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FORM OF UNDERWRITING AGREEMENT
EXHIBIT 1
HOUSEHOLD AFFINITY FUNDING CORPORATION
HOUSEHOLD AFFINITY CREDIT CARD MASTER TRUST I
SERIES [ ]
$[ ] [Floating Rate] [ %] Class A Credit Card Participation
Certificates
$[ ] [Floating Rate] [ %] Class B Credit Card Participation
Certificates
UNDERWRITING AGREEMENT
[____________]
[Underwriter]
Dear Sirs:
Household Bank (SB), N.A. (the "Bank") has conveyed and
proposes to further convey, from time to time, the receivables (the
"Receivables") that are generated in a portfolio of certain consumer revolving
credit card accounts and other rights to Household Affinity Funding Corporation
(the "Seller"), which has conveyed and will convey the Receivables to the
Household Affinity Credit Card Master Trust I (the "Trust"), and the Seller
proposes to cause the Trust to sell to you and to the underwriters named in
Schedule I hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), $[ ] [Floating Rate] [ %] Class A
Credit Card Participation Certificates (the "Class A Certificates") and $[ ]
[Floating Rate] [ %] Class B Credit Card Participation Certificates (the "Class
B Certificates" and, together with the Class A Certificates, the "Certificates")
in the Trust. The Receivables have been, and will from time to time be, conveyed
to the Seller by the Bank pursuant to a Receivables Purchase Agreement, dated as
of [ ] and as amended as of [ ] (the "Receivables Purchase Agreement"), between
Household Bank, f.s.b. and the Seller. The rights and obligations of Household
Bank, f.s.b. under the Receivables Purchase Agreement were assigned to the Bank
by Household Bank, f.s.b., pursuant to an Assignment Agreement (the "Assignment
Agreement"), dated as of [ ], between the Bank and
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Household Bank, f.s.b. The Receivables have been, and will from time to time be,
conveyed by the Seller to the Trust and the Certificates will be issued pursuant
to the Amended and Restated Pooling and Servicing Agreement, dated as of [ ]
(the "Pooling and Servicing Agreement"), among the Seller, Household Finance
Corporation, as servicer ("HFC"), and The Bank of New York, as trustee (the
"Trustee"), and the Series [ ] Supplement to the Pooling and Servicing
Agreement, dated as of [ ] (the "Supplement"), among the Seller, HFC and the
Trustee. The Bank, the Seller and HFC are direct or indirect subsidiaries of
Household International, Inc. ("Household"). HFC, the Bank and the Seller are
referred to collectively herein as the "Household Entities".
The Certificates will be sold pursuant to this Underwriting
Agreement (this "Agreement") and will represent undivided interests in certain
assets of the Trust (as hereinafter described).
Capitalized terms used herein without definition shall have
the meanings set forth in the Pooling and Servicing Agreement and the
Supplement.
Section 1. Representations and Warranties of the Bank and the
Seller.
(a) The Bank and the Seller, jointly and severally, represent
and warrant to, and agree with, each Underwriter as set forth in this
Section 1(a). Certain terms used in this Section 1(a) are defined in
the second paragraph of subsection 1(a)(i) below.
(i) The Seller meets the requirements for use of Form
S-1 under the Securities Act of 1933, as amended (the "Act"),
and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. [ ]),
including the Preliminary Prospectus relating to the
Certificates, on such Form S-1 for the registration under the
Act of the Certificates. The Seller may have filed one or more
amendments thereto, including the related Preliminary
Prospectus, each of which has previously been furnished to
you. The Seller will next file with the Commission either, (A)
prior to the effectiveness of such registration statement, a
further amendment thereto (including the form of final
prospectus) or, (B) after effectiveness of such registration
statement, a final prospectus in accordance with Rules 430A
and 424(b)(1) or (4). In the case of clause (B), the Seller
has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to
be included in the prospectuses with respect to the
Certificates and the offering thereof. As filed, such
amendment and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information and,
except to the extent the Underwriters shall agree in writing
to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond
that contained in the latest Preliminary Prospectus which has
previously been furnished to you) as the Seller has advised
you, prior to the Execution Time, will be included or
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made therein.
The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective under the Act. "Execution Time" shall mean
the date and time that this Agreement is executed and delivered by the parties
hereto. "Preliminary Prospectus" shall mean any preliminary prospectus referred
to in the preceding paragraph and any preliminary prospectus included in the
Registration Statement which, as of the Effective Date, omits Rule 430A
Information. "Prospectus" shall mean the prospectus relating to the Certificates
that is first filed with the Commission pursuant to Rule 424(b) and any
prospectuses subsequently filed pursuant to Rule 424 or, if no filing pursuant
to Rule 424(b) is required, shall mean the form of final prospectus included in
the Registration Statement at the Effective Date. "Registration Statement" shall
mean the registration statement referred to in the preceding paragraph and any
registration statement required to be filed under the Act or rules thereunder,
including amendments, incorporated documents, exhibits and financial statements,
in the form in which it has or shall become effective and, in the event that any
post-effective amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as so amended.
Such term shall include Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Act. "Rule 430A Information" means information with respect
to the Certificates and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
(ii) On the Effective Date, the Registration
Statement did or will comply in all material respects with the
applicable requirements of the Act and the rules thereunder;
on the Effective Date and when the Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the
Closing Date, the Prospectus (and any supplements thereto)
will comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the
Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the
date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
the Bank and the Seller make no representations or warranties
as to the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplements
thereto) in reliance upon and in conformity with information
furnished in writing to the Bank or the Seller by or on behalf
of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration
Statement or the Prospectus (or any supplements thereto).
