Document:

exv4w1

 

Exhibit 4.1

[BENEFICIAL CALIFORNIA INC., BENEFICIAL CONSUMER DISCOUNT COMPANY,

BENEFICIAL DELAWARE INC., BENEFICIAL FLORIDA INC., BENEFICIAL HAWAII INC.,

BENEFICIAL HOMEOWNER SERVICE CORPORATION, BENEFICIAL ILLINOIS INC., BENEFICIAL

INDIANA INC., BENEFICIAL IOWA INC., BENEFICIAL KENTUCKY INC., BENEFICIAL LOAN &

THRIFT CO., BENEFICIAL MAINE INC., BENEFICIAL MASSACHUSETTS INC., BENEFICIAL

MICHIGAN INC., BENEFICIAL MONTANA INC., BENEFICIAL MORTGAGE CO. OF ARIZONA,

BENEFICIAL MORTGAGE CO. OF COLORADO, BENEFICIAL MORTGAGE CO. OF CONNECTICUT,

BENEFICIAL MORTGAGE CO. OF GEORGIA, BENEFICIAL MORTGAGE CO. OF IDAHO,

BENEFICIAL MORTGAGE CO. OF KANSAS, INC., BENEFICIAL MORTGAGE CO. OF LOUISIANA,

BENEFICIAL MORTGAGE CO. OF MARYLAND, BENEFICIAL MORTGAGE CO. OF MISSOURI, INC.,

BENEFICIAL MORTGAGE CO. OF NEVADA, BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE,

BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA, BENEFICIAL MORTGAGE CO. OF RHODE

ISLAND, BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA, BENEFICIAL MORTGAGE CO. OF

UTAH, BENEFICIAL MORTGAGE CO. OF VIRGINIA, BENEFICIAL MORTGAGE CORPORATION,

BENEFICIAL NEBRASKA INC., BENEFICIAL NEW JERSEY INC., BENEFICIAL NEW MEXICO

INC., BENEFICIAL OHIO INC., BENEFICIAL OKLAHOMA INC., BENEFICIAL OREGON INC.,

BENEFICIAL SOUTH DAKOTA INC., BENEFICIAL TENNESSEE INC., BENEFICIAL TEXAS INC.,

BENEFICIAL WASHINGTON INC., BENEFICIAL WEST VIRGINIA, INC., BENEFICIAL

WISCONSIN INC., BENEFICIAL WYOMING INC., HOUSEHOLD FINANCE CONSUMER DISCOUNT

COMPANY, HOUSEHOLD FINANCE CORPORATION II, HOUSEHOLD FINANCE CORPORATION III,

HOUSEHOLD FINANCE CORPORATION OF ALABAMA, HOUSEHOLD FINANCE CORPORATION OF

CALIFORNIA, HOUSEHOLD FINANCE CORPORATION OF WEST VIRGINIA, HOUSEHOLD FINANCE

INDUSTRIAL LOAN COMPANY OF IOWA, HOUSEHOLD FINANCE REALTY CORPORATION OF

NEVADA, HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK, HOUSEHOLD FINANCIAL

CENTER INC., HOUSEHOLD INDUSTRIAL FINANCE COMPANY, HOUSEHOLD REALTY CORPORATION

and MORTGAGE ONE CORPORATION]

as Sellers

and

[HSBC HOME EQUITY LOAN CORPORATION I]

[HSBC HOME EQUITY LOAN CORPORATION II]

as Depositor

HOME EQUITY LOAN PURCHASE AGREEMENT

DATED [                    ]

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	Section 1.1. Definitions
	 	 	2	 
	Section 1.2. Other Definitional Provisions
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND CONVEYANCE OF LOAN BALANCES
	 	 	4	 
	 
	 	 	 	 
	Section 2.1. Purchase
	 	 	4	 
	 
	 	 	 	 
	ARTICLE III CONSIDERATION AND PAYMENT
	 	 	7	 
	 
	 	 	 	 
	Section 3.1. Purchase Price
	 	 	7	 
	Section 3.2. Settlement
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	7	 
	 
	 	 	 	 
	Section 4.1. Sellers Representations and Warranties
	 	 	7	 
	Section 4.2. Representations and Warranties of the Sellers Relating to the
Agreement and the Home Equity Loans
	 	 	9	 
	Section 4.3. Representations and Warranties of the Depositor
	 	 	13	 
	 
	 	 	 	 
	ARTICLE V COVENANTS OF THE SELLERS
	 	 	15	 
	 
	 	 	 	 
	Section 5.1. Sellers Covenants
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI REPURCHASE OBLIGATION
	 	 	15	 
	 
	 	 	 	 
	Section 6.1. Reassignment of Ineligible Home Equity Loans
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VII CONDITIONS PRECEDENT
	 	 	16	 
	 
	 	 	 	 
	Section 7.1. Conditions to the Depositor’s Obligations
	 	 	16	 
	Section 7.2. [Intentionally omitted]
	 	 	17	 
	Section 7.3. Conditions Precedent to the Sellers’ Obligations
	 	 	17	 
	 
	 	 	 	 
	ARTICLE VIII TERM & PURCHASE TERMINATION
	 	 	17	 
	 
	 	 	 	 
	Section 8.1. Term
	 	 	17	 
	Section 8.2. Purchase Termination
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS PROVISIONS
	 	 	18	 
	 
	 	 	 	 
	Section 9.1. Amendment
	 	 	18	 
	Section 9.2. GOVERNING LAW
	 	 	19	 
	Section 9.3. Notices
	 	 	19	 
	Section 9.4. Severability of Provisions
	 	 	19	 
	Section 9.5. Assignment
	 	 	19	 
	Section 9.6. Acknowledgment and Agreement of each Seller
	 	 	19	 
	Section 9.7. Further Assurances
	 	 	19	 
	Section 9.8. No Waiver; Cumulative Remedies
	 	 	20	 
	Section 9.9. Counterparts
	 	 	20	 
	Section 9.10. Binding Effect; Third-Party Beneficiaries
	 	 	20	 
	Section 9.11. Merger and Integration
	 	 	20	 
	Section 9.12. Headings
	 	 	20	 
	Section 9.13. Schedules and Exhibits
	 	 	20	 

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	Section 9.14. Survival of Representations and Warranties
	 	 	20	 
	 
	 	 	 	 
	Exhibit A Form of Settlement Statement
	 	 	 	 
	Schedule 1 Jurisdictions of Organization
	 	 	 	 
	Schedule 2 Home Equity Loan Schedule
	 	 	 	 

iii

 

 

HOME EQUITY LOAN PURCHASE

AGREEMENT

HOME EQUITY LOAN PURCHASE AGREEMENT, dated [          ], by and among [BENEFICIAL CALIFORNIA
INC., BENEFICIAL CONSUMER DISCOUNT COMPANY, BENEFICIAL DELAWARE INC., BENEFICIAL FLORIDA INC.,
BENEFICIAL HAWAII INC., BENEFICIAL HOMEOWNER SERVICE CORPORATION, BENEFICIAL ILLINOIS INC.,
BENEFICIAL INDIANA INC., BENEFICIAL IOWA INC., BENEFICIAL KENTUCKY INC., BENEFICIAL LOAN & THRIFT
CO., BENEFICIAL MAINE INC., BENEFICIAL MASSACHUSETTS INC., BENEFICIAL MICHIGAN INC., BENEFICIAL
MONTANA INC., BENEFICIAL MORTGAGE CO. OF ARIZONA, BENEFICIAL MORTGAGE CO. OF COLORADO, BENEFICIAL
MORTGAGE CO. OF CONNECTICUT, BENEFICIAL MORTGAGE CO. OF GEORGIA, BENEFICIAL MORTGAGE CO. OF IDAHO,
BENEFICIAL MORTGAGE CO. OF KANSAS, INC., BENEFICIAL MORTGAGE CO. OF LOUISIANA, BENEFICIAL MORTGAGE
CO. OF MARYLAND, BENEFICIAL MORTGAGE CO. OF MISSOURI, INC., BENEFICIAL MORTGAGE CO. OF NEVADA,
BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE, BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA, BENEFICIAL
MORTGAGE CO. OF RHODE ISLAND, BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA, BENEFICIAL MORTGAGE CO. OF
UTAH, BENEFICIAL MORTGAGE CO. OF VIRGINIA, BENEFICIAL MORTGAGE CORPORATION, BENEFICIAL NEBRASKA
INC., BENEFICIAL NEW JERSEY INC., BENEFICIAL NEW MEXICO INC., BENEFICIAL OHIO INC., BENEFICIAL
OKLAHOMA INC., BENEFICIAL OREGON INC., BENEFICIAL SOUTH DAKOTA INC., BENEFICIAL TENNESSEE INC.,
BENEFICIAL TEXAS INC., BENEFICIAL WASHINGTON INC., BENEFICIAL WEST VIRGINIA, INC., BENEFICIAL
WISCONSIN INC., BENEFICIAL WYOMING INC., HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY, HOUSEHOLD
FINANCE CORPORATION II, HOUSEHOLD FINANCE CORPORATION III, HOUSEHOLD FINANCE CORPORATION OF
ALABAMA, HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA, HOUSEHOLD FINANCE CORPORATION OF WEST
VIRGINIA, HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY OF IOWA, HOUSEHOLD FINANCE REALTY CORPORATION
OF NEVADA, HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK, HOUSEHOLD FINANCIAL CENTER INC.,
HOUSEHOLD INDUSTRIAL FINANCE COMPANY, HOUSEHOLD REALTY CORPORATION and MORTGAGE ONE CORPORATION]
and any of their successors (the “Sellers”), and [HSBC HOME EQUITY LOAN CORPORATION I][HSBC
HOME EQUITY LOAN CORPORATION II], (the “Depositor”).

W I T N E S S E T H;

          WHEREAS, the Depositor desires from time to time to purchase certain Home Equity Loans due to
the Sellers under certain Mortgage Files of the Sellers;

          WHEREAS, the Sellers desire from time to time to sell the existing balances and other related
rights under certain Home Equity Loans to the Depositor upon the terms and conditions hereinafter
set forth;

1

 

          [WHEREAS, it is contemplated that the Home Equity Loans purchased hereunder will be
transferred by the Depositor to HSBC Home Equity Loan Trust (USA) 200_-_, a Delaware statutory
trust (the “Trust”) in connection with the issuance of certain Notes;]

          [WHEREAS, it is contemplated that the Home Equity Loans purchased hereunder will be
transferred by the Depositor to [                    ], as trustee (the “Trustee”) on behalf of HSBC
Home Equity Loan Trust (USA) 200_-_, a New York common law trust (the “Trust”) in
connection with the issuance of certain Certificates;]

          [WHEREAS, it is contemplated that pursuant to the Transfer Agreement, the Sellers will sell
contemporaneously with the sale of the Home Equity Loans hereunder, all their additional right,
title and interest in and to the Related Documents to the Trust and that the Trust shall grant a
security interest in all its right, title and interest in and to the Home Equity Loans and the
Related Documents to the Indenture Trustee for the benefit of the Noteholders; and]

          [WHEREAS, it is contemplated that pursuant to the Transfer Agreement, the Sellers will sell
contemporaneously with the sale of the Home Equity Loans hereunder, all their additional right,
title and interest in and to the Related Documents to the Trustee for the benefit of the
Certificateholders; and]

          WHEREAS, the Sellers agree that all covenants and agreements made by the Sellers herein with
respect to the Home Equity Loans shall also be for the benefit of the [Trust and the Indenture
Trustee for the benefit of the Noteholders][Trustee for the benefit of the Certificateholders];

          NOW, THEREFORE, it is hereby agreed by and between the Depositor and the Sellers as follows:

ARTICLE I

DEFINITIONS

          Section 1.1. Definitions. All capitalized terms used herein or in any certificate,
document, or Conveyance Paper made or delivered pursuant hereto, and not otherwise defined herein
or therein, shall have the meaning ascribed thereto in [(a) the Sale and Servicing Agreement of
even date herewith among the Depositor, HSBC Finance Corporation, as Servicer (the
“Servicer”), the Trust, [                    ], as Administrator and [                    ],
as Indenture Trustee (the “Sale and Servicing Agreement”, which shall
include all amendments thereto) or (b) the Indenture of even date herewith among the Trust, [                    ],
as Owner Trustee, [                    ], as Administrator, and [                    ],
as Indenture Trustee (the “Indenture”, which shall include
all amendments thereto), as applicable,][the Pooling and Servicing Agreement of even date herewith
among the Depositor, HSBC Finance Corporation, as Servicer (the “Servicer”), the Trustee
and [                    ], as Administrator (the “Pooling and Servicing
Agreement”, which shall include all amendments thereto)] whenever used herein or therein; in
addition, the following words and phrases shall have the following meanings:

2

 

          “Agreement” shall mean this Home Equity Loan Purchase Agreement and all amendments
hereof and supplements hereto.

