Document:

<PAGE>

                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

________________________________________________________________________________

                  WILMINGTON TRUST COMPANY, AS TRUSTEE OF THE
                   HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I

                                    Issuer

                                      and

                         HOUSEHOLD FINANCE CORPORATION

                                 Administrator

                             AMENDED AND RESTATED
                           ADMINISTRATION AGREEMENT
                      amending and restating in full the
            Administration Agreement dated as of September 25, 2000

                         Dated as of November 16, 2000

________________________________________________________________________________
<PAGE>

                               Table of Contents
<TABLE>
<CAPTION>
                                                                                               Page
                                                                                               ----
<S>            <C>                                                                             <C>

Section 1.     Duties of Administrator........................................................  2
Section 2.     Records........................................................................  5
Section 3.     Compensation...................................................................  5
Section 4.     Additional Information to be Furnished to Issuer...............................  5
Section 5.     Independence of Administrator..................................................  5
Section 6.     No Joint Venture...............................................................  6
Section 7.     Other Activities of Administrator..............................................  6
Section 8.     Term of Agreement; Resignation and Removal of Administrator....................  6
Section 9.     Action upon Termination, Resignation or Removal................................  7
Section 10.    Notices........................................................................  7
Section 11.    Amendments.....................................................................  8
Section 12.    Successors and Assigns.........................................................  9
Section 13.    GOVERNING LAW..................................................................  9
Section 14.    Headings.......................................................................  9
Section 15     Counterparts...................................................................  9
Section 16.    Severability...................................................................  9
Section 17.    Not Applicable to Household Finance Corporation in Other Capacities............  9
Section 18.    Limitation of Liability of Owner Trustee.......................................  9
Section 19.    Third-Party Beneficiary........................................................ 10
Section 20.    Nonpetition Covenants.......................................................... 10
Section 21.    Successor Administrator........................................................ 10
</TABLE>

SCHEDULE 1 - ADMINISTRATION FEE

EXHIBIT A - FORM OF POWER OF ATTORNEY

<PAGE>

     This AMENDED AND RESTATED ADMINISTRATION AGREEMENT, dated as of November
16, 2000 (the "Administration Agreement"), between WILMINGTON TRUST COMPANY, not
               ------------------------
in its individual capacity but solely as Owner Trustee, on behalf of the
HOUSEHOLD CREDIT CARD MASTER NOTE TRUST I, a common law trust organized and
existing under the laws of the State of Delaware (herein, the "Issuer"), and
                                                               ------
HOUSEHOLD FINANCE CORPORATION, a Delaware corporation ("Household Finance
                                                        -----------------
Corporation"), as administrator (herein, the "Administrator") amends and
-----------                                   -------------
restates in full the Administration Agreement, dated as of September 25, 2000,
between the Issuer and the Administrator.

                             W I T N E S S E T H :

     WHEREAS the Issuer was formed pursuant to a trust agreement, dated as of
September 25, 2000 ( as amended and restated on November 16, 2000, and as may be
amended, modified or supplemented from time to time in accordance with the
provisions thereof, the "Trust Agreement"), between Household Receivables
                         ---------------
Funding, Inc. III and Wilmington Trust Company, as owner trustee (the "Owner
                                                                       -----
Trustee");
-------

     WHEREAS the Issuer has entered into an Amended and Restated Master
Indenture, dated as of November 16, 2000 (as amended, modified or supplemented
from time to time in accordance with the provisions thereof, the "Indenture"),
                                                                  ---------
between the Issuer and Wells Fargo Bank Minnesota, National Association, a
national banking association, as indenture trustee (the "Indenture Trustee") to
                                                         -----------------
provide for the issuance of its asset backed notes (the "Notes");
                                                         -----

     WHEREAS the Issuer has entered into certain agreements in connection with
the issuance of the Notes and of the beneficial ownership interest of the
Issuer, including (i) a Transfer and Servicing Agreement, dated as of the
Closing Date (as amended, modified or supplemented from time to time in
accordance with the provisions thereof, the "Transfer and Servicing Agreement"),
                                             --------------------------------
among Household Receivables Funding, Inc. III, as Transferor (the "Transferor"),
                                                                   ----------
Household Finance Corporation, as Servicer (in such capacity, the "Servicer"),
                                                                   --------
and the Issuer, and (ii) the Indenture (the Transfer and Servicing Agreement,
the Trust Agreement and the Indenture being hereinafter referred to collectively
as the "Related Agreements") (capitalized terms used herein and not defined
        ------------------
herein shall have the meanings assigned to such terms in the Transfer and
Servicing Agreement, or if not defined therein, in the Indenture);

     WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the Notes
and the collateral therefor pledged pursuant to the Indenture (the "Collateral")
                                                                    ----------
and (b) the beneficial ownership interest in the Issuer (the holder of such
interest being referred to herein as the "Owner");
                                          -----

     WHEREAS the Issuer and the Owner Trustee desire to have the Administrator
perform certain of the duties of the Issuer and the Owner Trustee referred to in
the preceding clause, and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer and the
Owner Trustee may from time to time request;

     WHEREAS the Administrator has the capacity to provide the services required
hereby and is willing to perform such services for the Issuer and the Owner
Trustee on the terms set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
<PAGE>

     Section 1.     Duties of Administrator.
                    -----------------------

     (a)     Duties with Respect to the Related Agreements.
             ---------------------------------------------

             (i)    The Administrator shall consult with the Owner Trustee
     regarding the duties of the Issuer and the Owner Trustee under the Related
     Agreements. The Administrator shall monitor the performance of the Issuer
     and shall advise the Owner Trustee when action is necessary to comply with
     the Issuer's or the Owner Trustee's duties under the Related Agreements.
     The Administrator shall prepare for execution by the Issuer or the Owner
     Trustee or shall cause the preparation by other appropriate persons of all
     such documents, reports, filings, instruments, certificates and opinions as
     it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
     deliver pursuant to any Related Agreement. In furtherance of the foregoing,
     the Administrator shall take all appropriate action that it is the duty of
     the Issuer or the Owner Trustee to take pursuant to the Indenture
     including, without limitation, such of the foregoing as are required with
     respect to the following matters under the Indenture (references are to
     sections of the Indenture):

                    (1)  the preparation of or obtaining of the documents and
             instruments required for execution, authentication and delivery of
             the Notes, if any, and delivery of the same to the Indenture
             Trustee (Section 2.03, 2.05, 2.06, 2.12(d), 2.15 and 2.16);

                    (2)  the duty to cause the Note Register to be kept and to
             give the Indenture Trustee notice of any appointment of a new
             Registrar and the location, or change in location, of the Note
             Register (Section 2.05);

                    (3)  the furnishing of the Indenture Trustee, the Servicer,
             any Noteholder or the Paying Agent with the names and addresses of
             Noteholders after receipt of a written request therefor from the
             Indenture Trustee, the Servicer, any Noteholder or the Paying
             Agent, respectively (Section 2.09(a) and Section 7.01);

                    (4)  the preparation, obtaining or filing of the
             instruments, opinions and certificates and other documents required
             for the release of collateral (Section 2.11);

                    (5)  the duty to cause newly appointed Paying Agents, if
             any, to deliver to the Indenture Trustee the instrument specified
             in the Indenture regarding funds held in trust (Section 3.03);

                    (6)  the direction to Paying Agents to pay to the Indenture
             Trustee all sums held in trust by such Paying Agents (Section
             3.03);

                    (7)  the obtaining and preservation of the Issuer's
             qualification to do business in each jurisdiction in which such
             qualification is or shall be necessary to protect the validity and
             enforceability of the Indenture, the Notes, the Collateral and each
             other instrument and agreement (Section 3.04);

                    (8)  the preparation of all supplements, amendments,
             financing statements, continuation statements, if any, instruments
             of further assurance and other instruments necessary to protect the
             Collateral (Section 3.05);

                    (9)  the obtaining of the Opinion of Counsel on the Closing
             Date and the annual delivery of Opinions of Counsel as to the
             Collateral, and the annual delivery of the

                                       2
<PAGE>

             Officers' Certificate and certain other statements as to compliance
             with the Indenture (Sections 3.06 and 3.09);

                    (10) the identification to the Indenture Trustee in an
             Officer's Certificate of a Person with whom the Issuer has
             contracted to perform its duties under the Indenture (Section
             3.07(b));

                    (11) the delivery of notice to the Indenture Trustee of the
             occurrence of any Servicer Default of which the Issuer has
             knowledge and the action, if any, the Issuer is taking in
             connection with such default (Section 3.07(d));

                    (12) the delivery to the Indenture Trustee, within 120 days
             after the end of each fiscal year of the Issuer of an Officer's
             Certificate with respect to various matters relating to compliance
             with the Indenture (Section 3.09);

                    (13) the preparation and obtaining of documents and
             instruments required for the release of the Issuer from its
             obligation under the Indenture (Section 3.10);

                    (14) the delivery of notice to the Indenture Trustee and the
             Rating Agencies of each Event of Default and each default by the
             Servicer or the Transferor under the Transfer and Servicing
             Agreement (Section 3.19);

                    (15) the monitoring of the Issuer's obligations as to the
             satisfaction and discharge of the Indenture and the preparation of
             an Officer's Certificate and the obtaining of the Opinion of
             Counsel and the Independent Certificate relating thereto (Section
             4.01);

                    (16) the compliance with any written directive of the
             Indenture Trustee with respect to the sale of the Collateral in a
             commercially reasonable manner if an Event of Default shall have
             occurred and be continuing (Section 5.05);

                    (17) the preparation of any written instruments required to
             confirm more fully the authority of any co-trustee or separate
             trustee and any written instruments necessary in connection with
             the resignation or removal of any co-trustee or separate trustee
             (Sections 6.08 and 6.10);

                    (18) the preparation of an Issuer Request and Officers'
             Certificate and the obtaining of an Opinion of Counsel and
             Independent Certificates, if necessary, for the release of the
             Collateral (Sections 8.09 and 8.10);

                    (19) the preparation of Issuer Orders and the obtaining of
             Opinions of Counsel with respect to the execution of supplemental
             indentures and the mailing to the Noteholders of notices with
             respect to such supplemental indentures (Sections 10.01, 10.02 and
             10.03);

                    (20) the execution of new Notes conforming to any
             supplemental indenture (Section 10.06);

                    (21) the preparation of all Officers' Certificates, Opinions
             of Counsel and Independent Certificates with respect to any
             requests by the Issuer to the Indenture Trustee to take any action
             under the Indenture (Section 12.01(a));

                                       3
<PAGE>

                    (22) the preparation and delivery of Officers' Certificates
             and the obtaining of Independent Certificates, if necessary, for
             the release of property from the lien of the Indenture (Section
             12.01(b));

                    (23) the notification of each Rating Agency of the
             information required pursuant to Section 12.05 of the Indenture
             (Section 12.05);

                    (24) the preparation and delivery to Noteholders and the
             Indenture Trustee of any agreements with respect to alternate
             payment and notice provisions (Section 12.06); and

                    (25) compliance with the administrative provisions of the
             Transfer and Servicing Agreement.

     (b)     Additional Duties.
             -----------------

             (i)    In addition to the duties of the Administrator set forth
     above, the Administrator shall perform all duties and obligations of the
     Issuer under the Related Agreements and shall perform such calculations and
     shall prepare for execution by the Issuer and shall cause the preparation
     by other appropriate persons of all such documents, reports, filings,
     instruments, certificates and opinions as it shall be the duty of the
     Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
     Related Agreements, and at the request of the Issuer shall take all
     appropriate action that it is the duty of the Issuer or the Owner Trustee
     to take pursuant to the Related Agreements. Subject to Sections 1(c)(ii)
     and 5 of this Agreement, and in accordance with the directions of the
     Issuer, the Administrator shall administer, perform or supervise the
     performance of such other activities in connection with the Collateral
     (including the Related Agreements) as are not covered by any of the
     foregoing provisions and as are expressly requested by the Owner Trustee
     and are reasonably within the capability of the Administrator.

