Document:

Exhibit
10.1

EXECUTION
VERSION

 

DEPOSIT ACCOUNT CONTROL AGREEMENT

This Deposit Account
Control Agreement (this “Agreement”) dated as of June 8, 2006, is made by
and among HSBC Automotive Trust (USA) 2006-1, as issuer (the “Issuer”),
The Bank of New York, as indenture trustee (the “Indenture Trustee”) under the
Indenture referred to below, and HSBC Bank USA, National Association, as
administrator and as bank (“HSBC” and, in its capacity as Administrator, the “Administrator”,
and in its capacity as bank, the “Bank”). Capitalized terms used but not
defined herein shall have the meaning assigned (including by reference therein)
in the Indenture dated as of June 8, 2006 (the “Indenture”) among the
Issuer, HSBC, as administrator, and the Indenture Trustee. All references
herein to the “UCC” shall mean the Uniform Commercial Code as in effect in the
State of New York.

Section 1.              Establishment of Deposit
Accounts. The Bank hereby confirms and agrees that:

(a)   The Bank has established account numbers 10-879490 (the “Collection
Account”) and 10-879491 (the “Reserve Account”) in the name “HSBC Bank
USA, National Association, as Administrator on behalf of The Bank of New York,
as Indenture Trustee, in trust for the registered holders of HSBC Automotive
Trust (USA) 2006-1 Notes” (such accounts and any successor accounts
thereof, the “Deposit Accounts”) designated as the “Collection Account” and the
“Reserve Account”, respectively, pursuant to the Indenture. Except as provided
in Section 12 hereof, the Bank shall not change the name, account number
or designation of the Deposit Accounts without the prior written consent of the
Indenture Trustee and without prior written notice to the Servicer, which
notice shall state the proposed effective date of any such change;

(b)   The Bank is an organization engaged in the business of banking and
is acting in such capacity in maintaining the Deposit Accounts and acting as
Bank hereunder;

(c)   Each Deposit Account has been established and will be maintained
as a “deposit account”(as defined in Section 9-102(29) of the UCC)
and is not evidenced by an “instrument” (as defined in Section 9-102(47)
of the UCC);

(d)   The Indenture Trustee is the Bank’s sole “customer” (within the
meaning of Section 9-104 of the UCC) with respect to the Deposit Accounts;

(e)   All cash and money delivered to the Bank pursuant to the Indenture
will be promptly credited to the Deposit Accounts in accordance with the terms
of the Basic Documents; and

(f)    The Bank’s “jurisdiction” (within the meaning of Section 9-304
of the UCC) is the State of New York.

Section 2.              Indenture Trustee’s Directions.
Notwithstanding anything to the contrary and for the avoidance of doubt, if at
any time the Bank shall receive any instructions originated by the Indenture
Trustee directing the disposition of funds in the Deposit Accounts, the Bank
shall comply with such instructions without further consent by the Issuer or
any other Person. The parties hereto acknowledge that the Administrator may
give instructions to the Bank directing the disposition of funds in the Deposit
Accounts pursuant to the Indenture. In the event of a conflict between the instructions
originated by the Indenture Trustee and the 

 

instructions originated by the Administrator directing
the disposition of funds in the Deposit Accounts, the instructions of the
Indenture Trustee shall prevail.

Section 3.              Subordination of Liens; Waiver
of Set-Off. In the event that the Bank has or
subsequently obtains by agreement, by operation of law or otherwise, a security
interest or other rights in the Deposit Accounts or any monies credited
thereto, the Bank hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Trustee. The monies
deposited in the Deposit Accounts will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any Person other than the
Indenture Trustee (except that the Bank may set off (i) all amounts due to
the Bank in respect of customary fees and expenses for the routine maintenance
and operation of the Deposit Accounts and (ii) the face amount of any
checks which have been credited to the Deposit Accounts but are subsequently
returned unpaid because of uncollected or insufficient funds).

Section 4.              Governing Law.
Both this Agreement and the Deposit Accounts shall be governed by the laws of
the State of New York applicable to agreements made and to be performed therein.
Regardless of any provision in any other agreement, for purposes of the UCC,
the State of New York shall be deemed to be the Bank’s jurisdiction (in
accordance with Section 9-304(b) of the UCC), and the Deposit
Accounts shall be governed by the laws of the State of New York.

Section 5.              Conflict with Other Agreements;
Amendments.

