Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

MASTER RECEIVABLES PURCHASE AGREEMENT

 

 

between

 

 

HOUSEHOLD AUTOMOTIVE FINANCE CORPORATION,

as Seller

 

and

 

 

HOUSEHOLD AUTO RECEIVABLES CORPORATION,

as Purchaser

 

 

dated as of

 

December 18, 2001

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I DEFINITIONS

  
	

   

  
	

  SECTION 1.1

  	

  General

  
	

  SECTION 1.2

  	

  Specific

  Terms

  
	

  SECTION 1.3

  	

  Other

  Definitional Provisions

  
	

  SECTION 1.4

  	

  Certain

  References

  
	

  SECTION 1.5

  	

  No Recourse

  
	

   

  	

   

  
	

  ARTICLE II CONVEYANCE OF THE RECEIVABLES

  AND THE OTHER CONVEYED PROPERTY

  
	

   

  
	

  SECTION 2.1

  	

  Purchase

  
	

   

  	

   

  
	

  ARTICLE III REPRESENTATIONS AND WARRANTIES

  
	

   

  
	

  SECTION 3.1

  	

  Representations

  and Warranties of Seller

  
	

  SECTION 3.2

  	

  Representations

  and Warranties of HARC

  
	

   

  	

   

  
	

  ARTICLE

  IV COVENANTS OF SELLER

  
	

   

  
	

  SECTION 4.1

  	

  Seller’s

  Covenants

  
	

   

  	

   

  
	

  ARTICLE

  V REPURCHASES

  
	

   

  
	

  SECTION 5.1

  	

  Repurchase of

  Receivables Upon Breach of Warranty

  
	

  SECTION 5.2

  	

  Reassignment

  of Repurchased Receivables

  
	

  SECTION 5.3

  	

  Waivers

  
	

   

  	

   

  
	

  ARTICLE

  VI MISCELLANEOUS

  
	

   

  
	

  SECTION 6.1

  	

  Liability of

  Seller

  
	

  SECTION 6.2

  	

  Amendment

  
	

  SECTION 6.3

  	

  GOVERNING LAW

  
	

  SECTION 6.4

  	

  Notices

  
	

  SECTION 6.5

  	

  Severability

  of Provisions

  
	

  SECTION 6.6

  	

  Assignment

  
	

  SECTION 6.7

  	

  Acknowledgment

  and Agreement of Seller

  
	

  SECTION 6.8

  	

  Further

  Assurances

  
	

  SECTION 6.9

  	

  No Waiver;

  Cumulative Remedies

  
	

  SECTION 6.10

  	

  Counterparts

  
	

  SECTION 6.11

  	

  Binding

  Effect; Third-Party Beneficiaries

  
	

  SECTION 6.12

  	

  Merger and

  Integration

  
	

  SECTION 6.13

  	

  Heading

  
	

  SECTION 6.14

  	

  Schedules

  and Exhibits

  
	

  SECTION 6.15

  	

  Survival of

  Representations and Warranties

  
	

  SECTION 6.16

  	

  Nonpetition

  Covenant

  

 

 

	

  EXHIBITS

  	

   

  
	

   

  	

   

  
	

  EXHIBIT

  A

  	

  Form of

  Receivables Purchase Agreement Supplement

  
	

   

  	

   

  
	

  SCHEDULES

  	

   

  
	

   

  	

   

  
	

  SCHEDULE

  A

  	

  Schedule of

  Receivables

  

 

 

THIS MASTER RECEIVABLES

PURCHASE AGREEMENT, dated as of December 18, 2001, executed between Household

Auto Receivables Corporation, a Nevada corporation, as purchaser (“HARC”)

and Household Automotive Finance Corporation, a Delaware corporation, as seller

(“Seller”).

 

WITNESSETH :

 

WHEREAS, HARC has agreed

to purchase from time to time from Seller, and Seller, pursuant to this

Agreement, has agreed to transfer from time to time to HARC the Receivables and

the Other Conveyed Property.

 

NOW, THEREFORE, in

consideration of the premises and the mutual agreements hereinafter contained,

and for other good and valuable consideration, the receipt of which is

acknowledged, HARC and Seller, intending to be legally bound, hereby agree as

follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1  General.  Capitalized terms used herein without definition shall have the

respective meanings assigned to such terms in the Master Sale and Servicing

Agreement.

 

SECTION 1.2  Specific Terms.  Whenever used in this Agreement, the

following words and phrases, unless the context otherwise requires, shall have

the following meanings:

 

“Agreement” means

this Master Receivables Purchase Agreement and all amendments hereof and

supplements hereto.

“Closing Date”

means December 18, 2001.

 

“Conveyance” shall

have the meaning specified in Section 2.1.

 

“Conveyance Papers”

shall have the meaning specified in Section 3.1.

 

“Cutoff Date”

shall have the meaning assigned to such term in the Master Sale and Servicing

Agreement or applicable Receivables Purchase Agreement Supplement.

 

“Master Sale and

Servicing Agreement” means the Master Sale and Servicing Agreement dated as

of December 18, 2001, by and among Household Automotive Warehouse Trust, as

Issuer, HARC, as Seller, Household Finance Corporation, as Master Servicer, and

Wells Fargo Bank Minnesota, National Association, as Indenture Trustee, as the

same may be amended, restated, supplemented or otherwise modified from time to

time.

 

 

“Other Conveyed

Property” means all money, instruments, rights and other property that are

subject or intended to be subject to the lien and security interest of the

Indenture (including all property and interests granted to the Indenture

Trustee), including all proceeds thereof, other than the Receivables.

 

“Purchase Date”

means, with respect to Receivables, any date, on which Receivables are to be

purchased by HARC pursuant to this Agreement and a Receivables Purchase

Agreement Supplement is executed and delivered by Seller and HARC.

 

“Receivables”

means the Receivables listed on the Schedules of Receivables attached to this

Agreement or to each Receivables Purchase Agreement Supplement as Schedule A.

 

“Receivables Purchase

Agreement Supplement” means an agreement between HARC and Seller,

substantially in the form of Exhibit A hereto.

 

“Repurchase Event”

means a determination pursuant to Section 3.2 or Section 4.7 of the Master Sale

and Servicing Agreement that HARC is required to repurchase a Receivable.

 

“Schedule of

Receivables” means the schedule of Receivables sold and transferred

pursuant to this Agreement and each related Receivables Purchase Agreement

Supplement from time to time, which schedule collectively includes the

schedules attached as Schedule A to this Agreement and Schedule A to each

related Receivables Purchase Agreement Supplement.

 

SECTION 1.3  Other Definitional Provisions.

 

(a)  All terms defined in this Agreement shall

have the defined meanings when used in any certificate, other documents, or

Conveyance Paper made or delivered pursuant hereto unless otherwise defined

herein.

 

(b)  The words “hereof”, “herein”

and “hereunder” and words of similar import when used in this Agreement

or any Conveyance Paper shall refer to this Agreement as a whole and not to any

particular provision of this Agreement; and Section, Subsection, Schedule and

Exhibit references contained in this Agreement are references to Sections,

Subsections, Schedules and Exhibits in or to this Agreement unless otherwise

specified.

 

(c)  All determinations of the principal or

finance charge balance of Receivables, and of any collections thereof, shall be

made in accordance with the Master Sale and Servicing Agreement and the Series

Supplement.

 

SECTION 1.4  Certain

References.  All references to the

Principal Balance of a Receivable as of any date of determination shall refer

to the close of business on such day, or as of the first day of a Collection

Period shall refer to the opening of business on such day.  All references to the last day of a

Collection Period shall refer to the close of business on such day.

 

2

 

SECTION 1.5  No Recourse.  Without limiting the obligations of Seller

hereunder, no recourse may be taken, directly or indirectly, under this

Agreement or any certificate or other writing delivered in connection herewith

or therewith, against any stockholder, officer or director, as such, of Seller,

or of any predecessor or successor of Seller.

 

ARTICLE II

 

CONVEYANCE OF THE

RECEIVABLES

AND THE OTHER CONVEYED PROPERTY

 

SECTION 2.1  Purchase.

 

(a)  By execution of this Agreement and subject

to the terms and conditions of this Agreement, on each Purchase Date Seller

shall sell, transfer, assign, and otherwise convey to HARC (collectively, the “Conveyance”)

without recourse (but without limitation of its obligations in this Agreement),

and HARC shall purchase, all right, title and interest of Seller in and to:

 

(i)                     each and

every Receivable listed from time to time on Schedule A hereto or to each

related Receivables Purchase Agreement Supplement and all monies paid or

payable thereon or in respect thereof on or after the related Cutoff Date

(including amounts due on or before the related Cutoff Date but received by

Seller on or after such date);

 

(ii)                  the security

interests in the related Financed Vehicles granted by Obligors pursuant to such

Receivables and any other interest of Seller in such Financed Vehicles;

 

(iii)               all rights of

Seller against Dealers pursuant to Dealer Agreements or Dealer Assignments

related to such Receivables;

 

(iv)              any proceeds and the

right to receive proceeds with respect to such Receivables repurchased by a

Dealer, pursuant to a Dealer Agreement, as a result of a breach of

representation or warranty in the related Dealer Agreement;

 

(v)                 all rights of

Seller under any Service Contracts on the related Financed Vehicles;

 

(vi)              any proceeds and the

right to receive proceeds with respect to the related Receivables from claims

on any physical damage, loss, credit life or disability insurance policies, if

any, covering Financed Vehicles or Obligors, including rebates of insurance

premiums relating to the Receivables and any proceeds from the liquidation of

such Receivables;

 

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(vii)           all items contained in

the Receivables Files with respect to such Receivables and any and all other

documents that Seller or Master Servicer keeps on file in accordance with its

customary procedures relating to the related Receivables, or the related

Financed Vehicles or Obligor;

 

(viii)        all property (including

the right to receive future Net Liquidation Proceeds) that secures each related

Receivable and that has been acquired by or on behalf of HARC pursuant to the

liquidation of such Receivable; and

 

(ix)                all present and

future claims, demands, causes and choses in action in respect of any or all of

the foregoing and all payments on or under and all proceeds of every kind and

nature whatsoever in respect of any or all of the foregoing, including all

proceeds of the conversion, voluntary or involuntary, into cash or other liquid

property, all cash proceeds, accounts, accounts receivable, notes, drafts,

acceptances, chattel paper, checks, deposit accounts, insurance proceeds,

condemnation awards, rights to payment of any and every kind and other forms of

obligations and receivables, instruments and other property which at any time

constitute all or part of or are included in the proceeds of any of the

foregoing.

 

(b)  Simultaneously with the conveyance of the

Receivables and the Other Conveyed Property to HARC by Seller, HARC has paid or

caused to be paid to or upon the order of Seller an amount equal to 100% of the

Principal Balance of the Receivables on the books and records of Seller, plus

the present value of anticipated excess spread on such Receivables, discounted

to take into account any uncertainty as to future performance matching

historical performance, servicing fees, delinquencies, pay down rates, yield

and such other factors as may be mutually agreed upon between Seller and HARC,

by wire transfer of immediately available funds.