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(iii) The Bank is duly organized, validly existing
and in good standing as a national banking association under
the laws of the United States and the Seller is a corporation
duly organized and validly existing and in good standing under
the laws of its jurisdiction of incorporation. Each of the
Bank and the Seller has all requisite power and authority to
own its properties and conduct its business as presently
conducted and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
which requires such qualification, except where failure to
have such requisite power and authority or to be so qualified
would not have a material adverse effect on the business or
consolidated financial condition of the Bank or the Seller.
(iv) Neither the Seller nor the Bank is in violation
of its charter or in default in the performance or observance
of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a
party or by which it may be bound, or to which any of the
property or assets of the Seller or the Bank, as the case may
be, is subject, except where any such violation or default
would not have a material adverse effect on the transactions
contemplated by this Agreement.
(v) The execution, delivery and performance by the
Seller of each of this Agreement, the Receivables Purchase
Agreement, the Pooling and Servicing Agreement, the
Supplement, the Collateral Agreement, and the Depository
Agreement, the issuance of the Certificates and the
consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary
action or proceedings and will not conflict with or constitute
a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Seller pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Seller is a party or by which it may
be bound, or to which any of the property or assets of the
Seller is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the
Seller or any applicable law, administrative regulation or
administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not
have a material adverse effect on the transactions
contemplated by this Agreement.
(vi) The execution, delivery and performance by the
Bank of this Agreement, the Receivables Purchase Agreement and
the Assignment Agreement, the issuance of the Certificates and
the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary
action or proceedings and will not conflict with or constitute
a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Bank pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Bank is a party or by which it may be
bound, or to which any of the property or assets of the Bank
is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the
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Bank or any applicable law, administrative regulation
or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not
have a material adverse effect on the transactions
contemplated by this Agreement.
(vii) This Agreement, the Receivables Purchase
Agreement and the Pooling and Servicing Agreement have been,
and the Supplement and the Collateral Agreement when executed
and delivered as contemplated hereby and thereby will have
been, duly executed and delivered by the Seller; and this
Agreement, the Receivables Purchase Agreement and the Pooling
and Servicing Agreement constitute, and the Supplement and the
Collateral Agreement when executed and delivered as
contemplated herein will constitute, legal, valid and binding
instruments enforceable against the Seller in accordance with
their respective terms, subject as to enforceability (A) to
applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting creditors' rights generally
and the rights and remedies of creditors of thrifts, savings
institutions or national banking associations, (B) to general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (C) with
respect to rights of indemnity under this Agreement or the
Collateral Agreement, to limitations of public policy under
applicable securities laws.
(viii) This Agreement, the Receivables Purchase
Agreement and the Assignment Agreement have been, duly
executed and delivered by the Bank; and this Agreement, the
Receivables Purchase Agreement and the Assignment Agreement
constitute legal, valid and binding instruments enforceable
against the Bank in accordance with their respective terms,
subject as to the enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or
national banking associations, (B) to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (C) with respect to rights
of indemnity under this Agreement, to limitations of public
policy under applicable securities law.
(ix) The Bank has authorized the conveyance of the
Receivables to the Seller; the Seller has authorized the
conveyance of the Receivables to the Trust; and the Seller has
directed the Trust to issue and sell the Certificates.
(x) The Bank will, upon request by the
Representatives, provide to the Representatives complete and
correct copies of publicly available portions of the
Consolidated Reports of Condition and Income of the Bank for
the year ended [ ] as submitted to the Comptroller of the
Currency. Except as set forth or contemplated in the
Registration Statement and the Prospectus, there has been no
material adverse change in the condition (financial or
otherwise) of the Bank since [ ].
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(xi) Any taxes, fees and other governmental charges
in connection with the execution, delivery and performance of
this Agreement, the Pooling and Servicing Agreement, the
Supplement, the Receivables Purchase Agreement, the Assignment
Agreement, the Collateral Agreement and the Certificates shall
have been paid or will be paid by the Seller at or prior to
the Closing Date.
(xii) The Certificates have been duly and validly
authorized, and, when validly executed, authenticated, issued
and delivered in accordance with the Pooling and Servicing
Agreement and the Supplement and as provided herein will
conform in all material respects to the description thereof
contained in the Prospectus and will be validly issued and
outstanding and entitled to the benefits of the Pooling and
Servicing Agreement and the Supplement.
(xiii) There are no legal or governmental proceedings
pending, or to the knowledge of the Bank or the Seller
threatened, to which the Bank or the Seller is a party or of
which any property of any of them is the subject, other than
proceedings which are not reasonably expected, individually or
in the aggregate, to have a material adverse effect on the
shareholder's equity or consolidated financial position of
such person and its subsidiaries taken as a whole, or which
would have a material adverse effect upon the consummation of
this Agreement.
(xiv) Xxxxxx Xxxxxxxx & Co. is an independent public
accountant with respect to the Bank and Seller.
(xv) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body of the United
States is required for the issue and sale of the Certificates,
or the consummation by the Bank or the Seller of the other
transactions contemplated by this Agreement, the Receivables
Purchase Agreement, the Assignment Agreement, the Pooling and
Servicing Agreement, the Supplement, the Collateral Agreement,
or the Depository Agreement, except for (A) the registration
under the Act of the Certificates, (B) such consents,
approvals, authorizations, orders, registrations,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Certificates and the
subsequent distribution of the Certificates by the
Underwriters or (C) where the failure to obtain such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits would not have a material
adverse effect on the business or consolidated financial
condition of the Bank and its subsidiaries taken as a whole or
the Seller or the transactions contemplated by such
agreements.
(xvi) Neither the Bank nor the Seller will conduct
their operations while any of the Certificates are outstanding
in a manner that would require the Seller or the Trust to be
registered as an "investment company" under the Investment
Company Act
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of 1940, as amended (the "1940 Act") as in effect on the date
hereof.