          “Appointment Date” shall have the meaning specified in Section 8.2.

          “Closing Date” shall mean [          ].

          “Conveyances” shall have the meaning specified in Section 2.1(a).

          “Conveyance Papers” shall have the meaning specified in Section 4.1(c).

          “Cut-Off Date” shall mean with respect to each Home Equity Loan, the date specified
with respect thereto in the applicable Transfer Notice.

          “Dissolution Event” shall have the meaning specified in Section 8.2.

          “Home Equity Loans” shall mean those home equity loans listed on Schedule 2 hereto.

          “Purchased Assets” shall have the meaning set forth in Section 2.1(a).

          “Purchase Price” shall have the meaning set forth in Section 3.1.

          “Related Documents” shall have the meaning set forth in Section 2.1(a).

          “Repurchase Price” shall have the meaning set forth in Section 6.1(b).

          “Settlement Statement” shall mean a document substantially in the form of Exhibit A
hereto.

          “Transfer Agreement” shall mean the Transfer Agreement of even date herewith with
respect to the Transferred Assets among the Sellers, as sellers, and [HSBC Home Equity Loan Trust
(USA) 200_-_, as Trust][the Trustee, as trustee], and all amendments thereto.

          “Transferred Assets” shall have such meaning specified in the Transfer Agreement.

          Section 1.2. Other Definitional Provisions. (a) All terms defined in this Agreement
shall have the same meanings defined when used in any certificate, other document, or Conveyance
Paper made or delivered pursuant hereto unless otherwise defined therein.

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

3

 

          (c) All determinations of the principal or finance charge balance of Home Equity Loans, and of
any collections thereof, shall be made in accordance with the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

ARTICLE II

PURCHASE AND CONVEYANCE OF LOAN BALANCES

          Section 2.1. Purchase. (a) Each Seller does hereby sell, transfer, assign, set over
and otherwise convey to the Depositor, without recourse, on each Transfer Date all of its right,
title and interest in, to and under (i) the unpaid principal balances of the related Home Equity
Loans as of the related Cut-Off Date, (ii) all monies due and/or to become due and all amounts
received with respect thereto after such Cut-Off Date (including, without limitation, all Principal
Collections and Interest Collections thereon), (iii) all property which secured such Home Equity
Loans and which had been acquired by foreclosure or deed in lieu of foreclosure, (iv) all insurance
proceeds related to such Home Equity Loans, and (v) all proceeds (including, without limitation,
“proceeds” as defined in Article 9 of the UCC as in effect in the State of Illinois) of any of the
foregoing. Each Seller also agrees that it shall, upon the request of the Depositor, to the extent
of the availability thereof, sell, transfer, assign, set over and otherwise convey to the
Depositor, without recourse, all of its right, title and interest in, to and under (1) the unpaid
principal balance of each Eligible Substitute Home Equity Loan as of the applicable Transfer Date,
(2) all monies due and/or to become due and all amounts received with respect thereto after the
applicable Transfer Date (including, without limitation, all Principal Collections and Interest
Collections thereon), (3) all property which secured such Eligible Substitute Home Equity Loan and
which had been acquired by foreclosure or deed in lieu of foreclosure, (4) all insurance proceeds
related to the Eligible Substitute Home Equity Loans, and (5) all proceeds (including, without
limitation, “proceeds” as defined in Article 9 of the UCC as in effect in the State of Illinois) of
any of the foregoing. All of the assets and rights transferred and to be transferred pursuant to
this Section 2.1(a) are hereinafter referred to collectively as the “Purchased
Assets” and the sales, transfers, assignments and conveyances of the Purchased Assets
contemplated by this Section 2.1(a) are hereinafter referred to collectively as the
“Conveyances”. The Purchased Assets shall not include any right to enforce payment of the
Mortgage Files and other instruments, documents and agreements relating to the Home Equity Loans
(the “Related Documents”). In the event the transactions set forth herein are
characterized by a court of competent jurisdiction as a pledge or a secured financing rather than a
sale, each Seller shall be deemed to have granted to the Depositor, and hereby does grant to the
Depositor, a security interest in all of such Seller’s right, title and interest in, to and under
the Purchased Assets, whether now owned or hereafter acquired, in order to secure all of such
Seller’s obligations hereunder. For purposes of each such transfer, this Agreement shall
constitute a security agreement under applicable law. With respect to the Purchased Assets sold by
each Seller to the Depositor, the Seller shall (and the Servicer shall cause the Seller to) file as
promptly as practicable, but in no event later than 10 days following the Closing Date, in the
appropriate public filing office or offices UCC-1 financing statements and continuation statements
describing such Purchased Assets and naming such Seller as the debtor and the Depositor as secured
party, file appropriate continuation statements thereto, file amendments thereto in the case of a
name change or change in corporate structure and file appropriate

4

 

additional UCC financing statements, if any, if such Seller changes its jurisdiction of
organization.

          (b) In further consideration of the Purchase Price set forth in Section 3.1, each
Seller hereby agrees to assign to the [Trust][Trustee] all of its right, title and interest in and
to the Mortgage Files evidencing and securing the Home Equity Loans, and all other Related
Documents, pursuant to the terms of the Transfer Agreement.

          (c) In connection with the Conveyances and in compliance with the Transfer Agreement, each
Seller agrees and confirms that it is entitled to retain possession of the applicable Mortgage
Files and other Related Documents as long as (i) the long-term senior unsecured debt of HSBC
Finance Corporation is assigned ratings by two of the three Rating Agencies of at least “[BBB]” by
Fitch, “[Baa3]” by Moody’s or “[BBB-]” by Standard & Poor’s (or such lower rating acceptable and
assigned by at least two of Moody’s, Standard & Poor’s and Fitch) and (ii) such Seller remains an
Affiliate of HSBC Finance. At such time as either of the conditions specified in the preceding
sentence is not satisfied, as promptly as practicable, but in no event more than 90 days thereafter
in the case of clause (i) below and 60 days in the case of clause (ii) below, each Seller shall (i)
either (x) record an Assignment of Mortgage in favor of the [Trust][Trustee] (which may be a
blanket assignment if permitted by applicable law) with respect to each of the Home Equity Loans
being serviced by such Seller in the appropriate real property or other records or (y) deliver to
the [Indenture Trustee][Trustee] the assignment of such Mortgage in favor of the [Trust][Trustee]
in form for recordation, together with an Opinion of Counsel addressed to the [Indenture
Trustee][Trustee] to the effect that recording is not required to protect the [Trust’s][Trustee’s]
right, title and interest in and to the related Home Equity Loans or to perfect a first priority
security interest in favor of the [Trust][Trustee] in the related Home Equity Loans, which Opinion
of Counsel also shall be reasonably acceptable to each of the Rating Agencies[, the Owner Trustee
and the Indenture Trustee][and the Trustee] as evidenced by each in writing and (ii) unless an
Opinion of Counsel, reasonably acceptable to each of the Rating Agencies[, the Owner Trustee and
the Indenture Trustee][and the Trustee] as evidenced by each in writing, is delivered to the
[Indenture Trustee][Trustee] to the effect that delivery of the Mortgage Files is not necessary to
protect the [Trust’s][Trustee’s] right, title and interest in and to the related Home Equity Loans
or to perfect a first priority security interest in favor of the [Trust][Trustee] in the related
Home Equity Loans, deliver the related Mortgage Files to the [Indenture Trustee][Trustee].
Furthermore, each Seller hereby acknowledges that in the event that any loss is suffered by the
[Trust][Trustee] in respect of a Home Equity Loan purchased by the Depositor as a result of such
Seller’s retention of the Related Documents, such Seller will repurchase such Home Equity Loan from
the Depositor simultaneously on or immediately after the Depositor repurchases such Home Equity
Loan from the [Trust][Trustee] in accordance with the terms of the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

          (d) In connection with the Conveyances, each Seller agrees (i) to record and file, at its own
expense, any financing statement (and continuation statements with respect to such financing
statements when applicable) with respect to the Home Equity Loans now existing and hereafter
created, meeting the requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect, and maintain perfection of, the Conveyances of such Purchased Assets
from such Seller to the Depositor, (ii) such financing statement shall

5

 

name the appropriate Seller, as seller, and the Depositor, as purchaser, of the Purchased
Assets and (iii) to deliver a file-stamped copy of such financing statements or other evidence of
such filings (excluding such continuation statements, which shall be delivered as filed) to the
Depositor (or to the [Indenture Trustee][Trustee], if the Depositor so directs) promptly upon
becoming available after the Closing Date with respect to the Home Equity Loans.

          (e) Computer records are the customary and principal means by which the Sellers and the
Depositor record the ownership of mortgage loans and other consumer receivables which HSBC Finance
and its affiliates originate, own or service. Therefore, in connection with such Conveyances and
in connection with each Seller’s transfers under the Transfer Agreement, each Seller further agrees
that it will, at its own expense, on or prior to the applicable Transfer Date with respect to the
related Home Equity Loans and on or prior to the applicable Transfer Date with respect to the
Eligible Substitute Home Equity Loans (i) indicate in its or its agent’s computer files or
microfiche lists that the applicable Mortgage Files and Related Documents have been sold to the
[Trust][Trustee] pursuant to the Transfer Agreement and the Purchased Assets related to the Home
Equity Loans listed in Schedule 2 to this Agreement have been conveyed to the [Trust pursuant to
the Sale and Servicing Agreement and that the Trust will grant a first priority perfected security
interest in such Purchased Assets and Related Documents pursuant to the Indenture to the Indenture
Trustee for the benefit of the Noteholders][Trustee for the benefit of the Certificateholders] by
including an appropriate code for such Home Equity Loans in such computer file and microfiche list
and (ii) deliver to the Depositor (or to the [Indenture Trustee][Trustee], if the Depositor so
directs) a computer file or electronic or magnetic tape list containing a true and complete list of
all such Home Equity Loans specifying for each such Home Equity Loan, as of the related Cut-Off
Date with respect to such Home Equity Loan and as of the applicable Transfer Date with respect to
each such Eligible Substitute Home Equity Loan, (a) the account number, (b) the aggregate unpaid
principal amount thereof, (c) the Loan Rate, (d) the lien position of the related Mortgage, and (e)
the CLTV. Such computer file or microfiche list shall be marked as Schedule 2 to this Agreement,
shall be delivered to the Depositor (or to the [Indenture Trustee][Trustee], if so directed by the
Depositor) as proprietary and confidential, and is hereby incorporated into and made a part of this
Agreement. Each Seller further agrees to make the same indications in its or its agent’s computer
files and the same deliveries to the [Trust][Trustee] as set forth in clauses (i) and (ii) of this
Section 2.1(e) with respect to Eligible Substitute Home Equity Loans purchased by the
Depositor and transferred to the [Trust][Trustee] and agrees not to alter the code referenced in
clause (i) of this paragraph with respect to any of the Home Equity Loans purchased by the
Depositor during the term of this Agreement unless and until (x) the related Home Equity Loans have
been reconveyed to the appropriate Seller or (y) the interest of the [Trust][Trustee] in the
related Home Equity Loans has been released in accordance with the terms of the [Sale and Servicing
Agreement][Pooling and Servicing Agreement]. Prior to the earlier of the reconveyance of the
related Home Equity Loans to the appropriate Seller, or the assignment of the Mortgage Documents
and delivery of the Mortgage Loan Files to the [Trust][Trustee] pursuant to the Transfer Agreement,
the aforementioned computer files shall be the register for ownership of the Purchased Assets.
Prior to the delivery by the registered owner to the Seller of the [Trust’s][Trustee’s] assignment
of a Home Equity Loan, the Subservicer, Servicer, the Depositor, and each Seller may treat the
Person registered in such computer records as the owner of the Purchased Assets for all purposes
hereunder. In addition, each Seller shall maintain in its internal written records documents which
indicate that the Purchased Assets have been sold to

6

 

the Depositor pursuant to this Agreement and that the Transferred Assets have been sold to the
[Trust][Trustee] pursuant to the Transfer Agreement. Furthermore, the Depositor shall maintain in
its internal written records documents which indicate that the Purchased Assets have been sold to
the [Trust pursuant to the Sale and Servicing Agreement][Trustee pursuant to the Pooling and
Servicing Agreement].