(c)  In connection with such Conveyance, Seller

further agrees that it will, at its own expense, on or prior to the Purchase

Date (i) indicate in its computer files or microfiche lists that the

Receivables have been conveyed to HARC in accordance with this Agreement and

have been conveyed by HARC to the Indenture Trustee pursuant to the Master Sale

and Servicing Agreement for the benefit of the Secured Parties by including in

such computer files and microfiche lists the code identifying each such

Receivable and (ii) deliver to HARC (or to the Indenture Trustee if HARC so

directs) a computer file or microfiche list containing a true and complete list

of all such Receivables specifying for each such Receivable, as of the Cutoff

Date (A) its account number and (B) the outstanding balance of such

Receivable.  Such computer files or

microfiche lists shall be delivered to HARC (or to the Indenture Trustee if so

directed by HARC) and marked as proprietary and confidential.  Seller further agrees not to alter the code

referenced in clause (i) of this paragraph with respect to any Receivable

during the term of this Agreement.

 

4

 

(d)  The parties hereto intend that the

conveyance of Seller’s right, title and interest in and to the Receivables and

Other Conveyed Property shall constitute a sale, conveying good title free and

clear of any liens, claims, encumbrances or rights of others from Seller to

HARC and that the Receivables and Other Conveyed Property shall not be part of

Seller’s estate in the event of the insolvency of Seller or a conservatorship,

receivership or similar event with respect to Seller.  It is the intention of the parties hereto that the arrangements

with respect to the Receivables and Other Conveyed Property shall constitute a

purchase and sale of such Receivables and not a loan.  In the event, however, that a court of competent jurisdiction

were to hold that the transactions evidenced hereby constitute a loan and not a

purchase and sale, it is the intention of the parties hereto that this

Agreement shall constitute a security agreement under applicable law, and that

Seller shall be deemed to have granted to HARC a first priority perfected

security interest in all of such Seller’s right, title and interest in and to

the Receivables and Other Conveyed Property.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.1  Representations

and Warranties of Seller.  Seller

makes the following representations and warranties as of the date hereof on

which HARC relies in purchasing the Receivables and the Other Conveyed Property

and in transferring the Receivables and the Other Conveyed Property to the

Issuer under the Master Sale and Servicing Agreement.  Such representations are made as of the execution and delivery of

this Agreement and as to Receivables and Other Conveyed Property conveyed

thereunder, as of the execution and delivery of each Receivables Purchase

Agreement Supplement, but shall survive the sale, transfer and assignment of

the Receivables and the Other Conveyed Property hereunder, and the sale,

transfer and assignment thereof by HARC to the Issuer under the Master Sale and

Servicing Agreement.  Seller and HARC

agree that HARC will assign to Issuer all HARC’s rights under this Agreement

and each Receivables Purchase Agreement Supplement and that the Indenture

Trustee will thereafter be entitled to enforce this Agreement and each

Receivables Purchase Agreement Supplement against Seller in the Indenture

Trustee’s own name on behalf of the Securityholders.

 

(a)  Eligibility Criteria.  Each of the Receivables which is to be

pledged as collateral for the Notes will satisfy the Eligibility Criteria set

forth in Schedule I to the Series Supplement.

 

(b)  Organization and Good Standing.  Seller is a corporation duly organized and

validly existing in good standing under the laws of the State of Delaware and

has, in all material respects, full power and authority to own its properties

and conduct its business as such properties are presently owned and such

business is presently conducted, and to execute, deliver and perform its

obligations under this Agreement.

 

(c)  Due Obligation.  Seller is duly qualified to do business and

is in good standing as a foreign corporation (or is exempt from such

requirements) and has obtained

 

5

 

all necessary licenses and approvals, in each

jurisdiction in which failure to so qualify or to obtain such licenses and

approvals would (i) render any Receivable unenforceable by Seller, HARC or the

Trust and (ii) have a material adverse effect on the Secured Parties.

 

(d)  Due Authorization.  The execution, delivery and performance of

this Agreement and any other document or instrument delivered pursuant hereto

(such other documents and instruments, including, but not limited to, the

Receivables Purchase Agreement Supplement collectively, the “Conveyance

Papers”) and the consummation of the transactions provided for in this

Agreement or any other Conveyance Papers have been duly authorized by all

necessary corporate action on the part of Seller and constitute or will

constitute the legal, valid and binding obligation of Seller, enforceable in

accordance with their terms.

 

(e)  No Conflict.  The execution and delivery of this Agreement

and the Conveyance Papers, the performance of the transactions contemplated by

this Agreement and the Conveyance Papers, and the fulfillment of the terms of

this Agreement and the Conveyance Papers applicable to Seller will not conflict

with, violate or result in any breach of any of the material terms and

provisions of, or constitute (with or without notice or lapse of time or both)

a material default under, any indenture, contract, agreement, mortgage, deed of

trust, or other instrument to which Seller is a party or by which it or any of

its properties are bound.

 

(f)  No Violation.  The execution, delivery and performance of

this Agreement and the Conveyance Papers and the fulfillment of the terms

contemplated herein and therein applicable to Seller will not conflict with or

violate any requirements of law applicable to Seller.

 

(g)  No Proceedings.  There are no proceedings or investigations

pending or, to the best knowledge of Seller, threatened against Seller, before

any court, regulatory body, administrative agency or other tribunal or governmental  instrumentality (i) asserting the invalidity

of this Agreement or the Conveyance Papers, (ii) seeking to prevent the

consummation of any of the transactions contemplated by this Agreement or the

Conveyance Papers, (iii) seeking any determination or ruling that, in the

reasonable judgment of Seller, would materially and adversely affect the

performance by Seller of its obligations under this Agreement or the Conveyance

Papers, (iv) seeking any determination or ruling that would materially and

adversely affect the validity or enforceability of this Agreement or the

Conveyance Papers or (v) seeking to affect adversely the income tax attributes

of the Trust under United States Federal, Nevada or California income tax

systems.

 

(h)  All Consents.  All authorizations, consents, orders,

approvals, registrations or declarations with, or of, any Governmental

Authority required to be obtained, effected or given by Seller in connection

with the execution and delivery by Seller of this Agreement or the Conveyance

Papers and the performance of the transactions contemplated by this Agreement

or the Conveyance Papers by Seller have been duly obtained, effected or given

and are in full force and effect.

 

6

 

SECTION 3.2  Representations

and Warranties of HARC.  HARC makes

the following representations and warranties, on which Seller relies in

selling, assigning, transferring and conveying the Receivables and the Other

Conveyed Property to HARC hereunder. 

Such representations are made as of the execution and delivery of this

Agreement and as to Receivables and Other Conveyed Property conveyed

thereunder, as of the execution and delivery of each Receivables Purchase

Agreement Supplement, but shall survive the sale, transfer and assignment of

the Receivables and the Other Conveyed Property hereunder and the sale,

transfer and assignment thereof by HARC to the Issuer under the Master Sale and

Servicing Agreement.

 

(a)  Organization and Good Standing.  HARC is a corporation duly organized and

validly existing under the laws of the State of Nevada and has, in all material

respects, full power and authority to own its properties and conduct its

business as such properties are presently owned and such business is presently

conducted and to execute, deliver and perform its obligations under this

Agreement and the Conveyance Papers.

 

(b)  Due Authorization.  The execution and delivery of this Agreement

and the Conveyance Papers and the consummation of the transactions provided for

in this Agreement and the Conveyance Papers have been duly authorized by HARC

by all necessary corporate action on the part of HARC.

 

(c)  No Conflict.  The execution and delivery of this Agreement

and the Conveyance Papers, the performance of the transactions contemplated by

this Agreement and the Conveyance Papers, and the fulfillment of the terms

hereof and thereof, will not conflict with, result in any breach of any of the

material terms and provisions of, or constitute (with or without notice or

lapse of time or both) a material default under, any indenture, contract,

agreement, mortgage, deed of trust or other instrument to which HARC is a party

or by which it or its properties is bound.

 

(d)  No Violation.  The execution, delivery and performance of

this Agreement and the Conveyance Papers by HARC and the fulfillment of the

terms contemplated herein and therein applicable to HARC will not conflict with

or violate any requirements of law applicable to HARC.

 

(e)  No Proceeding.  There are no proceedings or investigations

pending or, to the best knowledge of HARC, threatened against HARC, before any

court, regulatory body, administrative agency, or other tribunal or

governmental instrumentality (i) asserting the invalidity of this Agreement or

the Conveyance Papers, (ii) seeking to prevent the consummation of any of the

transactions contemplated by this Agreement or the Conveyance Papers, (iii)

seeking any determination or ruling that, in the reasonable judgment of HARC,

would materially and adversely affect the performance by HARC of its

obligations under this Agreement or the Conveyance Papers or (iv) seeking any

determination or ruling that would materially and adversely affect the validity

or enforceability of this Agreement or the Conveyance Papers.

 

7

 

(f)  All Consents.  All authorizations, consents, orders or

approvals of or registrations or declarations with any Governmental Authority

required to be obtained, effected or given by HARC in connection with the

execution and delivery by HARC of this Agreement and the Conveyance Papers and

the performance of the transactions contemplated by this Agreement and the

Conveyance Papers or the fulfillment of the terms of this Agreement and the

Conveyance Papers by HARC have been duly obtained.

 

In the event of any

breach of a representation and warranty made by HARC hereunder, Seller

covenants and agrees that it will not take any action to pursue any remedy that

it may have hereunder, in law, in equity or otherwise, until a year and a day

have passed since the date on which all Notes and Certificates issued by the

Trust have been paid in full.  Seller

and HARC agree that damages will not be an adequate remedy for such breach and

that this covenant may be specifically enforced by HARC, Issuer or by the

Indenture Trustee on behalf of the Noteholders and the Owner Trustee on behalf

of the Certificateholders.  Seller

agrees that with respect to its obligations in connection with a Repurchase

Event it will exercise no rights of offset with respect to any claims it may

have against HARC.

 

ARTICLE IV

 

COVENANTS OF SELLER

 

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

as follows:

 

(a)  Receivables Not To Be Evidenced by

Promissory Notes.  Seller will take

no action to cause any Receivable to be evidenced by any instrument (as defined

in the UCC).

 

(b)  Security Interests.  Except for the conveyances hereunder or as

otherwise provide herein, Seller will not sell, pledge, assign or transfer to

any other Person, or take any other action inconsistent with HARC’s ownership

of the Receivables or grant, create, incur, assume or suffer to exist any Lien

on any Receivable, whether now existing or hereafter created, or any interest

therein, and Seller shall not claim any ownership interest in the Receivables

and shall defend the right, title and interest of HARC in and to the

Receivables, whether now existing or hereafter created, against all claims of

third parties claiming through or under Seller.