(b) HFC represents and warrants to, and agrees with, each
Underwriter as set forth in this Section 1(b).
(i) HFC is a corporation duly organized and validly
existing and in good standing under the laws of its
jurisdiction of incorporation. HFC has all requisite power and
authority to own its properties and conduct its business as
presently conducted and is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction which requires such qualification, except
where the failure to have such power and authority or to be so
qualified would not have a material adverse effect on the
business or consolidated financial condition of HFC and its
subsidiaries taken as a whole.
(ii) HFC is not in violation of its restated articles
of incorporation or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which HFC is a
party or by which it may be bound, or to which any of the
property or assets of HFC is subject except where any such
violation or default would not have a material adverse effect
on the transactions contemplated by this Agreement.
(iii) The execution, delivery and performance by HFC
of this Agreement, the Pooling and Servicing Agreement, the
Supplement and the Collateral Agreement, and the consummation
of the transactions contemplated hereby and thereby have been
duly and validly authorized by all necessary action or
proceedings and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets
of HFC pursuant to, any contract, indenture, mortgage, loan
agreement,note, lease or other instrument to which HFC is a
party or by which it may be bound, or to which any of the
property or assets of HFC is subject, nor will such action
result in any violation of the provisions of the charter or
by-laws of HFC or any applicable law, administrative
regulation or administrative or court decree, except where any
such conflict, breach, default, encumbrance or violation would
not have a material adverse effect on the transactions
contemplated by this Agreement.
(iv) This Agreement and the Pooling and Servicing
Agreement have been, and the Supplement and the Collateral
Agreement when executed and delivered as contemplated hereby
and thereby will have been, duly executed and delivered by
HFC; and this Agreement and the Pooling and Servicing
Agreement constitute, and the Supplement and the Collateral
Agreement when executed and delivered as contemplated herein
will constitute, legal, valid and binding instruments
enforceable against HFC in accordance with their respective
terms, subject as to enforceability (A)
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to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights
generally, (B) to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law) and (C) with respect to rights of indemnity under this
Agreement or the Collateral Agreement, to limitations of
public policy under applicable securities laws.
(v) HFC will, upon request by the Representatives,
provide to the Representatives complete and correct copies of
all reports filed by it with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), during [ ]95. Except as set forth in or contemplated in
such reports, there has been no material adverse change in the
consolidated financial condition of HFC and its subsidiaries
taken as a whole.
(vi) There are no legal or governmental proceedings
pending, or to the knowledge of HFC threatened, to which HFC
is a party or of which any of its property is the subject,
other than proceedings which are not reasonably expected,
individually or in the aggregate, to have a material adverse
effect on the shareholder's equity or consolidated financial
position of HFC and its subsidiaries taken as a whole or which
would have a material adverse effect upon the consummation of
this Agreement.
(vii) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or
with any court or governmental agency or body of the United
States is required for the consummation by HFC of the
transactions contemplated by this Agreement, the Pooling and
Servicing Agreement, the Supplement and the Collateral
Agreement, except for (A) the registration under the Act of
the Certificates, (B) such consents, approvals,
authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been obtained or
as may be required under State securities or Blue Sky laws in
connection with the purchase of the Certificates and the
subsequent distribution of the Certificates by the
Underwriters or (C) where the failure to obtain such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits would not have a material
adverse effect on the business or consolidated financial
condition of HFC and its subsidiaries taken as a whole or the
transactions contemplated by such agreements.
(viii) Xxxxxx Xxxxxxxx & Co. is an independent public
accountant with respect to HFC.
(c) Any certificate signed by an officer on behalf of any of
the Household Entities and delivered to the Underwriters or counsel for
the Underwriters in connection with an offering of the Certificates
shall be deemed, and shall state that it is, a representation and
warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section 1 are made.
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Section 2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon
the covenants, representations and warranties herein set forth, the
Seller agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Seller the Principal Amount of Class A Certificates set forth opposite
such Underwriter's name in Schedule I pursuant to the terms of this
Agreement at a purchase price equal to 99.653125% of the aggregate
Principal Amount represented by the Class A Certificates.
(b) Subject to the terms and conditions and in reliance upon
the covenants, representations and warranties herein set forth, the
Seller agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Seller the Principal Amount of Class B Certificates set forth opposite
such Underwriter's name in Schedule I pursuant to the terms of this
Agreement at a purchase price equal to 99.434375% of the aggregate
Principal Amount represented by the Class B Certificates.
Section 3. Delivery and Payment.
(a) Delivery of and payment for the Certificates to be
purchased by the Underwriters in accordance with this Agreement shall
be made at the offices of [ ] at 9:00 a.m., [ ] on [ ] which date, time
or place may be postponed or changed by agreement between the
Representatives and the Seller (such date and time of delivery and
payment for the Certificates being herein referred to as the "Closing
Date"). Delivery of one or more global certificates representing the
Certificates shall be made to the accounts of the several Underwriters
against payment by the several Underwriters of the purchase price
therefor, to or upon the order of the Seller by one or more wire
transfers in immediately available funds. The global certificates to be
so delivered shall be registered in the name of Cede & Co., as nominee
for The Depository Trust Company ("DTC"). The interests of beneficial
owners of the Certificates will be represented by book entries on the
records of DTC and participating members thereof. Definitive
Certificates representing the Certificates will be available only under
limited circumstances as described in the Pooling and Servicing
Agreement.
The Seller agrees to have copies of the global certificates or
the Definitive Certificates available for inspection, checking and
packaging by the Underwriters in New York, New York, not later than
1:00 p.m., New York City time, on the business day prior to the Closing
Date.
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Section 4. Offering by Underwriters.
(a) It is understood that the Underwriters propose to offer
the Certificates for sale to the public as set forth in the Prospectus.
