Exhibit 10.7
EXECUTION COPY
 
SALE AND SERVICING AGREEMENT
 
among
 
HYUNDAI AUTO RECEIVABLES TRUST 2007-A,
Issuer,
 
HYUNDAI ABS FUNDING CORPORATION,
Depositor,
 
HYUNDAI MOTOR FINANCE COMPANY,
Seller and Servicer,
 
and
 
CITIBANK, N.A.,
Indenture Trustee
 
Dated as of September 28, 2007
 

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

TABLE OF CONTENTS

     
Page
ARTICLE I.
DEFINITIONS
1
 
Section 1.01
Definitions
1
 
Section 1.02
Other Definitional Provisions
18
ARTICLE II.
CONVEYANCE OF RECEIVABLES
19
 
Section 2.01
Conveyance of Receivables
19
ARTICLE III.
THE RECEIVABLES
20
 
Section 3.01
Representations and Warranties of the Seller
20
 
Section 3.02
Representations and Warranties of the Depositor
20
 
Section 3.03
Repurchase upon Breach
21
ARTICLE IV.
ADMINISTRATION AND SERVICING OF RECEIVABLES
22
 
Section 4.01
Duties of Servicer
22
 
Section 4.02
Collection of Receivable Payments; Modifications of Receivables
23
 
Section 4.03
Realization upon Receivables
23
 
Section 4.04
[Reserved]
24
 
Section 4.05
Maintenance of Security Interests in Financed Vehicles
24
 
Section 4.06
Covenants of Servicer
24
 
Section 4.07
Purchase of Receivables Upon Breach
24
 
Section 4.08
Servicing Fee
25
 
Section 4.09
Servicer’s Certificate
25
 
Section 4.10
Annual Statement as to Compliance, Notice of Servicer Termination Event
26
 
Section 4.11
Compliance with Regulation AB
26
 
Section 4.12
Access to Certain Documentation and Information Regarding Receivables
26
 
Section 4.13
Term of Servicer
26
 
Section 4.14
Annual Independent Accountants’ Report
26
 
Section 4.15
Reports to the Commission
27
 
Section 4.16
Compensation of Indenture Trustee
27
ARTICLE V.
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
28
 
Section 5.01
Accounts
28

 
 
-i-

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

TABLE OF CONTENTS
(continued)
 

     
Page
 
Section 5.02
Application of Collections
29
 
Section 5.03
Property of the Trust
30
 
Section 5.04
Purchased Amounts
30
 
Section 5.05
Distributions
30
 
Section 5.06
Reserve Account
31
 
Section 5.07
Statements to Securityholders
32
 
Section 5.08
Advances by the Servicer
32
 
Section 5.09
Interest Rate Swap Agreement
32
ARTICLE VI.
THE DEPOSITOR
34
 
Section 6.01
Representations of Depositor
34
 
Section 6.02
Corporate Existence
36
 
Section 6.03
Liability of Depositor
36
 
Section 6.04
Merger or Consolidation of, or Assumption of the Obligations of, Depositor
37
 
Section 6.05
Amendment of Depositor’s Organizational Documents
37
ARTICLE VII.
THE SERVICER
37
 
Section 7.01
Representations of Servicer
37
 
Section 7.02
Indemnities of Servicer
39
 
Section 7.03
Merger or Consolidation of, or Assumption of the Obligations of, Servicer
40
 
Section 7.04
Limitation on Liability of Servicer and Others
41
 
Section 7.05
Delegation of Duties
41
 
Section 7.06
Servicer Not to Resign
41
ARTICLE VIII.
DEFAULT
42
 
Section 8.01
Servicer Termination Events
42
 
Section 8.02
Consequences of a Servicer Termination Event
42
 
Section 8.03
Appointment of Successor Servicer
43
 
Section 8.04
Notification to Securityholders
43
 
Section 8.05
Waiver of Past Defaults
44
ARTICLE IX.
TERMINATION
44
 
Section 9.01
Optional Purchase of All Receivables
44

 
 