 

(c)  Security’s Interest.  Except for the conveyances hereunder and in

connection with any transaction permitted pursuant to Section 6.6, Seller

hereby agrees not to transfer, assign, exchange or otherwise convey or pledge,

hypothecate or otherwise grant a security interest in the Receivables and any

such attempted transfer, assignment, exchange, conveyance, pledge,

hypothecation or grant shall be void.

 

(d)  Delivery of Collections or Recoveries.  In the event that Seller receives

collections or recoveries with respect to the Receivables, Seller agrees to pay

to HARC

 

8

 

(or to the Master Servicer if HARC so directs) all

such collections and recoveries to the extent such amounts are payable to HARC

as soon as practicable after receipt thereof.

 

(e)  Notice of Liens.  Seller shall notify HARC promptly after

becoming aware of any Lien on any Receivable other than the conveyances

hereunder.

 

(f)  Documentation of Transfer.  Seller shall undertake to file the documents

which would be necessary to perfect and maintain the transfer of the security

interest in and to the Receivables and Other Conveyed Assets.

 

(g)  Approval of Office Records.  Seller shall cause this Agreement to be duly

approved by Seller’s Board of Directors, and Seller shall maintain the

Agreement as a part of the official records of Seller for the term of the

Agreement.

 

(h)  Maintenance of Security Interests in

Vehicles.  In the event that the

assignment of a Receivable to HARC or any assignee thereof is insufficient,

without a notation on the related Financed Vehicle’s certificate of title, or

without fulfilling any additional administrative requirements under the laws of

the state in which the Financed Vehicle is located, to perfect a security

interest in the related Financed Vehicle in favor of the HARC or any assignee

thereof, Seller hereby agrees that the designation of Seller or any Affiliate

of Seller as the secured party on the certificate of title is in its capacity

as agent of HARC or the agent of any assignee of HARC for such limited purpose.

 

ARTICLE V

 

REPURCHASES

 

SECTION 5.1  Repurchase of Receivables Upon Breach of

Warranty.  Upon the occurrence of a

Repurchase Event, Seller shall, unless the breach which is the subject of such

Repurchase Event shall have been cured in all material respects, repurchase the

Receivable relating thereto from the Issuer by the last day of the first full

calendar month following the discovery of such breach by Seller or receipt by

Seller of notice of such breach from any of the Master Servicer, HARC, a Trust

Officer of the Indenture Trustee or the Owner Trustee and, simultaneously with

the repurchase of the Receivable, Seller shall deposit the Repurchase Amount in

full, without deduction or offset, in the Collection Account, pursuant to

Section 3.2 of the Master Sale and Servicing Agreement.  It is understood and agreed that, except as

set forth in Section 6.1 hereof, the obligation of Seller to repurchase any

Receivable, as to which a breach occurred and is continuing, shall, if such

obligation is fulfilled, constitute the sole remedy against Seller for such

breach available to HARC, the Issuer, the Secured Parties, the Noteholders, the

Certificateholders, the Indenture Trustee on behalf of the Noteholders or the Owner

Trustee on behalf of the Certificateholders. 

The provisions of this Section 5.1 are intended to grant the Indenture

Trustee or the Issuer a direct right against Seller to demand performance

hereunder, and in connection therewith, Seller waives any requirement of prior

demand against HARC with respect to such repurchase obligation.  Any such repurchase shall take place in the

manner specified in Section 3.2 of the Master Sale and Servicing Agreement.  Notwithstanding any other provision of this

Agreement

 

9

 

or the Master Sale and Servicing Agreement to the

contrary, the obligation of Seller under this Section shall not terminate upon

a termination of Household Finance Corporation as Master Servicer under the

Master Sale and Servicing Agreement and shall be performed in accordance with

the terms hereof notwithstanding the failure of the Master Servicer or HARC to

perform any of their respective obligations with respect to such Receivable

under the Master Sale and Servicing Agreement.

 

SECTION 5.2  Reassignment

of Repurchased Receivables.  Upon

deposit in the Collection Account of the Repurchase Amount of any Receivable

repurchased by Seller under Section 5.1 hereof, HARC and the Issuer shall take

such steps as may be reasonably requested by Seller in order to assign to

Seller all of HARC’s and the Issuer’s right, title and interest in and to such

Receivable and all security and documents and all Other Conveyed Property

conveyed to HARC and the Issuer directly relating thereto, without recourse,

representation or warranty, except as to the absence of liens, charges or

encumbrances created by or arising as a result of actions of HARC or the

Issuer.  Such assignment shall be a sale

and assignment outright, and not for security. 

If, following the reassignment of a Repurchased Receivable, in any

enforcement suit or legal proceeding, it is held that Seller may not enforce

any such Receivable on the ground that it shall not be a real party in interest

or a holder entitled to enforce the Receivable, HARC and the Issuer shall, at

the expense of Seller, take such steps as Seller deems reasonably necessary to

enforce the Receivable, including bringing suit in HARC’s or in the Issuer’s

name.

 

SECTION 5.3  Waivers.  No failure or delay on the part of HARC, or

the Issuer as assignee of HARC, in exercising any power, right or remedy under

this Agreement shall operate as a waiver thereof, nor shall any single or

partial exercise of any such power, right or remedy preclude any other or

future exercise thereof or the exercise of any other power, right or remedy.

 

ARTICLE VI

 

MISCELLANEOUS

 

SECTION 6.1  Liability

of Seller.  Seller shall be liable

in accordance herewith only to the extent of the obligations in this Agreement

specifically undertaken by Seller and the representations and warranties of

Seller.

 

SECTION 6.2  Amendment.  This Agreement and any Conveyance Papers and

the rights and obligations of the parties hereunder may not be changed orally,

but only by an instrument in writing signed by HARC and Seller in accordance

with this Section 6.2.  This Agreement

and any Conveyance Papers may be amended from time to time, with the prior

written consent of the Administrative Agent, where one exists, or otherwise,

the Managing Agents, by HARC and Seller, provided that HARC provides to Seller

(a) an Officer’s Certificate to the effect that HARC reasonably believes that

such amendment will not have an adverse effect upon the interest of any Secured

Party, the Noteholders or the Certificateholders and (b) an Opinion of Counsel

addressed and 

 

10

 

delivered to Seller, dated the date of such amendment,

to the effect that the conditions precedent to any such amendment have been

satisfied.

 

SECTION 6.3  GOVERNING

LAW.  THIS AGREEMENT AND THE

CONVEYANCE PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE

OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE

OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED

IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 6.4  Notices.  All demands, notices and communications

hereunder shall be in writing and shall be deemed to have been duly given if

personally delivered at or mailed by registered mail, return receipt requested,

to (a) in the case of Seller, 5855 Copley Drive, San Diego, California 92111,

Attention:  Chief Operating Officer,

with a copy to 2700 Sanders Road, Prospect Heights, Illinois 60070 Attention:  Director-Asset Securitization, (b) in the

case of HARC, 1111 Town Center Drive, Las Vegas, Nevada 89134 Attention:  Compliance Officer, with a copy to 2700

Sanders Road, Prospect Heights, Illinois 60070,  Attention:  Treasurer; or,

as to each party, at such other address as shall be designated by such party in

a written notice to each other party.

 

SECTION 6.5  Severability

of Provisions.  If any one or more

of the covenants, agreements, provisions, or terms of this Agreement or

Conveyance Paper shall for any reason whatsoever be held invalid, then such

covenants, agreements, provisions, or terms shall be deemed severable from the

remaining covenants, agreements, provisions, and terms of this Agreement or any

Conveyance Paper and shall in no way affect the validity or enforceability of

the other provisions of this Agreement or of any Conveyance Paper.

 

SECTION 6.6  Assignment.  Notwithstanding anything to the contrary

contained herein, other than HARC’s assignment of its rights, title, and

interests in, to, and under this Agreement to the Issuer and by the Issuer to

the Indenture Trustee for the benefit of the Secured Parties, as contemplated

by the Master Sale and Servicing Agreement and Section 6.7 hereof, the

Receivables, the Other Conveyed Property, this Agreement and all other

Conveyance Papers may not be assigned by the parties hereto; provided, however,

that Seller shall have the right to assign its rights, title and interests, in

to and under this Agreement to (i) any successor by merger or consolidation, or

any Person which acquires by conveyance, transfer or sale the properties and

assets of Seller or (ii) any Affiliate owned directly or indirectly by

Household International, Inc.  The right

granted in the foregoing proviso is subject to the further condition that any

such successor or other Person shall expressly assume by written agreement, in

form and substance satisfactory to HARC, the obligations of Seller hereunder

and under the Conveyance Papers.

 

SECTION 6.7  Acknowledgment

and Agreement of Seller.  By

execution below, Seller expressly acknowledges and agrees that all of HARC’s

right, title, and interest in, to, and under this Agreement, including, without

limitation, all of HARC’s right title, and interest in and to the Receivables

purchased pursuant to this Agreement, shall be assigned by HARC to the Issuer

and by the Issuer to the Indenture Trustee for the

 

11

 

benefit of the Secured Parties, and Seller consents to

such assignment.  Additionally, Seller

agrees for the benefit of the Indenture Trustee that any amounts payable by

Seller to HARC hereunder which are to be paid by HARC to the Indenture Trustee

for the benefit of the Secured Parties shall be paid by Seller, on behalf of

HARC, directly to the Indenture Trustee. 

Any payment required to be made on or before a specified date in

same-day funds may be made on the prior business day in next-day funds.

 

SECTION 6.8  Further

Assurances.  HARC and Seller agree

to do and perform, from time to time, any and all acts to authenticate any and

further records, to execute any and further instruments, in each case required

or reasonably requested by the other party more fully to effect the purposes of

this Agreement and the Conveyance Papers, including, without limitation, the

execution of any financing statements or continuation statements or equivalent

documents relating to the Receivables for filing under the provisions of the

UCC or other law of any applicable jurisdiction.

 

SECTION 6.9  No Waiver; Cumulative Remedies.  No failure to exercise and no delay in

exercising, on the part of HARC or Seller, any right, remedy, power or

privilege hereunder, shall operate as a waiver thereof; nor shall any single or

partial exercise of any right, remedy, power or privilege hereunder preclude

any other or further exercise thereof or the exercise of any other right,

remedy, power or privilege.  The rights,

remedies, powers and privileges herein provided are cumulative and not

exhaustive of any rights, remedies, powers and privileges provided by law.

 

SECTION 6.10  Counterparts.  This Agreement and all Conveyance Papers may

be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all of which together

shall constitute one and the same instrument.

 

SECTION 6.11  Binding

Effect; Third-Party Beneficiaries. 

This Agreement and the Conveyance Papers will inure to the benefit of

and be binding upon the parties hereto and their respective successors and

permitted assigns.  Each of the Indenture

Trustee and the Owner Trustee shall be considered a third-party beneficiary of

this Agreement.