(a)   In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into
regarding the Deposit Accounts, the terms of this Agreement shall prevail.

(b)   No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing
and is signed by all of the parties hereto. This Agreement may not be amended
without satisfaction of the Rating Agency Condition.

(c)   The Bank, strictly in such capacity, hereby confirms and agrees that
it has not entered into, and until the termination of this Agreement will not
enter into, any agreement with the Issuer, the Indenture Trustee or any other
Person purporting to limit or condition the obligation of the Bank to comply
with the Indenture Trustee’s directions or instructions with respect to the
Deposit Accounts.

Section 6.              Adverse Claims.
Except for the claims and interest of the Indenture Trustee and the Issuer in
the Deposit Accounts, the Bank does not know or have notice of any claim to, or
interest in, the Deposit Accounts. If the Bank obtains actual knowledge of any
Person asserting any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Deposit Accounts, the Bank will promptly notify the Indenture
Trustee and the Issuer thereof.

Section 7.              Maintenance of Deposit Accounts.
The Bank will promptly send copies of all statements,
confirmations and other correspondence concerning the Deposit Accounts 

 2
 

 

simultaneously to the Indenture Trustee, the Servicer
and the Issuer at the addresses set forth in Section 11 of this Agreement.

Section 8.              Representations,
Warranties and Covenants of the Bank. The Bank hereby makes the
following representations, warranties and covenants:

(a)   the Deposit Accounts have been established as set forth in Section 1
above, and the Deposit Accounts will be maintained in the manner set forth
herein until termination of this Agreement; and

(b)   this Agreement is the valid and legally binding obligation of the
Bank.

Section 9.              Exculpatory Provisions;
Indemnification of Bank. The Issuer and the Indenture
Trustee hereby agree that the Bank is released from any and all liabilities to
the Issuer and the Indenture Trustee arising from the terms of this Agreement
and the compliance of the Bank with the terms hereof, except to the extent that
such liabilities arise from the Bank’s willful misconduct, negligence or bad
faith. The Issuer and its successors and assigns shall at all times indemnify
and save harmless the Bank from and against any and all claims, actions and
suits of others arising out of the terms of this Agreement or the compliance of
the Bank with the terms hereof, and from and against any and all liabilities,
losses, damages, costs, charges, counsel fees and other expenses of every
nature and character arising by reason of the same, except to the extent that
such arises from the Bank’s willful misconduct, negligence or bad faith. This Section 9
shall survive the termination of this Agreement.

Section 10.            Successors; Assignment.
The terms of this Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective corporate successors who
obtain such rights solely by operation of law. In the case of an assignment of
this Agreement, notice shall be provided to the Rating Agencies.

Section 11.            Notices. Any
notice, request or other communication required or permitted to be given under
this Agreement shall be in writing and deemed to have been properly given when
delivered in person, or when sent by telecopy or other electronic means and
electronic confirmation of error free receipt is received or two days after
being sent by certified or registered United States mail, return receipt
requested, postage prepaid, addressed to the party at the address set forth
below.

	
  Issuer:

  	
  HSBC Automotive Trust (USA) 2006-1 

  c/o U.S. Bank Trust National Association 

  209 South LaSalle Street, Suite 300 

  Chicago, Illinois 60604 

  Attention: Corporate Trust Services, HSBC Automotive Trust (USA)
 2006-1 

  Telephone Number: (312) 325-8902 

  Facsimile: (312) 325-8905

  

 3
 

 

 

	
  

  	
   

  
	
  Indenture Trustee:

  	
  The Bank of New York 

  101 Barclay Street, 8 West ABS 

  New York, New York 10286 

  Attention: Structured Finance, HSBC Automotive Trust (USA) 2006-1 

  Telephone Number: (212) 815-6019 

  Facsimile: (212) 815-2493

  
	
   

  	
   

  
	
  Bank:

  	
  HSBC Bank USA, National Association 

  452 Fifth Avenue 

  New York, New York 10018 

  Attention: Corporate Trust 

  Telephone Number: (212) 525-1345 

  Facsimile: (212) 525-1300

  
	
   

  	
   

  
	
  Servicer:

  	
  HSBC Finance Corporation 

  2700 Sanders Road 

  Prospect Heights, Illinois 60070 

  Attention: Treasurer 

  Telephone Number: (847) 564-5000 

  Facsimile: (847) 205-7538

  

 

Any party may change his
address for notices in the manner set forth above.

