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”).

 

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.

 

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;

 

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 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

  
					

 

 

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”).

 

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
                                                ,
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 CREDIT
  CORPORATION,

  
	
   

  	
  as
  Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD
  AUTO RECEIVABLES CORPORATION,

  
	
   

  	
  as
  Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

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”).

 

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.

 

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

  
					

 

 

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”).

 

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  .

 

“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,

 

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 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:

  	
   

  
					

 

 

SCHEDULE A

 

SCHEDULE OF RECEIVABLES

 

(COMPUTER FILE HELD AT THE OFFICES OF DEWEY BALLANTINE LLP)

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