 

SECTION 6.12  Merger

and Integration.  Except as

specifically stated otherwise herein, this Agreement and the Conveyance Papers

set forth the entire understanding of the parties relating to the subject

matter hereof, and all prior understandings, written or oral, are superseded by

this Agreement and the Conveyance Papers. 

This Agreement and the Conveyance Papers may not be modified, amended,

waived or supplemented except as provided herein.

 

SECTION 6.13  Heading.  The headings are for purposes of reference

only and shall not otherwise affect the meaning or interpretation of any

provision hereof.

 

SECTION 6.14  Schedules

and Exhibits.  The schedules and

exhibits attached hereto and referred to herein shall constitute a part of this

Agreement and are incorporated into this Agreement for all purposes.

 

SECTION 6.15  Survival

of Representations and Warranties. 

All representations, warranties and agreements contained in this

Agreement or contained in any Conveyance Paper, shall remain operative and in

full force and effect and shall 

 

12

 

survive conveyance of the Receivables by HARC to the

Issuer pursuant to the Master Sale and Servicing Agreement.

 

SECTION 6.16  Nonpetition

Covenant.  Until the date which is

one year and one day after payment in full of all the Notes, neither HARC nor

Seller shall petition or otherwise invoke the process of any court or

government authority for the purpose of commencing or sustaining a case against

HARC, Seller or the Issuer under any federal or state bankruptcy, insolvency or

similar law or appointing a receiver, liquidator, assignee, trustee, custodian,

sequestrator or other similar official of HARC, Seller or the Issuer or any

substantial part of their respective properties, or ordering the winding up or

liquidation of the affairs of HARC, Seller or the Issuer.  This provision shall survive the termination

of this Agreement.

 

[Signature Page Follows]

 

13

 

IN WITNESS WHEREOF, the

parties have caused this Master Receivables Purchase Agreement to be duly

executed by their respective officers as of the day and year first above

written.

 

	

   

  	

  HOUSEHOLD AUTOMOTIVE

  FINANCE 

  CORPORATION,

  
	

   

  	

   

  	

  as Seller

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ T. R. Condon

  	

   

  
	

   

  	

   

  	

  Name:

  	

  T. R. Condon

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Executive Vice

  President and Chief

  Financial Officer

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  HOUSEHOLD AUTO

  RECEIVABLES 

  CORPORATION,

  	

   

  
	

   

  	

   

  	

  as Purchaser

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Steven H. Smith

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Steven H. Smith

  	

   

  
	

   

  	

   

  	

  Title:

  	

  Vice President and

  Assistant Treasurer

  

 

14

 

EXHIBIT A

 

FORM OF RECEIVABLES PURCHASE

AGREEMENT SUPPLEMENT

 

Transfer No.

    of Receivables, dated as of

                                     ,

pursuant to a Master Receivables Purchase Agreement (the “Purchase Agreement”)

dated as of December 18, 2001, between Household Automotive Finance

Corporation, a Delaware corporation (the “Seller”) and Household Auto

Receivables Corporation, a Nevada corporation (“HARC”).

 

WITNESSETH:

 

WHEREAS pursuant to the

Purchase Agreement, Seller wishes to convey Receivables and Other Conveyed

Property to HARC; and

 

WHEREAS, HARC is willing

to accept such conveyance subject to the terms and conditions hereof.

 

NOW, THEREFORE, Seller

and HARC hereby agree as follows:

 

1.                                       Defined

Terms.  Capitalized terms used

herein shall have the meanings ascribed to them in the Purchase Agreement

unless otherwise defined herein.

 

“Cutoff Date”

shall mean with respect to the Receivables conveyed hereby, the close of

business on

                                           ,

20    .

 

“Purchase Date”

shall mean with respect to the Receivables conveyed hereby,

                                           ,

20    .

 

“Purchase Price”

shall mean 100% of the Principal Balance of the Receivables on the books and

records of Seller, plus the present value of anticipated excess spread on such

Receivables, discounted to take into account any uncertainty as to future

performance matching historical performance, servicing fees, delinquencies,

paydown rates, yield and such other factors as may be mutually agreed upon by

Seller and HARC.

 

“Transfer Date”

means, with respect to Receivables, any date on which Receivables are to be

transferred to the Trust pursuant to the Master Sale and Servicing Agreement

and this Agreement.

 

2.                                       Schedule

of Receivables.  Annexed as Schedule

A hereto is a computer file which reflects the Receivables that constitute the

Receivables to be conveyed pursuant to this Agreement on the Purchase Date.

 

3.                                       Conveyance

of Receivables.  In consideration of

HARC’s delivery to or upon the order of Seller of the Purchase Price, Seller

does hereby sell, transfer,

 

A-1

 

assign, set over and otherwise convey to HARC, without

recourse (except as expressly provided in the Purchase Agreement), all right,

title and interest of the Seller in and to:

 

(i)                                     each

and every Receivable listed on Schedule A hereto and all monies paid or payable

thereon or in respect thereof on or after the Cutoff Date (including amounts

due on or before the Cutoff Date but received by the Seller on or after such

date);

 

(ii)                                  the

security interests in the related Financed Vehicles granted by Obligors

pursuant to such Receivables and any other interest of the Seller in such

Financed Vehicles;

 

(iii)                               all

rights of Seller against Dealers pursuant to Dealer Agreements or Dealer

Assignments related to such Receivables;

 

(iv)                              any

proceeds and the right to receive proceeds with respect to such Receivables

repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a

breach of representation or warranty in the related Dealer Agreement;

 

(v)                                 all

rights of Seller under any Service Contracts on the related Financed Vehicles;

 

(vi)                              any

proceeds and the right to receive proceeds with respect to the related

Receivables from claims on any physical damage, loss, credit life or disability

insurance policies, if any, covering Financed Vehicles or Obligors, including

rebates of insurance premiums relating to the Receivables and any proceeds from

the liquidation of such Receivables;

 

(vii)                           all

items contained in the Receivables Files with respect to such Receivables and

any and all other documents that the Seller or the Master Servicer keeps on

file in accordance with its customary procedures relating to the related

Receivables, or the related Financed Vehicles or Obligor;

 

(viii)                        property

(including the right to receive future Net Liquidation Proceeds) that secures

each related Receivable and that has been acquired by or on behalf of HARC

pursuant to liquidation of such Receivable;

 

(ix)                                all

present and future claims, demands, causes and chooses in action in respect of

any or all of the foregoing and all payments on or under and all proceeds of

every kind and nature whatsoever in respect of any or all of the foregoing,

including all proceeds of the conversion, voluntary or involuntary, into cash

or other liquid property, all cash proceeds, accounts, accounts receivable,

notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance

proceeds, condemnation awards, rights to payment of any and every kind and

other forms of obligations and receivables, instruments and other property

which at any

 

A-2

 

time constitute all or

part of or are included in the proceeds of any of the foregoing.

 

4.                                       Representations

and Warranties of the Seller.  As of

the Purchase Date, the Seller hereby makes the representations and warranties

to HARC that are set forth in Section 3.1 of the Purchase Agreement with

respect to the Conveyance effected hereby to the same extent as if set forth in

full herein.

 

5.                                       Representations

and Warranties of HARC.  As of the

Purchase Date, HARC hereby makes the representations and warranties to the

Seller that are set forth in Section 3.2 of the Purchase Agreement with respect

to the Conveyance effected hereby to the same extent as if set forth in full

herein.

 

In the event of any breach

of a representation and warranty made by HARC hereunder, the Seller covenants

and agrees that it will not take any action to pursue any remedy that it may

have hereunder, in law, in equity or otherwise, until a year and a day have

passed since the date on which all Notes and Certificates issued by the Trust

have been paid in full.  Seller and HARC

agree that damages will not be an adequate remedy for such breach and that this

covenant may be specifically enforced by HARC, the Issuer or by the Indenture

Trustee on behalf of the Noteholders and the Owner Trustee on behalf of the

Certificateholders.

 

6.                                       Conditions

Precedent.  The obligation of HARC

to acquire the Receivables hereunder is subject to the satisfaction, on or

prior to the Purchase Date, of the following conditions precedent:

 

(a)                                  Representations

and Warranties.  Each of the

representations and warranties made by the Seller in Section 4 of this

Agreement and in Section 3.1 of the Master Receivables Purchase Agreement shall

be true and correct as of the date of this Agreement and as of the Purchase

Date.

 

(b)                               Additional

Information.  The Seller shall have

delivered to HARC such information as was reasonably requested by HARC to

satisfy itself as to (i) the accuracy of the representations and warranties set

forth in Section 4 of this Agreement and in Section 3.1 of the Master

Receivables Purchase Agreement and (ii) the satisfaction of the conditions set

forth in this Section.

 

7.                                       Ratification

of Agreement.  As supplemented by

this Agreement, the Purchase Agreement is in all respects ratified and

confirmed and the Purchase Agreement as so supplemented by this Agreement shall

be read, taken and construed as one and the same instrument.

 

8.                                       Counterparts.  This Agreement may be executed in two or

more counterparts (and by different parties in separate counterparts), each of

which shall be an original but all of which together shall constitute one and

the same instrument.

 

A-3

 

9.                                       Conveyance

of the Receivables and the Other Conveyed Property to the Issuer.  The Seller acknowledges that HARC intends,

pursuant to the Master Sale and Servicing Agreement, to convey the Receivables

and the Other Conveyed Property, together with its rights under this Agreement,

to the Issuer on the Transfer Date.  The

Seller acknowledges and consents to such conveyance and pledge and waives any

further notice thereof and covenants and agrees that the representations and

warranties of Seller contained in this Agreement and the rights of HARC

hereunder are intended to benefit the Issuer, the Indenture Trustee, the Owner

Trustee, the Secured Parties and the Certificateholders.  In furtherance of the foregoing, the Seller

covenants and agrees to perform its duties and obligations hereunder, in

accordance with the terms hereof for the benefit of the Secured Parties, the

Issuer, the Indenture Trustee and the Owner Trustee and that, notwithstanding

anything to the contrary in this Agreement, the Seller shall be directly liable

to the Issuer, the Owner Trustee, the Indenture Trustee and the Secured Parties

(notwithstanding any failure by the Master Servicer or HARC to perform their

respective duties and obligations hereunder or under any Basic Document) and

that the Indenture Trustee may enforce the duties and obligations of the Seller

under this Agreement against the Seller for the benefit of the Secured Parties

and the Owner Trustee.

 

10.                                 GOVERNING

LAW.  THIS AGREEMENT SHALL BE

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT

REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND

REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH

LAWS.

 

A-4

 

IN WITNESS WHEREOF, the

Seller and HARC have caused this Purchase Agreement to be duly executed and

delivered by their respective duly authorized officers as of day and the year

first above written.