             (ii)   The Administrator shall perform the duties of the
     Administrator specified in Section 9.02 of the Trust Agreement required to
     be performed in connection with the resignation or removal of the Owner
     Trustee, and any other duties expressly required to be performed by the
     Administrator under the Trust Agreement.

             (iii)  In carrying out the foregoing duties or any of its other
     obligations under this Agreement, the Administrator may enter into
     transactions with or otherwise deal with any of its Affiliates; provided,
     however, that the terms of any such transactions or dealings shall be in
     accordance with any directions received from the Issuer and shall be, in
     the Administrator's opinion, no less favorable to the Issuer than would be
     available from unaffiliated parties.

             (iv)   It is the intention of the parties hereto that the
     Administrator shall, and the Administrator hereby agrees to, prepare, file
     and deliver on behalf of the Issuer all such documents, reports, filings,
     instruments, certificates and opinions as it shall be the duty of the
     Issuer to prepare, file or deliver pursuant to the Related Agreements. In
     furtherance thereof, the Owner Trustee shall, on behalf of the Issuer,
     execute and deliver to the Administrator and its agents, and to each
     successor Administrator appointed pursuant to the terms hereof, one or more
     powers of attorney substantially in the form of Exhibit A hereto,
                                                     ---------
     appointing the Administrator the attorney-in-fact of the Issuer for the
     purpose of executing on behalf of the Issuer all such documents, reports,
     filings, instruments, certificates and opinions.

                                       4
<PAGE>

     (c)     Non-Ministerial Matters.
             -----------------------

             (i)    With respect to matters that in the reasonable judgment of
     the Administrator are non-ministerial, the Administrator shall not take any
     action unless within a reasonable time before the taking of such action,
     the Administrator shall have notified the Transferor of the proposed action
     and the Transferor shall not have withheld consent or provided an
     alternative direction. For the purpose of the preceding sentence, "non-
     ministerial matters" shall include, without limitation:

                    (1)  the amendment of or any supplement to the Indenture;

                    (2)  the initiation of any claim or lawsuit by the Issuer
             and the compromise of any action, claim or lawsuit brought by or
             against the Issuer (other than in connection with the collection or
             enforcement of the Collateral);

                    (3)  the amendment, change or modification of the Related
             Agreements;

                    (4)  the appointment of successor Registrars, successor
             Paying Agents and successor Indenture Trustees pursuant to the
             Indenture or the appointment of successor Administrators, or the
             consent to the assignment by the Registrar, Paying Agent or
             Indenture Trustee of its obligations under the Indenture; and

                    (5)  the removal of the Indenture Trustee.

             (ii)   Notwithstanding anything to the contrary in this Agreement,
     the Administrator shall not be obligated to, and shall not, (A) make any
     payments from its own funds to the Noteholders or the Owner under the
     Related Agreements, (B) sell the Collateral pursuant to Section 5.05 of the
     Indenture other than pursuant to a written directive of the Indenture
     Trustee or (C) take any other action that the Issuer directs the
     Administrator not to take on its behalf.

     Section 2.     Records. The Administrator shall maintain appropriate books
                    -------
of account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer, the Owner
Trustee, the Indenture Trustee, the Servicer and the Transferor at any time
during normal business hours.

     Section 3.     Compensation.  As compensation for the performance of the
                    ------------
Administrator's obligations under this Agreement, the Administrator shall be
entitled to the amount set forth on Schedule 1 which shall be payable in
                                    ----------
accordance with the applicable Indenture Supplement.  The Transferor shall be
responsible for payment of the Administrator's fees (to the extent not paid
pursuant to the applicable Indenture Supplement) and shall reimburse the
Administrator for any of its liabilities and extra out-of-pocket expenses
related to its performance hereunder or under any Related Document.

     Section 4.     Additional Information to be Furnished to Issuer.  The
                    ------------------------------------------------
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.

     Section 5.     Independence of Administrator.  For all purposes of this
                    -----------------------------
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Owner Trustee with respect to
the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer, the Administrator shall
have no authority to act for or represent the Issuer or the Owner Trustee in any
way and shall not otherwise be deemed an agent of the Issuer or the Owner
Trustee.

                                       5
<PAGE>

     Section 6.     No Joint Venture.  Nothing contained in this Agreement shall
                    ----------------
(a) constitute the Administrator and either of the Issuer or the Owner Trustee
as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (b) be construed to impose any
liability as such on any of them or (c) be deemed to confer on any of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the others.

     Section 7.     Other Activities of Administrator.  Nothing herein shall
                    ---------------------------------
prevent the Administrator or its affiliates from engaging in other businesses
or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.

     Section 8.     Term of Agreement; Resignation and Removal of Administrator.
                    -----------------------------------------------------------

     (a)     This Agreement shall continue in force until the termination of the
Issuer, upon which event this Agreement shall automatically terminate.

     (b)     Subject to Section 8(e) and (f), the Administrator may resign its
                        --------------------
duties hereunder by providing the Issuer with at least 60 days prior written
notice.

     (c)     Subject to Section 8(e) and (f), the Issuer may remove the
                        --------------------
Administrator without cause by providing the Administrator with at least 60 days
prior written notice.

     (d)     Subject to Section 8(e) and (f), at the sole option of the Issuer,
                        --------------------
the Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator if any of the following events shall occur:

             (i)    the Administrator shall default in the performance of any of
     its duties under this Agreement and, after notice of such default, shall
     not cure such default within 30 days (or, if such default cannot be cured
     in such time, shall not give within 30 days such assurance of cure as shall
     be reasonably satisfactory to the Issuer);

             (ii)   a court having jurisdiction in the premises shall enter a
     decree or order for relief, and such decree or order shall not have been
     vacated within 60 days, in respect of the Administrator in any involuntary
     case under any applicable bankruptcy, insolvency or other similar law now
     or hereafter in effect or appoint a receiver, conservator, liquidator,
     assignee, custodian, trustee, sequestrator or similar official for the
     Administrator or any substantial part of its property or order the winding-
     up or liquidation of its affairs; or

             (iii)  the Administrator shall commence a voluntary case under any
     applicable bankruptcy, insolvency or other similar law now or hereafter in
     effect, shall consent to the entry of an order for relief in an involuntary
     case under any such law, or shall consent to the appointment of a receiver,
     conservator, liquidator, assignee, trustee, custodian, sequestrator or
     similar official for the Administrator or any substantial part of its
     property, shall consent to the taking of possession by any such official of
     any substantial part of its property, shall make any general assignment for
     the benefit of creditors, shall admit in writing its inability to pay its
     debts generally as they become due or shall fail generally to pay its debts
     as they become due.

                    The Administrator agrees that if any of the events specified
     in clause (ii) or (iii) of this Section 8(d) shall occur, it shall give
     written notice thereof to the Issuer and the Indenture Trustee within seven
     days after the happening of such event.

                                       6
<PAGE>

     (e)     No resignation or removal of the Administrator pursuant to this
Section 8 shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.

     (f)     The appointment of any successor Administrator shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.

     Section 9.     Action upon Termination, Resignation or Removal.  Promptly
                    -----------------------------------------------
upon the effective date of termination of this Agreement pursuant to Section
8(a) or the resignation or removal of the Administrator pursuant to Section
8(b), (c) or (d) respectively, the Administrator shall be entitled to be paid
all fees and reimbursable expenses accruing to it to the date of such
termination, resignation or removal. The Administrator shall forthwith upon such
termination pursuant to Section 8(a) deliver to the Issuer all property and
documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation or removal of the Administrator
pursuant to Section 8(b), (c) or (d), respectively, the Administrator shall
cooperate with the Issuer and take all reasonable steps requested to assist the
Issuer in making an orderly transfer of the duties of the Administrator.

     Section 10.    Notices.  Any notice, report or other communication given
                    -------
hereunder shall be in writing and addressed as follows:

     (a)     if to the Issuer or the Owner Trustee, to

                    Household Credit Card Master Note Trust I
                    c/o Wilmington Trust Company
                    Rodney Square North
                    1100 North Market Street
                    Wilmington, DE 19890-0001
                    Telephone: 302-651-8856

     (b)     if to the Transferor, to

                    Household Receivables Funding, Inc. III
                    1111 Town Center Drive
                    Las Vegas, Nevada 89134
                    Attention: Manager-Compliance

     (c)     if to the Administrator, to

                    Household Finance Corporation
                    2700 Sanders Road
                    Prospect Heights, Illinois 60070
                    Telephone: 847-564-5000

     (d)     if to the Indenture Trustee, to

                    Wells Fargo Bank Minnesota, National Association
                    MAC N9311-161, 6th & Marquette
                    Minneapolis, MN 55479
                    Attention: Asset Backed Securities
                    Telephone: 612-667-8058

                                       7
<PAGE>

     (e)     if to Fitch, to
                    Fitch, Inc.
                    One State Street Plaza
                    New York, NY 10004,
                    Attention: ABS Surveillance
                    Telephone: 212-908-0500

     (f)     if to Moody's, to
                    Moody's Investors Service Inc.
                    99 Church Street
                    New York, NY 10007
                    Attention: ABS Monitoring Group
                    Telephone: 212-553-3648

     (g)     if to Standard & Poor's, to
                    Standard & Poor's Ratings Group
                    55 Water Street
                    New York, NY  10041
                    Attention: Credit Card ABS
                    Telephone: 212-438-2437

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above, except that notices to the
Indenture Trustee are effective only upon receipt.

     Section 11.    Amendments. This Agreement may be amended from time to time,
                    ----------
by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Transferor, with the written consent of the Owner Trustee,
without the consent of any of the Noteholders or the Owner, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, (iii) to add any other provisions
with respect to matters or questions arising under this Agreement which shall
not be inconsistent with the provisions of this Agreement, (iv) to change,
modify, delete or add any other obligation of the Issuer and the Administrator;
provided, however, the Issuer and the Administrator shall have delivered to the
Indenture Trustee an Officer's Certificate, dated the date of any such action,
stating that each of the Issuer and the Administrator reasonably believes that
such action will not have an Adverse Effect, unless the Owner Trustee and the
Indenture Trustee shall consent thereto.

     This Agreement may also be amended from time to time, by a written
amendment duly executed and delivered by the Issuer, the Administrator and the
Transferor, with the written consent of the Owner Trustee, the holders of Notes
evidencing not less than a majority in the Outstanding Amount of the Notes and
the Owner, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or modifying in any
manner the rights of Noteholders or the Owner; provided, however, that, without
the consent of the Holders of all of the Notes then outstanding, no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Receivables or
distributions that are required to be made for the benefit of the Noteholders or
(b) reduce the aforesaid portion of the Outstanding Amount of the Notes, the
Holders of which are required to consent to any such amendment

                                       8
<PAGE>

     Prior to the execution of any such amendment or consent, the Administrator
shall furnish 10 days prior written notification of the substance of such
amendment or consent to each Rating Agency.  Promptly after the execution of any
such amendment or consent, the Administrator shall furnish written notification
of the substance of such amendment or consent to the Indenture Trustee.

     It shall not be necessary for the consent of Noteholders pursuant to this
Section 11 to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance thereof.