-ii-

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

TABLE OF CONTENTS
(continued)
 

   
Page
ARTICLE X.
MISCELLANEOUS
44
 
Section 10.01
Amendment
44
 
Section 10.02
Protection of Title to Trust
45
 
Section 10.03
Notices
47
 
Section 10.04
Assignment by the Depositor or the Servicer
48
 
Section 10.05
Limitations on Rights of Others
48
 
Section 10.06
Severability
48
 
Section 10.07
Counterparts
48
 
Section 10.08
Headings
48
 
Section 10.09
GOVERNING LAW
48
 
Section 10.10
Assignment by Issuer
48
 
Section 10.11
Nonpetition Covenants
49
 
Section 10.12
Limitation of Liability of Owner Trustee and Indenture Trustee
49
 
Section 10.13
Limitation of Rights
49

Exhibit A
Representations and Warranties of Hyundai Motor Finance Company Under Section
3.02 of the Receivables Purchase Agreement
Exh. A-1
Exhibit B
Form of Record Date Statement
Exh. B-1
Exhibit C
Form of Servicer’s Certificate
Exh. C-1
Schedule A
Schedule of Receivables
Sched. A-1
Schedule B
Yield Supplement Overcollateralization Amount
Sched. B-1
Appendix A
Regulation AB Representations, Warranties and Covenants
App. A-1
Schedule I
Servicing Criteria To Be Addressed in Assessment of Compliance
Sched. I-1

 
 
-iii-

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

 
This SALE AND SERVICING AGREEMENT, dated as of September 28, 2007, among HYUNDAI
AUTO RECEIVABLES TRUST 2007-A, a Delaware statutory trust (the “Issuer”),
HYUNDAI ABS FUNDING CORPORATION, a Delaware corporation (the “Depositor”),
HYUNDAI MOTOR FINANCE COMPANY, a California corporation, as servicer (in such
capacity, the “Servicer”) and as seller (in such capacity, the “Seller”), and
Citibank, N.A., a national banking association, as indenture trustee (the
“Indenture Trustee”).
 
WHEREAS, the Issuer desires to purchase a portfolio of receivables arising in
connection with automobile retail installment sale contracts acquired by the
Seller in the ordinary course of business and sold by the Seller to the
Depositor;
 
WHEREAS, the Depositor is willing to sell such receivables to the Issuer; and
 
WHEREAS, the Servicer is willing to service such receivables.
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:
 
ARTICLE I.

 
DEFINITIONS
 
Section 1.01 Definitions. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
 
“Administration Agreement” means the Owner Trust Administration Agreement, dated
as of September 28, 2007, among Hyundai Auto Receivables Trust 2007-A, Hyundai
Motor Finance Company, and Citibank, N.A., a national banking association, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
 
“Administrator” means Hyundai Motor Finance Company, a California corporation,
and its successors in interest.
 
“Adjusted Pool Balance” means, with respect to any Payment Date, the Pool
Balance as of the end of the previous Collection Period less the Yield
Supplement Overcollateralization Amount with respect to such Payment Date.
 
“Advance” means, as to any Payment Date, an advance made by the Servicer on such
Payment Date pursuant to Section 5.08 in respect of the aggregate of all
Scheduled Payments of interest which were due during the related Collection
Period that remained unpaid at the end of such Collection Period.
 
“Agreement” means this Sale and Servicing Agreement, as amended, supplemented,
amended and restated or otherwise modified from time to time.
 
“Amount Financed” means with respect to a Receivable, the amount advanced under
the Receivable toward the purchase price of the Financed Vehicle and any related
costs.
 

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

 
“Annual Percentage Rate” or “APR” of a Receivable means the annual rate of
finance charges stated in the related Contract.
 