 

	

   

  	

  HOUSEHOLD AUTOMOTIVE

  FINANCE 

  CORPORATION,

  
	

   

  	

   

  	

  as Seller

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  HOUSEHOLD AUTO

  RECEIVABLES

  CORPORATION,

  
	

   

  	

   

  	

  as Purchaser

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  

 

A-5

 

SCHEDULE A

 

SCHEDULE OF RECEIVABLES

 

(COMPUTER FILE HELD AT THE OFFICES

OF DEWEY BALLANTINE LLP)

 

SCH A-1Exhibit

10.2

EXECUTION COPY

 

MASTER RECEIVABLES

PURCHASE AGREEMENT

 

 

between

 

 

HOUSEHOLD

AUTOMOTIVE CREDIT CORPORATION,

as Seller

 

 

and

 

 

HOUSEHOLD AUTO

RECEIVABLES CORPORATION,

as Purchaser

 

 

dated as of

 

June 24, 2002

 

 

 

TABLE OF CONTENTS

 

 

	

  ARTICLE I DEFINITIONS

  
	

   

  	

   

  
	

  SECTION 1.1

  	

  General

  
	

  SECTION 1.2

  	

  Specific

  Terms

  
	

  SECTION 1.3

  	

  Other

  Definitional Provisions.

  
	

  SECTION 1.4

  	

  Certain

  References

  
	

  SECTION 1.5

  	

  No Recourse

  
	

   

  	

   

  
	

  ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER

  CONVEYED PROPERTY

  
	

   

  	

   

  
	

  SECTION 2.1

  	

  Purchase.

  
	

   

  	

   

  
	

  ARTICLE III REPRESENTATIONS AND WARRANTIES

  
	

   

  	

   

  
	

  SECTION 3.1

  	

  Representations

  and Warranties of Seller

  
	

  SECTION 3.2

  	

  Representations

  and Warranties of HARC

  
	

   

  	

   

  
	

  ARTICLE IV COVENANTS OF SELLER

  
	

   

  	

   

  
	

  SECTION 4.1

  	

  Seller’s

  Covenants

  
	

   

  	

   

  
	

  ARTICLE V REPURCHASES

  
	

   

  	

   

  
	

  SECTION 5.1

  	

  Repurchase of

  Receivables Upon Breach of Warranty

  
	

  SECTION 5.2

  	

  Reassignment

  of Repurchased Receivables

  
	

  SECTION 5.3

  	

  Waivers

  
	

   

  	

   

  
	

  ARTICLE VI MISCELLANEOUS

  
	

   

  	

   

  
	

  SECTION 6.1

  	

  Liability of

  Seller

  
	

  SECTION 6.2

  	

  Amendment

  
	

  SECTION 6.3

  	

  GOVERNING LAW

  
	

  SECTION 6.4

  	

  Notices

  
	

  SECTION 6.5

  	

  Severability

  of Provisions

  
	

  SECTION 6.6

  	

  Assignment

  
	

  SECTION 6.7

  	

  Acknowledgment

  and Agreement of Seller

  
	

  SECTION 6.8

  	

  Further

  Assurances

  
	

  SECTION 6.9

  	

  No Waiver;

  Cumulative Remedies

  
	

  SECTION 6.10

  	

  Counterparts

  
	

  SECTION 6.11

  	

  Binding

  Effect; Third-Party Beneficiaries

  
	

  SECTION 6.12

  	

  Merger and

  Integration

  
	

  SECTION 6.13

  	

  Heading

  
	

  SECTION 6.14

  	

  Schedules

  and Exhibits

  
	

  SECTION 6.15

  	

  Survival of

  Representations and Warranties

  
	

  SECTION 6.16

  	

  Nonpetition

  Covenant

  

 

i

 

	

  EXHIBITS

  
	

   

  	

   

  
	

  EXHIBIT A

  	

  Form of Receivables Purchase Agreement

  Supplement

  
	

  SCHEDULE A

  	

  Schedule of Receivables

  

 

ii

 

THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as

of June 24, 2002, executed between Household Auto Receivables Corporation, a

Nevada corporation, as purchaser (“HARC”) and Household Automotive

Credit Corporation, a Delaware Corporation, as seller (“Seller”).

 

WITNESSETH:

 

WHEREAS, HARC has agreed to purchase from time to time

from Seller, and Seller, pursuant to this Agreement, has agreed to transfer

from time to time to HARC the Receivables and the Other Conveyed Property.

 

NOW, THEREFORE, in consideration of the premises and

the mutual agreements hereinafter contained, and for other good and valuable

consideration, the receipt of which is acknowledged, HARC and Seller, intending

to be legally bound, hereby agree as follows:

 

ARTICLE

I

 

DEFINITIONS

 

SECTION 1.1  

      General.    Capitalized terms used herein without

definition shall have the respective meanings assigned to such terms in the

Master Sale and Servicing Agreement.

 

SECTION 1.2  

      Specific Terms.  Whenever used in this Agreement, the following

words and phrases, unless the context otherwise requires, shall have the

following meanings:

 

“Agreement” means this Master Receivables

Purchase Agreement and all amendments hereof and supplements hereto.

 

“Conveyance” shall have the meaning specified

in Section 2.1.

 

“Conveyance Papers” shall have the meaning

specified in Section 3.1.

 

“Cutoff Date” shall have the meaning assigned

to such term in the Master Sale and Servicing Agreement or applicable

Receivables Purchase Agreement Supplement.

 

“Master Sale and Servicing Agreement” means the

Master Sale and Servicing Agreement dated as of December 18, 2001, by and among

Household Automotive Warehouse Trust, as Issuer, HARC, as Seller, Household

Finance Corporation, as Master Servicer, and Wells Fargo Bank Minnesota,

National Association, as Indenture Trustee, as the same may be amended,

restated, supplemented or otherwise modified from time to time.

 

1

 

“Other Conveyed Property” means all money,

instruments, rights and other property that are subject or intended to be

subject to the lien and security interest of the Indenture (including all

property and interests granted to the Indenture Trustee), including all

proceeds thereof, other than the Receivables.

 

“Purchase Date” means, with respect to

Receivables, any date, on which Receivables are to be purchased by HARC

pursuant to this Agreement and a Receivables Purchase Agreement Supplement is

executed and delivered by Seller and HARC.

 

“Receivables” means the Receivables listed on

the Schedules of Receivables attached to this Agreement or to each Receivables

Purchase Agreement Supplement as Schedule A.

 

“Receivables Purchase Agreement Supplement”

means an agreement between HARC and Seller, substantially in the form of

Exhibit A hereto.

 

“Repurchase Event” means a determination

pursuant to Section 3.2 or Section 4.7 of the Master Sale and Servicing

Agreement that HARC is required to repurchase a Receivable.

 

“Schedule of Receivables” means the schedule of

Receivables sold and transferred pursuant to this Agreement and each related

Receivables Purchase Agreement Supplement from time to time, which schedule

collectively includes the schedules attached as Schedule A to this Agreement

and Schedule A to each related Receivables Purchase Agreement Supplement.

 

SECTION 1.3  

      Other Definitional

Provisions.

 

(a)  All terms

defined in this Agreement shall have the defined meanings when used in any

certificate, other documents, or Conveyance Paper made or delivered pursuant

hereto unless otherwise defined herein.

 

(b)  The words

“hereof”, “herein” and “hereunder” and words of similar import when used in

this Agreement or any Conveyance Paper shall refer to this Agreement as a whole

and not to any particular provision of this Agreement; and Section, Subsection,

Schedule and Exhibit references contained in this Agreement are references to

Sections, Subsections, Schedules and Exhibits in or to this Agreement unless

otherwise specified.

 

(c)  All

determinations of the principal or finance charge balance of Receivables, and

of any collections thereof, shall be made in accordance with the Master Sale

and Servicing Agreement and the Series Supplement.

 

SECTION 1.4         Certain

References.  All references to the

Principal Balance of a Receivable as of any date of determination shall refer

to the close of business on such day, or as of the first day of a Collection

Period shall refer to the opening of business on such day.  All references to the last day of a

Collection Period shall refer to the close of business on such day.

 

2

 

SECTION 1.5  

      No Recourse.  Without limiting the obligations of Seller

hereunder, no recourse may be taken, directly or indirectly, under this

Agreement or any certificate or other writing delivered in connection herewith

or therewith, against any stockholder, officer or director, as such, of Seller,

or of any predecessor or successor of Seller.

 

ARTICLE

II

 

CONVEYANCE OF THE

RECEIVABLES

AND THE OTHER CONVEYED PROPERTY

 

SECTION 2.1  

      Purchase.

 

(a)  By

execution of this Agreement and subject to the terms and conditions of this

Agreement, on each Purchase Date Seller shall sell, transfer, assign, and

otherwise convey to HARC (collectively, the “Conveyance”) without

recourse (but without limitation of its obligations in this Agreement), and

HARC shall purchase, all right, title and interest of Seller in and to:

 

(i)            each

and every Receivable listed from time to time on Schedule A hereto or to each

related Receivables Purchase Agreement Supplement and all monies paid or

payable thereon or in respect thereof on or after the related Cutoff Date

(including amounts due on or before the related Cutoff Date but received by

Seller on or after such date);

 

(ii)           the

security interests in the related Financed Vehicles granted by Obligors

pursuant to such Receivables and any other interest of Seller in such Financed

Vehicles;

 

(iii)          all

rights of Seller against Dealers pursuant to Dealer Agreements or Dealer

Assignments related to such Receivables;

 

(iv)          any

proceeds and the right to receive proceeds with respect to such Receivables

repurchased by a Dealer, pursuant to a Dealer Agreement;

 

(v)           all

rights of Seller under any Service Contracts on the related Financed Vehicles;

 

(vi)          any

proceeds and the right to receive proceeds with respect to the related

Receivables from claims on any physical damage, loss, credit life or disability

insurance policies, if any, covering Financed Vehicles or Obligors, including

rebates of insurance premiums relating to the Receivables and any proceeds from

the liquidation of such Receivables;

 

3

 

(vii)         all

items contained in the Receivables Files with respect to such Receivables and

any and all other documents that Seller or Master Servicer keeps on file in

accordance with its customary procedures relating to the related Receivables,

or the related Financed Vehicles or Obligor;

 

(viii)        all

property (including the right to receive future Net Liquidation Proceeds) that

secures each related Receivable and that has been acquired by or on behalf of

HARC pursuant to the liquidation of such Receivable; and

 

(ix)           all

present and future claims, demands, causes and choses in action in respect of

any or all of the foregoing and all payments on or under and all proceeds of

every kind and nature whatsoever in respect of any or all of the foregoing,

including all proceeds of the conversion, voluntary or involuntary, into cash

or other liquid property, all cash proceeds, accounts, accounts receivable,

notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance

proceeds, condemnation awards, rights to payment of any and every kind and

other forms of obligations and receivables, instruments and other property

which at any time constitute all or part of or are included in the proceeds of

any of the foregoing.

 

(b) 

Simultaneously with the conveyance of the Receivables and the Other

Conveyed Property to HARC by Seller, HARC has paid or caused to be paid to or

upon the order of Seller an amount equal to 100% of the Principal Balance of

the Receivables on the books and records of Seller, plus the present value of

anticipated excess spread on such Receivables, discounted to take into account

any uncertainty as to future performance matching historical performance,

servicing fees, delinquencies, pay down rates, yield and such other factors as

may be mutually agreed upon between Seller and HARC, by wire transfer of

immediately available funds.