(b) Each Underwriter severally agrees that if it is a foreign
broker dealer not eligible for membership in the National Association
of Securities Dealers, Inc. (the "NASD"), it will not effect any
transaction in the Certificates within the United States or induce or
attempt to induce the purchase of or sale of the Certificates within
the United States, except that it shall be permitted to make sales to
the other Underwriters or to its United States affiliates provided that
such sales are made in compliance with an exemption of certain foreign
brokers or dealers under Rule 15a-6 under the Exchange Act and in
conformity with the Rules of Fair Practice of the NASD as such Rules
apply to non-NASD brokers or dealers.
(c) Each Underwriter severally represents and agrees that (i)
it has complied and will comply with all applicable provisions of the
Financial Services Xxx 0000 with respect to anything done by it in
relation to the Certificates in, from or otherwise involving the United
Kingdom; (ii) it has only issued or passed on and will only issue or
pass on to any person in the United Kingdom any document received by it
in connection with the issue of the Certificates if that person is of a
kind described in Article 9(3) of the Financial Services Xxx 0000
(Investment Advertisements) (Exemptions) Order 1988 (as amended); (iii)
if it is an authorized person under Chapter III of the Financial
Services Xxx 0000, it has only promoted and will only promote (as that
term is defined in Regulation 1.02 of the Financial Services (Promotion
of Unregulated Collective Investment Schemes) Regulations 1991) to any
person in the United Kingdom the scheme described in the Prospectus if
that person is of a kind described either in Section 76(2) of the
Financial Services Xxx 0000 or in Regulation 1.04 of the Financial
Services (Promotion of Unregulated Collective Investment Schemes)
Regulations 1991; and (iv) it is a person of a kind described in
Article 9(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1988 (as amended).
Section 5. Agreements. The Household Entities, jointly and
severally, covenant and agree with the several Underwriters that:
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(a) The Seller will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at
the Execution Time, to become effective. If the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Seller will
file the Prospectus, properly completed, pursuant to Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to
the Underwriters of such timely filing. The Seller will promptly advise
the Representatives (i) when the Registration Statement shall have
become effective, (ii) when any amendment thereof shall have become
effective, (iii) of any request by the Commission for any amendment or
supplement of the Registration Statement or the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose,
and (v) of the receipt by the Seller of any notification with respect
to the suspension of the qualification of the Certificates for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Seller will not file any amendment of the
Registration Statement or supplement to the Prospectus to which the
Representatives reasonably object. The Seller will use its best efforts
to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a Prospectus relating to the
Certificates is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to supplement such Prospectus to comply with the Act
or the rules thereunder, the Seller shall be required to notify the
Representatives and upon the Representatives' request to prepare and
furnish without charge to each Underwriter and to any dealer of Class B
Certificates as many copies as such Underwriter may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which shall correct such statement or omission or effect
such compliance.
(c) As soon as practicable, the Seller will make generally
available to Certificateholders and to the Representatives an earnings
statement or statements of the Trust which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Seller will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of each Preliminary Prospectus relating to the Certificates
and the Prospectus and any supplement thereto as the Underwriters may
reasonably request.
(e) The Household Entities, jointly and severally, agree to
pay all expenses incidental to the performance of their obligations
under this Agreement, including without limitation (i) expenses of
preparing, printing and reproducing the Registration Statement, the
Prospectus, this Agreement, the Receivables Purchase Agreement, the
Pooling and Servicing
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Agreement, the Supplement, the Collateral Agreement, the Depository
Agreement and the Certificates, (ii) any fees charged by any rating
agency for the rating of the Certificates, (iii) any expenses
(including reasonable fees and disbursements of counsel not to exceed
$20,000) incurred by the Underwriters in connection with qualification
of the Certificates for sale under the laws of such jurisdictions as
the Representatives designate, (iv) the fees and expenses of (A) Xxxxx
Xxxxxxxxxx as special counsel for the Household Entities, (B) Xxxxxx
Xxxxxxxx and (C) Xxxxx Xxxx as counsel to the Collateral Interest
Holder, (v) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Pooling and Servicing Agreement and the
Certificates, and (vi) the cost of delivering the Certificates to the
offices of the Underwriters, insured to the satisfaction of the
Underwriters (it being understood that, except as provided in this
paragraph (e) and in Sections 7 and 8 hereof, the Underwriters will pay
their own expenses, including the expense of preparing, printing and
reproducing this Agreement, any agreement among underwriters, the fees
and expenses of counsel for the Underwriters, any transfer taxes on
resale of any of the Certificates by them and advertising expenses
connected with any offers that the Underwriters may make).
(f) The Seller will take all reasonable actions requested by
the Underwriters to arrange for the qualification of the Certificates
for sale under the laws of such jurisdictions within the United States
or as necessary to qualify for the Euroclear System or CEDEL societe
anonyme and as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Certificates and will arrange for the determination of the legality
of the Certificates for purchase by institutional investors.
(g) For so long as the Certificates are outstanding, the
Seller (i) shall deliver to the Representatives by first-class mail and
as soon as practicable a copy of all reports and notices delivered to
the Trustee or the Certificateholders under the Pooling and Servicing
Agreement or the Supplement or to the Collateral Interest Holder under
the Collateral Agreement, and (ii) as promptly as available but in no
event later than each Record Date, shall give notice by telecopy, to
the Representatives of the Class A Pool Factor and Class B Pool Factor
for such Record Date.
(h) For so long as the Certificates are outstanding, the
Household Entities will furnish to the Representatives (i) as soon as
practicable after the end of each fiscal year, all documents required
to be distributed to Certificateholders and (ii) as soon as practicable
after filing, any other information concerning the Household Entities
filed with any government or regulatory authority which is otherwise
publicly available, as the Representatives may reasonably request.