Section 12.            Termination.
The obligations of the Bank to the Indenture Trustee pursuant to this Agreement
shall continue in effect until the security interest of the Indenture Trustee
in the Deposit Accounts has been terminated pursuant to the terms of the
Indenture and the Indenture Trustee has notified the Bank of such termination
in writing.

Section 13.            Limited Recourse.
Notwithstanding any other provision contained herein or in any of the Basic
Documents, the liability of the Issuer to the Indenture Trustee and the Bank
hereunder is limited in recourse to the Series Trust Estate and to the
extent the proceeds of the Series Trust Estate, when applied in accordance
with Section 4.04 of the Series Supplement, dated as of June 8,
2006, among HSBC Finance Corporation, as Servicer, the Issuer, HSBC Auto
Receivables Corporation, as seller, the Indenture Trustee, the Owner Trustee
and the Administrator, are insufficient to meet the obligations of the Issuer
hereunder in full, the Issuer shall have no further liability in respect of any
such outstanding obligations which shall thereupon extinguish and shall not
thereafter revive.

Section 14.            Non-Petition.
Notwithstanding any other provision of this Agreement, neither the Indenture
Trustee nor the Bank, in its capacity as Bank hereunder, may, prior to the date
which is one year (or, if longer, the applicable preference period then in
effect) and one day after the payment in full of all Notes, institute against,
or join any other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceedings,
or other proceedings under federal or state bankruptcy or similar laws.

 4
 

 

 

Section 15.            Counterparts.
This Agreement may be executed in any number of counterparts, all of which
shall constitute one and the same instrument, and any party hereto may execute
this Agreement by signing and delivering one or more counterparts.

Section 16.            Headings. The
headings of the sections of this Agreement are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.

Section 17.            Owner Trustee Limitation
of Liability. It is expressly understood and agreed by the
parties hereto that (a) this Agreement is executed and delivered by the
Owner Trustee, not individually or personally but solely as Owner Trustee of
the Issuer under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by the
Owner Trustee but is made and intended for the purpose of binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on the Owner Trustee individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties to this Agreement and by any person
claiming by, through or under them and (d) under no circumstances shall
the Owner Trustee be personally liable for the payment of any indebtedness or
expenses of the Issuer or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaking by the
Issuer under this Agreement or any related documents.

 5

 

IN WITNESS WHEREOF the parties have caused this
Deposit Account Control Agreement to be duly executed by their officers or
partners thereunto duly authorized as of the day and year first above written.

	
  

  	
  HSBC AUTOMOTIVE TRUST (USA) 2006-1,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. BANK TRUST NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  not in its individual capacity but

  
	
   

  	
   

  	
  solely as Owner Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia M. Child

  
	
   

  	
   

  	
  Name:

  	
  Patricia M. Child

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION

  
	
   

  	
  not in its
  individual capacity, but solely as Administrator

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elena Zheng

  
	
   

  	
   

  	
  Name:

  	
  Elena Zheng

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  	
   

  	
  HSBC Bank USA, N.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION

  
	
   

  	
  not in its
  individual capacity, but solely as Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elena Zheng

  
	
   

  	
   

  	
  Name:

  	
  Elena Zheng

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  	
   

  	
  HSBC Bank USA, N.A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Indenture
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan Li

  
	
   

  	
   

  	
  Name:

  	
  Alan Li

  
	
   

  	
   

  	
  Title:

  	
  Assistant TreasurerExhibit
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

August 8,
2002

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
  

  	
   

  	
  Page

  	
   

  
	
  ARTICLE I   DEFINITIONS

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
   

  	
  General

  	
   

  	
  1

  	
   

  
	
  SECTION 1.2

  	
   

  	
  Specific Terms

  	
   

  	
  1

  	
   

  
	
  SECTION 1.3

  	
   

  	
  Other Definitional
  Provisions

  	
   

  	
  2

  	
   

  
	
  SECTION 1.4

  	
   

  	
  Certain References

  	
   

  	
  2

  	
   

  
	
  SECTION 1.5

  	
   

  	
  No Recourse

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II   CONVEYANCE
  OF THE RECEIVABLES AND THE OTHER CONVEYED PROPERTY

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Purchase

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III   REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
   

  	
  Representations and
  Warranties of Seller

  	
   

  	
  5

  	
   

  
	
  SECTION 3.2

  	
   