 

(c)  In

connection with such Conveyance, Seller further agrees that it will, at its own

expense, on or prior to the Purchase Date (i) indicate in its computer files or

microfiche lists that the Receivables have been conveyed to HARC in accordance

with this Agreement and have been conveyed by HARC to the Indenture Trustee

pursuant to the Master Sale and Servicing Agreement for the benefit of the

Secured Parties by including in such computer files and microfiche lists the

code identifying each such Receivable and (ii) deliver to HARC (or to the

Indenture Trustee if HARC so directs) a computer file or microfiche list

containing a true and complete list of all such Receivables specifying for each

such Receivable, as of the Cutoff Date (A) its account number and (B) the

outstanding balance of such Receivable. 

Such computer files or microfiche lists shall be delivered to HARC (or

to the Indenture Trustee if so directed by HARC) and marked as proprietary and

confidential.  Seller further agrees not

to alter the code referenced in clause (i) of this paragraph with respect to

any Receivable during the term of this Agreement.

 

4

 

(d)  The

parties hereto intend that the conveyance of Seller’s right, title and interest

in and to the Receivables and Other Conveyed Property shall constitute a sale,

conveying good title free and clear of any liens, claims, encumbrances or

rights of others from Seller to HARC and that the Receivables and Other

Conveyed Property shall not be part of Seller’s estate in the event of the

insolvency of Seller or a conservatorship, receivership or similar event with

respect to Seller.  It is the intention

of the parties hereto that the arrangements with respect to the Receivables and

Other Conveyed Property shall constitute a purchase and sale of such

Receivables and not a loan.  In the

event, however, that a court of competent jurisdiction were to hold that the

transactions evidenced hereby constitute a loan and not a purchase and sale, it

is the intention of the parties hereto that this Agreement shall constitute a

security agreement under applicable law, and that Seller shall be deemed to

have granted to HARC a first priority perfected security interest in all of

such Seller’s right, title and interest in and to the Receivables and Other

Conveyed Property.

 

ARTICLE

III

 

REPRESENTATIONS

AND WARRANTIES

 

SECTION 3.1  

      Representations and

Warranties of Seller.  Seller makes

the following representations and warranties as of the date hereof on which

HARC relies in purchasing the Receivables and the Other Conveyed Property and

in transferring the Receivables and the Other Conveyed Property to the Issuer

under the Master Sale and Servicing Agreement. 

Such representations are made as of the execution and delivery of this

Agreement and as to Receivables and Other Conveyed Property conveyed

thereunder, as of the execution and delivery of each Receivables Purchase

Agreement Supplement, but shall survive the sale, transfer and assignment of

the Receivables and the Other Conveyed Property hereunder, and the sale,

transfer and assignment thereof by HARC to the Issuer under the Master Sale and

Servicing Agreement.  Seller and HARC

agree that HARC will assign to Issuer all HARC’s rights under this Agreement

and each Receivables Purchase Agreement Supplement and that the Indenture

Trustee will thereafter be entitled to enforce this Agreement and each

Receivables Purchase Agreement Supplement against Seller in the Indenture

Trustee’s own name on behalf of the Securityholders.

 

(a)  Eligibility

Criteria.  Each of the Receivables

which is to be pledged as collateral for the Notes will satisfy the Eligibility

Criteria set forth in Schedule I to the Series Supplement.

 

(b)  Organization

and Good Standing.  Seller is a

corporation duly organized and validly existing in good standing under the laws

of the state of Delaware and has, in all material respects, full power and

authority to own its properties and conduct its business as such properties are

presently owned and such business is presently conducted, and to execute,

deliver and perform its obligations under this Agreement.

 

(c)  Due

Obligation.  Seller is duly

qualified to do business and is in good standing as a foreign corporation (or

is exempt from such requirements) and has obtained

 

5

 

all necessary licenses and approvals, in each jurisdiction in which

failure to so qualify or to obtain such licenses and approvals would (i) render

any Receivable unenforceable by Seller, HARC or the Trust and (ii) have a

material adverse effect on the Secured Parties.

 

(d)  Due

Authorization.  The execution,

delivery and performance of this Agreement and any other document or instrument

delivered pursuant hereto (such other documents and instruments, including, but

not limited to, the Receivables Purchase Agreement Supplement collectively, the

“Conveyance Papers”) and the consummation of the transactions provided

for in this Agreement or any other Conveyance Papers have been duly authorized

by all necessary corporate action on the part of Seller and constitute or will

constitute the legal, valid and binding obligation of Seller, enforceable in

accordance with their terms.

 

(e)  No

Conflict.  The execution and

delivery of this Agreement and the Conveyance Papers, the performance of the

transactions contemplated by this Agreement and the Conveyance Papers, and the

fulfillment of the terms of this Agreement and the Conveyance Papers applicable

to Seller will not conflict with, violate or result in any breach of any of the

material terms and provisions of, or constitute (with or without notice or

lapse of time or both) a material default under, any indenture, contract,

agreement, mortgage, deed of trust, or other instrument to which Seller is a

party or by which it or any of its properties are bound.

 

(f)  No

Violation.  The execution, delivery

and performance of this Agreement and the Conveyance Papers and the fulfillment

of the terms contemplated herein and therein applicable to Seller will not

conflict with or violate any requirements of law applicable to Seller.

 

(g)  No

Proceedings.  There are no

proceedings or investigations pending or, to the best knowledge of Seller,

threatened against Seller, before any court, regulatory body, administrative

agency or other tribunal or governmental 

instrumentality (i) asserting the invalidity of this Agreement or the

Conveyance Papers, (ii) seeking to prevent the consummation of any of the

transactions contemplated by this Agreement or the Conveyance Papers, (iii)

seeking any determination or ruling that, in the reasonable judgment of Seller,

would materially and adversely affect the performance by Seller of its

obligations under this Agreement or the Conveyance Papers, (iv) seeking any

determination or ruling that would materially and adversely affect the validity

or enforceability of this Agreement or the Conveyance Papers or (v) seeking to

affect adversely the income tax attributes of the Trust under United States

Federal, Nevada or California income tax systems.

 

(h)  All Consents.  All authorizations, consents, orders,

approvals, registrations or declarations with, or of, any Governmental

Authority required to be obtained, effected or given by Seller in connection

with the execution and delivery by Seller of this Agreement or the Conveyance

Papers and the performance of the transactions contemplated by this Agreement

or the Conveyance Papers by Seller have been duly obtained, effected or given

and are in full force and effect

 

6

 

SECTION 3.2  

      Representations and

Warranties of HARC.  HARC makes the

following representations and warranties, on which Seller relies in selling,

assigning, transferring and conveying the Receivables and the Other Conveyed

Property to HARC hereunder.  Such

representations are made as of the execution and delivery of this Agreement and

as to Receivables and Other Conveyed Property conveyed thereunder, as of the

execution and delivery of each Receivables Purchase Agreement Supplement, but

shall survive the sale, transfer and assignment of the Receivables and the

Other Conveyed Property hereunder and the sale, transfer and assignment thereof

by HARC to the Issuer under the Master Sale and Servicing Agreement.

 

(a)  Organization

and Good Standing.  HARC is a

corporation duly organized and validly existing under the laws of the State of

Nevada and has, in all material respects, full power and authority to own its

properties and conduct its business as such properties are presently owned and

such business is presently conducted and to execute, deliver and perform its

obligations under this Agreement and the Conveyance Papers.

 

(b)  Due

Authorization.  The execution and

delivery of this Agreement and the Conveyance Papers and the consummation of

the transactions provided for in this Agreement and the Conveyance Papers have

been duly authorized by HARC by all necessary corporate action on the part of

HARC.

 

(c)  No

Conflict.  The execution and

delivery of this Agreement and the Conveyance Papers, the performance of the

transactions contemplated by this Agreement and the Conveyance Papers, and the

fulfillment of the terms hereof and thereof, will not conflict with, result in

any breach of any of the material terms and provisions of, or constitute (with

or without notice or lapse of time or both) a material default under, any

indenture, contract, agreement, mortgage, deed of trust or other instrument to

which HARC is a party or by which it or its properties is bound.

 

(d)  No

Violation.  The execution, delivery

and performance of this Agreement and the Conveyance Papers by HARC and the

fulfillment of the terms contemplated herein and therein applicable to HARC

will not conflict with or violate any requirements of law applicable to HARC.

 

(e)  No

Proceeding.  There are no

proceedings or investigations pending or, to the best knowledge of HARC,

threatened against HARC, before any court, regulatory body, administrative

agency, or other tribunal or governmental instrumentality (i) asserting the

invalidity of this Agreement or the Conveyance Papers, (ii) seeking to prevent

the consummation of any of the transactions contemplated by this Agreement or

the Conveyance Papers, (iii) seeking any determination or ruling that, in the

reasonable judgment of HARC, would materially and adversely affect the

performance by HARC of its obligations under this Agreement or the Conveyance

Papers or (iv) seeking any determination or ruling that would materially and

adversely affect the validity or enforceability of this Agreement or the Conveyance

Papers.

 

7

 

(f)  All

Consents.  All authorizations,

consents, orders or approvals of or registrations or declarations with any

Governmental Authority required to be obtained, effected or given by HARC in

connection with the execution and delivery by HARC of this Agreement and the

Conveyance Papers and the performance of the transactions contemplated by this

Agreement and the Conveyance Papers or the fulfillment of the terms of this

Agreement and the Conveyance Papers by HARC have been duly obtained.

 

In the event of any breach of a representation and

warranty made by HARC hereunder, Seller covenants and agrees that it will not

take any action to pursue any remedy that it may have hereunder, in law, in equity

or otherwise, until a year and a day have passed since the date on which all

Notes and Certificates issued by the Trust, have been paid in full.  Seller and HARC agree that damages will not

be an adequate remedy for such breach and that this covenant may be

specifically enforced by HARC, Issuer or by the Indenture Trustee on behalf of

the Noteholders and the Owner Trustee on behalf of the Certificateholders.  Seller agrees that with respect to its

obligations in connection with a Repurchase Event it will exercise no rights of

offset with respect to any claims it may have against HARC.

 

ARTICLE

IV

 

COVENANTS OF SELLER

 

SECTION 4.1  

      Seller’s Covenants.  Seller hereby covenants and agrees with HARC

as follows:

 

(a)  Receivables Not To Be Evidenced by Promissory

Notes.  Seller will take no action

to cause any Receivable to be evidenced by any instrument (as defined in the

UCC).