(i) To the extent, if any, that any rating provided with
respect to the Certificates set forth in Section 6(l) hereof is
conditional upon the furnishing of documents reasonably available to
the Household Entities, the Household Entities shall furnish such
documents.
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(j) The Household Entities confirm as of the date hereof that
the Household Entities and all affiliates thereof are in compliance
with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An
Act Relating to Disclosure of Doing Business with Cuba, and the
Household Entities further agree that if any Household Entity or any
affiliate thereof commence in the engaging of business with the
government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes or has become
effective with the Securities and Exchange Commission or with the
Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if
any, concerning any Household Entity's business with Cuba or with any
person or affiliate located in Cuba changes in any material way, the
Household Entities will provide the Department notice of such business
or change, as appropriate, in a form acceptable to the Department.
Section 6. Conditions of Closing; Termination of Rights Under
Section 2. The obligations of the Underwriters to purchase and pay for the
Certificates on the Closing Date shall be subject to the material accuracy of
the representations and warranties of the Household Entities contained herein as
of the Execution Time and as of the Closing Date, to the material accuracy of
the statements of the Household Entities made in any certificates delivered
pursuant to the provisions hereof, to the performance by the Household Entities
of their obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement shall have become
effective not later than 12:00 Noon New York City time on the business
day following the day on which the public offering price was
determined; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus shall have been filed
in the manner and within the time period required by Rule 424(b); and
no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) Each of the Household Entities shall have delivered a
certificate, dated the Closing Date, signed by its President or any
Vice President and its principal financial or principal accounting
officer or its Treasurer or any Assistant Treasurer or its Secretary or
any Assistant Secretary to the effect that the signers of such
certificate, on behalf of the named Household Entity, have carefully
examined this Agreement, the Receivables Purchase Agreement, the
Assignment Agreement, the Pooling and Servicing Agreement, the
Supplement, the Collateral Agreement, the Prospectus (and any
supplements thereto) and the Registration Statement, stating that:
(i) the representations and warranties of such
Household Entity in this Agreement are true and correct in all
material respects at and as of the date of such certificate as
if made on and as of such date (except to the extent they
expressly relate to an earlier date);
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(ii) such Household Entity has complied, in all
material respects, with all the agreements and satisfied, in
all material respects, all the conditions on its part to be
performed or satisfied at or prior to the date of such
certificate;
(iii) nothing has come to the attention of such
Household Entity that would lead it to believe that the
Registration Statement contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the knowledge of
the xxxxxx, threatened.
(c) Xxxx X. Xxxxxx, Assistant General Counsel of Household,
shall have delivered a favorable opinion with respect to clauses (i)
through (xiii) of this paragraph (c), and Xxxxx Xxxxxxxxxx, special
counsel to the Household Entities, shall have delivered a favorable
opinion with respect to clauses (xiv) through (xvi) of this paragraph
(c) (except that, portions of the opinion provided for in clause (xvi)
concerning the tax laws of the State of Nevada shall be provided for by
such other counsel as is acceptable to the Underwriters), each opinion
shall be dated the Closing Date and satisfactory in form and substance
to the Representatives and counsel for the Underwriters, to the effect
that:
(i) the Bank has been duly chartered as a national
banking association and is validly existing and in good
standing under the laws of the United States, is duly
qualified to do business and is in good standing under the
laws of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts
material business, and has full power and authority to own its
properties, and to enter into and perform its obligations
under the Receivables Purchase Agreement and the Assignment
Agreement, except where failure to have such power and
authority or to be so qualified will not have a material
adverse effect on the business or consolidated financial
condition of the Bank and its subsidiaries taken as a whole;
(ii) each of HFC and the Seller is duly incorporated
and validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation with corporate
power and authority to own its properties and to conduct its
business, except where failure to have such power and
authority do not have a material adverse effect, as the case
may be, on the business or consolidated financial condition of
HFC and its subsidiaries, taken as a whole, or the Seller, to
enter into and perform its obligations under the Underwriting
Agreement, the Receivables Purchase Agreement, the Collateral
Agreement, the Depository Agreement, the Pooling and Servicing
Agreement and the Supplement and to consummate the
transactions contemplated
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hereby and thereby;
(iii) the Underwriting Agreement, the Receivables
Purchase Agreement, the Assignment Agreement, the Pooling and
Servicing Agreement, the Supplement, the Collateral Agreement
and the Depository Agreement have been duly authorized,
executed and delivered by HFC, the Bank or the Seller, as the
case may be, and, when executed by the Trustee and the
Collateral Interest Holder, when required, constitute the
legal, valid and binding agreement of HFC, the Bank or the
Seller, as the case may be, enforceable in accordance with its
terms subject, as to enforceability (A) to applicable
bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and the
rights and remedies of creditors of thrifts, savings
institutions or national banking associations, (B) to general
principles of equity (regardless of whether enforcement is
sought in a proceedings in equity or at law) and (C) with
respect to rights of indemnity under the Underwriting
Agreement or the Collateral Agreement, to limitations of
public policy under applicable securities laws;
(iv) the Certificates have been duly created and,
when executed and authenticated in accordance with the terms
of the Pooling and Servicing Agreement and the Supplement and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be validly issued and outstanding, enforceable
in accordance with their terms subject, as to enforceability
(A) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights
generally and the rights and remedies of creditors of thrifts,
savings institutions or national banking associations and (B)
to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(v) neither the execution nor the delivery of the
Underwriting Agreement, the Receivables Purchase Agreement,
the Assignment Agreement, the Collateral Agreement, the
Depository Agreement, the Pooling and Servicing Agreement or
the Supplement nor the issuance or delivery of the
Certificates, nor the consummation of any of the transactions
contemplated herein or therein, nor the fulfillment of the
terms of the Certificates, the Underwriting Agreement, the