     Section 12.    Successors and Assigns.  This Agreement may not be assigned
                    ----------------------
by the Administrator unless such assignment is previously consented to in
writing by the Issuer, the Transferor and the Owner Trustee and subject to the
satisfaction of the Rating Agency Condition in respect thereof. An assignment
with such consent and satisfaction, if accepted by the assignee, shall bind the
assignee hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, this Agreement may be assigned by the
Administrator without the consent of the Issuer, the Transferor, the Owner
Trustee or the Rating Agencies to a corporation or other organization that is a
successor (by merger, consolidation or purchase of assets) to the Administrator,
provided that such successor organization executes and delivers to the Issuer,
the Transferor and the Owner Trustee an agreement in which such corporation or
other organization agrees to be bound hereunder by the terms of said assignment
in the same manner as the Administrator is bound hereunder. Subject to the
foregoing, this Agreement shall bind any successors or assigns of the parties
hereto.

     Section 13.    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.

     Section 14.    Headings. The section headings hereof have been inserted for
                    --------
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.

     Section 15     Counterparts.  This Agreement may be executed in
                    ------------
counterparts, each of which when so executed shall together constitute but one
and the same agreement.

     Section 16.    Severability.  Any provision of this Agreement that is
                    ------------
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     Section 17.    Not Applicable to Household Finance Corporation in Other
                    --------------------------------------------------------
Capacities.  Nothing in this Agreement shall affect any obligation Household
----------
Finance Corporation may have in any other capacity.

     Section 18.    Limitation of Liability of Owner Trustee.  Notwithstanding
                    ----------------------------------------
anything contained herein to the contrary, this instrument has been signed by
Wilmington Trust Company not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall Wilmington Trust
Company in its individual capacity or any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer.  For all purposes of this Agreement, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles IV, V, VI and VII of the Trust Agreement.

                                       9
<PAGE>

     Section 19.    Third-Party Beneficiary.
                    -----------------------

     The Owner Trustee is a third-party beneficiary to this Agreement and is
entitled to the rights and benefits hereunder and may enforce the provisions
hereof as if it were a party hereto.

     Section 20.    Nonpetition Covenants. Notwithstanding any prior termination
                    ---------------------
of this Agreement, the Administrator shall not at any time with respect to the
Issuer or the Transferor acquiesce, petition or otherwise invoke or cause the
Issuer or the Transferor to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
or the Transferor under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, conservator, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or the
Transferor or any substantial part of its property, or ordering the winding up
or liquidation of the affairs of the Issuer or the Transferor; provided,
however, that this Section 20 shall not operate to preclude any remedy described
in Article V of the Indenture.

     Section 21.    Successor Administrator. In the event of a servicing
                    -----------------------
transfer pursuant to Article V of the Transfer and Servicing Agreement, the
successor servicer under the Transfer and Servicing Agreement shall, upon the
date of such servicing transfer, become the successor Administrator hereunder.
"Administrator" shall mean initially Household Finance Corporation and
 -------------
thereafter its permitted successor and assigns as provided in Section 12 or any
successor Administrator as provided in this Section 21.

                                       10
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

                              WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely
                              as Owner Trustee on behalf of the
                              HOUSEHOLD CREDIT CARD MASTER
                              NOTE TRUST I

                              By:   /s/ Patricia A. Evans
                                 -----------------------------------------
                                 Name:  Patricia A. Evans
                                 Title: Senior Financial Services Advisor

                              HOUSEHOLD FINANCE CORPORATION,
                                 as Administrator,

                              By:   /s/ B.B. Moss, Jr.
                                 -----------------------------------------
                                 Name:  B.B. Moss, Jr.
                                 Title: Vice President and Treasurer

Acknowledged and Accepted:

By:  Household Receivables Funding, Inc. III,
     Transferor

     By:  /s/  S.H. Smith
        ----------------------------------
        Name:  S.H. Smith
        Title: Assistant Treasurer
<PAGE>

                                                                      SCHEDULE 1

The Administration Fee shall equal $1,200 per annum.
<PAGE>

                                                                       EXHIBIT A
                                                     [Form of Power of Attorney]

                               POWER OF ATTORNEY

STATE OF DELAWARE         )
                          )
COUNTY OF ______________  )

          KNOW ALL MEN BY THESE PRESENTS, that Household Credit Card Master Note
Trust I, a Delaware statutory business trust ("Trust"), does hereby make,
                                               -----
constitute and appoint Household Finance Corporation, as Administrator under the
Administration Agreement (as defined below), and its agents and attorneys, as
Attorneys-in-Fact to execute on behalf of the Trust all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Trust to prepare, file or deliver pursuant to the Related Agreements (as defined
in the Administration Agreement), including, without limitation, to appear for
and represent the Trust in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Trust, and with full
power to perform any and all acts associated with such returns and audits that
the Trust could perform, including without limitation, the right to distribute
and receive confidential information, defend and assert positions in response to
audits, initiate and defend litigation, and to execute waivers of restriction on
assessments of deficiencies, consents to the extension of any statutory or
regulatory time limit, and settlements.  For the purpose of this Power of
Attorney, the term "Administration Agreement" means the Amended and Restated
                    ------------------------
Administration Agreement, dated as of November 16, 2000, between the Trust and
Household Finance Corporation, as Administrator and as such may be amended from
time to time.

          This power of attorney is coupled with an interest and shall survive
and not be affected by the subsequent bankruptcy or dissolution of the Trust.

     All powers of attorney for this purpose heretofore filed or executed by the
Trust are hereby revoked.

     EXECUTED this ____ day of _________, 2000.

                              WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely
                              as Owner Trustee on behalf of the
                              HOUSEHOLD CREDIT CARD MASTER
                              NOTE TRUST I

                              By:__________________________________________
                                 Name:
                                 Title:<PAGE>

                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

--------------------------------------------------------------------------------

                         HOUSEHOLD BANK (NEVADA), N.A.

                                      and

                    HOUSEHOLD RECEIVABLES FUNDING, INC. III

                             AMENDED AND RESTATED
                        RECEIVABLES PURCHASE AGREEMENT
                      amending and restating in full the
         Receivables Purchase Agreement dated as of September 25, 2000

                         Dated as of November 16, 2000

--------------------------------------------------------------------------------
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
<S>                                                                                                         <C>
ARTICLE I    DEFINITIONS...................................................................................   1

     Section 1.01.  Definitions............................................................................   1

     Section 1.02.  Other Definitional Provisions..........................................................   4

ARTICLE II   PURCHASE AND CONVEYANCE OF RECEIVABLES........................................................   5

     Section 2.01.  Purchase...............................................................................   5

     Section 2.02.  Addition of Aggregate Addition Accounts................................................   6

     Section 2.03.  Addition of New Accounts...............................................................   7

     Section 2.04   Representations and Warranties.........................................................   8

     Section 2.05.  Delivery of Documents..................................................................   8

ARTICLE III  CONSIDERATION AND PAYMENT.....................................................................   9

     Section 3.01.  Purchase Price.........................................................................   9

     Section 3.02.  Adjustments to Purchase Price..........................................................   9

ARTICLE IV   REPRESENTATIONS AND WARRANTIES................................................................  10

     Section 4.01.  Representations and Warranties of the Bank Relating to the Bank........................  10

     Section 4.02.  Representations and Warranties of the Bank Relating to the Agreement
                      and the Receivables..................................................................  11
     Section 4.03.  Representations and Warranties of HRF..................................................  12

ARTICLE V    COVENANTS.....................................................................................  14

     Section 5.01.  Covenants of the Bank..................................................................  14

ARTICLE VI   REPURCHASE OBLIGATION.........................................................................  16

     Section 6.01.  Reassignment of Ineligible Receivables.................................................  16

     Section 6.02.  Reassignment of Trust Portfolio........................................................  16

ARTICLE VII  CONDITIONS PRECEDENT..........................................................................  17

     Section 7.01.  Conditions to HRF's Obligations Regarding Initial Receivables..........................  17

     Section 7.02.  Conditions Precedent to the Bank's Obligations.........................................  17

ARTICLE VIII TERM AND PURCHASE TERMINATION.................................................................  19

     Section 8.01.  Term...................................................................................  19

     Section 8.02.  Purchase Termination...................................................................  19

ARTICLE IX   MISCELLANEOUS PROVISIONS......................................................................  20

     Section 9.01.  Amendment..............................................................................  20

     Section 9.02.  Governing Law..........................................................................  20

     Section 9.03.  Notices................................................................................  20

     Section 9.04.  Severability of Provisions.............................................................  20

     Section 9.05.  Assignment.............................................................................  20
</TABLE>

                                      -i-
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                                                            Page
<S>                                                                                                         <C>
     Section 9.06.  Acknowledgement and Agreement of the Bank..............................................  21

     Section 9.07.  Further Assurances.....................................................................  21

     Section 9.08.  No Waiver; Cumulative Remedies.........................................................  21

     Section 9.09.  Counterparts...........................................................................  21

     Section 9.10.  Binding; Third-Party Beneficiaries.....................................................  21

     Section 9.11.  Merger and Integration.................................................................  22

     Section 9.12.  Headings...............................................................................  22

     Section 9.13.  Schedules and Exhibits.................................................................  22

     Section 9.14.  Survival of Representations and Warranties.............................................  22

     Section 9.15.  Nonpetition Covenant...................................................................  22

EXHIBIT A..................................................................................................   1

FORM OF SUPPLEMENTAL CONVEYANCE............................................................................   1

Schedule I..................................................................................................  2

LIST OF ACCOUNTS............................................................................................  2
</TABLE>

                                    -ii-
<PAGE>

          This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
November 16, 2000, by and between HOUSEHOLD RECEIVABLES FUNDING, INC. III, a
Delaware corporation ("HRF"), and HOUSEHOLD BANK (NEVADA), N.A., a national
                       ---
banking association (the "Bank") amends and restates in full the Receivables
                          ----
Purchase Agreement, dated as of September 25, 2000, between HRF and the Bank.

                             W I T N E S S E T H:

          WHEREAS, HRF desires to purchase, from time to time, certain
Receivables (hereinafter defined) arising under certain revolving credit
accounts of the Bank;

          WHEREAS, the Bank desires to sell and assign from time to time certain
Receivables to HRF upon the terms and conditions hereinafter set forth;

          WHEREAS, it is contemplated that the Receivables purchased hereunder
will be transferred by HRF to the Trust (hereinafter defined) in connection with
the issuance of certain Securities (hereinafter defined); and

          WHEREAS, the Bank agrees that all representations, warranties,
covenants and agreements made by the Bank herein with respect to the Accounts
(hereinafter defined) and Receivables shall also be for the benefit of the Owner
Trustee (hereinafter defined), the Indenture Trustee (hereinafter defined) and
all beneficiaries of the Trust, including the holders of the Securities.

          NOW, THEREFORE, it is hereby agreed by and between HRF and the Bank as
follows:

                                   ARTICLE I

                                  DEFINITIONS

          Section 1.01.  Definitions.  All capitalized terms used herein or in
                         -----------
any certificate, document, or Conveyance Paper made or delivered pursuant
hereto, and not defined herein or therein, shall have the meaning ascribed
thereto in the Transfer and Servicing Agreement; in addition, the following
words and phrases shall have the following meanings:

          "Account" shall mean (a) each Initial Account, (b) each Additional
           -------
Account (but only from and after the Addition Date with respect thereto), (c)
each Related Account, and (d) each account into which an Account shall be
transferred (a "Transferred Account") provided that (i) such transfer was made
                -------------------
in accordance with the Credit Guidelines and (ii) such account can be traced or
identified as an account into which an Account has been transferred, but shall
exclude (e) any Account that (x) after the Removal Date, the newly generated
Receivables in which shall not be assigned to HRF hereunder, (y) the right,
title and interest of HRF in the Receivables in which are reassigned to the Bank
pursuant to Section 6.01 or (z) the right, title and interest of the Trust in
the Receivables in which are assigned and transferred to the Servicer pursuant
to Section 3.03 of the Transfer and Servicing Agreement.