 

(b)  Security Interests.  Except for the conveyances hereunder or as

otherwise provide herein, Seller will not sell, pledge, assign or transfer to

any other Person, or take any other action inconsistent with HARC’s ownership

of the Receivables or grant, create, incur, assume or suffer to exist any Lien

on any Receivable, whether now existing or hereafter created, or any interest therein,

and Seller shall not claim any ownership interest in the Receivables and shall

defend the right, title and interest of HARC in and to the Receivables, whether

now existing or hereafter created, against all claims of third parties claiming

through or under Seller.

 

(c)  Security’s Interest.  Except for the conveyances hereunder and in

connection with any transaction permitted pursuant to Section 6.6, Seller

hereby agrees not to transfer, assign, exchange or otherwise convey or pledge,

hypothecate or otherwise grant a security interest in the Receivables and any

such attempted transfer, assignment, exchange, conveyance, pledge,

hypothecation or grant shall be void.

 

(d)  Delivery of Collections or Recoveries.  In the event that Seller receives collections

or recoveries with respect to the Receivables, Seller agrees to pay to HARC

 

8

 

(or to the Master Servicer if HARC so directs) all such collections and

recoveries to the extent such amounts are payable to HARC as soon as

practicable after receipt thereof.

 

(e)  Notice of Liens.  Seller shall notify HARC promptly after

becoming aware of any Lien on any Receivable other than the conveyances

hereunder.

 

(f)  Documentation of Transfer.  Seller shall undertake to file the documents

which would be necessary to perfect and maintain the transfer of the security

interest in and to the Receivables and Other Conveyed Assets.

 

(g)  Approval of Office Records.  Seller shall cause this Agreement to be duly

approved by Seller’s Board of Directors, and Seller shall maintain the

Agreement as a part of the official records of Seller for the term of the

Agreement.

 

(h)  Maintenance of Security Interests in

Vehicles.  In the event that the

assignment of a Receivable to HARC or any assignee thereof is insufficient,

without a notation on the related Financed Vehicle’s certificate of title, or

without fulfilling any additional administrative requirements under the laws of

the state in which the Financed Vehicle is located, to perfect a security

interest in the related Financed Vehicle in favor of HARC or any assignee

thereof, Seller hereby agrees that the designation of Seller or any Affiliate

of Seller as the secured party on the certificate of title is in its capacity

as agent of HARC or the agent of any assignee of HARC for such limited purpose.

 

ARTICLE

V

 

REPURCHASES

 

SECTION 5.1  

      Repurchase of Receivables

Upon Breach of Warranty.  Upon the

occurrence of a Repurchase Event, Seller shall, unless the breach which is the

subject of such Repurchase Event shall have been cured in all material

respects, repurchase the Receivable relating thereto from the Issuer by the

last day of the first full calendar month following the discovery of such

breach by Seller or receipt by Seller of notice of such breach from any of the

Master Servicer, HARC, a Trust Officer of the Indenture Trustee or the Owner

Trustee and, simultaneously with the repurchase of the Receivable, Seller shall

deposit the Repurchase Amount in full, without deduction or offset, in the

Collection Account, pursuant to Section 3.2 of the Master Sale and Servicing

Agreement.  It is understood and agreed

that, except as set forth in Section 6.1 hereof, the obligation of Seller to

repurchase any Receivable, as to which a breach occurred and is continuing,

shall, if such obligation is fulfilled, constitute the sole remedy against

Seller for such breach available to HARC, the Issuer, the Secured Parties, the

Certificateholders, the Indenture Trustee, on behalf of the Noteholders or the

Owner Trustee on behalf of the Certificateholders.  The provisions of this Section 5.1 are intended to grant the

Indenture Trustee or the Issuer a direct right against Seller to demand

performance hereunder, and in connection therewith, Seller waives any

requirement of prior demand against HARC with respect to such repurchase

obligation.  Any such repurchase shall

take place in the manner specified in Section 3.2 of the Master Sale and

Servicing Agreement.  Notwithstanding

any other provision of this Agreement

 

9

 

or the Master Sale and Servicing Agreement to the contrary, the

obligation of Seller under this Section shall not terminate upon a termination

of Household Finance Corporation as Master Servicer under the Master Sale and

Servicing Agreement and shall be performed in accordance with the terms hereof

notwithstanding the failure of the Master Servicer or HARC to perform any of

their respective obligations with respect to such Receivable under the Master

Sale and Servicing Agreement.

 

SECTION 5.2  

      Reassignment of

Repurchased Receivables.  Upon

deposit in the Collection Account of the Repurchase Amount of any Receivable

repurchased by Seller under Section 5.1 hereof, HARC and the Issuer shall take

such steps as may be reasonably requested by Seller in order to assign to

Seller all of HARC’s and the Issuer’s right, title and interest in and to such

Receivable and all security and documents and all Other Conveyed Property

conveyed to HARC and the Issuer directly relating thereto, without recourse,

representation or warranty, except as to the absence of liens, charges or

encumbrances created by or arising as a result of actions of HARC or the

Issuer.  Such assignment shall be a sale

and assignment outright, and not for security. 

If, following the reassignment of a Repurchased Receivable, in any

enforcement suit or legal proceeding, it is held that Seller may not enforce

any such Receivable on the ground that it shall not be a real party in interest

or a holder entitled to enforce the Receivable, HARC and the Issuer shall, at

the expense of Seller, take such steps as Seller deems reasonably necessary to

enforce the Receivable, including bringing suit in HARC’s or in the Issuer’s

name.

 

SECTION 5.3  

      Waivers.  No failure or delay on the part of HARC, or

the Issuer as assignee of HARC, in exercising any power, right or remedy under

this Agreement shall operate as a waiver thereof, nor shall any single or

partial exercise of any such power, right or remedy preclude any other or

future exercise thereof or the exercise of any other power, right or remedy.

 

ARTICLE

VI

 

MISCELLANEOUS

 

SECTION 6.1  

      Liability of Seller.  Seller shall be liable in accordance

herewith only to the extent of the obligations in this Agreement specifically

undertaken by Seller and the representations and warranties of Seller.

 

SECTION 6.2  

      Amendment.  This Agreement and any Conveyance Papers and

the rights and obligations of the parties hereunder may not be changed orally,

but only by an instrument in writing signed by HARC and Seller in accordance

with this Section 6.2.  This Agreement

and any Conveyance Papers may be amended from time to time, with the prior

written consent of the Administrative Agent, where one exists, or otherwise,

the Managing Agents, by HARC and Seller.

 

SECTION 6.3  

      GOVERNING LAW.  THIS AGREEMENT AND THE CONVEYANCE PAPERS

SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,

WITHOUT REFERENCE TO ITS 

 

10

 

CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF

THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 6.4  

      Notices.  All demands, notices and communications

hereunder shall be in writing and shall be deemed to have been duly given if

personally delivered at or mailed by registered mail, return receipt requested,

to (a) in the case of Seller, 5855 Copley Drive, San Diego, CA 92111,

Attention:  Chief Operating Officer,

with a copy to 2700 Sanders Road, Prospect Heights, Illinois 60070  Attention: 

Director–Asset Securitization, (b) in the case of HARC, 1111 Town Center

Drive, Las Vegas, Nevada 89134 Attention: 

Compliance Officer, with a copy to 2700 Sanders Road, Prospect Heights,

Illinois 60070,  Attention:  Treasurer; or, as to each party, at such

other address as shall be designated by such party in a written notice to each

other party.

 

SECTION 6.5  

      Severability of Provisions.  If any one or more of the covenants,

agreements, provisions, or terms of this Agreement or Conveyance Paper shall

for any reason whatsoever be held invalid, then such covenants, agreements,

provisions, or terms shall be deemed severable from the remaining covenants,

agreements, provisions, and terms of this Agreement or any Conveyance Paper and

shall in no way affect the validity or enforceability of the other provisions

of this Agreement or of any Conveyance Paper.

 

SECTION 6.6  

      Assignment.  Notwithstanding anything to the contrary

contained herein, other than HARC’s assignment of its rights, title, and

interests in, to, and under this Agreement to the Issuer and by the Issuer to

the Indenture Trustee for the benefit of the Secured Parties, as contemplated

by the Master Sale and Servicing Agreement and Section 6.7 hereof, the

Receivables, the Other Conveyed Property, this Agreement and all other

Conveyance Papers may not be assigned by the parties hereto; provided, however,

that Seller shall have the right to assign its rights, title and interests, in

to and under this Agreement to (i) any successor by merger or consolidation, or

any Person which acquires by conveyance, transfer or sale the properties and

assets of Seller or (ii) any Affiliate owned directly or indirectly by

Household International, Inc.  The right

granted in the foregoing proviso is subject to the further condition that any

such successor or other Person shall expressly assume by written agreement, in

form and substance satisfactory to HARC, the obligations of Seller hereunder

and under the Conveyance Papers.

 

SECTION 6.7  

      Acknowledgment and

Agreement of Seller.  By execution

below, Seller expressly acknowledges and agrees that all of HARC’s right,

title, and interest in, to, and under this Agreement, including, without

limitation, all of HARC’s right title, and interest in and to the Receivables

purchased pursuant to this Agreement, shall be assigned by HARC to the Issuer

and by the Issuer to the Indenture Trustee for the benefit of the Secured

Parties, and Seller consents to such assignment.  Additionally, Seller agrees for the benefit of the Indenture

Trustee that any amounts payable by Seller to HARC hereunder which are to be

paid by HARC to the Indenture Trustee for the benefit of the Secured Parties

shall be paid by Seller, on behalf of HARC, directly to the 

 

11

 

Indenture Trustee.  Any payment

required to be made on or before a specified date in same-day funds may be made

on the prior business day in next-day funds.

 

SECTION 6.8  

      Further Assurances.  HARC and Seller agree to do and perform,

from time to time, any and all acts to authenticate any and further records, to

execute any and further instruments, in each case required or reasonably

requested by the other party more fully to effect the purposes of this

Agreement and the Conveyance Papers, including, without limitation, the

execution of any financing statements or continuation statements or equivalent

documents relating to the Receivables for filing under the provisions of the

UCC or other law of any applicable jurisdiction.

 

SECTION 6.9         No

Waiver; Cumulative Remedies.  No

failure to exercise and no delay in exercising, on the part of HARC or Seller,

any right, remedy, power or privilege hereunder, shall operate as a waiver

thereof; nor shall any single or partial exercise of any right, remedy, power

or privilege hereunder preclude any other or further exercise thereof or the

exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges

herein provided are cumulative and not exhaustive of any rights, remedies,

powers and privileges provided by law.

 

SECTION 6.10  

    Counterparts.  This Agreement and all Conveyance Papers may

be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all of which together

shall constitute one and the same instrument.

 

SECTION 6.11  

    Binding Effect; Third-Party

Beneficiaries.  This Agreement and

the Conveyance Papers will inure to the benefit of and be binding upon the

parties hereto and their respective successors and permitted assigns.  Each of the Indenture Trustee and the Owner

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

 

SECTION 6.12  

    Merger and Integration.  Except as specifically stated otherwise

herein, this Agreement and the Conveyance Papers set forth the entire

understanding of the parties relating to the subject matter hereof,  and all prior understandings, written or

oral, are superseded by this Agreement and the Conveyance Papers.  This Agreement  and the Conveyance Papers may not be modified, amended, waived or

supplemented except as provided herein.