          (f) The parties hereto intend that the conveyance to the Depositor of each Seller’s right,
title and interest in and to the Purchased Assets shall constitute an absolute sale, conveying good
title free and clear of any liens, claims, encumbrances or right of others from the Sellers to the
Depositor and that the Purchased Assets shall not be part of the applicable Seller’s estate in the
event of the insolvency of such Seller or a conservatorship, receivership or similar event with
respect thereto.

ARTICLE III

CONSIDERATION AND PAYMENT

          Section 3.1. Purchase Price. The Purchase Price for the Purchased Assets relating to
the Home Equity Loans to be conveyed hereunder shall be payable on the Transfer Date and shall be
an amount equal to the principal amount of such Home Equity Loans as of the applicable Cut-Off
Date, plus a premium based upon the present value of the aggregate anticipated excess spread on
such Home Equity Loans, taking into account applicable servicing fees, cost of funds, credit
enhancement fees and expected losses (calculated on an historical basis). The Purchase Price for
any Eligible Substitute Home Equity Loans conveyed to the Depositor under this Agreement shall be
payable as of the Transfer Date thereof by the Depositor for a price, in each case, equal to the
aggregate principal amount of such Eligible Substitute Home Equity Loans so conveyed plus a premium
calculated in the same manner as the purchase price for the Home Equity Loans conveyed on any
Transfer Date.

          Section 3.2. Settlement. On each Determination Date, each Seller shall deliver to the
Depositor a Settlement Statement in substantially the form of Exhibit A, showing the aggregate
Repurchase Price of Home Equity Loans repurchased by such Seller during such Collection Period, if
any, and the amount of Home Equity Loans outstanding during such Collection Period;
provided, however, that on the Payment Date following the conveyance to the
Depositor of any Eligible Substitute Home Equity Loans to the Depositor, each Seller shall include
in such Settlement Statement the aggregate Purchase Price for its Eligible Substitute Home Equity
Loans.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

          Section 4.1. Sellers Representations and Warranties. Each Seller, severally and not
jointly, hereby represents and warrants to, and agrees with, the Depositor as of the Closing Date
and on each Transfer Date, that:

7

 

          (a) Organization and Good Standing of Sellers. It is a corporation duly organized,
validly existing and in good standing under the laws of the State of its incorporation and has, in
all material respects, full power and authority to own its properties and conduct its business as
such properties are presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and the Transfer Agreement and when this
Agreement and the Transfer Agreement have been executed and delivered, this Agreement and the
Transfer Agreement will constitute the legal, valid and binding obligation of such Seller
enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies (whether in a proceeding at law or in equity).

          (b) Due Qualification. It is duly qualified to do business and is in good standing as
a foreign corporation (or is exempt from such requirements) and has obtained all necessary licenses
and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Mortgage File relating to any Home Equity Loan unenforceable by it or
the [Indenture Trustee][Trustee] and would have a material adverse effect on its business,
properties, assets or condition (financial or other).

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

          (d) No Conflict. Its execution and delivery of this Agreement, the Transfer Agreement
and the Conveyance Papers, the performance of the transactions contemplated by this Agreement, the
Transfer Agreement and the Conveyance Papers, and the fulfillment of the terms of this Agreement,
the Transfer Agreement and the Conveyance Papers applicable to it will not violate any existing law
or regulation or any order or decree of any court applicable to it or any provision of its
certificate of incorporation or bylaws, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which it is a party or by which it or any of its properties are bound.

          (e) No Violation. The execution, delivery and performance of this Agreement, the
Transfer Agreement and the Conveyance Papers and the fulfillment of the terms contemplated herein
and therein applicable to it will materially comply with currently existing applicable laws.

          (f) No Proceedings. There are no proceedings or investigations pending or, to the
best of its knowledge, threatened against it, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement, the Transfer Agreement or the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, the Transfer Agreement or
the Conveyance Papers, (iii) seeking any determination or ruling that, in its judgment, has a
reasonable likelihood of resulting in a material adverse effect on the transactions contemplated by
this Agreement, the Transfer Agreement or the Conveyance Papers, (iv) seeking

8

 

any determination or ruling that would materially and adversely affect the validity or
enforcement of this Agreement, the Transfer Agreement or the Conveyance Papers or (v) seeking to
affect adversely the income tax attributes of the Trust under United States Federal or Illinois
income tax systems.

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

          (h) Chief Executive Office. Its chief executive office (i.e., the place from which
the Seller manages the main part of its business operations) is currently located within the State
of Illinois and has been located in the State of Illinois for the five years preceding the date
hereof.

          (i) Jurisdiction of Organization. Its sole jurisdiction of organization and its
organizational identification number, if any, is accurately set forth opposite its name on Schedule
1 hereto.

          The representations and warranties set forth in this Section 4.1 shall survive the
transfer and assignment of the Home Equity Loans to the Depositor and the transfer of the remaining
right, title and interest under the Home Equity Loans to the [Trust][Trustee] under the Transfer
Agreement. Upon discovery by any of the Sellers or the Depositor of a breach of any of the
foregoing representations and warranties, the party discovering such breach shall give written
notice to the other parties within three Business Days following such discovery.

          Section 4.2. Representations and Warranties of the Sellers Relating to the Agreement and
the Home Equity Loans.

          (a) Representations and Warranties. Each Seller (referred to individually in this
Section 4.2 as “the Seller”) hereby, severally and not jointly, represents and warrants to
the Depositor as of the respective Cut-Off Date with respect to each Home Equity Loan it sells (and
to the extent expressly stated below at such other time) that, as to such Home Equity Loan:

     (i) This Agreement constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors’ rights in general
and except as such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);

     (ii) This Agreement constitutes a valid transfer and assignment to the Depositor of all
right, title and interest of the Seller in and to the applicable Home Equity Loans, all
monies due or to become due with respect thereto, and all proceeds of such Home Equity Loans
and all other property specified in the definition of “Purchased Assets” relating to such
Home Equity Loans;

9

 

     (iii) As of the applicable Transfer Date with respect to the related Home Equity Loans,
and as of the applicable Transfer Date with respect to any Eligible Substitute Home Equity
Loans, the related computer file or electronic or magnetic tape list referred to in Section
2.1(e), are true, accurate and complete listings in all material respects of all such Home
Equity Loans, and the information contained therein with respect to the identity of such
Home Equity Loans and other statistical information with respect thereto is true and correct
in all material respects;

     (iv) The Purchased Assets related to the related Home Equity Loans as of the Transfer
Date, and to the Eligible Substitute Home Equity Loans as of the applicable Transfer Date,
have not been assigned or pledged, and the Seller has good and marketable title thereto, and
the Seller is the sole owner and holder of such assets free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges, charges or security
interests of any nature and has full right and authority, under all governmental and
regulatory bodies having jurisdiction over the ownership of the applicable Home Equity
Loans, to sell, assign or transfer the Purchased Assets pursuant to this Agreement.

     (v) Immediately prior to the Seller’s assignment of the Transferred Assets to the
[Trust][Trustee] pursuant to the Transfer Agreement, the Transferred Assets with respect to
each Home Equity Loan have not been assigned or pledged, and the Seller has good and
marketable title thereto, and the Seller is the sole owner and holder of the Transferred
Assets relating to the Home Equity Loans free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or security interests of
any nature, and has full right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of such Home Equity Loans, to transfer and assign the
Transferred Assets pursuant to the Transfer Agreement;

     (vi) As to each Home Equity Loan, the related Mortgage is a valid and existing first or
second lien, as set forth on the related computer file or electronic or magnetic tape list
referred to in Section 2.1(e), on the property therein described, and the related Mortgaged
Property is free and clear of all encumbrances and liens having priority over the first or
second lien, as applicable, of such Mortgage except for liens for (i) real estate taxes and
special assessments not yet delinquent; (ii) any first and, if applicable, second mortgage
loan secured by such Mortgaged Property and specified on the related computer file or
microfiche list referred to in Section 2.1(e); (iii) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of recording that
are acceptable to mortgage lending institutions generally, and (iv) other matters to which
like properties are commonly subject which do not materially interfere with the benefits of
the security intended to be provided by such Mortgage;

     (vii) As of the applicable Transfer Date with respect to the related Home Equity Loans
and any related Eligible Substitute Home Equity Loans, to the best knowledge of the Seller,
there is no valid offset, defense or counterclaim of any obligor under any Mortgage File or
Mortgage;

     (viii) To the best knowledge of the Seller, as of the applicable Transfer Date with
respect to the related Home Equity Loans and any related Eligible Substitute Home

10

 

Equity Loans, there is no delinquent recording or other tax or fee or assessment lien
against any related Mortgage Property;

     (ix) As of the applicable Transfer Date with respect to the related Home Equity Loans
and any related Eligible Substitute Home Equity Loans, to the Seller’s best knowledge, there
is no proceeding pending or threatened for the total or partial condemnation of the related
Mortgaged Property, and such property is free of material damage and is in good repair;

     (x) As of the applicable Transfer Date with respect to the related Home Equity Loans
and any related Eligible Substitute Home Equity Loans, there are no mechanics’ or similar
liens or claims which have been filed for work, labor or material affecting the related
Mortgaged Property which are, or may be, liens prior or equal to, the lien of the related
Mortgage, except liens which are fully insured against by the title insurance policy
referred to in clause (xiv) or liens which do not materially interfere with the collection
of the Home Equity Loan upon foreclosure or otherwise;

     (xi) As of the Cut-Off Date for the related Home Equity Loans (or as of the applicable
Transfer Date for any Eligible Substitute Home Equity Loan), no scheduled monthly payment is
more than 30 days delinquent (measured on a contractual basis);

     (xii) For each Home Equity Loan, the related Mortgage File contains each of the
documents and instruments specified to be included therein (including, if applicable, an
appraisal (which may be an appraisal prepared using a statistical data base));

     (xiii) As to each of the Seller’s Home Equity Loans, the related Mortgage and the
related Mortgage Note at the time they were made complied in all material respects with
applicable state and federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, anti-predatory lending, equal
credit opportunity or disclosure laws applicable to such Home Equity Loan;

     (xiv) A lender’s title insurance policy or binder was issued on within 60 days of the
date of origination of each of the Seller’s Home Equity Loans and any Eligible Substitute
Home Equity Loans in excess of $50,000, if secured by a first lien, or $100,000, if secured
by a second lien (in excess of $75,000, if secured by a first lien in Oklahoma or Texas,
$100,000, if secured by a first or second lien in Iowa), and each such policy is valid and
remains in full force and effect, and a title search or other assurance of title customary
in the relevant jurisdiction was obtained with respect to each such Home Equity Loan as to
which no title insurance policy or binder was issued;

     (xv) The related Mortgaged Property is not a mobile home or a manufactured housing unit
that is not permanently attached to its foundation;

     (xvi) As of the Cut-Off Date, the Combined Loan-to-Value Ratio for each Home Equity
Loan was not in excess of [___]%;

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     (xvii) No selection procedure reasonably believed by the Seller to be adverse to the
interests of the Noteholders was utilized in selecting the Home Equity Loans or any Eligible
Substitute Home Equity Loan, as applicable, transferred hereunder;

     (xviii) The Seller has not transferred Home Equity Loans with any intent to hinder,
delay or defraud any of its creditors;