          "Account Owner" shall mean the Bank, or any other entity which is the
           -------------
issuer of the revolving credit relating to an Account pursuant to a Credit
Agreement and/or a seller of Receivables to HRF.

          "Addition Date" shall mean (a) with respect to Aggregate Addition
           -------------
Accounts, the date from and after which such Aggregate Addition Accounts are to
be included as Accounts pursuant to Section 2.02 and (b) with respect to New
Accounts, the first Distribution Date following the calendar

                                       1
<PAGE>

month in which the later of the dates on which such New Accounts are originated
or designated pursuant to Section 2.03 occurs.

          "Addition Notice Date" shall have the meaning specified in Section
           --------------------
2.02 of this Agreement.

          "Additional Account" shall mean each New Account and each Aggregate
           ------------------
Addition Account.

          "Additional Cut-Off Date" shall mean (a) with respect to Aggregate
           -----------------------
Addition Accounts, the date specified as such in the notice delivered with
respect thereto pursuant to Section 2.02, and (b) with respect to New Accounts,
the later of the dates on which such New Accounts are originated or designated
pursuant to Section 2.03.

          "Aggregate Addition Account" shall mean each Eligible Account that is
           --------------------------
designated pursuant to Section 2.02 to be included as an Account and is
identified in the computer file or microfiche list delivered to HRF by the Bank
pursuant to Sections 2.01 and 2.05.

          "Agreement" shall mean this Amended and Restated Receivables Purchase
           ---------
Agreement and all amendments hereof and supplements hereto.

          "Bank" shall mean Household Bank (Nevada), N.A., a national banking
           ----
association, and its successors and permitted assigns.

          "Closing Date" shall mean September 25, 2000.
           ------------

          "Conveyance" shall have the meaning specified in subsection 2.01(a).
           ----------

          "Conveyance Papers" shall have the meaning specified in subsection
           -----------------
4.01(c).

          "Credit Adjustment" shall have the meaning specified in Section 3.02.
           -----------------

          "Debtor Relief Laws" shall mean (a) the Bankruptcy Code of the United
           ------------------
States of America and (b) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, any state or any foreign country from
time to time in effect affecting the rights of creditors generally.

          "Eligible Receivable" shall have the meaning set forth in the Transfer
           -------------------
and Servicing Agreement, except that "the Bank" shall be substituted for each
occurrence of "the Transferor," "HRF" shall be substituted for each occurrence
of "the Owner Trustee," and all references to the Notes shall be ignored.

          "Finance Charge and Administrative Receivables" shall mean all
           ---------------------------------------------
Receivables in the Accounts which would be treated as "Finance Charge and
Administrative Receivables" in accordance with the definition for such term in
the Transfer and Servicing Agreement.

          "HRF" shall mean Household Receivables Funding, Inc. III, a Delaware
           ---
corporation, and its permitted successors and assigns.

                                       2
<PAGE>

          "Indenture" shall mean the Amended and Restated Master Indenture
           ---------
between the Trust and Wells Fargo Bank Minnesota, National Association, as
Indenture Trustee, dated as of November 16, 2000, as supplemented by Indenture
Supplements applicable to any Series that may be issued from time to time.

          "Indenture Supplement" shall mean the indenture supplement pursuant to
           --------------------
which a Series is issued.

          "Indenture Trustee" shall mean Wells Fargo Bank Minnesota, National
           -----------------
Association in its capacity as indenture trustee, or any successor indenture
trustee.

          "Initial Account" shall mean each Account included in the computer
           ---------------
file delivered to the Indenture Trustee as of the Closing Date.

          "Insolvency Event" shall have the meaning specified in Section 8.02.
           ----------------

          "New Account" shall mean each MasterCard(R) and VISA(R) revolving
           -----------
credit account established pursuant to a Credit Agreement, which account is
designated pursuant to Section 2.03 to be included as an Account and is
identified in the computer file or microfiche list delivered to HRF by the Bank
pursuant to Sections 2.01 and 2.05.

          "New Principal Receivables" shall have the meaning set forth in
           -------------------------
Section 3.01.

          "Obligor" shall mean, with respect to each Account, each person that
           -------
would be treated as an "Obligor" in accordance with the definition for such term
in the Transfer and Servicing Agreement.

          "Owner Trustee" shall mean Wilmington Trust Company, a Delaware
           -------------
banking corporation, the institution executing the Trust Agreement as and acting
in the capacity of Owner Trustee thereunder, or its successor in interest, or
any successor trustee appointed as provided in the Trust Agreement.

          "Principal Receivables" shall mean all Receivables other than Finance
           ---------------------
Charge and Administrative Receivables.

          "Purchase Price" shall have the meaning set forth in Section 3.01.
           --------------

          "Purchased Assets" shall have the meaning set forth in Section 2.01.
           ----------------

          "Receivables" shall mean all amounts shown on the Bank's records as
           -----------
amounts payable by Obligors on any Account from time to time, including amounts
payable for Principal Receivables and Finance Charge and Administrative
Receivables.  Receivables that become Defaulted Receivables will cease to be
included as Receivables as of the day on which they become Defaulted
Receivables.  Unless the context otherwise requires (whether or not there is a
specific reference to the underlying receivable), any reference in this
Agreement or any Supplemental Conveyance to a Receivable (including any
Principal Receivable, Finance Charge and Administration Receivable or Defaulted
Receivable) and any Collections thereon or other amounts recoverable with
respect thereto shall refer to only the fractional undivided interest that is
transferred from the Bank to HRF in the amounts paid or payable by Obligors on
the Accounts, which fractional interest may be less than a 100% undivided
interest therein.  Any reference in this Agreement to the "underlying
receivable" with respect to a Receivable shall refer to the receivable in which
such Receivable represents an undivided interest.

                                       3
<PAGE>

          "Removed Account" shall mean an Account hereunder that is a "Removed
           ---------------
Account" (as such term is defined in the Transfer and Servicing Agreement) that
is designated for removal pursuant to Section 2.10 of the Transfer and Servicing
Agreement.

          "Securities" shall mean any one of the Notes (as such term is defined
           ----------
in the Indenture) or the Transferor Certificates.

          "Supplemental Conveyance" shall have the meaning set forth in Section
           -----------------------
2.05.

          "Terminated RPA" shall mean the Receivables Purchase Agreement, dated
           --------------
as of December 1, 1994, between the Bank and Household Receivables Funding, Inc.

          "Transfer and Servicing Agreement" shall mean the Amended and Restated
           --------------------------------
Transfer and Servicing Agreement, dated as of November 16, 2000, among Household
Finance Corporation, as Servicer, HRF, as Transferor, and the Owner Trustee on
behalf of the Trust, and all amendments and supplements thereto.

          "Trust" shall mean the Household Credit Card Master Note Trust I,
           -----
acting by and through Wilmington Trust Company, not in its individual capacity
but solely as Owner Trustee.

          "Trust Agreement" shall mean the Household Credit Card Master Note
           ---------------
Trust I Amended and Restated Trust Agreement, dated as of November 16, 2000,
between HRF, as Transferor, and the Owner Trustee on behalf of the Trust.

          "Trust Collateral" shall have the meaning set forth in Section 2.01.
           ----------------

          Section 1.02.  Other Definitional Provisions.
                         -----------------------------

          All terms defined in this Agreement shall have the defined meanings
when used in any certificate, other document, or Conveyance Paper made or
delivered pursuant hereto unless otherwise defined therein.

          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.

          All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Transfer and Servicing Agreement and the Indenture.

          All capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Indenture or the Transfer and
Servicing Agreement.

                              [END OF ARTICLE I]

                                       4
<PAGE>

                                  ARTICLE II

                    PURCHASE AND CONVEYANCE OF RECEIVABLES

          Section 2.01.  Purchase.
                         --------

          (a) By execution of this Agreement, the Bank does hereby sell,
transfer, assign, set over and otherwise convey to HRF (collectively, the

"Conveyance"), without recourse except as provided herein, all its right, title
-----------
and interest in, to and under the Receivables existing at the close of business
on the Closing Date, in the case of Receivables arising in the Initial Accounts,
and on each Additional Cut-Off Date, in the case of Receivables arising in the
Additional Accounts, and in each case thereafter created from time to time until
the termination of this Agreement pursuant to Article VIII hereof, all
Interchange and Recoveries with respect to such Accounts, all monies due or to
become due and all amounts received or receivable with respect thereto, and all
proceeds (including, without limitation, "proceeds" as defined in the UCC)
thereof (the "Purchased Assets").
              ----------------

          (b) In connection with such Conveyance, the Bank agrees (i) to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables existing at the close of business on the Closing Date
and thereafter created in the Initial Accounts and existing as of the Additional
Cut-Off Date and thereafter created in the Additional Accounts, meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect, and maintain perfection of, the Conveyance of such
Receivables from the Bank to HRF, (ii) that such financing statements shall name
the Bank, as seller, and HRF, as purchaser, of the Receivables and (iii) to
deliver a file-stamped copy of such financing statements or other evidence of
such filings (excluding such continuation statements, which shall be delivered
as filed) to HRF as soon as is practicable after filing.

          (c) In connection with each such Conveyance, the Bank further agrees
that it will, at its own expense, (i) on or prior to (A) the Closing Date, in
the case of Initial Accounts, (B) the applicable Addition Date, in the case of
Additional Accounts, and (C) the applicable Removal Date, in the case of Removed
Accounts, indicate in its computer files that, in the case of the Initial
Accounts or the Additional Accounts, Receivables created in connection with such
Accounts have been conveyed to HRF in accordance with this Agreement and have
been conveyed by HRF to the Trust pursuant to the Transfer and Servicing
Agreement and have been pledged by the Trust to the Indenture Trustee pursuant
to the Indenture for the benefit of the Noteholders by including (or deleting,
in the case of newly originated Receivables in Removed Accounts) in such
computer files the code that identifies each such Account and (ii) on or prior
to (A) the Closing Date, in the case of the Initial Accounts, (B) the date that
is five Business Days after the applicable Addition Date, in the case of
designation of Aggregate Addition Accounts, (C) the date that is 30 days after
the applicable Addition Date, in the case of New Accounts, and (D) the date that
is five Business Days after the applicable Removal Date, in the case of Removed
Accounts, to deliver to HRF a computer file or microfiche list containing a true
and complete list of all such Accounts specifying for each such Account, as of
the Closing Date, in the case of the Initial Accounts, the applicable Additional
Cut-Off Date, in the case of Additional Accounts, and the applicable Removal
Date, in the case of Removed Accounts, (1) its account number, (2) the aggregate
amount outstanding in such Account and (3) the aggregate amount of Principal
Receivables in such Account.  Each such computer file or microfiche list, as
supplemented from time to time to reflect Additional Accounts or Removed
Accounts, shall be marked as Schedule I to this Agreement, shall be delivered to
                             ----------
HRF, and is hereby incorporated into and made a part of this Agreement.  The
Bank further agrees not to alter the code referenced in clause (i) of this
paragraph with respect to any Account during the term of this Agreement unless
and until such Account becomes a Removed Account.

                                       5
<PAGE>

          (d) The parties hereto intend that the conveyance of the Bank's right,
title and interest in and to the Purchased Assets shall constitute an absolute
sale, conveying good title free and clear of any liens, claims, encumbrances or
rights of others from the Bank to HRF and that the Purchased Assets shall not be
part of the Bank's estate in the event of the insolvency of the Bank or a
conservatorship, receivership or similar event with respect to the Bank.  It is
the intention of the parties hereto that the arrangements with respect to the
Purchased Assets shall constitute a purchase and sale of such Purchased Assets
and not a loan or a borrowing secured by such Purchased Assets.  In the event,
however, that it were to be determined 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 the Bank shall be deemed to have granted and does
hereby grant to HRF a first priority perfected security interest in all of the
Bank's right, title and interest, whether now owned or hereafter acquired, in,
to and under the Receivables and other Purchased Assets to secure the
obligations of the Bank hereunder.

