Vehicle was covered
by a comprehensive and collision insurance policy (i) in an amount at
least equal to the lesser of (a) its maximum insurable value and
(b) the principal amount due from the Obligor thereunder, (ii) naming
HAFC (or any predecessor or Affiliate of HAFC, as applicable) and its
successors and assigns as loss payee and (iii) insuring against loss and
damage due to fire, theft,


 


SCH-I-4
















 


transportation, collision and other risks generally
covered by comprehensive and collision coverage and with respect to which the
Obligor is required to maintain physical loss and damage insurance, naming HAFC
(or any predecessor or Affiliate of HAFC, as applicable) and its successors and
assigns as additional insured parties, and such Receivable permits the holder
thereof to obtain physical loss and damage insurance at the expense of the
Obligor if the Obligor fails to do so;


 


(aa)                            with
respect to which the following is true:


 


The
Lien Certificate for the related Financed Vehicle shows, or if a new or
replacement Lien Certificate is being applied for with respect to such Financed
Vehicle the Lien Certificate will be received within 180 days of the Closing
Date and will show, HAFC (or any predecessor or Affiliate of HAFC, as
applicable) named as the original secured party under such Receivable and,
accordingly, HAFC (or any predecessor or Affiliate of HAFC, as applicable) will
be the holder of a first priority security interest in such Financed
Vehicle.  With respect to each Receivable
for which the Lien Certificate has not yet been returned from the Registrar of
Titles, HAFC has either applied for or received written evidence from the
related Dealer or the Obligor that such Lien Certificate showing HAFC (or any
predecessor or Affiliate of HAFC, as applicable) as first lienholder has been
applied for.  If the Receivable was
originated in a state in which a filing or recording is required of the secured
party to perfect a security interest in motor vehicles, such filings or
recordings have been duly made to show HAFC (or any predecessor or Affiliate of
HAFC, as applicable) named as the original secured party under the related
Receivable;


 


(bb)                          with
respect to which the related Contract contains no mark or notation indicating
that such Contract has been sold or pledged by the Seller to any person other
than the Issuer;


 


(cc)                            as to
which no selection procedures adverse to the Noteholders or the
Certificateholder have been utilized in selecting such Receivable from all
other similar Receivables purchased by HAFC or any predecessor or Affiliate of
HAFC;


 


(dd)                          as to
which, as of the Cutoff Date, no Obligor had been identified on the records of
HAFC (or any predecessor or Affiliate of HAFC, as applicable) as being the
subject of a current bankruptcy proceeding; and


 


(ee)                            as to which all funds have been fully advanced to or
on behalf of the related Obligor in accordance with its terms.


 


SCH-I-5
















 


Schedule II


 


Schedule of
Receivables on File in Electronic Form

at Dewey Ballantine LLP


 
















 


Exhibit
A


 


Form of Master
Servicer’s Certificate


 


MASTER SERVICER’S CERTIFICATE


(Delivered pursuant to Section 4.9


of the Master Sale and Servicing Agreement)


 


HOUSEHOLD FINANCE CORPORATION,


Master Servicer


HOUSEHOLD AUTO RECEIVABLES CORPORATION


 


HOUSEHOLD AUTOMOTIVE TRUST 2004-1


Class A Notes


 


1.               This Certificate relates to the Distribution
Date occurring on


 


2.               Series 2004-1 Information


 


(a)                      The amount of Collected Funds with respect to the Collection Period was
equal to


 


(b)                     The amount of Available Funds with respect to the Collection Period was
equal to


 


(c)                      The Liquidated Receivables for the Collection Period was equal to


 


(d)                     Net Liquidation Proceeds for the Collection Period was equal to


 


(e)                      The Pool Balance at the beginning of the Collection Period was equal to


 


(f)                        The Pool Balance on the last day of the Collection Period was equal to


 


(g)                     The aggregate outstanding 
balance of the Receivables which were one payment delinquent as of the
close of business on the last day of the Collection Period with respect to such
Distribution Date was equal to


 