     (xix) Each Mortgage Note and each Mortgage is in substantially the form previously
provided to the Depositor by the Seller and each Home Equity Loan is an enforceable
obligation of the related Mortgagor;

     (xx) As of the applicable Transfer Date with respect to the related Home Equity Loans
and any related Eligible Substitute Home Equity Loans, the Seller has not received a notice
of default of any senior mortgage loan with respect to the related Mortgaged Property that
has not been cured by a party other than the Seller;

     (xxi) Each Home Equity Loan does not have an original term to maturity in excess of
[360] months; and the Principal Balance of each such Home Equity Loan, when included in the
Pool Balance (as of the Cut-off Date), would not cause the weighted average remaining term
to maturity of the Home Equity Loans on a contractual basis to be greater than [___] months;

     (xxii) Each Mortgaged Property consists of a single parcel of real property with a
one-to-four unit single family residence erected thereon, or an individual condominium unit,
planned unit development unit or townhouse;

     (xxiii) The Principal Balance of each Home Equity Loan, when included in the Pool
Balance (in each case as of the Cut-Off Date), would not cause the average Principal Balance
of such Home Equity Loans to be greater than $[                    ];

     (xxiv) The Principal Balance of each Home Equity Loan, when included in the Pool
Balance (in each case as of the Cut-Off Date), would not cause the weighted average
percentage of the Home Equity Loans secured by first liens to be less than [___]%; and would
not cause the weighted average percentage of the Home Equity Loans secured by second liens
to be greater than [___]%;

     (xxv) The related Mortgaged Property is located within one of the fifty United States
of America, the District of Columbia or Puerto Rico;

     (xxvi) The Mortgage Note related to such Home Equity Loan provides for fixed monthly
payments which fully amortize the Home Equity Loan over its term; and

     (xxvii) Within 10 days of the Closing Date, each Seller will file UCC-1 financing
statements in accordance with Section 2.1 hereof.

     (xxviii) Each Home Equity Loan was originated in accordance with HSBC Finance’s
underwriting guidelines and procedures including full and reduced documentation programs.

12

 

     (xxix) No Home Equity Loan is a High Cost Loan or Covered Loan, as applicable (as such
terms are defined in the then current Standard & Poor’s LEVELS® Glossary which is now
[Version 5.6 Revised, Appendix E]) and no Home Equity Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.

     (xxx) No Home Equity Loan originated on or after November 27, 2003 is a High-Cost Home
Loan, as defined by New Jersey predatory and abusive lending law effected on November 27,
2003.

     (xxxi) No Home Equity Loan is a “high cost home,” “high risk home” or “predatory” loan
under any other applicable state, federal or local law (or similarly classified loan using
different terminology under a law imposing additional legal liability for residential
mortgage loans having high interest rates, points and/or fees); and

     (xxxii) With respect to each Mortgage Note, one of the following has been obtained: an
appraisal on Form 1004, an appraisal on Form 2055 with interior inspection, an appraisal on
any other form of uniform residential appraisal report commonly known as a full appraisal,
or a valuation using an automated valuation model.

          (b) Notice of Breach. The representations and warranties set forth in this Section
4.2 shall survive the transfer and assignment of the Purchased Assets to the Depositor. Upon
discovery by either the Sellers or the Depositor of a breach of any of the representations and
warranties set forth in this Section 4.2 (without regard to any limitation set forth therein
concerning the knowledge of any Seller as to the facts stated therein), the party discovering such
breach shall give written notice to the other party within three Business Days following such
discovery. The Sellers hereby acknowledge that the Depositor intends to rely on the
representations hereunder in connection with representations made by the Depositor to secured
parties, assignees or subsequent transferees including but not limited to transfers made by the
Depositor to the [Trust pursuant to the Sale and Servicing Agreement][Trustee pursuant to the
Pooling and Servicing Agreement].

          Section 4.3. Representations and Warranties of the Depositor. As of the applicable
Transfer Date and as of the Transfer Date on which the Depositor acquires the Eligible Substitute
Home Equity Loans, if any, the Depositor hereby represents and warrants to, and agrees with, the
Sellers that:

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

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

13

 

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

          (d) No Violation. The execution, delivery and performance of this Agreement and the
Conveyance Papers and the fulfillment of the terms contemplated herein and therein applicable to
the Depositor will materially comply with currently existing state or federal laws applicable to
the Depositor.

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

          (f) All Consents. All authorizations, consents, orders or approvals of any court or
other governmental authority required to be obtained by the Depositor in connection with the
execution and delivery of this Agreement and the Conveyance Papers and the performance of the
transactions contemplated by this Agreement and the Conveyance Papers or the fulfillment of the
terms of this Agreement and the Conveyance Papers have been obtained.

          The representations and warranties set forth in this Article IV shall survive the Conveyance
of the Home Equity Loans to the Depositor and termination of the rights and obligations of the
Depositor and the Sellers under this Agreement. Upon discovery by the Depositor or the Sellers of
a breach of any of the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others.

          In connection with any conveyance by the Depositor of Purchased Assets under the [Sale and
Servicing Agreement][Pooling and Servicing Agreement], the Depositor may request written
confirmation from each Seller that the representations and warranties set forth herein are true and
correct in all material respects as if made by such Seller as of the date of the [Sale and
Servicing Agreement][Pooling and Servicing Agreement]. If so requested, each Seller shall advise
the Depositor in writing with respect to such representations and warranties and, except to the
extent that a Seller has advised the Depositor that any such representations and warranties are not
correct as of the date of the [Sale and Servicing Agreement][Pooling and Servicing Agreement], such
representations and warranties shall be deemed remade as of the date of the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

14

 

ARTICLE V

COVENANTS OF THE SELLERS

          Section 5.1. Sellers Covenants. Each of the Sellers hereby covenants and agrees with
the Depositor as follows:

          (a) Security Interests. Except for the conveyances hereunder and to the
[Trust][Trustee] pursuant to the Transfer Agreement and subject to the transactions permitted
pursuant to Section 9.5 hereof, such Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any Home Equity Loan or the
Purchased Assets, whether now existing or hereafter created, or any interest therein, and such
Seller, at its expense, shall defend the right, title and interest of the Depositor in, to and
under the Purchased Assets, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Depositor or such Seller; provided, however,
that nothing in this Section 5.1(a) shall prevent or be deemed to prohibit such Seller from
suffering to exist upon any of the applicable Home Equity Loans any Liens for municipal or other
governmental charges if such taxes or governmental charges shall not at the time be due and payable
or if such Seller shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect thereto.

          (b) Delivery of Collections. In the event that any of the Sellers receives Interest
Collections or Principal Collections, the applicable Seller agrees to pay to the Depositor (or to
the Servicer if the Depositor so directs) all such collections as soon as practicable after receipt
thereof.

          (c) Notice of Liens. Each of the Sellers shall notify the Depositor promptly after
becoming aware of any Lien on any Home Equity Loan or the Purchased Assets other than the
conveyances hereunder or pursuant to the Transfer Agreement or the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

          (d) Mortgage File Modification Guidelines. Each Seller may make changes to the terms
and provisions of its respective Mortgage Files in any respect (including, without limitation, the
calculation of the amount or the timing of charge-offs and the finance charges to be assessed on
advances made thereunder) solely if expressly permitted by the terms of the [Sale and Servicing
Agreement][Pooling and Servicing Agreement] and applicable laws.

ARTICLE VI

REPURCHASE OBLIGATION

          Section 6.1. Reassignment of Ineligible Home Equity Loans.

          (a) In the event any representation or warranty under Section 4.2 is not true and correct in
any material respect as of the date specified therein and as a result of such breach the Depositor
is required to accept reassignment of Defective Home Equity Loans pursuant to Section [2.02][2.04]
of the [Sale and Servicing Agreement][Pooling and Servicing Agreement],

15

 

the applicable Seller shall accept reassignment of the Depositor’s interest in the applicable
Defective Home Equity Loans on the terms and conditions set forth in Section 6.1(b).

          (b) Each Seller shall accept reassignment of any applicable Defective Home Equity Loans
originally transferred by it to the Depositor on or prior to the end of the Collection Period in
which such reassignment obligation arises, and shall pay for such reassigned Defective Home Equity
Loans the entire principal balance thereof plus accrued and unpaid interest thereon, plus any
applicable premium previously received by such Seller pursuant to Section 3.1 hereof with respect
to such Home Equity Loans repurchased minus any Principal Collections credited to such Defective
Home Equity Loan thereof prior to such retransfer date (the “Repurchase Price”). Upon
reassignment of Defective Home Equity Loans, the Depositor shall automatically and without further
action be deemed to sell, transfer, assign, set-over and otherwise convey to the applicable Seller,
without recourse, representation or warranty, all the right, title and interest of the Depositor in
and to such Defective Home Equity Loans, all monies due or to become due with respect thereto and
all proceeds thereof. The appropriate Sellers shall forward the Repurchase Price to the Depositor
or any portion thereof to the [Trust][Trustee] upon the direction of the Depositor and such
reassigned Defective Home Equity Loans shall be treated by the Depositor as collected in full as of
the date on which the Repurchase Price therefor was received by the Depositor or the
[Trust][Trustee]. The Depositor shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the Sellers to effect
the conveyance of such Defective Home Equity Loans pursuant to this subsection. The Sellers
acknowledge that the Depositor has appointed the [Trust][Trustee] as its attorney in fact to
collect the Repurchase Price and to enforce its rights hereunder.

ARTICLE VII

CONDITIONS PRECEDENT

          Section 7.1. Conditions to the Depositor’s Obligations. The obligations of the
Depositor to purchase the related Home Equity Loans on the applicable Transfer Date shall be
subject to the satisfaction of the following conditions:

          (a) All information concerning the related Home Equity Loans provided as of the applicable
Cut-Off Date shall be true and correct as of such Cut-Off Date in all material respects;

          (b) Each Seller shall have delivered to the Depositor (or to the [Indenture Trustee][Trustee],
which the Depositor hereby directs) a computer file or electronic or magnetic tape list containing
a true and complete list of all information specified in Section 2.1(e) hereof and shall have
substantially performed all other obligations required to be performed by the provisions of this
Agreement;

          (c) Each Seller shall have prepared for recording and filing, at its expense, any financing
statement with respect to the Home Equity Loans now existing and hereafter created for the transfer
of payment intangibles (as defined in Section 9-102 of the UCC as in effect in the State of
Illinois) meeting the requirements of applicable state law in such manner

16

 

and in such jurisdictions as would be necessary to perfect the sale of such Home Equity Loans
from such Seller to the Depositor if such Home Equity Loans were deemed to constitute payment
intangibles under applicable law, and shall deliver a file-stamped copy of such financing
statements or other evidence of such filings to the [Indenture Trustee][Trustee] as agent for the
Depositor;

          (d) On or before the Closing Date, the Depositor and the [Trust][Trustee] shall have entered
into the [Sale and Servicing Agreement][Pooling and Servicing Agreement] and the closing under the
[Sale and Servicing Agreement][Pooling and Servicing Agreement] shall take place simultaneously
with the initial closing hereunder; and

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

          Section 7.2. [Intentionally omitted].

          Section 7.3. Conditions Precedent to the Sellers’ Obligations. The obligations of
each of the Sellers to sell the related Home Equity Loans on the applicable Transfer Date and to
sell any Eligible Substitute Home Equity Loans on the applicable Transfer Date therefor shall, in
each case, be subject to the satisfaction of the following conditions:

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

          (b) Payment or provision for payment of the applicable Purchase Price in accordance with the
provisions of Article III hereof shall have been made; and

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

ARTICLE VIII

TERM & PURCHASE TERMINATION

          Section 8.1. Term. This Agreement shall commence as of the date of execution and
delivery hereof and shall continue until the obligations of the Depositor, the Sellers, the
Servicer, [the Trust,] the Administrator and the [Indenture Trustee][Trustee] under the [Sale and
Servicing Agreement][Pooling and Servicing Agreement] have terminated in accordance with Section
[8.01][10.01] thereof.