          (e) To the extent that the Bank retains any interest in the Purchased
Assets, the Bank hereby grants to the Indenture Trustee for the benefit of the
Noteholders a security interest in all of the Bank's right, title, and interest,
whether now owned or hereafter acquired, in, to, and under the Receivables and
other Purchased Assets that are intended to be pledged to the Indenture Trustee
pursuant to the Indenture (collectively, the "Trust Collateral"), to secure the
                                              ----------------
performance of all of the obligations of the Bank under this Agreement and any
other agreement or document related to the Transfer and Servicing Agreement or
the Indenture.  With respect to the Trust Collateral, the Indenture Trustee
shall have all of the rights that it has under the Transfer and Servicing
Agreement and the Indenture and all of the rights of a secured creditor under
the UCC.

          Section 2.02.  Addition of Aggregate Addition Accounts.
                         ---------------------------------------

          (a) If, from time to time, HRF becomes obligated to designate
Aggregate Addition Accounts (as such term is defined in the Transfer and
Servicing Agreement) pursuant to subsection 2.09(a) of the Transfer and
Servicing Agreement, then HRF may, at its option, give the Bank written notice
thereof on or before the fifth Business Day (the "Addition Notice Date") prior
                                                  --------------------
to the Addition Date therefor, and upon receipt of such notice the Bank shall on
or before the Addition Date, designate sufficient Eligible Accounts to be
included as Additional Accounts so that after the inclusion thereof HRF will be
in compliance with the requirements of said subsection 2.09(a).  Additionally,
subject to subsections 2.09(b) and (c) of the Transfer and Servicing Agreement
and subsection 2.02(b), from time to time Eligible Accounts may be designated to
be included as Aggregate Addition Accounts, upon the mutual agreement of HRF and
the Bank.  In either event, the Bank shall have sole responsibility for
selecting the Aggregate Addition Accounts.

          (b) On the Addition Date with respect to any designation of Aggregate
Addition Accounts, HRF shall purchase the Bank's right, title and interest in,
to and under the Receivables in Aggregate Addition Accounts (and such Aggregate
Addition Accounts shall be deemed to be Accounts for purposes of this Agreement)
and the related Purchased Assets, subject to the satisfaction of the following
conditions on such Addition Date:

               (i)   all Aggregate Addition Accounts shall be Eligible Accounts;

               (ii)  the Bank shall have delivered to HRF copies of UCC-1
     financing statements covering such Aggregate Addition Accounts or
     Participation Interests, if necessary to perfect HRF's undivided interest
     in the Receivables arising therein;

                                       6
<PAGE>

                (iii)    to the extent required of HRF by Section 2.09(c) of the
     Transfer and Servicing Agreement, the Bank shall have deposited in the
     Collection Account (as such term is defined in the Indenture) all
     Collections with respect to such Aggregate Addition Accounts or
     Participation Interests since the Additional Cut-Off Date;

                (iv)     as of each of the Additional Cut-Off Date and the
     Addition Date, no Insolvency Event with respect to the Bank or other
     Account Owner, as the case may be, shall have occurred nor shall the
     transfer of the Receivables arising in the Aggregate Addition Accounts or
     Participation Interests to HRF have been made in contemplation of the
     occurrence thereof;

                (v)      solely with respect to Aggregate Addition Accounts
     designated pursuant to the second sentence of subsection 2.02(a), the
     Rating Agency Condition shall have been satisfied;

                (vi)     the Bank shall have delivered to HRF an Officer's
     Certificate, dated the Addition Date, confirming, to the extent applicable,
     the items set forth in clauses (i) through (v) above; and

                (vii)    the transfer of the Receivables arising in the
     Aggregate Addition Accounts or Participation Interests to HRF will not
     result in an Adverse Effect and the Bank shall have delivered to HRF an
     Officer's Certificate, dated the Addition Date, stating that the Bank
     reasonably believes that the addition of the Receivables arising in the
     Aggregate Addition Accounts or Participation Interests to HRF will not have
     an Adverse Effect.

          Section 2.03.  Addition of New Accounts.
                         ------------------------

          (a)  Upon the mutual agreement of HRF and the Bank, subject to
compliance with the conditions specified in subsections 2.09(d) and (e) of the
Transfer and Servicing Agreement and compliance with subsection 2.03(b), the
Bank may designate newly originated Eligible Accounts to be included as New
Accounts.  Upon such designation, such New Accounts shall be deemed to be
Accounts hereunder.  The Bank shall cooperate with HRF to enable HRF to comply
with the requirements of Section 2.09 of the Transfer and Servicing Agreement
and shall cooperate with HRF to enable it to perform with respect to the
Receivables in such New Accounts all actions specified in subsections 2.09(d)
and (e) of the Transfer and Servicing Agreement.

          (b)  On the Addition Date with respect to any New Accounts, HRF shall
purchase the Bank's right, title and interest in, to and under the Receivables
in New Accounts (and such New Accounts shall be deemed to be Accounts for
purposes of this Agreement) as of the close of business on the applicable
Additional Cut-Off Date and the related Purchased Assets, subject to the
satisfaction of the following conditions on such Addition Date:

               (i)   all New Accounts shall be Eligible Accounts;

               (ii)  the Bank shall have delivered to HRF copies of UCC-1
     financing statements covering such New Accounts, if necessary to perfect
     HRF's interest in the Receivables arising therein;

               (iii) to the extent required of HRF by Section 2.09(e) of the
     Transfer and Servicing Agreement, the Bank shall have deposited in the
     Collection Account all Collections with respect to such New Accounts since
     the Additional Cut-Off Date;

                                       7
<PAGE>

                  (iv)  as of each of the Additional Cut-Off Date and the
     Addition Date, no Insolvency Event with respect to the Bank or other
     Account Owner, as applicable, shall have occurred nor shall the transfer of
     the Receivables arising in the New Accounts to HRF have been made in
     contemplation of the occurrence thereof;

                  (v)   the Bank shall have delivered to HRF an officer's
     certificate, dated the Addition Date, confirming to the extent applicable,
     the items set forth in clauses (ii) through (iv) above; and

                  (vi)  the transfer of the Receivables arising in the New
     Accounts to HRF will not result in an Adverse Effect, and the Bank shall
     have delivered to HRF an officer's certificate, dated the Addition Date,
     stating that the Bank reasonably believes that the addition to the Trust of
     the Receivables arising in the New Accounts will not have an Adverse
     Effect.

          Section 2.04  Representations and Warranties.  The Bank hereby
                        ------------------------------
represents and warrants to HRF as of the related Addition Date as to the matters
set forth in subsections 2.02(b)(ii) and 2.03(b)(ii) above and that, in the case
of Additional Accounts, the list delivered pursuant to Section 2.05 below is, as
of the applicable Additional Cut-Off Date, true and complete in all material
respects.

          Section 2.05. Delivery of Documents.  In the case of the designation
                        ---------------------
of Additional Accounts, the Bank shall deliver to HRF (i) the computer file or
microfiche list required to be delivered pursuant to Section 2.01 with respect
                                                     ------------
to such Additional Accounts on the date such file or list is required to be
delivered pursuant to Section 2.01 (the "Document Delivery Date") and (ii) a
                                         ----------------------
duly executed, written assignment (including an acceptance by HRF),
substantially in the form of Exhibit A (the "Supplemental Conveyance"), on the
                             ---------       -----------------------
Document Delivery Date.  In addition, in the case of the designation of New
Accounts, the Bank shall deliver to HRF on the Document Delivery Date an
Officer's Certificate confirming, to the extent applicable, the items set forth
in clause (i) through (vi) of subsection 2.03(b) above.

                              [END OF ARTICLE II]

                                       8
<PAGE>

                                  ARTICLE III

                           CONSIDERATION AND PAYMENT

          Section 3.01.  Purchase Price.
                         --------------

          (a) The "Purchase Price" for the Receivables in the Initial Accounts
                   --------------
and the related Purchased Assets conveyed to HRF under this Agreement shall be
payable on the Closing Date and shall be an amount equal to 100% of the
aggregate balance of Principal Receivables in those Accounts as of the Closing
Date, plus the present value of anticipated excess spread, including Interchange
computed by taking into account factors such as historical losses (and
discounted to take into account any uncertainty as to future performance
matching historical performance), servicing fees, delinquencies and paydown
rates, yield and such other factors as the Bank and HRF mutually agree will
result in a Purchase Price determined to be the fair market value of such
Purchased Assets.  This computation of initial purchase price shall assume no
reinvestment in new Receivables.  The Purchase Price for the Receivables and the
related Purchased Assets (including Receivables and the related Purchased Assets
in Additional Accounts) to be conveyed to HRF under this Agreement which come
into existence after the Closing Date, shall be payable on the Distribution Date
following the Due Period in which such Receivables and Purchased Assets are
conveyed by the Bank to HRF in an amount equal to 100% of the aggregate balance
of the Principal Receivables so conveyed (the "New Principal Receivables"), plus
                                               -------------------------
the present value of anticipated excess spread, including Interchange computed
by taking into account factors such as historical losses (and discounted to take
into account any uncertainty as to future performance matching historical
performance), servicing fees, delinquencies, paydown rates and yield.

          (b) The Purchase Price to be paid by HRF on the Closing Date and on
each Distribution Date following a Due Period during which New Principal
Receivables are conveyed to HRF shall be paid in cash.

          Section 3.02.  Adjustments to Purchase Price.  The Purchase Price
                         -----------------------------
shall be adjusted on each Distribution Date (a "Credit Adjustment") with respect
                                                -----------------
to any Receivable previously conveyed to HRF by the Bank which has since been
reversed by the Bank or the Servicer because of a rebate, refund, unauthorized
charge or billing error to a cardholder because such Receivable was created in
respect of merchandise which was refused or returned by a cardholder.  The
amount of such adjustment shall equal (x) the reduction in the principal balance
of such Receivable resulting from the occurrence of such event multiplied by (y)
the quotient (expressed as a percentage) of (i) the Purchase Price for Principal
Receivables payable on such Distribution Date computed in accordance with
Section 3.01(a) divided by (ii) the Principal Receivables paid for on such date
pursuant to such Section.  In the event that an adjustment pursuant to this
Section 3.02 causes the Purchase Price to be a negative number, the Bank agrees
that, not later than 1:00 P.M. New York City time on such Distribution Date, the
Bank shall pay to HRF an amount equal to the amount by which the Purchase Price
minus the Credit Adjustment would be reduced below zero.

                             [END OF ARTICLE III]

                                       9
<PAGE>

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES

          Section 4.01.  Representations and Warranties of the Bank Relating to
                         ------------------------------------------------------
the Bank.  The Bank hereby represents and warrants to, and agrees with, HRF as
--------
of the Closing Date and on each Addition Date, that:

          (a) Organization and Good Standing.  The Bank is a national bank duly
              ------------------------------
organized and validly existing in good standing under the laws of the United
States 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.

          (b) Due Qualification.  The Bank is duly qualified to do business and
              -----------------
is in good standing as a foreign corporation (or is exempt from such
requirements) and has obtained all necessary licenses and approvals, in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Credit Agreement relating to an Account or any
Receivable unenforceable by the Bank, HRF or the Owner Trustee on behalf of the
Trust and (ii) have a material adverse effect on the Noteholders.