(h)                     The aggregate outstanding 
balance of the Receivables which were two payments delinquent as of the
close of business on the last day of the Collection Period with respect to such
Distribution Date was equal to


 


(i)                         The aggregate outstanding 
balance of the Receivables which were three or more payments delinquent
as of the close of business on the last day of the Collection Period with
respect to such Distribution Date was equal to


 


(j)                         The Servicing Fee paid on the Distribution Date was equal to


 


(k)                      The Aggregate Note Principal Balance immediately prior to the
Distribution Date was equal to


 


(l)                         The Aggregate Optimal Note Principal Balance for the Distribution Date
was equal to


 


(m)                   The Optimal Principal Distributable Amount for the Distribution Date
was equal to


 


(n)                     The Class A Minimum Principal Distributable Amount for the Distribution
Date was equal to


 
















 


(o)                     The Class A Additional Principal Distributable Amount for the
Distribution Date was equal to


 


(p)                     The Aggregate Note Principal Balance as of the Distribution Date was
equal to


 


(q)                     The Reserve Account Balance for the Distribution Date


 


(r)                        The Targeted Reserve Account Balance was equal to


 


(s)                      The Reserve Account Shortfall Amount for the Distribution Date


 


(t)                        The amount on deposit in the Reserve Account after distributions was
equal to


 


(u)                     The amount on deposit in the Reserve Account as a percentage of the
Pool Balance on the Distribution Date was equal to


 


(v)       The
ending Certificate Balance was equal to


 


(w)                   The ending Certificate balance as a percentage of the Pool Balance on
the Distribution Date was equal to


 


(x)                       The weighted average coupon (WAC) was equal to


 


(y)                     The weighted average remaining maturity (WARM) was equal to


 


3.               Noteholder Information


 


(a) Class A-1


 


A.           Information regarding distributions


 


1.   Total
distribution per $1,000


 


2.   Principal
distribution per $1,000


 


3.   Interest
distribution per $1,000


 


B.             Calculation of class A-1 interest due


 


1.   Class A-1 related Note Rate


 


2.   Class A-1 note balance - beginning of period


 


3.   Accrual convention


 


4.   Days in Interest Period


 


5.   Class A-1 interest due - current period


 


6.   Class A Interest Carryover Shortfall with
respect to Class A-1


 


7.   Class A-1 interest paid


 


8.   Class A-1 interest paid by Insurer


 


9.   Class A-1 unpaid interest with respect to
the Distribution Date


 


C.             Calculation of Class A-1 principal balance


 


1.  Class A-1 note balance - beginning of period


 


2.  Class A-1 minimum principal distributable
amount - due


 


A-2
















 


3.  Class A-1 additional principal distributable
amount - due


 


4.  Class A-1 minimum principal distributable
amount - paid


 


5.  Class A-1 additional principal distributable
amount - paid


 


6.  Class A-1 note balance - end of period


 


7.  Class A-1 notes as a percentage of the total
Notes outstanding on the Distribution Date


 


8.  Class A-1 notes as a percentage of the Pool
Balance on the Distribution Date


 


(b) Class A-2


 


A.           Information Regarding Distributions


 


1.   Total distribution per $1,000


 


2.   Principal distribution per $1,000


 


3.   Interest distribution per $1,000


 


B.             Calculation of Class A-2 interest due


 


1.   Class A-2 related Note Rate


 


2.   Class A-2 note balance - beginning of period


 


3.   Accrual convention


 


4.   Days


 


5.   Class A-2 interest due - current period


 


6.   Class A Interest Carryover Shortfall with
respect to Class A-2


 


7.   Class A-2 interest paid


 


8.   Class A-2 interest paid by Insurer


 


9.   Class A-2 unpaid interest with respect to
the Distribution Date


 


C.             Calculation of Class A-2 principal balance


 


1.  Class A-2 note balance - beginning of period


 


2.  Class A-2 minimum principal distributable
amount - due


 


3.  Class A-2 additional principal distributable
amount - due


 


4.  Class A-2 minimum principal distributable
amount - paid


 


5.  Class A-2 additional principal distributable
amount - paid


 