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          Section 8.2. Purchase Termination. If any Seller voluntarily goes into liquidation or
consents to the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar proceeding of or relating to
such Seller or of or relating to all or substantially all its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the premises for the appointment of
a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceeding, or for the winding-up or liquidation of its affairs, shall
have been entered against such Seller; or such Seller shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations (such voluntary liquidation, appointment, entering
of such decree, admission, filing, making or suspension, a “Dissolution Event”), such
Seller shall on the day of such appointment, voluntary liquidation, entering of such decree,
admission, filing, making or suspension, as the case may be (the “Appointment Date”),
immediately cease to transfer new Home Equity Loans or Eligible Substitute Home Equity Loans to the
Depositor and shall promptly give notice to the Depositor[, the Trust] and the [Indenture
Trustee][Trustee] of such Dissolution Event. Notwithstanding any cessation of the transfer to the
Depositor of Home Equity Loans, Home Equity Loans transferred to the Depositor prior to the
occurrence of such Dissolution Event and Principal Collections and Interest Collections, insurance
proceeds and other monies in respect of such Home Equity Loans whenever received, shall continue to
be property of the Depositor available for transfer by the Depositor to the [Trust][Trustee]
pursuant to the [Sale and Servicing Agreement][Pooling and Servicing Agreement].

ARTICLE IX

MISCELLANEOUS PROVISIONS

          Section 9.1. Amendment. This Agreement and any Conveyance Papers and the rights and
obligations of the parties hereunder may not be changed orally, but only by an instrument in
writing signed by the Depositor and the Sellers (provided that a Seller and the Depositor may
change the terms as it applies to their agreements to each other without the written consent of the
other Sellers) in accordance with this Section 9.1. This Agreement and any Conveyance Papers may
be amended from time to time by the Depositor and the Sellers (i) to cure any ambiguity, (ii) to
correct or supplement any provisions herein which may be inconsistent with any other provisions
herein or in any such other Conveyance Papers, (iii) to add any other provisions with respect to
matters or questions arising under this Agreement or any Conveyance Papers which shall not be
inconsistent with the provisions of this Agreement or any Conveyance Papers, and (iv) to change,
modify, delete or add any other obligation of the Sellers or the Depositor; provided,
however, that no amendment pursuant to clause (iv) of this Section 9.1 shall be effective
unless the [Indenture Trustee][Trustee] has consented thereto or the Rating Agencies have notified
the Sellers and the Depositor in writing that such amendment will not result in a reduction or
withdrawal of the rating of the Notes. Any reconveyance executed in accordance with the provisions
hereof shall not be considered to be an amendment to this Agreement.

18

 

          Section 9.2. GOVERNING LAW. THIS AGREEMENT AND THE CONVEYANCE PAPERS SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT
OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          Section 9.3. Notices. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, return receipt requested, to (a) the Sellers, 2700 Sanders Road, Prospect Heights,
Illinois 60070, Attention: Treasurer and (b) in the case of the Depositor, [HSBC Home Equity Loan
Corporation I][HSBC Home Equity Loan Corporation II], 2700 Sanders Road, Prospect Heights, Illinois
60070, Attention: Secretary, (facsimile [               ]) or, as to each party, at such other
address as shall be designated by such party in a written notice to each other party.

          Section 9.4. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement or any Conveyance Papers shall for any reason
whatsoever be held invalid, then such covenants, agreements, provisions, or terms shall be deemed
severable from the remaining covenants, agreements, provisions and terms of this Agreement or any
Conveyance Papers and shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of any Conveyance Papers.

          Section 9.5. Assignment. Notwithstanding anything to the contrary contained herein,
this Agreement and all other Conveyance Papers may not be assigned by the parties hereto;
provided, however, that (i) each Seller shall have the right to assign its right,
title and interest, in, to and under this Agreement, to (a) any entity affiliated with HSBC Finance
Corporation and (b) any other entity provided that the [Indenture Trustee][Trustee] has consented
thereto, or the Rating Agencies have advised the Depositor and the Sellers that such assignment
will not result in the reduction or withdrawal of the rating of the [Notes][Certificates], and (ii)
the Depositor shall have the right to assign this Agreement to (a) the [Trust][Trustee], (b) any
affiliate of HSBC Finance or (c) any other entity provided that the Rating Agencies have advised
the Depositor that such assignment will not result in the reduction or withdrawal of the rating of
the [Notes][Certificates].

          Section 9.6. Acknowledgment and Agreement of each Seller. By execution below, each
Seller expressly acknowledges and agrees that any amounts payable by such Seller to the Depositor
hereunder which are to be paid by the Depositor to the [Trust][Trustee], to the extent required by
and pursuant to the terms of the [Sale and Servicing Agreement][Pooling and Servicing Agreement]
(including, without limitation, payments to be made under Article III, Section 6.1 and 6.2 hereof)
shall be paid by such Seller, on behalf of the Depositor, directly to the [Trust][Trustee]. Any
payment required to be made on or before a specified date in same-day funds may be made on the
prior business day in next-day funds.

          Section 9.7. Further Assurances. The Depositor and each Seller agree to do and
perform, from time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the other parties more fully to effect the purposes of this

19

 

Agreement and the Conveyance Papers, including, without limitation, the execution of any
financing statements or continuation statements or equivalent documents relating to the Purchased
Assets for filing under the provisions of the UCC (as in effect in the State of Illinois) or other
law of any applicable jurisdiction.

          Section 9.8. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Depositor or any Seller, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.

          Section 9.9. Counterparts. This Agreement and all Conveyance Papers may be executed
in two or more counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the same instrument.

          Section 9.10. Binding Effect; Third-Party Beneficiaries. This Agreement and the
Conveyance Papers will inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns.

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

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

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

          Section 9.14. Survival of Representations and Warranties. All representations,
warranties and agreements contained in this Agreement, or contained in certificates of officers of
any Seller submitted pursuant hereto, or contained in any assignment permitted hereunder, shall
remain operative and in full force and effect and shall survive conveyance of the related Purchased
Assets by the Depositor to the [Trust][Trustee] pursuant to the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

20

 

          IN WITNESS WHEREOF, the Depositor and the Sellers have caused this Home Equity Loan Purchase
Agreement to be duly executed by their respective officers as of the day and year first above
written.

[BENEFICIAL CALIFORNIA INC.

BENEFICIAL CONSUMER DISCOUNT COMPANY

BENEFICIAL DELAWARE INC.

BENEFICIAL FLORIDA INC.

BENEFICIAL HAWAII INC.

BENEFICIAL HOMEOWNER SERVICE CORPORATION

BENEFICIAL ILLINOIS INC.

BENEFICIAL INDIANA INC.

BENEFICIAL IOWA INC.

BENEFICIAL KENTUCKY INC.

BENEFICIAL LOAN & THRIFT CO.

BENEFICIAL MAINE INC.

BENEFICIAL MASSACHUSETTS INC.

BENEFICIAL MICHIGAN INC.

BENEFICIAL MONTANA INC.

BENEFICIAL MORTGAGE CO. OF ARIZONA

BENEFICIAL MORTGAGE CO. OF COLORADO

BENEFICIAL MORTGAGE CO. OF CONNECTICUT

BENEFICIAL MORTGAGE CO. OF GEORGIA

BENEFICIAL MORTGAGE CO. OF IDAHO

BENEFICIAL MORTGAGE CO. OF KANSAS, INC.

BENEFICIAL MORTGAGE CO. OF LOUISIANA

BENEFICIAL MORTGAGE CO. OF MARYLAND

BENEFICIAL MORTGAGE CO. OF MISSOURI, INC.

BENEFICIAL MORTGAGE CO. OF NEVADA

BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE

BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA

BENEFICIAL MORTGAGE CO. OF RHODE ISLAND

BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA

BENEFICIAL MORTGAGE CO. OF UTAH

BENEFICIAL MORTGAGE CO. OF VIRGINIA]

	 	 	 	 	 	 	 
	 

	 	BY:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	  [name and title]	 	 

 

 

[BENEFICIAL MORTGAGE CORPORATION

BENEFICIAL NEBRASKA INC.

BENEFICIAL NEW JERSEY INC.

BENEFICIAL NEW MEXICO INC.

BENEFICIAL OHIO INC.

BENEFICIAL OKLAHOMA INC.

BENEFICIAL OREGON INC.

BENEFICIAL SOUTH DAKOTA INC.

BENEFICIAL TENNESSEE INC.

BENEFICIAL TEXAS INC.

BENEFICIAL WASHINGTON INC.

BENEFICIAL WEST VIRGINIA, INC.

BENEFICIAL WISCONSIN INC.

BENEFICIAL WYOMING INC.

HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY

HOUSEHOLD FINANCE CORPORATION II

HOUSEHOLD FINANCE CORPORATION III

HOUSEHOLD FINANCE CORPORATION OF ALABAMA

HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA

HOUSEHOLD FINANCE CORPORATION OF WEST VIRGINIA

HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY OF IOWA

HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA

HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK

HOUSEHOLD FINANCIAL CENTER INC.

HOUSEHOLD INDUSTRIAL FINANCE COMPANY

HOUSEHOLD REALTY CORPORATION

MORTGAGE ONE CORPORATION]

	 	 	 	 	 	 	 
	 

	 	BY:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	  [name and title]	 	 
	 
	 	 	 	 	 	 
	 	 	[HSBC HOME EQUITY LOAN CORPORATION I]	 	 
	 	 	[HSBC HOME EQUITY LOAN CORPORATION II]	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	  [name and title]	 	 

 

 

EXHIBIT A

to HOME EQUITY LOAN PURCHASE AGREEMENT

FORM OF SETTLEMENT STATEMENT

HOME EQUITY LOAN PURCHASE AGREEMENT

Current Settlement Date:                     

                                                           
            (the “Seller”) and [HSBC Home Equity Loan
Corporation I][HSBC HOME EQUITY LOAN CORPORATION II] (the “Depositor”), pursuant to the
HOME EQUITY LOAN PURCHASE AGREEMENT (the “HOME EQUITY LOAN
PURCHASE AGREEMENT”) dated [
     
], by and among the Seller, other sellers named therein and the Depositor, do hereby agree
and certify as follows:

     1. Capitalized terms used in this Settlement Statement have their respective meanings in the
HOME EQUITY LOAN PURCHASE AGREEMENT. As used herein, the term “Collection Period” shall
mean the Collection Period immediately preceding the calendar month in which this Settlement
Statement is delivered. This Settlement Statement is being delivered pursuant to Section 3.2 of
the HOME EQUITY LOAN PURCHASE AGREEMENT. References hereto to certain sections are references to
the respective sections in the HOME EQUITY LOAN PURCHASE AGREEMENT.

     2. The date of this Settlement Statement is a Payment Date under the [Sale and Servicing
Agreement][Pooling and Servicing Agreement].

     3. The Repurchase Price for any Home Equity Loans required to be repurchased by [Seller]
pursuant to Section 6.1 of the Home Equity Loan Purchase Agreement with respect to the Collection
Period is equal to $                    .