Receivables Purchase Agreement, the Assignment Agreement, the
Collateral Agreement, the Depository Agreement, the Pooling
and Servicing Agreement or the Supplement will conflict with
or violate any term or provision of the charter or by-laws of
the Household Entities, or result in a breach or violation of,
or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
any of the Household Entities pursuant to, any material
statute currently applicable to any of them or the Trust or
any order or regulation known to such counsel to be currently
applicable to any of them or the Trust of any court,
regulatory body, administrative agency or governmental body
having jurisdiction over the Bank or the Seller or the Trust,
as the case may be, or the terms of any indenture or other
agreement or instrument known to such counsel to which the
Household Entities or the Trust is a party or by which any of
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them or any of their properties are bound, except where
any such conflict, breach, violation, default or encumbrance
would not have a material adverse effect on the transactions
contemplated by this Agreement;
(vi) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator with respect to the Underwriting Agreement, the
Trust, the Certificates, the Receivables Purchase Agreement,
the Assignment Agreement, the Collateral Agreement, the
Depository Agreement, the Pooling and Servicing Agreement or
the Supplement or any of the transactions contemplated herein
or therein or with respect to the Household Entities which, in
the case of any such action, suit or proceeding with respect
to any of them, would have a material adverse effect on the
Certificateholders or the Trust or upon the ability of any of
them to perform their obligations under any of such
agreements, and there is no material contract, franchise or
document relating to the Trust or property conveyed to the
Trust which is not disclosed in the Registration Statement or
Prospectus; and the statements included in the Registration
Statement, Preliminary Prospectus and Prospectus describing
statutes (other than those relating to tax and ERISA matters),
legal proceedings, contracts and other documents fairly
summarize the matters therein described;
(vii) the Registration Statement has become effective
under the Act; any required filing of the Prospectus or any
supplement thereto pursuant to Rule 424 has been made in the
manner and within the time period required by Rule 424; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened; the Registration Statement and the Prospectus (and
any supplements thereto) (other than financial and statistical
information contained therein as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules
thereunder;
(viii) such counsel has no reason to believe that at
any Effective Date the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Preliminary Prospectus, as of its date, or the Prospectus, as
of its date, includes any untrue statement of a material fact
or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading (other than financial and
statistical information contained therein as to which such
counsel need express no opinion), it being understood that
such counsel expresses no opinion with respect to the adequacy
of disclosure to potential investors in the Collateral
Interest in the Trust;
(ix) no consent, approval, authorization, order,
registration, filing,
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qualification, license or permit of or with any court,
federal or state governmental agency or regulatory body is
required for any Household Entity to consummate the
transactions contemplated in the Underwriting Agreement, the
Collateral Agreement, the Depository Agreement, the
Receivables Purchase Agreement, the Assignment Agreement, the
Pooling and Servicing Agreement or the Supplement, except (A)
such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses or permits
as have been made or obtained or as may be required under the
State securities or blue sky laws of any jurisdiction in
connection with the purchase of the Certificates by the
Underwriters and the subsequent distribution of the
Certificates by the Underwriters or (B) where the failure to
have such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses or permits
would not have a material adverse effect on the Trust's
interests in the Receivables or the transactions contemplated
by such agreements;
(x) the Certificates, the Underwriting Agreement,
the Receivables Purchase Agreement, the Assignment Agreement,
the Collateral Agreement, the Pooling and Servicing Agreement
and the Supplement conform in all material respects to the
descriptions thereof contained in the Registration Statement
and the Prospectus;
(xi) neither the Pooling and Servicing Agreement
nor the Supplement will be required to be qualified under
the Trust Indenture Act of 1939;
(xii) the statements in the Registration Statement
under the heading "Certain Legal Aspects of the Receivables"
to the extent that they constitute statements of matters of
law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel or attorneys under the
control of such counsel and are correct in all material
respects;
(xiii) the Trust is not required to be registered
as an "investment company" under the 1940 Act;
(xiv) the assignment of the Receivables, all
documents and instruments relating thereto and all proceeds
thereof to the Seller pursuant to the Receivables Purchase
Agreement, and the subsequent assignment of the Receivables,
all documents and instruments relating thereto and all
proceeds thereof to the Trustee pursuant to the Pooling and
Servicing Agreement, either (A) vests in the Trustee all
right, title and interest of the Seller and the Bank in and to
the Receivables, free and clear of any liens, security
interests or encumbrances that have been perfected or are
known to such counsel except as specifically permitted
pursuant to the Pooling and Servicing Agreement and the
Supplement or (B) in the event that a court were to conclude
that either of such assignments were not a sale pursuant to
the Receivables Purchase Agreement and the
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Pooling and Servicing Agreement and the Supplement, as the
case may be, the transactions provided for by the Receivables
Purchase Agreement and the Pooling and Servicing
Agreement and the Supplement, as the case may be, would
constitute a grant of a valid security interest and, together
with the filing of the financing statements in the States of
California, Illinois, Nevada and Virginia, create a first
priority perfected security interest within the meaning of
Article 9 of the Uniform Commercial Code in the Receivables,
all documents and instruments relating thereto and all
proceeds thereof (in rendering such opinion, counsel may take
such exceptions as are appropriate and reasonably acceptable
under the circumstances);
(xv) No other filings or other actions, with respect
to the Trustee's interest in the Receivables, are necessary to
perfect the interest of the Trustee in the Receivables, and
proceeds thereof, against third parties, except that
appropriate continuation statements must be filed in
accordance with the applicable state's requirements, which is
presently at least every five years; and
(xvi) the statements in the Registration Statement
and Prospectus under the heading "Tax Matters" accurately
describe the material Federal, state and local income tax
consequences to holders of the Certificates and the statements
under the heading "ERISA Considerations", to the extent that
they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or
reviewed by such counsel and accurately describe the material
consequences to holders of the Certificates under ERISA.