6.  Class A-2 note balance - end of period


 


7.  Class A-2 notes as a percentage of the total
Notes outstanding on the Distribution Date


 


8.  Class A-2 notes as a percentage of the Pool
Balance on the Distribution Date


 


9.
 Class A-1 and A-2 notes as a percentage
of the Pool Balance on the Distribution Date


 


A-3
















 


(c) Class A-3


 


A.           Information Regarding Distributions


 


1.   Total distribution per $1,000


 


2.   Principal distribution per $1,000


 


3.   Interest distribution per $1,000


 


B.             Calculation of Class A-3 interest Due


 


1.   Class A-3 related Note Rate


 


2.   Class A-3 note balance - beginning of period


 


3.   Accrual convention


 


4.   Days


 


5.   Class A-3 interest due - current period


 


6.   Class A Interest Carryover Shortfall with
respect to Class A-3


 


7.   Class A-3 interest paid


 


8.   Class A-3 interest paid by Insurer


 


9.   Class A-3 unpaid interest with respect to
the Distribution Date


 


C.             Calculation of Class A-3 principal balance


 


1.  Class A-3 note balance - beginning of period


 


2.  Class A-3 minimum principal distributable
amount - due


 


3.  Class A-3 additional principal distributable
amount - due


 


4.  Class A-3 minimum principal distributable
amount - paid


 


5.  Class A-3 additional principal distributable
amount - paid


 


6.  Class A-3 note balance - end of period


 


7.  Class A-3 notes as a percentage of the total
Notes outstanding on the Distribution Date


 


8.  Class A-3 notes as a percentage of the Pool
Balance on the Distribution Date


 


9.  Class A-1, A-2, and A-3 notes as a percentage
of the Pool Balance on the Distribution Date


 


(d) Class A-4


 


A.           Information Regarding Distributions


 


1.   Total distribution per $1,000


 


2.   Principal distribution per $1,000


 


3.   Interest distribution per $1,000


 


B.             Calculation of Class A-4 Interest Due


 


1.   Class A-4 related Note Rate


 


A-4
















 


2.   Class A-4 principal balance - beginning of
period


 


3.   Accrual convention


 


4.   Days in Interest Period


 


5.   Class A-4 interest due - current period


 


6.   Class A Interest Carryover Shortfall with
respect to Class A-4


 


7.   Class A-4 interest paid


 


8.   Class A-4 interest paid by Insurer


 


9.   Class A-4 unpaid interest with respect to
the Distribution Date


 


C.             Calculation of Class A-4 principal balance


 


1.  Class A-4 note balance - beginning of period


 


2.  Class A-4 minimum principal distributable
amount - due


 


3.  Class A-4 additional principal distributable
amount - due


 


4.  Class A-4 minimum principal distributable
amount - paid


 


5.  Class A-4 additional principal distributable
amount - paid


 


6.  Class A-4 note balance - end of period


 


7.  Class A-4. notes as a percentage of the total
Notes outstanding on the Distribution Date


 


8.  Class A-4 Notes as a percentage of the Pool
Balance on the Distribution Date


 


9.  Class A-1, A-2, A-3, and A-4 notes as a
percentage of the Pool Balance on the Distribution  Date


 


A-5
















 


Exhibit B


 


Forms of Notes


 


	
  REGISTERED

  	
  $                 

  
	
  No.
         

  	
   

  



 


SEE REVERSE FOR
CERTAIN DEFINITIONS


 


CUSIP NO.
                 


 


Unless
this Note is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.


 


THE
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.


 


HOUSEHOLD
AUTOMOTIVE TRUST 2004-1


 


CLASS [A-1]
        % NOTE


 


Household
Automotive Trust 2004-1, a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of                                                                   
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is
$                    
and the denominator of which is
$                    
by (ii) the aggregate amount, if any, payable from Available Funds in respect
of principal on the Class        Notes pursuant
to the Indenture; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on
                              
(the “Class        Scheduled Maturity
Date”).  The Issuer will pay interest on
this Note at the rate per annum shown above on each Distribution Date until the
principal of this Note is paid or made available for payment.  Interest on this Note will accrue for each
Distribution Date from the most recent Distribution Date on which interest has
been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from July 28, 2004. 
Interest will be computed on the basis of a 360-day year and the actual
number of days elapsed in an applicable Interest Period.  Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.