	 	 	 	 	 	 	 
	 

	 	BY:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	ITS:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

Schedule 1

JURISDICTIONS OF ORGANIZATION;

ORGANIZATIONAL IDENTIFICATION NUMBERS

	 	 	 	 	 
	 	 	 	 	Organizational
	 	 	 	 	Identification
	 	 	 	 	Number (other
	 	 	Jurisdiction of	 	than for State of
	Name	 	Organization	 	Delaware)
	[BENEFICIAL CALIFORNIA INC.
	 	[Delaware	 	[N/A
	BENEFICIAL CONSUMER DISCOUNT COMPANY
	 	Pennsylvania	 	000276769
	BENEFICIAL DELAWARE INC.
	 	Delaware	 	N/A
	BENEFICIAL FLORIDA INC.
	 	Delaware	 	N/A
	BENEFICIAL HAWAII INC.
	 	Delaware	 	N/A
	BENEFICIAL HOMEOWNER SERVICE CORPORATION
	 	Delaware	 	N/A
	BENEFICIAL ILLINOIS INC.
	 	Delaware	 	N/A
	BENEFICIAL INDIANA INC.
	 	Delaware	 	N/A
	BENEFICIAL IOWA INC.
	 	Iowa	 	4167
	BENEFICIAL KENTUCKY INC.
	 	Delaware	 	N/A
	BENEFICIAL LOAN & THRIFT CO.
	 	Minnesota	 	Q-302
	BENEFICIAL MAINE INC.
	 	Delaware	 	N/A
	BENEFICIAL MASSACHUSETTS INC.
	 	Delaware	 	N/A
	BENEFICIAL MICHIGAN INC.
	 	Delaware	 	N/A
	BENEFICIAL MONTANA INC.
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF ARIZONA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF COLORADO
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF CONNECTICUT
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF GEORGIA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF IDAHO
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF KANSAS, INC.
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF LOUISIANA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF MARYLAND
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF MISSOURI, INC.
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF NEVADA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF RHODE ISLAND
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF UTAH
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CO. OF VIRGINIA
	 	Delaware	 	N/A
	BENEFICIAL MORTGAGE CORPORATION
	 	Delaware	 	N/A
	BENEFICIAL NEBRASKA INC.
	 	Nebraska	 	None
	BENEFICIAL NEW JERSEY INC.
	 	Delaware	 	N/A
	BENEFICIAL NEW MEXICO INC.
	 	Delaware	 	N/A
	BENEFICIAL OHIO INC.
	 	Delaware	 	N/A
	BENEFICIAL OKLAHOMA INC.
	 	Delaware	 	N/A
	 
	 	 	 	 

 

 

	 	 	 	 	 
	 	 	 	 	Organizational
	 	 	 	 	Identification
	 	 	 	 	Number (other
	 	 	Jurisdiction of	 	than for State of
	Name	 	Organization	 	Delaware)
	BENEFICIAL OREGON INC.]
	 	Delaware]	 	N/A]
	[BENEFICIAL SOUTH DAKOTA INC.
	 	[Delaware	 	[N/A
	BENEFICIAL TENNESSEE INC.
	 	Tennessee	 	0059918
	BENEFICIAL TEXAS INC.
	 	Texas	 	0017008200
	BENEFICIAL WASHINGTON INC.
	 	Delaware	 	N/A
	BENEFICIAL WISCONSIN INC.
	 	Delaware	 	N/A
	BENEFICIAL WYOMING INC.
	 	Wyoming	 	198000150151
	BENEFICIAL WEST VIRGINIA, INC.
	 	West Virginia	 	None
	HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY
	 	Pennsylvania	 	000166331
	HOUSEHOLD FINANCE CORPORATION OF ALABAMA
	 	Alabama	 	none
	HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA
	 	Delaware	 	N/A
	HOUSEHOLD FINANCE CORPORATION OF WEST VIRGINIA
	 	West Virginia	 	None
	HOUSEHOLD FINANCE CORPORATION II
	 	Delaware	 	N/A
	HOUSEHOLD FINANCE CORPORATION III
	 	Delaware	 	N/A
	HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY OF IOWA
	 	Iowa	 	000173851
	HOUSEHOLD FINANCIAL CENTER INC.
	 	Tennessee	 	0015102
	HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA
	 	Delaware	 	N/A
	HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK
	 	Delaware	 	N/A
	HOUSEHOLD INDUSTRIAL FINANCE COMPANY
	 	Minnesota	 	U-448
	HOUSEHOLD REALTY CORPORATION
	 	Delaware	 	N/A
	MORTGAGE ONE CORPORATION]
	 	Delaware]	 	N/A]

 

 

Schedule 2

Home Equity Loan Schedule

Attached as Exhibit A to [Sale and Servicing Agreement][Pooling and Servicing Agreement]exv4w2

 

Exhibit 4.2

 

[BENEFICIAL CALIFORNIA INC., BENEFICIAL CONSUMER DISCOUNT COMPANY, BENEFICIAL
DELAWARE INC., BENEFICIAL FLORIDA INC., BENEFICIAL HAWAII INC., BENEFICIAL
HOMEOWNER SERVICE CORPORATION, BENEFICIAL ILLINOIS INC., BENEFICIAL INDIANA
INC., BENEFICIAL IOWA INC., BENEFICIAL KENTUCKY INC., BENEFICIAL LOAN & THRIFT
CO., BENEFICIAL MAINE INC., BENEFICIAL MASSACHUSETTS INC., BENEFICIAL MICHIGAN
INC., BENEFICIAL MONTANA INC., BENEFICIAL MORTGAGE CO. OF ARIZONA, BENEFICIAL
MORTGAGE CO. OF COLORADO, BENEFICIAL MORTGAGE CO. OF CONNECTICUT, BENEFICIAL
MORTGAGE CO. OF GEORGIA, BENEFICIAL MORTGAGE CO. OF IDAHO, BENEFICIAL MORTGAGE
CO. OF KANSAS, INC., BENEFICIAL MORTGAGE CO. OF LOUISIANA, BENEFICIAL MORTGAGE
CO. OF MARYLAND, BENEFICIAL MORTGAGE CO. OF MISSOURI, INC., BENEFICIAL MORTGAGE
CO. OF NEVADA, BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE, BENEFICIAL MORTGAGE
CO. OF NORTH CAROLINA, BENEFICIAL MORTGAGE CO. OF RHODE ISLAND, BENEFICIAL
MORTGAGE CO. OF SOUTH CAROLINA, BENEFICIAL MORTGAGE CO. OF UTAH, BENEFICIAL
MORTGAGE CO. OF VIRGINIA, BENEFICIAL MORTGAGE CORPORATION, BENEFICIAL NEBRASKA
INC., BENEFICIAL NEW JERSEY INC., BENEFICIAL NEW MEXICO INC., BENEFICIAL OHIO
INC., BENEFICIAL OKLAHOMA INC., BENEFICIAL OREGON INC., BENEFICIAL SOUTH DAKOTA
INC., BENEFICIAL TENNESSEE INC., BENEFICIAL TEXAS INC., BENEFICIAL WASHINGTON
INC., BENEFICIAL WEST VIRGINIA, INC., BENEFICIAL WISCONSIN INC., BENEFICIAL
WYOMING INC., HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY, HOUSEHOLD FINANCE
CORPORATION II, HOUSEHOLD FINANCE CORPORATION III, HOUSEHOLD FINANCE
CORPORATION OF ALABAMA, HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA, HOUSEHOLD
FINANCE CORPORATION OF WEST VIRGINIA, HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY
OF IOWA, HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA, HOUSEHOLD FINANCE
REALTY CORPORATION OF NEW YORK, HOUSEHOLD FINANCIAL CENTER INC., HOUSEHOLD
INDUSTRIAL FINANCE COMPANY, HOUSEHOLD REALTY CORPORATION and MORTGAGE ONE
CORPORATION]

as Sellers

and

[HSBC HOME EQUITY LOAN TRUST (USA) 200-_][__________]

as [Trust][Trustee]

TRANSFER AGREEMENT

DATED [                    ]

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS
	 	 	2	 
	Section 1.1. Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II TRANSFERS OF RELATED DOCUMENTS
	 	 	3	 
	Section 2.1. Transfers to Trust
	 	 	3	 
	Section 2.2. Possession of Related Documents
	 	 	4	 
	Section 2.3. UCC Financing Statements
	 	 	4	 
	Section 2.4. Absolute Transfer
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III [INTENTIONALLY OMITTED]
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	5	 
	Section 4.1. Sellers’ Representations and Warranties
	 	 	5	 
	Section 4.2. Representations and Warranties of the Sellers Relating to the Home
Equity Loans
	 	 	6	 
	Section 4.3. Notice of Breach
	 	 	7	 
	 
	 	 	 	 
	ARTICLE V COVENANTS OF THE SELLERS
	 	 	7	 
	Section 5.1. Covenants
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI RECONVEYANCE
	 	 	7	 
	Section 6.1. Reconveyance of the Related Documents
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VII CONDITIONS PRECEDENT
	 	 	7	 
	Section 7.1. Conditions Precedent
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VIII TERM
	 	 	7	 
	Section 8.1. Term
	 	 	7	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS PROVISIONS
	 	 	8	 
	Section 9.1. Amendment
	 	 	8	 
	Section 9.2. GOVERNING LAW
	 	 	8	 
	Section 9.3. Notices
	 	 	8	 
	Section 9.4. Severability of Provisions
	 	 	8	 
	Section 9.5. Assignment
	 	 	8	 
	Section 9.6. Further Assurances
	 	 	9	 
	Section 9.7. No Waiver; Cumulative Remedies
	 	 	9	 
	Section 9.8. Counterparts
	 	 	9	 
	Section 9.9. Binding Effect; Third-Party Beneficiaries
	 	 	9	 
	Section 9.10. Merger and Integration
	 	 	9	 
	Section 9.11. Headings
	 	 	9	 
	Section 9.12. Survival of Representations and Warranties
	 	 	9	 
	Section 9.13. [Reserved]
	 	 	9	 
	Section 9.14. Limitation of Liability
	 	 	9	 

 i 

 

 

TRANSFER AGREEMENT

     TRANSFER AGREEMENT, dated [                    ], by and among [BENEFICIAL CALIFORNIA INC.,
BENEFICIAL CONSUMER DISCOUNT COMPANY, BENEFICIAL DELAWARE INC., BENEFICIAL FLORIDA INC., BENEFICIAL
HAWAII INC., BENEFICIAL HOMEOWNER SERVICE CORPORATION, BENEFICIAL ILLINOIS INC., BENEFICIAL INDIANA
INC., BENEFICIAL IOWA INC., BENEFICIAL KENTUCKY INC., BENEFICIAL LOAN & THRIFT CO., BENEFICIAL
MAINE INC., BENEFICIAL MASSACHUSETTS INC., BENEFICIAL MICHIGAN INC., BENEFICIAL MONTANA INC.,
BENEFICIAL MORTGAGE CO. OF ARIZONA, BENEFICIAL MORTGAGE CO. OF COLORADO, BENEFICIAL MORTGAGE CO. OF
CONNECTICUT, BENEFICIAL MORTGAGE CO. OF GEORGIA, BENEFICIAL MORTGAGE CO. OF IDAHO, BENEFICIAL
MORTGAGE CO. OF KANSAS, INC., BENEFICIAL MORTGAGE CO. OF LOUISIANA, BENEFICIAL MORTGAGE CO. OF
MARYLAND, BENEFICIAL MORTGAGE CO. OF MISSOURI, INC., BENEFICIAL MORTGAGE CO. OF NEVADA, BENEFICIAL
MORTGAGE CO. OF NEW HAMPSHIRE, BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA, BENEFICIAL MORTGAGE CO.
OF RHODE ISLAND, BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA, BENEFICIAL MORTGAGE CO. OF UTAH,
BENEFICIAL MORTGAGE CO. OF VIRGINIA, BENEFICIAL MORTGAGE CORPORATION, BENEFICIAL NEBRASKA INC.,
BENEFICIAL NEW JERSEY INC., BENEFICIAL NEW MEXICO INC., BENEFICIAL OHIO INC., BENEFICIAL OKLAHOMA
INC., BENEFICIAL OREGON INC., BENEFICIAL SOUTH DAKOTA INC., BENEFICIAL TENNESSEE INC., BENEFICIAL
TEXAS INC., BENEFICIAL WASHINGTON INC., BENEFICIAL WEST VIRGINIA, INC., BENEFICIAL WISCONSIN INC.,
BENEFICIAL WYOMING INC., HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY, HOUSEHOLD FINANCE CORPORATION
II, HOUSEHOLD FINANCE CORPORATION III, HOUSEHOLD FINANCE CORPORATION OF ALABAMA, HOUSEHOLD FINANCE
CORPORATION OF CALIFORNIA, HOUSEHOLD FINANCE CORPORATION OF WEST VIRGINIA, HOUSEHOLD FINANCE
INDUSTRIAL LOAN COMPANY OF IOWA, HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA, HOUSEHOLD FINANCE
REALTY CORPORATION OF NEW YORK, HOUSEHOLD FINANCIAL CENTER INC., HOUSEHOLD INDUSTRIAL FINANCE
COMPANY, HOUSEHOLD REALTY CORPORATION and MORTGAGE ONE CORPORATION] and any of their successors
(the “Sellers”), and [HSBC HOME EQUITY LOAN TRUST (USA) 200-_, a Delaware statutory trust
(the “Trust”)][___, a ___(the “Trustee”)].