          (c) Due Authorization.  The execution, delivery and performance of
              -----------------
this Agreement and any other document or instrument delivered pursuant hereto,
including any Supplemental Conveyance to which the Bank is a party (such other
documents or instruments, collectively, the "Conveyance Papers"), and the
                                             -----------------
consummation of the transactions provided for in this Agreement and the
Conveyance Papers have been duly authorized by the Bank by all necessary
corporate action on the part of the Bank.

          (d) No Conflict.  The execution and delivery of this Agreement and the
              -----------
Conveyance Papers by the Bank, 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 the Bank 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 the Bank is a party or by which it or any of
its properties are bound.

          (e) No Violation.  The execution, delivery and performance of this
              ------------
Agreement and the Conveyance Papers by the Bank and the fulfillment of the terms
contemplated herein and therein applicable to the Bank will not conflict with or
violate any Requirements of Law applicable to the Bank.

          (f) No Proceedings.  There are no proceedings or investigations
              --------------
pending or, to the best knowledge of the Bank, threatened against the Bank,
before any Governmental Authority (i) asserting the invalidity of this Agreement
or the Conveyance Papers, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or the Conveyance Papers, (iii)
seeking any determination or ruling that, in the reasonable judgment of the
Bank, would materially and adversely affect the performance by the Bank 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 the United States
Federal or Delaware income tax systems.

                                       10
<PAGE>

          (g)  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 the Bank in connection with the execution and
delivery by the Bank of this Agreement and the Conveyance Papers and the
performance of the transactions contemplated by this Agreement or the Conveyance
Papers by the Bank have been duly obtained, effected or given and are in full
force and effect.

          The representations and warranties set forth in this Section 4.01
shall survive the transfer and assignment of the Receivables to HRF.  Upon
discovery by the Bank or HRF of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give written notice to
the other party, the Owner Trustee and the Indenture Trustee within three
Business Days following such discovery.

          Section 4.02.  Representations and Warranties of the Bank Relating to
                         ------------------------------------------------------
the Agreement and the Receivables.
---------------------------------

          (a)  Representations and Warranties.  The Bank hereby represents and
               ------------------------------
warrants to HRF as of the date of this Agreement, as of the Closing Date and,
with respect to Additional Accounts, as of the related Addition Date that:

               (i)    this Agreement and, in the case of Additional Accounts,
     the related Supplemental Conveyance, each constitutes a legal, valid and
     binding obligation of the Bank enforceable against the Bank in accordance
     with its terms, except as such enforceability may be limited by applicable
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting creditors' rights generally from time to time in effect or
     general principles of equity;

               (ii)   as of the Closing Date with respect to Initial Accounts,
     and as of the related Additional Cut-Off Date with respect to Additional
     Accounts, Schedule I to this Agreement, as supplemented to such date, is an
               ----------
     accurate and complete listing in all material respects of all the Accounts
     as of the Closing Date or such Additional Cut-Off Date, as the case may be,
     and the information contained therein with respect to the identity of such
     Accounts and the Receivables existing thereunder is true and correct in all
     material respects as of the Closing Date or such applicable Additional Cut-
     Off Date, as the case may be;

               (iii)  each Receivable has been conveyed to HRF free and clear of
     any Lien and each underlying receivable is free and clear of all Liens;

               (iv)   all authorizations, consents, orders or approvals of or
     registrations or declarations with any Governmental Authority required to
     be obtained, effected or given by the Bank in connection with the
     conveyance of Receivables to HRF have been duly obtained, effected or given
     and are in full force and effect;

               (v)    this Agreement or, in the case of Additional Accounts, the
     related Supplemental Conveyance constitutes a valid sale, transfer and
     assignment to HRF of all right, title and interest of the Bank in the
     Receivables and the proceeds thereof and the Interchange payable pursuant
     to this Agreement and the Recoveries payable pursuant to this Agreement;

               (vi)   on the Additional Cut-Off Date, each related Additional
     Account is an Eligible Account;

               (vii)  on the applicable Additional Cut-Off Date, each Receivable
     generated thereunder is an Eligible Receivable;

                                       11
<PAGE>

               (viii) as of the date of the creation of any new Receivable,
     such Receivable is an Eligible Receivable; and

               (ix)   no selection procedures believed by the Bank to be
     materially adverse to the interests of HRF or the Noteholders have been
     used in selecting such Accounts.

          (b)  Notice of Breach.  The representations and warranties set forth
               ----------------
in this Section 4.02 shall survive the transfer and assignment of the
Receivables to HRF. Upon discovery by either the Bank or HRF of a breach of any
of the representations and warranties set forth in this Section 4.02, the party
discovering such breach shall give written notice to the other party, the Owner
Trustee and the Indenture Trustee within three Business Days following such
discovery; provided that the failure to give notice within three Business Days
does not preclude subsequent notice. The Bank hereby acknowledges that HRF
intends to rely on the representations hereunder in connection with
representations made by HRF to secured parties, assignees or subsequent
transferees including but not limited to transfers made by HRF to the Trust
pursuant to the Transfer and Servicing Agreement and by the Trust to the
Indenture Trustee pursuant to the Indenture and that the Owner Trustee and the
Indenture Trustee may enforce such representations directly against the Bank.

          Section 4.03.  Representations and Warranties of HRF.  As of the
                         -------------------------------------
Closing Date and on each Addition Date, HRF hereby represents and warrants to,
and agrees with, the Bank that:

          (a)  Organization and Good Standing.  HRF is a corporation duly
               ------------------------------
organized and validly existing 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.

          (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 HRF by
all necessary corporate action on the part of HRF.

          (c)  No Conflict. The execution and delivery of this Agreement and the
               -----------
Conveyance Papers by HRF, 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 HRF, 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 HRF is a party or by which it or any of its properties are
bound.

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

          (e)  No Proceedings.  There are no proceedings or investigations
               --------------
pending or, to the best knowledge of HRF, threatened against HRF, before any
Governmental Authority (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 HRF,
would materially and adversely affect the performance by HRF 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.

                                       12
<PAGE>

          (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 HRF in connection with the execution and
delivery by HRF of this Agreement and the Conveyance Papers and the performance
of the transactions contemplated by this Agreement and the Conveyance Papers
have been duly obtained, effected or given and are in full force and effect.

          The representations and warranties set forth in this Section 4.03
shall survive the Conveyance of the Receivables to HRF.  Upon discovery by HRF
or the Bank of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the other
party, the Owner Trustee and the Indenture Trustee.

                              [END OF ARTICLE IV]

                                       13
<PAGE>

                                   ARTICLE V

                                   COVENANTS

          Section 5.01.  Covenants of the Bank.  The Bank hereby covenants and
                         ---------------------
agrees with HRF as follows:

          (a)  Receivables Not To Be Evidenced by Promissory Notes.  Except in
               ---------------------------------------------------
connection with its enforcement or collection of an Account, the Bank will take
no action to cause any Receivable (or underlying receivable) to be evidenced by
any instrument (as defined in the UCC) and if any Receivable (or underlying
receivable) is so evidenced as a result of any action by the Bank it shall be
deemed to be an Ineligible Receivable in accordance with Section 6.01(a) and
shall be reassigned to the Bank in accordance with Section 6.01(b)

          (b)  Security Interests.  Except for the conveyances hereunder, the
               ------------------
Bank will not sell, pledge, assign or transfer to any other Person, or take any
other action inconsistent with HRF's ownership of the Receivables or grant,
create, incur, assume or suffer to exist any Lien (arising through or under the
Bank) on, any Receivable (or the underlying receivable), whether now existing or
hereafter created, or any interest therein, and the Bank shall not claim any
ownership interest in the Receivables and shall defend the right, title and
interest of HRF in, to and under the Receivables, whether now existing or
hereafter created, against all claims of third parties claiming through or under
the Bank.

          (c)  Account Allocations. In the event that the Bank is unable for any
               -------------------
reason to transfer Receivables to HRF in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 8.02 or any order of any Governmental Authority), then, in
any such event, the Bank agrees (except as prohibited by any such order) to
allocate and pay to HRF, after the date of such inability, all amounts that HRF
will be required to allocate and pay to the Trust pursuant to Section 2.11 of
the Transfer and Servicing Agreement.

          (d)  Delivery of Collections or Recoveries. In the event that the Bank
               -------------------------------------
receives Collections or Recoveries, the Bank agrees to pay to HRF (or to the
Servicer if HRF so directs) all such Collections and Recoveries as soon as
practicable after receipt thereof.

          (e)  Notice of Liens.  The Bank shall notify HRF promptly after
               ---------------
becoming aware of any Lien on any Receivable (or on the underlying receivable)
other than the conveyances hereunder, under the Transfer and Servicing Agreement
and under the Indenture.

          (f)  Interchange.  Not later than 1:00 p.m., New York City time, on
               -----------
each Transfer Date, the Bank shall deposit into the Collection Account, in
immediately available funds, (i) the amount of Interchange to be included as
Collections of Finance Charge and Administrative Receivables with respect to the
preceding Due Period or (ii) if at any time the Bank cannot identify the amount
of such Interchange, the amount reasonably estimated by the Bank as the amount
of such Interchange.

          (g)  Documentation of Transfer.  The Bank shall undertake to file the
               -------------------------
documents which would be necessary to perfect and maintain the transfer of the
Purchased Assets to HRF.

          (h)  Periodic Rate Finance Charges.  Except (A) as otherwise required
               -----------------------------
by any Requirements of Law or (B) as is deemed by the Bank or other Account
Owner, as the case may be, to be necessary in order for it to maintain its
credit business or a program operated by such credit business on a competitive
basis based on a good faith assessment by it of the nature of the competition
with respect to the credit business or such program, it shall not at any time
take any action which would have the effect

                                       14
<PAGE>

of reducing the Series Portfolio Yield to a level that could be reasonably
expected to result in an Adverse Effect with respect to any Series based on the
insufficiency of the Series Portfolio Yield or any similar test.

          (i)  Credit Agreements and Guidelines.  Subject to compliance with all
               --------------------------------
Requirements of Law and paragraph (h) above, the Bank (or other Account Owner if
the Bank is not the Account Owner) may change the terms and provisions of the
applicable Credit Agreements or the applicable Credit Guidelines of the Bank (or
other Account Owner if the Bank is not the Account Owner) in any respect
(including the calculation of the amount or the timing of charge-offs and the
Periodic Rate Finance Charges to be assessed thereon).  Notwithstanding the
above, unless required by Requirements of Law or as permitted by paragraph (h)
above, the Bank (or other Account Owner if the Bank is not the Account Owner)
will not take any action unless (i) at the time of such action, the Bank or
other Account Owner, as the case may be, reasonably believes that such action
will not cause an Adverse Effect, and (ii) such change is made applicable to the
comparable segment of the revolving credit accounts owned by the Bank or other
Account Owner, as the case may be, which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of such change,
except as otherwise restricted by an endorsement, sponsorship, or other
agreement between the Bank or other Account Owner, as the case may be, and an
unrelated third party or by the terms of the Credit Agreements.

          (j)  Approval of Office Records.  The Bank shall cause this Agreement
               --------------------------
to be duly approved by the Bank's Board of Directors, and the Bank shall
maintain this Agreement as a part of the official records of the Bank for the
term of this Agreement.

          (k)  MasterCard International and VISA USA.  The Bank shall, to the
               -------------------------------------
extent applicable to Accounts owned or serviced by it, use its best efforts to
remain, either directly or indirectly, a member in good standing of the
MasterCard system, the VISA system and any other similar entity's or
organization's system relating to any other type of revolving credit card
accounts included as Accounts.