“Available Amounts” means, with respect to any Payment Date, the sum of the
following amounts (without duplication) with respect to the related Collection
Period: (i) all Collections on Receivables, (ii) the Purchased Amount of each
Receivable that becomes a Purchased Receivable, (iii) Advances, (iv) Recoveries,
(v) any amounts paid by the Servicer in connection with a purchase of
Receivables pursuant to Section 9.01(a) hereof, (vi) the Net Swap Receipts
(excluding Swap Termination Payments received from the Swap Counterparty and
deposited into the Swap Termination Payment Account), (vii) amounts on deposit
in the Swap Termination Payment Account to the extent such amounts are required
to be included in Available Amounts pursuant to Section 5.09(d) of this
Agreement and (viii) Swap Replacement Proceeds, to the extent required to be
included in Available Amounts pursuant to Section 5.09(f) of this Agreement.
 
“Available Amounts Shortfall” means, with respect to any Payment Date, the
positive difference, if any, of the Total Required Payment for such Payment Date
minus the Available Amounts for such Payment Date.
 
“Basic Documents” means the Trust Agreement, the Securities Account Control
Agreement, the Indenture, this Agreement, the Receivables Purchase Agreement,
the Administration Agreement, the Note Depository Agreement, the Interest Rate
Swap Agreement and other documents and certificates delivered in connection
therewith.
 
“Business Day” means any day other than a Saturday, a Sunday or a day on which a
commercial banking institution in the states of California, Delaware or New York
are authorized or obligated by law or executive order to remain closed.
 
“Certificate” means a certificate evidencing the beneficial interest of a
Certificateholder in the Trust.
 
“Certificateholders” has the meaning assigned to such term in the Trust
Agreement.
 
“Class” means any one of the classes of Notes.
 
“Class A-1 Noteholder” means the Person in whose name a Class A-1 Note is
registered in the Note Register.
 
“Class A-1 Notes” means the 5.29050% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A-1 to the Indenture.
 
“Class A-1 Rate” means 5.29050% per annum, computed on the basis of an
actual/360-day year.
 
“Class A-2 Noteholder” means the Class A-2a Noteholders and the Class A-2b
Noteholders.
 
“Class A-2 Notes” means, collectively, the Class A-2a Notes and the Class A-2b
Notes.
 
2

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

 
“Class A-2a Noteholder” means the Person in whose name a Class A-2a Note is
registered in the Note Register.
 
“Class A-2a Notes” means the 5.11% Asset Backed Notes, Class A-2a, substantially
in the form of Exhibit A-2a to the Indenture.
 
“Class A-2a Rate” means 5.11% per annum, computed on the basis of a 360-day year
consisting of twelve 30-day months.
 
“Class A-2b Notes” means the LIBOR + 0.35% Asset Backed Notes, Class A-2b,
substantially in the form of Exhibit A-2b to the Indenture.
 
“Class A-2b Rate” means LIBOR + 0.35% per annum, computed on the basis of an
actual/360-day year.
 
“Class A-3 Noteholder” means the Class A-3a Noteholders and the Class A-3b
Noteholders.
 
“Class A-3 Notes” means, collectively, the Class A-3a Notes and the Class A-3b
Notes.
 
“Class A-3a Noteholder” means the Person in whose name a Class A-3a Note is
registered in the Note Register.
 
“Class A-3a Notes” means the 5.04% Asset Backed Notes, Class A-3a, substantially
in the form of Exhibit A-3a to the Indenture.
 
“Class A-3a Rate” means 5.04% per annum, computed on the basis of a 360-day year
consisting of twelve 30-day months.
 
“Class A-3b Notes” means the LIBOR + 0.40% Asset Backed Notes, Class A-3b,
substantially in the form of Exhibit A-3b to the Indenture.
 
“Class A-3b Rate” means LIBOR + 0.40% per annum, computed on the basis of an
actual/360-day year.
 
“Class A-4 Noteholder” means the Person in whose name a Class A-4 Note is
registered in the Note Register.
 