W I T N E S S E T H;

     WHEREAS, the Sellers and [HSBC Home Equity Loan Corporation I][HSBC Home Equity Loan
Corporation II] (the “Depositor”) are parties to that certain Home Equity Loan Purchase
Agreement of even date herewith (as the same may be amended, supplemented or otherwise modified
from time to time, the “Home Equity Loan Purchase Agreement”), pursuant to which the
Sellers have agreed, from time to time, to sell, and the Depositor has agreed, from time to time,
to purchase, among other things, the outstanding principal balances and related

 

 

proceeds under certain “Home Equity Loans” evidenced by certain “Mortgage
Files” (each as defined in the Sale and Servicing Agreement (as defined below)) of the Sellers;

     [WHEREAS, the Depositor, as Depositor, HSBC Finance Corporation, as Servicer, the Trust, [                    ], as Administrator, and
[                    ], as Indenture
Trustee, are parties to that certain Sale and Servicing Agreement of even date herewith (as the
same may be amended, supplemented or otherwise modified from time to time, the “Sale and
Servicing Agreement”) pursuant to which, among other things, the Trust has agreed, from time to
time, to purchase from the Depositor the assets purchased by the Depositor under the Home Equity
Loan Purchase Agreement and certain other assets;]

     [WHEREAS, the Depositor, as Depositor, HSBC Finance Corporation, as Servicer, [                    ], as Administrator, and
[                    ], as Trustee, are parties to
that certain Pooling and Servicing Agreement of even date herewith (as the same may be amended,
supplemented or otherwise modified from time to time, the “Pooling and Servicing
Agreement”) pursuant to which, among other things, the Trustee has agreed, from time to time,
to purchase from the Depositor the assets purchased by the Depositor under the Home Equity Loan
Purchase Agreement and certain other assets;]

     WHEREAS, the Sellers will benefit directly from the transactions contemplated by the Sale and
Servicing Agreement in that the [Trust’s][Trustee’s] payments of the purchase price for the Home
Equity Loans purchased from time to time under the [Sale and Servicing Agreement][Pooling and
Servicing Agreement] will provide the Depositor with certain of the funds it needs to satisfy its
purchase obligations under the Home Equity Loan Purchase Agreement;

     WHEREAS, as a condition precedent to the [Trust’s][Trustee’s] entering into the [Sale and
Servicing Agreement][Pooling and Servicing Agreement], the [Trust][Trustee] has required that the
Sellers enter into this Agreement to convey, from time to time, all of the Sellers’ remaining
right, title and interest in the applicable Home Equity Loans, comprising the Mortgage Files and
Related Documents to the [Trust][Trustee];

     NOW, THEREFORE, in consideration of the recitals hereto and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Sellers and the
[Trust][Trustee] agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Definitions. (a) “Agreement” shall mean this Transfer Agreement
and all amendments and other modifications hereof and supplements hereto. All other capitalized
terms used herein or in any certificate or document made or delivered pursuant hereto, and not
defined herein or therein, shall have the meaning ascribed thereto in the Home Equity Loan Purchase
Agreement or in the [Sale and Servicing Agreement][Pooling and Servicing Agreement], as applicable.

2

 

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

     (b) All determinations of the principal balance or finance charges of Home Equity Loans, and
of any collections thereof, shall be made in accordance with the Sale and Servicing Agreement.

ARTICLE II

TRANSFERS OF RELATED DOCUMENTS

     Section 2.1. Transfers to Trust. In consideration of the Trust’s execution and
delivery of the Sale and Servicing Agreement, each Seller severally, and not jointly, does hereby
(i) on each Transfer Date, sell, transfer, assign, set over and otherwise convey to the
[Trust][Trustee], without recourse and subject only to the concurrent transfer of the outstanding
balances and other assets with respect to related Home Equity Loans sold to the Depositor pursuant
to the Home Equity Loan Purchase Agreement, all of its remaining right, title, and interest in, to
and under such Home Equity Loans, including without limitation all agreements, instruments and
other documents evidencing or governing the Mortgagors’ obligations under the Home Equity Loans or
otherwise related thereto or establishing or setting forth the terms and conditions thereof, and
any amendments or modifications thereto, and all property and collateral securing the Mortgagors’
obligations thereunder, and upon such conveyance the [Trust][Trustee] shall have full rights to
enforce and receive all benefits under the applicable Related Documents as owner thereof to the
same extent as such Seller had prior to such conveyance (the foregoing assets collectively being
the “Transferred Assets” with respect to the related Home Equity Loans), and (ii) agree
that on the applicable Transfer Date it will, subject to the availability thereof, sell, transfer,
assign, set over and otherwise convey to the [Trust][Trustee], without recourse and subject to the
prior transfer of any Eligible Substitute Home Equity Loan to the Depositor pursuant to the Home
Equity Loan Purchase Agreement, all of its remaining aspects, right, title and interest in, to and
under the Transferred Assets relating to such Eligible Substitute Home Equity Loan, and upon such
conveyance the [Trust][Trustee] shall have full rights to enforce and receive all benefits under
the applicable Related Documents as owner thereof to the same extent as such Seller had prior to
such conveyance. The parties hereto intend that each transfer of the Transferred Assets set forth
above constitute a true sale or absolute transfer thereof and each such transfer is intended to be
absolute and irrevocable and to provide the [Trust][Trustee] with the full benefits of ownership of
such Transferred Assets. In the event the transactions set forth herein are characterized by a
court of competent jurisdiction as a pledge or a secured financing rather than a sale, each Seller
shall be deemed to have granted to the [Trust][Trustee], and hereby does grant to the
[Trust][Trustee], a security interest in all of such Seller’s right, title and interest in, to and
under the Transferred Assets, whether now owned or hereafter acquired, in order to secure all of
such Seller’s obligations hereunder. For purposes of each such transfer, this Agreement shall
constitute a security agreement under applicable law. With respect to the Transferred Assets sold
by each Seller to the [Trust][Trustee], and without limiting the

3

 

requirements set forth in Section 2.2 hereof, the Seller shall (and the Servicer shall cause
such Seller to) file as promptly as practicable, but in no event later than 10 days following the
Closing Date, in the appropriate public filing office or offices UCC-1 financing statements and
continuation statements describing such Transferred Assets and naming such Seller as the debtor and
the [Trust][Trustee] as secured party, file appropriate continuation statements thereto, file
amendments thereto in the case of a name change or change in corporate structure and file
appropriate additional UCC financing statements, if any, if such Seller changes its jurisdiction of
organization.

     Section 2.2. Possession of Related Documents. In connection with the foregoing
conveyance of the Transferred Assets, each Seller and the [Trust][Trustee] agree that the related
Seller shall retain possession of the applicable Mortgage Files and other Related Documents, as
custodian for and on behalf of the [Trust][Trustee] so long as (i) the long-term senior unsecured
debt of HSBC Finance Corporation is assigned ratings by two of the three Rating Agencies of at
least “BBB” by Fitch, “Baa3” by Moody’s or “BBB-” by Standard and Poor’s (or such lower rating
acceptable and assigned by at least two of Moody’s, Standard and Poor’s and Fitch) and (ii) such
Seller remains an Affiliate of HSBC Finance. At such time as either of the conditions specified in
the preceding sentence is not satisfied, as promptly as practicable, but in no event more than 90
days thereafter in the case of clause (i) below and 60 days in the case of clause (ii) below, each
Seller shall (i) either (x) record an Assignment of Mortgage in favor of the [Trust][Trustee]
(which may be a blanket assignment if permitted by applicable law) with respect to each of the Home
Equity Loans being serviced by such Seller in the appropriate real property or other records or (y)
deliver to the [Indenture Trustee][Trustee] the assignment of such Mortgage in favor of the
[Trust][Trustee] in form for recordation, together with an Opinion of Counsel addressed to the
[Indenture Trustee][Trustee] to the effect that recording is not required to protect the
[Trust’s][Trustee’s] right, title and interest in and to the related Home Equity Loans or to
perfect a first priority security interest in favor of the [Trust][Trustee] in the related Home
Equity Loans, which Opinion of Counsel also shall be reasonably acceptable to each of the Rating
Agencies[, the Owner Trustee and the Indenture Trustee][and the Trustee] (each of which as
evidenced in writing), and (ii) unless an Opinion of Counsel, reasonably acceptable to each of the
Rating Agencies[, the Owner Trustee and the Indenture Trustee][and the Trustee] (each of which as
evidenced in writing) is delivered to the [Indenture Trustee][Trustee] to the effect that delivery
of the Mortgage Files is not necessary to protect the [Trust’s][Trustee’s] right, title and
interest in and to the related Home Equity Loans or to perfect a first priority security interest
in favor of the [Trust][Trustee] in the related Home Equity Loans, deliver the related Mortgage
Files to the [Indenture Trustee][Trustee] or to such Person as the [Indenture Trustee][Trustee]
shall so direct. Each Seller hereby agrees that in the event that the Depositor is required to
repurchase a Home Equity Loan from the [Trust][Trustee] pursuant to the [Sale and Servicing
Agreement][Pooling and Servicing Agreement] or a Seller is required to repurchase a Home Equity
Loan from the Depositor pursuant to the Home Equity Loan Purchase Agreement, the applicable Seller
will purchase the corresponding Related Documents from the [Trust][Trustee] to the extent required
by and pursuant to the terms of the [Sale and Servicing Agreement][Pooling and Servicing Agreement]
and Home Equity Loan Purchase Agreement.

     Section 2.3. UCC Financing Statements. In conjunction with the conveyance described
in Section 2.1, each Seller agrees (i) to record and file, at its own expense, any

4

 

financing statement (and continuation statements with respect to such financing statements
when applicable) with respect to the Transferred Assets that the [Trust][Trustee] may reasonably
request, meeting the requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect, and maintain perfection of, the conveyances described herein from such
Seller to the [Trust][Trustee] that may be perfected in such manner, (ii) such financing statement
shall name the appropriate Seller, as seller, and the [Trust][Trustee], as purchaser, of the
Related Documents and the [Indenture Trustee][Trustee] as assignee and (iii) to deliver a
file-stamped copy of such financing statements or other evidence of such filings (excluding such
continuation statements, which shall be delivered as filed) to the [Trust][Trustee] promptly upon
becoming available after the Closing Date.

     Section 2.4. Absolute Transfer. The parties hereto intend that each conveyance of
each Seller’s right, title and interest in and to the Transferred Assets shall constitute an
absolute transfer, conveying good title free and clear of any liens, claims, encumbrances or rights
of others (other than the Conveyance pursuant to the Home Equity Loan Purchase Agreement) from such
Seller to the [Trust][Trustee] and that the Transferred Assets shall not be part of the applicable
Seller’s estate in the event of the insolvency of such Seller or a conservatorship, receivership or
similar event with respect thereto.

ARTICLE III

[INTENTIONALLY OMITTED]

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

     Section 4.1. Representations and Warranties. Each Seller, severally and not jointly,
hereby represents and warrants to, and agrees with, the [Trust][Trustee] as of the Closing Date and
on each Transfer Date, that:

     (a) Organization and Good Standing. It is a corporation duly organized, validly
existing and in good standing under the laws of the State of its incorporation and has, in all
material respects, full power and authority to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement and when this Agreement has been executed and
delivered, this Agreement will constitute the legal, valid and binding obligation of such Seller,
enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies (whether in a proceeding at law or in equity).

     (b) Due Qualification. It is duly qualified to do business and is in good standing as
a foreign corporation (or is exempt from such requirements) and has obtained all necessary licenses
and approvals, in each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any Mortgage File relating to any Home Equity Loan

5

 

unenforceable by it or the [Trust][Trustee] and would have a material adverse effect on its
business, properties, assets or condition (financial or other).

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

     (d) No Conflict. Its execution and delivery of this Agreement and the Conveyance
Papers, the performance of the transactions contemplated by this Agreement and the Conveyance
Papers, and the fulfillment of the terms of this Agreement and the Conveyance Papers applicable to
it will not violate any existing law or regulation or any order or decree of any court applicable
to it or any provision of its certificate of incorporation or bylaws, or constitute (with or
without notice or lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which it is a party or by which it or
any of its properties are bound.