                              [END OF ARTICLE V]

                                       15
<PAGE>

                                  ARTICLE VI

                             REPURCHASE OBLIGATION

          Section 6.01.  Reassignment of Ineligible Receivables.
                         --------------------------------------

          (a)  In the event any representation or warranty under Section
4.02(a)(ii), (iii), (iv), (vi), (vii) or (viii) is not true and correct in any
material respect as of the date specified therein with respect to any Receivable
or the related Account and as a result of such breach HRF is required to accept
reassignment of Ineligible Receivables previously sold by the Bank to HRF
pursuant to Section 2.05(a) of the Transfer and Servicing Agreement, the Bank
shall accept reassignment of HRF's interest in such Ineligible Receivables on
the terms and conditions set forth in Section 6.01(b).

          (b)  The Bank shall accept reassignment of any Ineligible Receivables
previously sold by the Bank to HRF from HRF on the date on which such
reassignment obligation arises, and shall pay for such reassigned Ineligible
Receivables by paying to HRF, not later than 3:00 p.m., New York City time on
such date, an amount equal to the unpaid principal balance of such Ineligible
Receivables plus accrued and unpaid finance charges at the annual percentage
rate applicable to such Receivables from the last date billed through the end of
the Due Period in which such reassignment obligation arises.  Upon reassignment
of such Ineligible Receivables, HRF shall automatically and without further
action be deemed to sell, transfer, assign, set-over and otherwise convey to the
Bank, without recourse, representation or warranty, all the right, title and
interest of HRF in and to such Ineligible Receivables, all Interchange and
Recoveries related thereto, all monies and amounts due or to become due with
respect thereto and all proceeds thereof; and such reassigned Ineligible
Receivables shall be treated by HRF as collected in full as of the date on which
they were transferred.  HRF shall execute such documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by the Bank to effect the conveyance of such Ineligible Receivables
and other property pursuant to this subsection.

          Section 6.02.  Reassignment of Trust Portfolio.  In the event any
                         -------------------------------
representation or warranty set forth in Section 4.01(a), (c), (d), (f) or (g) or
Section 4.02(a)(i), (a)(v) or (a)(ix) is not true and correct in any material
respect and as a result of such breach HRF is required to accept a reassignment
of the Receivables previously sold by the Bank to HRF pursuant to Section 2.06
of the Transfer and Servicing Agreement, the Bank shall be obligated to accept a
reassignment of HRF's interest in such Receivables on the terms set forth below.

          The Bank shall pay to HRF by depositing in the Collection Account in
immediately available funds, not later than 1:00 P.M. New York City time, on the
first Transfer Date following the Due Period in which such reassignment
obligation arises, in payment for such reassignment, an amount equal to the
amount specified in Section 2.06 of the Transfer and Servicing Agreement.  Upon
such reassignment of Receivables, HRF shall automatically and without further
action be deemed to sell, transfer, assign, set-over and otherwise convey to the
Bank, without recourse, representation or warranty, all the right, title and
interest of HRF in and to such Receivables, all Interchange and Recoveries
related thereto, all monies and amounts due or to become due with respect
thereto and all proceeds thereof; and such reassigned Receivables shall be
treated by HRF as collected in full as of the date on which they were
transferred.  HRF shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the
Bank to effect the conveyance of such Receivables and other property pursuant to
this subsection.

                              [END OF ARTICLE VI]

                                       16
<PAGE>

                                  ARTICLE VII

                             CONDITIONS PRECEDENT

          Section 7.01.  Conditions to HRF's Obligations Regarding Initial
                         -------------------------------------------------
Receivables.  The obligations of HRF to purchase the Receivables in the Initial
-----------
Accounts on the Closing Date shall be subject to the satisfaction of the
following conditions:

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

          (b)  All information concerning the Initial Accounts provided to HRF
shall be true and correct as of the Closing Date in all material respects;

          (c)  The Bank shall have (i) delivered to HRF a computer file or
microfiche list containing a true and complete list of all Initial Accounts
identified by account number and by the Receivables balance as of the Closing
Date and (ii) substantially performed all other obligations required to be
performed by the provisions of this Agreement;

          (d)  The Bank shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables (other than Receivables in
Additional Accounts) now existing and hereafter created for the transfer of
accounts and general intangibles (each as defined in Section 9-106 of the UCC)
meeting the requirements of applicable state law in such manner and in such
jurisdictions as would be necessary to perfect the sale of and security interest
in the Receivables from the Bank to HRF, and shall deliver a file-stamped copy
of such financing statements or other evidence of such filings to HRF;

          (e)  On or before the Closing Date, (i) HRF and the Owner Trustee
shall have entered into the Trust Agreement (ii) HRF, the Bank and the Owner
Trustee shall have entered into the Transfer and Servicing Agreement, (iii) the
Trust and the Indenture Trustee shall have entered into the Indenture and (iv)
the closing under the Transfer and Servicing Agreement and the Indenture shall
take place simultaneously with the initial closing hereunder; and

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

          Section 7.02.  Conditions Precedent to the Bank's Obligations.  The
                         ----------------------------------------------
obligations of the Bank to sell Receivables in the Initial Accounts on the
Closing Date shall be subject to the satisfaction of the following conditions:

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

          (b)  Payment or provision for payment of the Purchase Price in
accordance with the provision of Section 3.01 hereof shall have been made; and

                                       17
<PAGE>

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

                             [END OF ARTICLE VII]

                                       18
<PAGE>

                                 ARTICLE VIII

                         TERM AND PURCHASE TERMINATION

          Section 8.01.  Term.  This Agreement shall commence as of the date of
                         ----
execution and delivery hereof and shall continue until the termination of the
Trust as provided in Article VIII of the Trust Agreement.

          Section 8.02.  Purchase Termination.  If the Bank shall fail generally
                         --------------------
to, or admit in writing its inability to, pay its debts as they become due; or
if a proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of the Bank in an
involuntary case under any Debtor Relief Law, or for the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or
other similar official of the Bank or for any substantial part of the Bank's
property, or for the winding-up or liquidation of the Bank's affairs and, if
instituted against the Bank, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of the
actions sought in such proceeding shall occur; or if the Bank shall commence a
voluntary case under any Debtor Relief Law, or if the Bank shall consent to the
entry of an order for relief in an involuntary case under any Debtor Relief Law,
or consent to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator, conservator or other similar
official of, or for, any substantial part of its property, or any general
assignment for the benefit of its creditors; or the Bank or any subsidiary of
the Bank shall have taken any corporate action in furtherance of any of the
foregoing actions (each an "Insolvency Event"); then the Bank shall immediately
                            ----------------
cease to transfer Principal Receivables to HRF and shall promptly give notice to
HRF, the Owner Trustee and the Indenture Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to HRF of additional Principal
Receivables, Principal Receivables transferred to HRF prior to the occurrence of
such Insolvency Event and Collections in respect of such Principal Receivables
and Finance Charge and Administrative Receivables whenever created, accrued in
respect of such Principal Receivables, shall continue to be property of HRF
available for transfer by HRF to the Trust pursuant to the Transfer and
Servicing Agreement.

                             [END OF ARTICLE VIII]

                                       19
<PAGE>

                                  ARTICLE IX

                           MISCELLANEOUS PROVISIONS

          Section 9.01.  Amendment.  This Agreement and any Conveyance Papers
                         ---------
and the rights and obligations of the parties hereunder and thereunder may not
be changed orally, but only by an instrument in writing signed by HRF and the
Bank in accordance with this Section 9.01.  This Agreement and any Conveyance
Papers may be amended from time to time by HRF and the Bank (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or in any such other Conveyance
Papers, (iii) to add any other provisions with respect to matters or questions
arising under this Agreement or any Conveyance Papers which shall not be
inconsistent with the provisions of this Agreement or any Conveyance Papers,
(iv) to change or modify the Purchase Price and (v) to change, modify, delete or
add any other obligation of the Bank or HRF; provided, however that no amendment
pursuant to clause (v) of this Section 9.01 shall be effective unless the Bank
and HRF have been notified in writing that the Rating Agency Condition has been
satisfied; provided, further, the Bank and HRF shall have delivered to the Owner
Trustee and the Indenture Trustee an Officer's Certificate, dated the date of
any such action, stating that each of the Bank and HRF, respectively, reasonably
believes that such action will not have an Adverse Effect, unless the Owner
Trustee and the Indenture Trustee shall consent thereto.  Any reconveyance
executed in accordance with the provisions hereof shall not be considered to be
an amendment to this Agreement.  A copy of any amendment to this Agreement shall
be sent to the Rating Agency.

          Section 9.02.  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 9.03.  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 the Bank, 1111 Town Center Drive, Las Vegas, Nevada 89134,
Attention: General Counsel, (b) in the case of HRF, 1111 Town Center Drive, Las
Vegas, Nevada 89134, Attention: Manager-Compliance, (c) in the case of the Owner
Trustee, Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-
0001, (d) in the case of the Indenture Trustee, Wells Fargo Bank Minnesota,
N.A., MAC N9311-161, 6th & Marquette, Minneapolis, MN 55479, Attention: Asset
Backed Securities, (e) in the case of Fitch, Fitch, Inc., One State Street
Plaza, New York, NY 10004, Attention:  ABS Surveillance, (f) in the case of
Moody's, Moody's Investors Service Inc., 99 Church Street, New York, NY 10007,
Attention: ABS Monitoring Group, or (g) in the case of Standard & Poor's,
Standard & Poor's Ratings Group, 55 Water Street, New York, NY  10041,
Attention: Credit Card ABS; or, as to each party, at such other address as shall
be designated by such party in a written notice to each other party.

          Section 9.04.  Severability of Provisions.  If any one or more of the
                         --------------------------
covenants, agreements, provisions or terms of this Agreement or any 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 9.05.  Assignment.  Notwithstanding anything to the contrary
                         ----------
contained herein, other than HRF's assignment of its rights, title, and
interests in, to, and under this Agreement to the Trust

                                       20
<PAGE>

and the Trust's assignment of its rights, title and interests in, to and under
this Agreement to the Indenture Trustee for the benefit of the beneficiaries of
the Trust, including the Noteholders as contemplated by the Transfer and
Servicing Agreement, the Indenture and Section 9.06 hereof, this Agreement and
all other Conveyance Papers may not be assigned by the parties hereto unless the
Bank shall assign its rights, title and interests in, to and under this
Agreement to (a) any successor by merger assuming this Agreement (b) to any
affiliate owned directly or indirectly by Household International, Inc. which
assumes the obligations of this Agreement or (c) to any entity provided that the
Rating Agency has advised HRF and the Bank that the Rating Agency Condition has
been satisfied.

          Section 9.06.  Acknowledgement and Agreement of the Bank.  By
                         -----------------------------------------
execution below, the Bank expressly acknowledges and agrees that all of HRF's
right, title, and interest in, to, and under this Agreement, including, without
limitation, all of HRF's right, title, and interest in and to the Receivables
purchased pursuant to this Agreement, shall be assigned by HRF to the Owner
Trustee, and shall be assigned by the Owner Trustee to the Indenture Trustee for
the benefit of the beneficiaries of the Trust, including the Noteholders, and
the Bank consents to such assignments.  The Bank further agrees that
notwithstanding any claim, counterclaim, right of setoff or defense which it may
have against HRF, due to a breach by HRF of this Agreement or for any other
reason, and notwithstanding the bankruptcy of HRF or any other event whatsoever,
the Bank's sole remedy shall be a claim against HRF for money damages, and then
only to the extent of funds received by HRF pursuant to the Transfer and
Servicing Agreement, and in no event shall the Bank assert any claim on or any
interest in the Receivables or any proceeds thereof or take any action which
would reduce or delay receipt by the Owner Trustee of collections with respect
to the Receivables.  Additionally, the Bank agrees for the benefit of the
Noteholders that any amounts payable by the Bank to HRF hereunder which are to
be paid by HRF to the Owner Trustee and pledged to the Indenture Trustee for the
benefit of the Noteholders shall be paid by the Bank, on behalf of HRF, directly
to the Owner Trustee.