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In rendering such opinion, counsel may rely (A) as to matters
involving the application of the law of any jurisdiction other than the State of
Illinois, the corporate law of the State of Delaware and the United States
Federal laws, to the extent deemed proper and stated in such opinion, upon the
opinion of other counsel of good standing believed by such counsel to be
reliable and acceptable to you and your counsel, and (B) as to matters of fact,
to the extent deemed proper and as stated therein, on certificates of
responsible officers of the Trust, Household Entities and public officials.
References to the Prospectus in this paragraph (c) include any supplements
thereto.
(d) Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx, counsel for the
Underwriters, shall have delivered a favorable opinion dated the
Closing Date with respect to the validity of the Certificates, the
Underwriting Agreement, the Pooling and Servicing Agreement, the
Supplement, the Registration Statement, the Prospectus and such other
related matters as the Representatives may reasonably require and the
Household Entities shall have furnished to such counsel such documents
as they reasonably request for the purpose of enabling them to pass on
such matters. In giving their opinion, Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
may rely (i) as to matters of California, Illinois, Nevada, Virginia
and Delaware law (other than Delaware corporation law) upon the
opinions of counsel delivered pursuant to subsection (c) above, (ii) as
to matters involving the application of laws of any jurisdiction other
than the State of New York, the United States Federal laws or the
corporation law of the State of Delaware, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable, and (iii) as to matters of fact,
to the extent deemed proper and as stated therein on certificates of
responsible officers of the Trust, Household Entities and public
officials.
(e) The Collateral Agreement shall have been duly authorized,
executed and delivered by the Collateral Interest Holder; all fees then
due and payable to the Collateral Interest Holder shall have been paid
in full at or prior to the Closing Date, as the case may be; and the
Collateral Agreement shall conform in all material respects to the
respective descriptions thereof in the Registration Statement and the
Prospectus.
(f) Counsel to the Collateral Interest Holder shall have
delivered a favorable opinion, dated the Closing Date, and satisfactory
in form and substance to the Representatives, counsel for the
Underwriters, the Household Entities and their counsel.
(g) At the Execution Time and at the Closing Date, Xxxxxx
Xxxxxxxx & Co. shall have furnished to the Representatives a letter or
letters, dated respectively as of the date of this Agreement and the
date of the Closing Date, in form and substance satisfactory to the
Representatives and counsel for the Underwriters, confirming that they
are certified independent public accountants within the meaning of the
Act, the Exchange Act and the rules and regulations promulgated
thereunder and stating in effect that they have performed certain
specified procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which is
limited to accounting, financial or statistical information derived
from the general accounting records of the Trust, the Bank and the
Seller)
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set forth in the Registration Statement and the Prospectus (and any
supplements thereto), agrees with the accounting records of the Trust,
and the Household Entities, excluding any questions of legal
interpretation, and (ii) they have performed certain specified
procedures with respect to the computer programs used to select the
Eligible Accounts and to generate information with respect to the
Accounts set forth in the Registration Statement and the Prospectus
(and any supplements thereto).
(h) The Representatives shall receive evidence satisfactory to
them that, on or before the Closing Date, UCC-1 financing statements
are being filed in the offices of the Secretaries of State of the
States of California, Illinois, Nevada and Virginia (and such other
states as may be necessary or desirable pursuant to applicable state
law) reflecting the interest of the Trust in the Receivables and the
proceeds thereof.
(i) Counsel to the Trustee shall have delivered a favorable
opinion, dated the Closing Date, and satisfactory in form and substance
to the Representatives and counsel for the Underwriters, the Household
Entities and their counsel, to the effect that:
(i) the Trustee has been duly incorporated and is
validly existing and in good standing as a corporation under
the laws of the State of New York, is duly qualified to do
business in all jurisdictions where the nature of its
operations as contemplated by the Pooling and Servicing
Agreement, the Supplement and the Collateral Agreement
requires such qualifications, and has the power and authority
(corporate and other) to issue, and to take all action
required of it under, the Pooling and Servicing Agreement, the
Supplement and the Collateral Agreement;
(ii) the execution, delivery and performance by the
Trustee of the Pooling and Servicing Agreement, the Supplement
and the Collateral Agreement and the issuance of the
Certificates by the Trustee have been duly authorized by all
necessary corporate action on the part of the Trustee, and
under present laws do not and will not contravene any law or
governmental regulation or order presently binding on the
Trustee or the charter or the by-laws of the Trustee or
contravene any provision of or constitute a default under any
indenture, contract or other instrument to which the Trustee
is a party or by which the Trustee is bound;
(iii) the execution, delivery and performance by the
Trustee of the Pooling and Servicing Agreement, the Supplement
and the Collateral Agreement and the issuance of the
Certificates by the Trustee do not require the consent or
approval of, the giving of notice to, the registration with,
or the taking of any other action in respect of any Federal,
state or other governmental agency or authority which has not
previously been effected;
(iv) each of the Certificates has been duly
authenticated and delivered by the Trustee and each of the
Certificates and the Pooling and Servicing Agreement, the
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Supplement and the Collateral Agreement constitute legal,
valid and binding agreements of the Trustee, enforceable
against the Trustee in accordance with its terms (subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally); and
(v) no approval, authorization or other action by, or
filing with, any governmental authority of the United States
of America or the State of New York having jurisdiction over
the banking or trust powers of the Trustee is required in
connection with its execution and delivery of the Pooling and
Servicing Agreement, the Supplement and the Collateral
Agreement or the performance by the Trustee of the terms of
the Pooling and Servicing Agreement, the Supplement and the
Collateral Agreement.