     (e) No Violation. The execution, delivery and performance of this Agreement and the
Conveyance Papers and the fulfillment of the terms contemplated herein and therein applicable to it
will materially comply with currently existing applicable laws.

     (f) No Proceedings. There are no proceedings or investigations pending or, to the
best of its knowledge, threatened against it, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or the Conveyance Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in its judgment, has a reasonable likelihood of resulting in a
material adverse effect on the transactions contemplated by this Agreement or the Conveyance
Papers, or (iv) seeking any determination or ruling that would materially and adversely affect the
validity or enforcement of this Agreement or the Conveyance Papers.

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

     (h) Chief Executive Office. Its chief executive office (i.e., the place from which it
manages the main part of its business operations) is currently located within the State of Illinois
and has been located in the State of Illinois for the five years preceding the date hereof.

     (i) Jurisdiction of Organization. Its sole jurisdiction of organization and its
organizational identification number, if any, are accurately set forth opposite its name on
Schedule 1 to the Home Equity Loan Purchase Agreement.

     Section 4.2. Representations and Warranties Relating to the Home Equity Loans. Each
Seller severally and not jointly represents and warrants to the [Trust and the Indenture

6

 

Trustee][Trustee] as of the related Cut-Off Date with respect to each Home Equity Loan, that
this Agreement constitutes a valid transfer and assignment to the [Trust][Trustee] by each Seller
of all of its right, title and interest in and to the Related Documents, all monies due to become
due with respect thereto and all proceeds of such Home Equity Loan, subject to such Seller’s
possession of the Mortgage File for servicing purposes as custodian and bailee for the
[Trust][Trustee] pursuant to Section 2.2 hereof, and to the Conveyance to the Depositor under the
Home Equity Loan Purchase Agreement.

     Section 4.3. Notice of Breach. The representations and warranties under this Article
IV shall survive the conveyance of the Related Documents to the [Trust][Trustee]. Upon discovery
by any of the Sellers or the [Trust][Trustee] of a breach of any of the representations and
warranties under Section 4.1 or 4.2, the party discovering such breach shall give written notice to
the other parties within three Business Days following such discovery.

ARTICLE V

COVENANTS OF THE SELLERS

     Section 5.1. Covenants. Each Seller severally and not jointly covenants and agrees
with the [Trust][Trustee] that it will observe and perform, for the benefit of the
[Trust][Trustee], all of the covenants set forth in Article V of the Home Equity Loan Purchase
Agreement to be performed by it.

ARTICLE VI

RECONVEYANCE

     Section 6.1. Reconveyance of the Related Documents. In the event any Seller accepts a
reconveyance of the Depositor’s interest in one or more Home Equity Loans pursuant to the Home
Equity Loan Purchase Agreement, then the applicable Seller shall accept reconveyance of the Related
Documents held by the [Trust][Trustee].

ARTICLE VII

CONDITIONS PRECEDENT

     Section 7.1. Conditions Precedent. This Agreement shall become effective when it has
been executed and delivered by all the parties hereto and when all of the conditions precedent set
forth in Section 7.1 of the Home Equity Loan Purchase Agreement have been satisfied.

ARTICLE VIII

TERM

     Section 8.1. Term. Subject to Article VII hereof, this Agreement shall commence as of
the date of execution and delivery hereof and shall continue until the obligations of the
Depositor, the Sellers, the Servicer, [the Trust,] the Administrator and the [Indenture
Trustee][the

7

 

Trustee] under the [Sale and Servicing Agreement][Pooling and Servicing Agreement] have
terminated in accordance with Section 8.01 thereof.

ARTICLE IX

MISCELLANEOUS PROVISIONS

     Section 9.1. Amendment. This Agreement and the rights and obligations of the parties
hereunder may not be changed orally, but only by an instrument in writing signed by the
[Trust][Trustee] and the Sellers in accordance with this Section 9.1. This Agreement may be
amended from time to time by the [Trust][Trustee] and the Sellers (i) to cure any ambiguity, (ii)
to correct or supplement any provisions herein which may be inconsistent with any other provisions
herein, (iii) to add any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement, and (iv) to
change, modify, delete or add any other obligation of the Sellers or the [Trust][Trustee];
provided, however, that no amendment pursuant to clause (iv) of this Section 9.1
shall be effective unless, the [Indenture Trustee][Trustee] has consented thereto, or the Rating
Agencies have notified the Depositor and the [Trust][Trustee] in writing that such amendment will
not result in a reduction or withdrawal of the rating of the [Notes][Certificates]. Any
reconveyance executed in accordance with the provisions hereof shall not be considered to be an
amendment to this Agreement.

     Section 9.2. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

     Section 9.3. Notices. All demands, notices and communications hereunder shall be in
writing and shall be given (i) to the Sellers in the manner and at the addresses specified in the
Home Equity Loan Purchase Agreement, and (ii) to the [Trust][Trustee] in the manner and at the
address specified in the [Sale and Servicing Agreement][Pooling and Servicing Agreement], or, as to
each party, at such other address as shall be designated by such party in a written notice to each
other party.

     Section 9.4. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid,
then such covenants, agreements, provisions, or terms shall be deemed severable from the remaining
covenants, agreements, provisions, and terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement.

     Section 9.5. Assignment. Notwithstanding anything to the contrary contained herein,
this Agreement may not be assigned by the parties hereto; provided, however, that
(i) each Seller shall have the right to assign its right, title and interest, in, to and under this
Agreement, to (a) any entity affiliated with HSBC Finance Corporation and (b) any other entity
provided that the [Indenture Trustee][Trustee] has consented thereto, or the Rating Agencies have
advised the Depositor and the Sellers that such assignment will not result in the reduction or
withdrawal of

8

 

the rating of the [Notes][Certificates], and (ii) the [Trust][Trustee] shall have the right to
assign this Agreement to (a) [the Indenture Trustee, (b)] any affiliate of HSBC Finance or
[(b)][(c)] any other entity provided that the Rating Agencies have advised the [Trust][Trustee]
that such assignment will not result in the reduction or withdrawal of the rating of the
[Notes][Certificates].

     Section 9.6. Further Assurances. The [Trust][Trustee] and each Seller agrees to do
and perform, from time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the other parties more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing statements or continuation
statements or equivalent documents relating to the Related Documents for filing under the
provisions of the UCC or other law of any applicable jurisdiction.

     Section 9.7. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the [Trust][Trustee] or any Seller, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.

     Section 9.8. Counterparts. This Agreement may be executed in two or more counterparts
(and by different parties on separate counterparts), each of which shall be an original, but all of
which together shall constitute one and the same instrument.

     Section 9.9. Binding Effect; Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective successors and permitted
assigns.

     Section 9.10. Merger and Integration. Except as specifically stated otherwise herein,
this Agreement sets forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as provided herein.

     Section 9.11. Headings. The headings are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.

     Section 9.12. Survival of Representations and Warranties. All representations,
warranties and agreements contained in this Agreement, shall remain operative and in full force and
effect and shall survive conveyance of the Related Documents by the Sellers to the [Trust][Trustee]
pursuant hereto.

Section 9.13. [Reserved]

     Section 9.14. [Limitation of Liability. It is understood by each party hereto that
the sole recourse of each party hereto in respect of the obligations of the Issuer hereunder and
under the other Transaction Documents to which it is a party shall be to the Trust Estate. In
addition,

9

 

[name of owner trustee] is executing this Agreement and other Transaction Documents to which
the Issuer is a party solely in its capacity as Owner Trustee under the Trust Agreement and not in
its individual capacity and in no case shall [name of owner trustee] (or any Person acting as
successor Owner Trustee under the Trust Agreement) be personally liable for or on account of any of
the statements, representations, warranties, covenants or obligations stated to be those of the
Issuer hereunder or thereunder, all such liability, if any, being expressly waived by the parties
hereto and any person claiming by, through or under such party.]

10

 

     IN WITNESS WHEREOF, the Sellers and the [Trust][Trustee] have caused this Transfer Agreement
to be duly executed by their respective officers as of the day and year first above written.

[BENEFICIAL CALIFORNIA INC.

BENEFICIAL CONSUMER DISCOUNT COMPANY

BENEFICIAL DELAWARE INC.

BENEFICIAL FLORIDA INC.

BENEFICIAL HAWAII INC.

BENEFICIAL HOMEOWNER SERVICE CORPORATION

BENEFICIAL ILLINOIS INC.

BENEFICIAL INDIANA INC.

BENEFICIAL IOWA INC.

BENEFICIAL KENTUCKY INC.

BENEFICIAL LOAN & THRIFT CO.

BENEFICIAL MAINE INC.

BENEFICIAL MASSACHUSETTS INC.

BENEFICIAL MICHIGAN INC.

BENEFICIAL MONTANA INC.

BENEFICIAL MORTGAGE CO. OF ARIZONA

BENEFICIAL MORTGAGE CO. OF COLORADO

BENEFICIAL MORTGAGE CO. OF CONNECTICUT

BENEFICIAL MORTGAGE CO. OF GEORGIA

BENEFICIAL MORTGAGE CO. OF IDAHO

BENEFICIAL MORTGAGE CO. OF KANSAS, INC.

BENEFICIAL MORTGAGE CO. OF LOUISIANA

BENEFICIAL MORTGAGE CO. OF MARYLAND

BENEFICIAL MORTGAGE CO. OF MISSOURI, INC.

BENEFICIAL MORTGAGE CO. OF NEVADA

BENEFICIAL MORTGAGE CO. OF NEW HAMPSHIRE

BENEFICIAL MORTGAGE CO. OF NORTH CAROLINA

BENEFICIAL MORTGAGE CO. OF RHODE ISLAND

BENEFICIAL MORTGAGE CO. OF SOUTH CAROLINA

BENEFICIAL MORTGAGE CO. OF UTAH

BENEFICIAL MORTGAGE CO. OF VIRGINIA]

	 	 	 	 	 
	 

	 	BY:	 	 
	 

	 	 	 	 
	 

	 	 	 	     [name and title]

 

 

[BENEFICIAL MORTGAGE CORPORATION

BENEFICIAL NEBRASKA INC.

BENEFICIAL NEW JERSEY INC.

BENEFICIAL NEW MEXICO INC.

BENEFICIAL OHIO INC.

BENEFICIAL OKLAHOMA INC.

BENEFICIAL OREGON INC.

BENEFICIAL SOUTH DAKOTA INC.

BENEFICIAL TENNESSEE INC.

BENEFICIAL TEXAS INC.

BENEFICIAL WASHINGTON INC.

BENEFICIAL WEST VIRGINIA, INC.

BENEFICIAL WISCONSIN INC.

BENEFICIAL WYOMING INC.

HOUSEHOLD FINANCE CONSUMER DISCOUNT COMPANY

HOUSEHOLD FINANCE CORPORATION II

HOUSEHOLD FINANCE CORPORATION III

HOUSEHOLD FINANCE CORPORATION OF ALABAMA

HOUSEHOLD FINANCE CORPORATION OF CALIFORNIA

HOUSEHOLD FINANCE CORPORATION OF WEST VIRGINIA

HOUSEHOLD FINANCE INDUSTRIAL LOAN COMPANY OF IOWA

HOUSEHOLD FINANCE REALTY CORPORATION OF NEVADA

HOUSEHOLD FINANCE REALTY CORPORATION OF NEW YORK

HOUSEHOLD FINANCIAL CENTER INC.

HOUSEHOLD INDUSTRIAL FINANCE COMPANY

HOUSEHOLD REALTY CORPORATION

MORTGAGE ONE CORPORATION]

	 	 	 	 	 
	 

	 	BY:	 	 
	 

	 	 	 	 
	 

	 	 	 	     [name and title]

 

 

	 	 	 	 	 
	 	 	[HSBC HOME EQUITY LOAN TRUST (USA) 200_-_
	 

	 	By:
	 	[name of owner trustee], not in its individual
capacity but solely as Owner Trustee under the Trust Agreement]
	 
	 	 	 	 
	 	 	[[______________], as Trustee]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:

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