          Section 9.07.  Further Assurances.  HRF and the Bank agree to do and
                         ------------------
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the other party, the Owner
Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement, the Conveyance Papers and the Transfer and Servicing Agreement,
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 9.08.  No Waiver; Cumulative Remedies.  No failure to exercise
                         ------------------------------
and no delay in exercising, on the part of HRF or the Bank, 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.  Subject to Section 9.06, the rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.

          Section 9.09.  Counterparts.  This Agreement and all Conveyance Papers
                         ------------
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.

          Section 9.10.  Binding; 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.  The Owner
Trustee and the Indenture Trustee shall be considered third-party beneficiaries
of this Agreement.

                                       21
<PAGE>

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

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

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

          Section 9.14.  Survival of Representations and Warranties.  All
                         ------------------------------------------
representations, warranties and agreements contained in this Agreement or
contained in any Supplemental Conveyance, shall remain operative and in full
force and effect and shall survive conveyance of the Receivables by the Bank to
HRF and thereafter to the Trust pursuant to the Transfer and Servicing Agreement
and by the Trust and the Indenture Trustee pursuant to the Indenture.

          Section 9.15.  Nonpetition Covenant.  Notwithstanding any prior
                         --------------------
termination of this Agreement, the Bank shall not, prior to the date which is
one year and one day after the termination of this Agreement, acquiesce,
petition or otherwise invoke or cause HRF to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against HRF under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, conservator, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of HRF or any substantial part of its
property or ordering the winding-up or liquidation or the affairs of HRF.

                              [END OF ARTICLE IX]

                                       22
<PAGE>

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

                            HOUSEHOLD BANK (NEVADA), N.A.

                              By:   /s/ Margaret A. Sprude
                                  --------------------------------------
                                Name:  M.A. Sprude
                                Title: Executive Vice President & CFO

                              HOUSEHOLD RECEIVABLES FUNDING, INC. III

                              By:   /s/ S.H Smith
                                  --------------------------------------
                                Name:  S.H. Smith
                                Title: Assistant Treasurer
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                        FORM OF SUPPLEMENTAL CONVEYANCE

                        (As required by Section 2.05 of
           the Amended and Restated Receivables Purchase Agreement)

          SUPPLEMENTAL CONVEYANCE No. ________ dated as of _______________
______, __________, by and between HOUSEHOLD BANK (NEVADA), N.A. (the "Bank"),
                                                                       ----
and HOUSEHOLD RECEIVABLES FUNDING, INC. III ("HRF"), pursuant to the Amended
                                              ---
Amended and Restated Receivables Purchase Agreement referred to below.

                                  WITNESSETH:
                                  -----------

          WHEREAS, the Bank and HRF are parties to an Amended and Restated
Receivables Purchase Agreement, dated as of November 16, 2000 (hereinafter as
such agreement may have been, or may from time to time be, amended, supplemented
or otherwise modified, the "Receivables Purchase Agreement");
                            ------------------------------

          WHEREAS, pursuant to the Receivables Purchase Agreement, the Bank
wishes to designate Additional Accounts to be included as Accounts and the Bank
wishes to convey its right, title and interest in the Receivables of such
Additional Accounts, whether now existing or hereafter created, to HRF pursuant
to the Receivables Purchase Agreement; and

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

          NOW, THEREFORE, the Bank and HRF hereby agree as follows:

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

          "Addition Date" shall mean, with respect to the Additional Accounts
           -------------
designated hereby ______________ ______, __________.

          "Additional Cut-Off Date" shall mean, with respect to the Additional
           -----------------------
Accounts designated hereby, ________________ ______, __________.

          2.   Designation of Additional Accounts.  The Bank delivers herewith a
               ----------------------------------
computer file or microfiche list containing a true and complete schedule
identifying all such Additional Accounts designated hereby (the "Additional
                                                                 ----------
Accounts") and specifying for each such Additional Account, as of the Additional
--------
Cut-Off Date, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables in such Additional
Account.  Such computer file, microfiche list or other documentation shall be as
of the date of this Supplemental Conveyance incorporated into and made part of
this Supplemental Conveyance and is marked as Schedule I to this Supplemental
                                              ----------
Conveyance.

          3.   Conveyance of Receivables.
               -------------------------

                                      A-1
<PAGE>

          (a)  The Bank does hereby sell, transfer, assign, set over and
otherwise convey to HRF, without recourse except as provided in the Receivables
Purchase Agreement, all its right, title and interest in, to and under the
Receivables generated by such Additional Accounts, existing at the close of
business on the Additional Cut-Off Date and thereafter created until termination
of the Receivables Purchase Agreement pursuant to Article VIII thereof, all
Interchange and Recoveries with respect to such Accounts, all monies due or to
become due and all amounts received or receivable with respect thereto and all
"proceeds" (including, without limitation, "proceeds" as defined in Article 9 of
the UCC) thereof.

          (b)  In connection with such sale, the Bank agrees to record and file,
at its own expense, one or more financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables, existing on the Additional Cut-Off Date and
thereafter created, for the transfer of accounts and general intangibles meeting
the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect the sale and assignment of and the
security interest in the Receivables to HRF, and to deliver a file-stamped copy
of such financing statement or other evidence of such filing to HRF.

          (c)  In connection with such sale, the Bank further agrees, at its own
expense, on or prior to the date of this Supplemental Conveyance, to indicate in
the appropriate computer files or microfiche list that all Receivables created
in connection with the Additional Accounts designated hereby have been conveyed
to HRF pursuant to this Supplemental Conveyance.

          (d)  The parties hereto intend that the conveyance described in
Section 3(a) constitute an absolute sale consistent with the intent expressed in
Section 2.01(d) of the Receivables Purchase Agreement. In the event, however,
that notwithstanding such intent 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 Supplemental
Conveyance shall constitute a security agreement under applicable law, and that
the Bank shall be deemed to have granted, and the Bank does hereby grant, to HRF
a first priority perfected security interest in all of the Bank's right, title
and interest, whether now owned or hereafter acquired, in, to and under all
Receivables existing on the Additional Cut-Off Date in the Additional Accounts
and thereafter created from time to time until the termination of the
Receivables Purchase Agreement pursuant to Article VIII thereof, all Interchange
and Recoveries with respect to such Accounts, all monies due or to become due
and all amounts received or receivable with respect thereto, and all proceeds
(including, without limitation, "proceeds" as defined in Article 9 of the UCC)
thereof.

          4.   Acceptance by HRF.  HRF hereby acknowledges its acceptance of all
               -----------------
right, title and interest to the property, now existing and hereafter created,
conveyed to HRF pursuant to Section 3 of this Supplemental Conveyance, and
declares that it shall maintain such right, title and interest.  HRF further
acknowledges that, prior to or simultaneously with the execution and delivery of
this Supplemental Conveyance, the Bank delivered to HRF the computer file or
microfiche list described in Section 2 of this Supplemental Conveyance.

          5.   Representations and Warranties of the Bank.  The Bank hereby
               ------------------------------------------
represents and warrants to HRF as of the date of this Supplemental Conveyance
and as of the Addition Date that:

          (a)  Legal, Valid and Binding Obligation.  This Supplemental
               -----------------------------------
Conveyance constitutes a legal, valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally from time to time in effect or general principles of equity;

                                      A-2
<PAGE>

          (b)  Eligibility of Accounts.  On the Additional Cut-Off Date, each
               -----------------------
Additional Account designated hereby is an Eligible Account;

          (c)  No Liens.  Each Receivable in an Additional Account designated
               --------
hereby has been conveyed to HRF free and clear of any Lien and each underlying
receivable is free and clear of all Liens;

          (d)  Eligibility of Receivables.  On the Additional Cut-Off Date, each
               --------------------------
Receivable existing in an Additional Account designated hereby is an Eligible
Receivable and as of the date of creation of any Receivable in an Additional
Account designated hereby, such Receivable is an Eligible Receivable;

          (e)  Selection Procedures. No selection procedure believed by the Bank
               --------------------
to be adverse to the interests of HRF or the Noteholders was utilized in
selecting the Additional Accounts;

          (f)  Transfer of Receivables. This Supplemental Conveyance constitutes
               -----------------------
a valid sale, transfer and assignment to HRF of all right, title and interest of
the Bank in the Receivables arising in the Additional Accounts designated hereby
now existing or hereafter created, all monies due or to become due and all
amounts received with respect thereto and the "proceeds" (including, without
limitation, "proceeds" as defined in Article 9 of the UCC) thereof and the
Interchange and the Recoveries with respect thereto;

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

          (h)  No Violation.  The execution and delivery of this Supplemental
               ------------
Conveyance by the Bank, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof applicable to
the Bank will not conflict with or violate any Requirements of Law applicable to
the Bank;

          (i)  No Proceedings.  There are no proceedings or investigations,
               --------------
pending or, to the best knowledge of the Bank, threatened against the Bank
before any Governmental Authority (i) asserting the invalidity of this
Supplemental Conveyance, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Supplemental Conveyance, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Bank, would
materially and adversely affect the performance by the Bank of its obligations
under this Supplemental Conveyance or (iv) seeking any determination or ruling
that would materially and adversely affect the validity or enforceability of
this Supplemental Conveyance; and

          (j)  All Consents.  All authorizations, consents, orders or approvals
               ------------
of any Governmental Authority required to be obtained by the Bank in connection
with the execution and delivery of this Supplemental Conveyance by the Bank and
the performance of the transactions contemplated by this Supplemental Conveyance
by the Bank, have been obtained.

          6.   Ratification of the Receivables Purchase Agreement.  The
               --------------------------------------------------
Receivables Purchase Agreement is hereby ratified, and all references to the
"Receivables Purchase Agreement," to "this Agreement" and "herein" shall be
 -------------------------------      --------------       ------
deemed from and after the Addition Date to be a reference to the Receivables
Purchase Agreement as supplemented by this Supplemental Conveyance.  Except as
expressly amended hereby, all the representations, warranties, terms, covenants
and conditions of the Receivables Purchase Agreement shall remain unamended and
shall continue to be, and shall, remain, in full force and effect in accordance
with its terms and except as expressly provided herein shall not constitute or
be

                                      A-3
<PAGE>

deemed to constitute a waiver of compliance with or consent to non-compliance
with any term or provision of the Receivables Purchase Agreement.

          7.   Counterparts. This Supplemental Conveyance may be executed in any
               ------------
number of counterparts, all of which taken together shall constitute one and the
same instrument.

          8.   Governing Law.  THIS SUPPLEMENTAL CONVEYANCE SHALL BE CONTRUED 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
<PAGE>

          IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly authorized
officers on the day and the year first above written.

Dated: _____________ __,200_       HOUSEHOLD BANK (NEVADA), N.A.

                                   By:  ______________________________________
                                        Name:
                                        Title:

                                   HOUSEHOLD RECEIVABLES FUNDING, INC. III

                                   By:  ______________________________________
                                        Name:
                                        Title:

                                      A-5
<PAGE>

                                                                   Schedule I to
                                                                    Supplemental
                                                                    ------------
                                                                      Conveyance
                                                                      ----------

                              ADDITIONAL ACCOUNTS
                              -------------------

      COMPUTER FILES CONTAINING ACCOUNT INFORMATION DELIVERED TO HRF ARE
                           INCORPORATED BY REFERENCE

                                      I-1
<PAGE>

                                                                      Schedule I
                                                                      ----------

                               LIST OF ACCOUNTS
                               ----------------

      COMPUTER FILES CONTAINING ACCOUNT INFORMATION DELIVERED TO HRF ARE
                           INCORPORATED BY REFERENCE

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