 


B-1
















 


The principal
of and interest on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.  All payments
made by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid principal
of this Note.


 


Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note.


 


Unless
the certificate of authentication hereon has been executed by the Administrator
whose name appears below by manual signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.


 


B-2
















 


IN
WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or in facsimile, by its Authorized Officer as of the date set forth below.


 


	
  Date:  July 28, 2004

  	
  HOUSEHOLD AUTOMOTIVE
  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
   

  	
  By:     WILMINGTON
  TRUST COMPANY , not in

  its individual capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


B-3
















 


ADMINISTRATOR’S
CERTIFICATE OF AUTHENTICATION


 


This
is one of the Notes designated above and referred to in the within-mentioned
Indenture.


 


	
  Date: 
  July 28, 2004

  	
  U.S. BANK NATIONAL ASSOCIATION, not in its

  individual capacity but solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  



 


B-4
















 


[REVERSE OF NOTE]


 


This
Note is one of a duly authorized issue of Notes of the Issuer, designated as
its Class           
        % Notes (herein called the
“Class        Notes”), all issued under an
Indenture dated as of July     , 2004 (such indenture,
as supplemented or amended, is herein called the “Indenture”), among the
Issuer, U.S. Bank National Association, as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Indenture) and HSBC Bank USA, National Association, as administrator (the
“Administrator”, which term includes any successor Administrator under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee, the Administrator and the
Holders of the Notes.  The Notes are
subject to all terms of the Indenture. 
All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.


 


The
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes (together, the “Notes”) are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.


 


Principal
of the Class        Notes will be payable on each
Distribution Date in an amount described on the face hereof. “Distribution
Date” means the seventeenth day of each month, or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on August 17,
2004.  The term “Distribution Date” shall
be deemed to include the Class        Scheduled
Maturity Date.


 


As
described above, the entire unpaid principal amount of this Note shall be due
and payable on the Class        Scheduled
Maturity Date.  This Note is also subject
to redemption when the Pool Balance is reduced to an amount that is less than
or equal to 10% of the original Pool Balance. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable on any
date on or after which an Event of Default shall have occurred and be
continuing if the Indenture Trustee in its discretion or if requested by
Holders of the Notes representing at least 66 2/3% of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All
principal payments on the Class        Notes
shall be made pro rata to the Class       
Noteholders entitled thereto.


 


Payments
of interest on this Note due and payable on each Distribution Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as
the Holder of this Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee.  Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment.  Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of


 


B-5
















 


transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon.  If
funds are expected to be available, as provided in the Indenture, for payment
in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Administrator, in the name of and on behalf of the
Issuer, will notify the Person who was the Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed prior to such Distribution
Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Administrator’s principal
Corporate Trust Office or at the office of the Administrator’s agent appointed
for such purposes located in New York, New York.


 


The
Issuer shall pay interest on overdue installments of interest at the Class
       Note Rate to the extent lawful.


 


As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Holder hereof or his attorney duly authorized in writing,
with such signature guaranteed by an “eligible guarantor institution” meeting
the requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program (“Stamp”) or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Indenture
Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.  No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.


 


Each
Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note covenants and agrees that no recourse
may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee, the Administrator or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Seller, the Servicer, the Indenture
Trustee, the Administrator or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Seller, the
Servicer, the Indenture Trustee, the Administrator or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Owner Trustee, the Administrator or the Indenture
Trustee or of any successor or assign of the Seller, the Servicer, the Indenture
Trustee, the Administrator or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.


 


Prior
to the due presentment for registration of transfer of this Note, the Issuer,
the Indenture Trustee and the Administrator and any agent of the Issuer, the
Indenture Trustee or the


 


B-6
















 


Administrator may treat the Person in whose name this
Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and none of the Issuer, the Indenture
Trustee, the Administrator nor any such agent shall be affected by notice to
the contrary.