 

SECTION 6.13  

    Heading.  The headings are for purposes of reference

only and shall not otherwise affect the meaning or interpretation of any

provision hereof.

 

SECTION 6.14  

    Schedules and Exhibits.  The schedules and exhibits attached hereto

and referred to herein shall constitute a part of this Agreement and are

incorporated into this Agreement for all purposes.

 

SECTION 6.15  

    Survival of Representations

and Warranties.  All

representations, warranties and agreements contained in this Agreement or

contained in any Conveyance Paper, shall remain operative and in full force and

effect and shall 

 

12

 

survive conveyance of the Receivables by HARC to the Issuer pursuant to

the Master Sale and Servicing Agreement.

 

SECTION 6.16  

    Nonpetition Covenant.  Until the date which is one year and one day

after payment in full of all the Notes, neither HARC nor Seller shall petition

or otherwise invoke the process of any court or government authority for the

purpose of commencing or sustaining a case against HARC, Seller or the Issuer

under any federal or state bankruptcy, insolvency or similar law or appointing

a receiver, liquidator, assignee, trustee, custodian, sequestrator or other

similar official of HARC, Seller or the Issuer or any substantial part of their

respective properties, or ordering the winding up or liquidation of the affairs

of HARC, Seller or the Issuer.  This

provision shall survive the termination of this Agreement.

 

[Signature Page Follows]

 

13

 

IN WITNESS WHEREOF, the parties have caused this

Master Receivables Purchase Agreement to be duly executed by their respective

officers as of the day and year first above written.

 

	

   

  	

  HOUSEHOLD AUTOMOTIVE

  CREDIT 

  CORPORATION

  
	

   

  	

   

  	

  as Seller

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Timothy R. Condon

  	

   

  
	

   

  	

   

  	

  Name:  

  	

  Timothy R. Condon

  
	

   

  	

   

  	

  Title:

  	

  Executive Vice

  President & CFO

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  HOUSEHOLD AUTO

  RECEIVABLES 

  CORPORATION,

  
	

   

  	

   

  	

  as Purchaser

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Steven H. Smith

  	

   

  
	

   

  	

   

  	

  Name:

  	

  Steven H. Smith

  
	

   

  	

   

  	

  Title:

  	

  Vice President and

  Assistant Treasurer

  
									

 

14

 

EXHIBIT A

 

 

FORM

OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT

 

 

Transfer No.     of Receivables, dated

as of

                                          ,

pursuant to a Master Receivables Purchase Agreement (the “Purchase Agreement”)

dated as of June 12, 2002, between Household Automotive Credit Corporation, a

Delaware corporation (the “Seller”) and Household Auto Receivables

Corporation, a Nevada corporation (“HARC”).

 

WITNESSETH:

 

WHEREAS pursuant to the Purchase Agreement, Seller

wishes to convey Receivables and Other Conveyed Property to HARC; and

 

WHEREAS, HARC is willing to accept such conveyance

subject to the terms and conditions hereof.

 

NOW, THEREFORE, Seller and HARC hereby agree as

follows:

 

1.             Defined Terms. 

Capitalized terms used herein shall have the meanings ascribed to them

in the Purchase Agreement unless otherwise defined herein.

 

“Cutoff Date” shall mean with respect to the

Receivables conveyed hereby, the close of business on

                                      ,

200   .

 

“Purchase Date” shall mean with respect to the

Receivables conveyed hereby,

                                      ,

200   .

 

“Purchase Price” shall mean 100% of the

Principal Balance of the Receivables on the books and records of the Seller,

plus the present value of anticipated excess spread on such Receivables,

discounted to take into account any uncertainty as to future performance

matching historical performance, servicing fees, delinquencies, paydown rates,

yield and such other factors as may be mutually agreed upon by Seller and HARC.

 

“Transfer Date” means, with respect to

Receivables, any date on which Receivables are to be transferred to the Trust

pursuant to the Master Sale and Servicing Agreement and this Agreement.

 

2.             Schedule of Receivables.  Annexed as Schedule A hereto is a computer

file which reflects the Receivables that constitute the Receivables to be

conveyed pursuant to this Agreement on the Purchase Date.

 

3.             Conveyance of Receivables.  In consideration of HARC’s delivery to or

upon the order of the Seller of the Purchase Price, Seller does hereby sell,

transfer,

 

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assign, set over and otherwise convey to HARC, without recourse (except

as expressly provided in the Purchase Agreement), all right, title and interest

of the Seller in and to:

 

(i)            each

and every Receivable listed on Schedule A hereto and all monies paid or payable

thereon or in respect thereof on or after the Cutoff Date (including amounts

due on or before the Cutoff Date but received by Seller on or after such date);

 

(ii)           the

security interests in the related Financed Vehicles granted by Obligors

pursuant to such Receivables and any other interest of the Seller in such

Financed Vehicles;

 

(iii)          all

rights of the Seller against Dealers pursuant to Dealer Agreements, or Dealer

Assignments related to such Receivables;

 

(iv)          any

proceeds and the right to receive proceeds with respect to such Receivables

repurchased by a Dealer pursuant to a Dealer Agreement;

 

(v)           all

rights of Seller under any Service Contracts on the related Financed Vehicles;

 

(vi)          any

proceeds and the right to receive proceeds with respect to the related

Receivables from claims on any physical damage, loss, credit life or disability

insurance policies, if any, covering Financed Vehicles or Obligors, including

rebates of insurance premiums relating to the Receivables and any proceeds from

the liquidation of such Receivables;

 

(vii)         all

items contained in the Receivables Files with respect to such Receivables and

any and all other documents that the Seller or the Master Servicer keeps on

file in accordance with its customary procedures relating to the related

Receivables, or the related Financed Vehicles or Obligor;

 

(viii)        property

(including the right to receive future Net Liquidation Proceeds) that secures

each related Receivable and that has been acquired by or on behalf of HARC

pursuant to liquidation of such Receivable;

 

(ix)           all

present and future claims, demands, causes and chooses in action in respect of

any or all of the foregoing and all payments on or under and all proceeds of

every kind and nature whatsoever in respect of any or all of the foregoing,

including all proceeds of the conversion, voluntary or involuntary, into cash

or other liquid property, all cash proceeds, accounts, accounts receivable,

notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance

proceeds, condemnation awards, rights to payment of any and every kind and

other forms of obligations and receivables, instruments and other property

which at any time constitute all or part of or are included in the proceeds of

any of the foregoing.

 

A-2

 

4.             Representations and Warranties of Seller.  As of the Purchase Date, Seller hereby makes

the representations and warranties to HARC that are set forth in Section 3.1 of

the Purchase Agreement with respect to the Conveyance effected hereby to the

same extent as if set forth in full herein.

 

5.             Representations and Warranties of HARC.  As of the Purchase Date, HARC hereby makes

the representations and warranties to Seller that are set forth in Section 3.2

of the Purchase Agreement with respect to the Conveyance effected hereby to the

same extent as if set forth in full herein. 

In the event of any breach of a representation and warranty made by HARC

hereunder, the Seller covenants and agrees that it will not take any action to

pursue any remedy that it may have hereunder, in law, in equity or otherwise,

until a year and a day have passed since the date on which all Notes and

Certificates issued by the Trust have been paid in full.  The Seller and HARC agree that damages will

not be an adequate remedy for such breach and that this covenant may be specifically

enforced by HARC, the Issuer or by the Indenture Trustee on behalf of the

Noteholders and the Owner Trustee on behalf of the Certificateholders.

 

6.             Conditions Precedent.  The obligation of HARC to acquire the Receivables hereunder is

subject to the satisfaction, on or prior to the Purchase Date, of the following

conditions precedent:

 

(a)           Representations and Warranties.  Each of the representations and warranties

made by the Seller in Section 4 of this Agreement and in Section 3.1 of the

Master Receivables Purchase Agreement shall be true and correct as of the date

of this Agreement and as of the Purchase Date.

 

(b)           Additional Information.  Seller shall have delivered to HARC such

information as was reasonably requested by HARC to satisfy itself as to (i) the

accuracy of the representations and warranties set forth in Section 4 of this

Agreement and in Section 3.1 of the Purchase Agreement and (ii) the

satisfaction of the conditions set forth in this Section.

 

7.             Ratification of Agreement.  As supplemented by this Agreement, the

Purchase Agreement is in all respects ratified and confirmed and the Purchase

Agreement as so supplemented by this Agreement shall be read, taken and

construed as one and the same instrument.

 

8.             Counterparts. 

This Agreement may be executed in two or more counterparts (and by

different parties in separate counterparts), each of which shall be an original

but all of which together shall constitute one and the same instrument.

 

9.             Conveyance of the Receivables and the Other Conveyed

Property to the Issuer.  The Seller acknowledges

that HARC intends, pursuant to the Master Sale and Servicing Agreement, to

convey the Receivables and the Other Conveyed Property, together with its

rights under this Agreement, to the Issuer on the Transfer Date.  The Seller acknowledges and consents to such

conveyance and pledge and waives any further notice thereof and covenants and

agrees that the representations and warranties of the

 

A-3

 

Seller contained in this Agreement and the rights of HARC hereunder are

intended to benefit the Issuer, the Owner Trustee, the Indenture Trustee, the

Secured Parties and the Certificateholders. 

In furtherance of the foregoing, the Seller covenants and agrees to perform

its duties and obligations hereunder, in accordance with the terms hereof for

the benefit of the Issuer, the Owner Trustee, the Indenture Trustee and the

Secured Parties and that, notwithstanding anything to the contrary in this

Agreement, the Seller shall be directly liable to the Issuer, the Owner

Trustee, the Indenture Trustee and the Secured Parties (notwithstanding any

failure by the Master Servicer or HARC to perform their respective duties and

obligations hereunder or under any Basic Document) and that the Indenture

Trustee may enforce the duties and obligations of the Seller under this

Agreement against Seller for the benefit of the Secured Parties and the Owner

Trustee.

 

10.           GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS

CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE

PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

A-4

 

IN WITNESS WHEREOF, the Seller and HARC have caused

this Purchase Agreement to be duly executed and delivered by their respective

duly authorized officers as of day and the year first above written.

 

	

   

  	

  HOUSEHOLD AUTOMOTIVE

  CREDIT 

  CORPORATION,

  	

   

  
	

   

  	

   

  	

  as Seller

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  HOUSEHOLD AUTO

  RECEIVABLES 

  CORPORATION,

  	

   

  
	

   

  	

   

  	

  as Purchaser

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Name:

  	

   

  
	

   

  	

   

  	

  Title:

  	

   

  

 

A-5

 

SCHEDULE A

 

SCHEDULE

OF RECEIVABLES

 

(COMPUTER

FILE HELD AT THE OFFICES OF DEWEY BALLANTINE LLP)

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