“Class A-4 Notes” means the 5.21% Asset Backed Notes, Class A-4, substantially
in the form of Exhibit A-4 to the Indenture.
 
“Class A-4 Rate” means 5.21% per annum, computed on the basis of a 360-day year
consisting of twelve 30-day months.
 
“Closing Date” means September 28, 2007.
 
“CFR” means the Code of Federal Regulations.
 
“Collateral” has the meaning specified in the Granting Clause of the Indenture.
 
3

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

 
“Collection” means, with respect to any Receivable and to the extent received by
the Servicer after the Cutoff Date, (a) any monthly payment by or on behalf of
the Obligor thereunder, (b) full or partial prepayment of that Receivable, (c)
all Liquidation Proceeds and (d) any other amounts received by the Servicer
which, in accordance with its customary servicing practices, would be applied to
the payment of accrued interest or to reduce the Principal Balance of that
Receivable; provided, however, that the term “Collection” in no event will
include (i) any amounts in respect of any Receivable purchased by the Servicer,
the Seller or the Depositor on a prior Payment Date or (ii) any late fees,
extension fees, non-sufficient funds charges and any and all other
administrative fees or similar charges allowed by applicable law with respect to
any Receivable and payable to the Servicer.
 
“Collection Account” means the account designated as such, established and
maintained pursuant to Section 5.01.
 
“Collection Period” means each fiscal month of the Servicer during the term of
this Agreement; provided, however, that the first Collection Period is the
period from and including August 19, 2007 through September 30, 2007. With
respect to any Determination Date or Payment Date, the “related Collection
Period” means the Collection Period preceding the fiscal month in which such
Determination Date or Payment Date occurs.
 
“Commission” means the Securities and Exchange Commission.
 
“Contract” means a motor vehicle retail installment sale contract.
 
“Conveyed Assets” has the meaning provided in Section 2.01.
 
“Corporate Trust Administration Department” has the meaning set forth in the
Trust Agreement.
 
“Corporate Trust Office” has the meaning set forth in the Indenture.
 
“Credit and Collection Policy” means the credit and collection practices,
policies and procedures of HMFC from time to time.
 
“Cutoff Date” means the close of business on August 18, 2007.
 
“Dealer” means the dealer who sold a Financed Vehicle and who originated the
related Receivable and assigned it to HMFC pursuant to a Dealer Agreement.
 
“Dealer Agreement” means an agreement between HMFC and a Dealer pursuant to
which such Dealer sells Contracts to HMFC.
 
“Defaulted Receivables” means any Receivable (a) on which any installment is
unpaid more than sixty (60) days past its original due date or (b) where the
Servicer’s records show that the Obligor has suffered an Insolvency Event.
 
4

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

 
“Deliver” or “Delivered”: when used with respect to Trust Account Property means
when the relevant steps specified below are accomplished with respect to such
Trust Account Property:
 
(a) if such Trust Account Property is an instrument or a certificated security
(each as defined in the UCC), by (i) delivering such instrument or security
certificate to the Eligible Institution then maintaining the applicable Eligible
Account either registered in the name of such Eligible Institution, or indorsed,
by an effective endorsement, to the Eligible Institution or in blank (provided,
that no endorsement shall be required for certificated securities in bearer
form), (ii) causing such Eligible Institution to maintain (on behalf of the
Indenture Trustee) continuous possession of such instrument or security
certificate, (iii) causing the Eligible Institution to credit such instrument or
certificated security to the appropriate Eligible Account, (iv) causing the
Eligible Institution to agree to treat all such instruments and certificated
securities as “financial assets” (as defined in the UCC) and (v) causing the
Eligible Institution to agree pursuant to a Control Agreement that it will
comply with “entitlement orders” (as defined in the UCC) originated by the
Indenture Trustee with respect to each security entitlement (as defined in the
UCC) relating to such instruments and certificated securities without further
consent by the Depositor, the Issuer or any other Person;
 