 


The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the rights of the Holders of the Notes under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time Outstanding.


 


The
term “Issuer” as used in this Note includes any successor to the Issuer under
the Indenture.


 


The
Issuer is permitted by the Indenture, under certain circumstances, to merge or
consolidate, subject to the rights of the Indenture Trustee and the Noteholders
under the Indenture.


 


The
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations therein set forth.


 


This
Note and the Indenture 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 and thereunder shall
be determined in accordance with such laws.


 


No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place, and rate, and in the coin or currency herein prescribed.


 


Anything
herein to the contrary notwithstanding, except as expressly provided in the
Indenture or the Basic Documents, neither U.S. Bank Trust National Association
in its individual capacity, any owner of a beneficial interest in the Issuer,
nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein
shall be taken to prevent recourse to, and enforcement against, the assets of
the Issuer for any and all liabilities, obligations and undertakings contained
in the Indenture or in this Note.


 


B-7
















 


ASSIGNMENT


 


Social Security or
taxpayer I.D. or other identifying number of assignee


 


FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                              
(name and address of assignee)


 


the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.


 


	
  Dated

  	
   

  	
   (1)

  	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  



 


 










(1)                                  NOTE:
The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.


 


B-8
















 


	
  REGISTERED

  	
  $              

  
	
  No.           

  	
   

  



 


SEE REVERSE FOR
CERTAIN DEFINITIONS


 


CUSIP NO.
                          


 


Unless
this Note is presented by an authorized representative of The Depository Trust
Company, a New York corporation (“DTC”), to the Issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.


 


THE
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.


 


HOUSEHOLD
AUTOMOTIVE TRUST 2004-1


 


CLASS [A-2] [A-3]
[A-4]           % NOTE


 


Household
Automotive Trust 2004-1, a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of
                                                                  
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is
$                    
and the denominator of which is $                    
by (ii) the aggregate amount, if any, payable from Available Funds in respect
of principal on the Class        Notes pursuant
to the Indenture; provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on
                              
(the “Class        Scheduled Maturity
Date”).  The Issuer will pay interest on
this Note at the rate per annum shown above on each Distribution Date until the
principal of this Note is paid or made available for payment.  Interest on this Note will accrue for each
Distribution Date from the most recent Distribution Date on which interest has
been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from July 28, 2004. 
Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months.


 


The
principal of and interest on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.  All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.


 


B-9
















 


Reference
is made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth on the face of this
Note.


 


Unless
the certificate of authentication hereon has been executed by the Administrator
whose name appears below by manual signature, this Note shall not be entitled
to any benefit under the Indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.


 


B-10
















 


IN
WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually
or in facsimile, by its Authorized Officer as of the date set forth below.


 


	
  Date:  July 28, 2004

  	
  HOUSEHOLD AUTOMOTIVE
  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
   

  	
  By:     WILMINGTON
  TRUST COMPANY, not

  in its individual capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


B-11
















 


ADMINISTRATOR’S
CERTIFICATE OF AUTHENTICATION


 


This
is one of the Notes designated above and referred to in the within-mentioned
Indenture.


 


	
  Date: 
  July 28, 2004

  	
  U.S.BANK NATIONAL ASSOCIATION, not in its

  individual capacity but solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  



 


B-12
















 


[REVERSE OF NOTE]


 


This
Note is one of a duly authorized issue of Notes of the Issuer, designated as
its Class           
        % Notes (herein called the
“Class        Notes”), all issued under an
Indenture dated as of July     , 2004 (such indenture,
as supplemented or amended, is herein called the “Indenture”), among the
Issuer, U.S. Bank National Association, as indenture trustee (the “Indenture
Trustee”, which term includes any successor Indenture Trustee under the
Indenture) and HSBC Bank USA, National Association, as administrator (the
“Administrator”, which term includes any successor Administrator under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee, the Administrator and the
Holders of the Notes.  The Notes are
subject to all terms of the Indenture. 
All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.