  	
  Representations and
  Warranties of HARC

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV   COVENANTS
  OF SELLER

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Seller’s Covenants

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V   REPURCHASES

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Repurchase of
  Receivables Upon Breach of Warranty

  	
   

  	
  9

  	
   

  
	
  SECTION 5.2

  	
   

  	
  Reassignment of
  Repurchased Receivables

  	
   

  	
  10

  	
   

  
	
  SECTION 5.3

  	
   

  	
  Waivers

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI   MISCELLANEOUS

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Liability of Seller

  	
   

  	
  11

  	
   

  
	
  SECTION 6.2

  	
   

  	
  Amendment

  	
   

  	
  11

  	
   

  
	
  SECTION 6.3

  	
   

  	
  GOVERNING LAW

  	
   

  	
  11

  	
   

  
	
  SECTION 6.4

  	
   

  	
  Notices

  	
   

  	
  11

  	
   

  
	
  SECTION 6.5

  	
   

  	
  Severability of
  Provisions

  	
   

  	
  11

  	
   

  
	
  SECTION 6.6

  	
   

  	
  Assignment

  	
   

  	
  11

  	
   

  
	
  SECTION 6.7

  	
   

  	
  Acknowledgment and
  Agreement of Seller

  	
   

  	
  12

  	
   

  
	
  SECTION 6.8

  	
   

  	
  Further Assurances

  	
   

  	
  12

  	
   

  
	
  SECTION 6.9

  	
   

  	
  No Waiver; Cumulative
  Remedies

  	
   

  	
  12

  	
   

  
	
  SECTION 6.10

  	
   

  	
  Counterparts

  	
   

  	
  12

  	
   

  
	
  SECTION 6.11

  	
   

  	
  Binding Effect;
  Third-Party Beneficiaries

  	
   

  	
  12

  	
   

  
	
  SECTION 6.12

  	
   

  	
  Merger and Integration

  	
   

  	
  13

  	
   

  
	
  SECTION 6.13

  	
   

  	
  Heading

  	
   

  	
  13

  	
   

  
	
  SECTION 6.14

  	
   

  	
  Schedules and Exhibits

  	
   

  	
  13

  	
   

  
	
  SECTION 6.15

  	
   

  	
  Survival of
  Representations and Warranties

  	
   

  	
  13

  	
   

  
	
  SECTION 6.16

  	
   

  	
  Nonpetition Covenant

  	
   

  	
  13

  	
   

  

 i
  
 

 

EXHIBITS

	
  EXHIBIT A

  	
   

  	
  Form of Receivables Purchase Agreement
  Supplement

  
	
  SCHEDULE A

  	
   

  	
  Schedule of Related
  Master Sale and Servicing Agreements

  

 

 ii
  

 

THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as
of August 8, 2002, executed between Household Auto Receivables
Corporation, a Nevada corporation, as purchaser (“HARC”) and Household
Automotive Credit Corporation, a Delaware corporation, as seller (“Seller”).

W I T N E S S E T H :

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

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

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

 1
 

 

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

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

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

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

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

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

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

SECTION 1.3    Other
Definitional Provisions.

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

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

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

SECTION 1.4   Certain
References.   All references to the Principal Balance of a Receivable
as of any date of determination shall refer to the close of 

 2
 

 

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

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

ARTICLE II

CONVEYANCE OF THE RECEIVABLES

AND THE OTHER CONVEYED PROPERTY

SECTION 2.1 Purchase.

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

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

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

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

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

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

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

 3
 

 

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

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

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

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

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

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

 4
 

 

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

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

ARTICLE III

REPRESENTATIONS AND WARRANTIES

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

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

 5
 

 

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

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

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

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

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

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

 6
 

 

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

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

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

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

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

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

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

 7
 

 

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

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

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

ARTICLE IV

COVENANTS OF SELLER

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

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

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

 8
 

 

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

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

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

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

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

(h)   Maintenance
of Security Interests in Vehicles. In the event that the assignment of a
Receivable to HARC or any assignee thereof is insufficient, without a notation
on the related Financed Vehicle’s certificate of title, or without fulfilling
any additional administrative requirements under the laws of the state in which
the Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle in favor of HARC or any assignee thereof, Seller hereby agrees
that the designation of Seller or any Affiliate of Seller as the secured party
on the certificate of title is in its capacity as agent of HARC or the agent of
any assignee of HARC for such limited purpose.