(j) The Class A Certificates shall be given the highest
investment grade rating by both Xxxxx'x Investors Service, Inc.
("Xxxxx'x"), and Standard & Poor's Corporation ("S&P") and neither
Xxxxx'x nor S&P shall have placed the Class A Certificates under review
with possible negative implications.
(k) The Class B Certificates shall be rated at least "A" or
its equivalent by both Xxxxx'x and S&P and neither Moody's nor S&P
shall have placed the Class B Certificates under review with possible
negative implications.
(l) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall
not have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Trust or any
of the Household Entities, the effect of which, in any case referred to
above, is, in the judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or the delivery of the Certificates as contemplated by the
Registration Statement and the Prospectus.
(m) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, and the Representatives and counsel
for the Underwriters shall have received such information, certificates
and documents as the Representatives or counsel for the Underwriters
may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Representatives and the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Trustee and the Seller in writing or by telephone or telegraph confirmed in
writing.
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Section 7. Reimbursement of Expenses. If the sale of the
Certificates provided for herein is not consummated because any condition to the
Representatives' obligations set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Trustee or the Household
Entities to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Representatives or the Underwriters,
the Household Entities, jointly and severally, will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Certificates.
Section 8. Indemnification and Contribution.
(a) As an inducement to the Underwriters to participate in the
public offering of the Certificates, the Seller and HFC, jointly and
severally (and the Bank with respect to any information that it has
provided in connection with the preparation of the Preliminary
Prospectus or Prospectus and, with respect to the breach of any of its
representations and warranties under Section 1 hereunder), agree to
indemnify and hold harmless each Underwriter and each person who
controls any Underwriter within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however that (i) the Household Entities will not be liable in any such
case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to
the Household Entities by or on behalf of any Underwriter through the
Representatives specifically for use in connection with the preparation
thereof, and (ii) such indemnity with respect to any untrue statement
or omission in the Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased
the Certificates which are the subject thereof if such person was not
sent a copy of the Prospectus (or the Prospectus as supplemented) at or
prior to the confirmation of the sale of such Certificates to such
person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in any
Preliminary Prospectus was corrected in the Prospectus (or the
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Prospectus as supplemented). This indemnity agreement will be in
addition to any liability which the Household Entities may otherwise
have.
(b) Each Underwriter, severally, agrees to indemnify and hold
harmless each of the Household Entities, each of their directors, each
of the officers who signs the Registration Statement, and each person
who controls any Household Entity within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnities from the Household Entities to each Underwriter,
but only with reference to written information relating to such
Underwriter furnished to the Household Entities by or on behalf of such
Underwriter specifically for use in the preparation of the documents
referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any Underwriter may otherwise
have. The Household Entities acknowledge that the statements relating
to the Underwriters set forth in the last paragraph of the cover page,
the second sentence under the heading "Special Considerations - Limited
Liquidity," and the statements under the heading "Underwriting" in any
Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by the Underwriters or on behalf of
the Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus, and you confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party
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within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying
party.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Household Entities on the
one hand and the Underwriters on the other from the offering of the
Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Household Entities on the one
hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations.
The relative benefits received by the Household Entities on the one
hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Household Entities bears to the
total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Household Entities or the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Certificates underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
Section 9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Certificates agreed
to be purchased by such Underwriter or
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Underwriters hereunder on the Closing Date and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Certificates set
forth opposite their names in Schedule I with respect to the Closing Date hereto
bears to the aggregate amount of Certificates set forth opposite the names of
all the remaining Underwriters) the Certificates which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Certificates which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Certificates set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Certificates, and if such
nondefaulting Underwriters do not purchase all the Certificates, the obligations
will terminate without liability of any nondefaulting Underwriter, the Trust, or
any Household Entity. In the event of a default by any Underwriter as set forth
in this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Underwriters shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Seller, HFC, the Bank and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
Section 10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Seller if after the Execution Time and prior to delivery of and payment
for the Certificates on the Closing Date, (i) trading in the Common Stock of
Household International, Inc. shall have been suspended by the Commission or the
New York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
by Federal, State of New York or State of California authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war or the occurrence of any other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Certificates as contemplated by the Prospectus.
Section 11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Trust, the Household Entities or the officers of each of them
and of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriters or the Trust, the Household Entities or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Certificates. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
Section 12. Notices. All communications hereunder shall be in
writing and effective only on receipt, and, if sent to the Underwriters, will be
mailed, delivered or telegraphed and confirmed
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to the Representative at [ ], [ ]Attention: Registration Department;
if sent to any Household Entity, will be mailed, delivered or telegraphed and
confirmed to them at 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
attention of General Counsel; provided however, that any notice to an
Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed and
confirmed to such Underwriter.
SECTION 13. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 14. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers, directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
Section 15. Counterparts. This Agreement may be executed by
one or more parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 16. Miscellaneous. This agreement supersedes all prior
agreements and understandings relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
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If you are in agreement with the foregoing, please sign two
counterparts hereof and return one to each of the Bank and the Seller whereupon
this letter and your acceptance shall become a binding agreement among the
Household Entities and the several Underwriters.
Very truly yours,
HOUSEHOLD BANK (SB), N.A.
By_____________________________
Name:
Title:
HOUSEHOLD AFFINITY FUNDING
CORPORATION
By_____________________________
Name:
Title:
HOUSEHOLD FINANCE CORPORATION
By____________________________
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date hereof.
[Underwriter]
by [Underwriter]
By__________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing Agreement.
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Schedule I
CLASS A CERTIFICATES
Principal
Amount
------
[Underwriter]. $[ ]
[Underwriter] $[ ]
$[ ].00
_______________________
CLASS B CERTIFICATES
Principal
Amount
------
[Underwriter] $[
[Underwriter] $[ ]
$[ ].00
_______________________