 


The
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes (together, the “Notes”) are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.


 


Principal
of the Class        Notes will be payable on each
Distribution Date in an amount described on the face hereof. “Distribution
Date” means the seventeenth day of each month, or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on August 17,
2004.  The term “Distribution Date” shall
be deemed to include the Class        Scheduled
Maturity Date.


 


As
described above, the entire unpaid principal amount of this Note shall be due
and payable on the Class        Scheduled
Maturity Date.  This Note is also subject
to redemption when the Pool Balance is reduced to an amount that is less than
or equal to 10% of the original Pool Balance. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable on any
date on or after which an Event of Default shall have occurred and be
continuing if the Indenture Trustee in its discretion or if requested by
Holders of the Notes representing at least 66 2/3% of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All
principal payments on the Class        Notes
shall be made pro rata to the Class       
Noteholders entitled thereto.


 


Payments
of interest on this Note due and payable on each Distribution Date, together
with the installment of principal, if any, to the extent not in full payment of
this Note, shall be made by check mailed to the Person whose name appears as
the Holder of this Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee to be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee.  Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment.  Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall


 


B-13
















 


be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. 
If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Administrator, in the name of and on behalf of the
Issuer, will notify the Person who was the Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed prior to such Distribution
Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Administrator’s principal
Corporate Trust Office or at the office of the Administrator ‘s agent appointed
for such purposes located in New York, New York.


 


The
Issuer shall pay interest on overdue installments of interest at the Class
       Note Rate to the extent lawful.


 


As
provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender
of this Note for registration of transfer at the office or agency designated by
the Issuer pursuant to the Indenture, (i) duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Indenture Trustee
duly executed by, the Holder hereof or his attorney duly authorized in writing,
with such signature guaranteed by an “eligible guarantor institution” meeting
the requirements of the Note Registrar which requirements include membership or
participation in Securities Transfer Agents Medallion Program (“Stamp”) or such
other “signature guarantee program” as may be determined by the Note Registrar
in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Indenture
Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.  No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.


 


Each
Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note covenants and agrees that no recourse
may be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee, the Administrator or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Seller, the Servicer, the Indenture
Trustee, the Administrator or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner,
owner, beneficiary, agent, officer, director or employee of the Seller, the
Servicer, the Indenture Trustee, the Administrator or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Owner Trustee, the Administrator or the Indenture
Trustee, the Administrator or of any successor or assign of the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.


 


B-14
















 


Prior
to the due presentment for registration of transfer of this Note, the Issuer,
the Indenture Trustee and the Administrator and any agent of the Issuer, the
Indenture Trustee or the Administrator may treat the Person in whose name this
Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Note be overdue, and none of the Issuer, the Indenture
Trustee, the Administrator nor any such agent shall be affected by notice to
the contrary.


 


The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and
the rights of the Holders of the Notes under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time Outstanding.


 


The
term “Issuer” as used in this Note includes any successor to the Issuer under
the Indenture.


 


The
Issuer is permitted by the Indenture, under certain circumstances, to merge or
consolidate, subject to the rights of the Indenture Trustee and the Noteholders
under the Indenture.


 


The
Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations therein set forth.


 


This
Note and the Indenture 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 and thereunder shall
be determined in accordance with such laws.


 


No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute
and unconditional, to pay the principal of and interest on this Note at the
times, place, and rate, and in the coin or currency herein prescribed.


 


Anything
herein to the contrary notwithstanding, except as expressly provided in the
Indenture or the Basic Documents, neither U.S. Bank Trust National Association
in its individual capacity, any owner of a beneficial interest in the Issuer,
nor any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein
shall be taken to prevent recourse to, and enforcement


 


B-15
















 


against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.


 


B-16
















 


ASSIGNMENT


 


Social Security or
taxpayer I.D. or other identifying number of assignee


 


FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
                                                        
(name and address of assignee)


 


the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.


 


	
  Dated

  	
   

  	
   (1)

  	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  



 


 










(1)                                  NOTE:
The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.


 


B-17