ARTICLE V

REPURCHASES

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

 9
 

 

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

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

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

 10

 

ARTICLE VI

MISCELLANEOUS

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

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

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

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

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

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

 11
 

 

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

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

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

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

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

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

 12
 

 

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

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

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

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

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

SECTION 6.16   Nonpetition
Covenant.   Until the date which is one year and one day after payment
in full of all the Notes of all Series, neither HARC nor Seller shall petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against Seller or any Issuer under
any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of Seller or any Issuer or any substantial part of their
respective properties, or ordering the winding up or liquidation of the affairs
of Seller or any Issuer. This provision shall survive the termination of this
Agreement.

[Signature Page Follows]

 13
 

 

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

	
  

  	
  HOUSEHOLD AUTOMOTIVE CREDIT CORPORATION

        as Seller

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ TIMOTHY R.
  CONDON

  
	
   

  	
   

  	
  Name: Timothy R. Condon

  
	
   

  	
   

  	
  Title: Executive Vice President and Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO RECEIVABLES 

  CORPORATION,

        as Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. H.
  SMITH

  
	
   

  	
   

  	
  Name: S. 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 August 8, 2002, between Household Automotive Credit
Corporation, a Delaware corporation (“Seller”) and Household Auto
Receivables Corporation, a Nevada corporation (“HARC”).

W I T N E S S E T H :

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

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

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

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

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

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

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

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

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

 A-1
 

 

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

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

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

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

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

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

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

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

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

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

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

 A-2
 

 

other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.

4.             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, Seller covenants and agrees
that it will not take any action to pursue any remedy that it may have
hereunder, in law, in equity or otherwise, until a year and a day have passed
since the date on which all Notes and Certificates issued by the Trust have
been paid in full. Seller and HARC agree that damages will not be an adequate
remedy for such breach and that this covenant may be specifically enforced by
HARC, the related Issuer or by the related Indenture Trustee on behalf of the
related Secured Parties and the related Owner Trustee on behalf of the related
Certificateholders.

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

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

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

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

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

 A-3
 

 

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

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

 A-4
 

 

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

	
  

  	
  HOUSEHOLD AUTOMOTIVE CREDIT
 CORPORATION,

        as Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO RECEIVABLES

  CORPORATION,

        as Purchaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 A-5

 

SCHEDULE A

SCHEDULE OF
RELATED MASTER SALE AND SERVICING AGREEMENTS

(1) Master
Sale and Servicing Agreement dated as of August 8, 2002, among Household
Finance Corporation, as Master Servicer, Household Automotive Trust 2002-2,
as Issuer, Household Auto Receivables Corporation, as Seller and JPMorgan Chase
Bank, as Indenture Trustee.

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

(3) Master Sale and  Servicing Agreement, dated as of November 26,
2003, among Household Finance Corporation, as Master Servicer, Household
Automotive Trust 2003-2, as Issuer, Household Auto Receivables
Corporation, as Seller and Wells Fargo Bank Minnesota, National Association, as
Indenture Trustee.

(4) Master Sale and Servicing Agreement, dated as
of June 22, 2005, among HSBC Finance Corporation (formerly Household
Finance Corporation), as Master Servicer, HSBC Automotive Trust 2005-1,
as Issuer, HSBC Auto Receivables Corporation (formerly Household Auto
Receivables Corporation), as Seller, Wells Fargo Bank, National Association, as
Indenture Trustee and HSBC Bank USA, National Association, as Administrator.

(5) Master Sale and Servicing Agreement, dated as
of July 27, 2005, among HSBC Finance Corporation, as Master Servicer, HSBC
Automotive Trust 2005-2, as Issuer, HSBC Auto Receivables Corporation, as
Seller, U.S. Bank National Association, as Indenture Trustee and HSBC Bank USA,
National Association, as Administrator.

(6) Master Sale and Servicing Agreement, dated as
of November 3, 2005, among HSBC Finance Corporation, as Master Servicer,
HSBC Automotive Trust 2005-3, as Issuer, HSBC Auto Receivables
Corporation, as Seller, JPMorgan Chase Bank, N.A., as Indenture Trustee and
HSBC Bank USA, National Association, as Administrator.

(7) Sale and Servicing Agreement, dated as of June 8,
2006, among HSBC Finance Corporation, as Servicer, HSBC Automotive Trust (USA)
2006-1, as Issuer, HSBC Auto Receivables Corporation, as Seller, The Bank
of New York, as Indenture Trustee and HSBC Bank USA, National Association, as
Administrator.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]