(b) if such Trust Account Property is a security entitlement (as defined in the
UCC), by (i) causing the Eligible Institution then maintaining the applicable
Eligible Account to become the entitlement holder of such security entitlement,
(ii) causing the Eligible Institution to credit such security entitlement to the
appropriate Eligible Account thereby creating a securities entitlement with
respect to the financial asset underlying such securities entitlement and
(iii) causing the Eligible Institution to agree pursuant to a Control Agreement
that it will comply with “entitlement orders” (as defined in the UCC) originated
by the Indenture Trustee with respect to each security entitlement (as defined
in the UCC) without further consent by the Depositor, Issuer or any other
Person;
 
(c) if such Trust Account Property is an uncertificated security (as defined in
the UCC), by (i) causing the Eligible Institution then maintaining the
applicable Eligible Account to become the registered owner of such
uncertificated security, (ii) causing such registration to remain effective,
(iii) causing the Eligible Institution to credit such uncertificated security to
the appropriate Eligible Account thereby creating a securities entitlement with
respect to the uncertificated security, and (iv) causing the Eligible
Institution to agree pursuant to a Control Agreement that it will comply with
“entitlement orders” (as defined in the UCC) originated by the Indenture Trustee
with respect to each security entitlement (as defined in the UCC) without
further consent by the Depositor, Issuer or any other Person;
 
(d) if such Trust Account Property consists of deposit accounts (as defined in
the UCC) by either (i) causing the Indenture Trustee to be the customer with
respect to such deposit accounts or (ii) causing the bank maintaining such
deposit account to enter into a Control Agreement pursuant to which it agrees to
comply with all instructions issued by the Indenture Trustee without further
consent by the Depositor, Issuer or any other Person;
 
5

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

 
(e) in the case of any general intangibles, by causing an effective financing
statement naming the Issuer as debtor and the Indenture Trustee as secured party
and covering such general intangibles to be filed in the location (within the
meaning of Section 9-307 of the UCC) of the Issuer; and
 
(f) in the case of any Trust Account Property not covered above or as an
additional method of delivery for any of the foregoing, by delivering to the
Indenture Trustee a legal opinion of counsel reasonably satisfactory to the
Indenture Trustee specifying another method of delivery that will result in the
Indenture Trustee having a valid and perfected security interest therein and by
delivery in compliance with the method specified in such legal opinion.
 
“Depositor” means Hyundai ABS Funding Corporation, a Delaware corporation, and
its successors in interest.
 
“Determination Date” means, with respect to each Payment Date, the tenth
calendar day of the month in which such Payment Date occurs (or if such tenth
day is not a Business Day, the next succeeding Business Day).
 
“Eligible Account” means a segregated securities account with an Eligible
Institution.
 
“Eligible Institution” means the following:
 
(a) a depository institution or trust company
 
(i) whose commercial paper, short-term unsecured debt obligations or other
short-term deposits are rated “P-1” by Moody's or “A-1+” by Standard & Poor's or
“F1” by Fitch, if the deposits are to be held in the account for 30 days or
less, or
 
(ii) whose long-term unsecured debt obligations are rated at least “Aa3” by
Moody’s or “AA-” by Standard & Poor's or “AA-” by Fitch, if the deposits are to
be held in the account more than 30 days, or
 
(b) a segregated trust account or accounts maintained in the trust department of
a federal or state-chartered depository institution having a combined capital
and surplus of at least $50,000,000 and subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), or
 
(c) any other institution that the Rating Agencies shall approve in writing.
 
“Eligible Investments” means book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form and that
evidence:
 
(a) direct obligations of, and obligations fully guaranteed as to the full and
timely payment by, the United States of America;
 
6

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

 
(b) demand deposits, time deposits or certificates of deposit of any depository
institution (including any affiliate of the Depositor, the Servicer, the
Indenture Trustee or the Owner Trustee) or trust company incorporated under the
laws of the United States of America or any state thereof or the District of
Columbia (or any domestic branch of a foreign bank) and subject to supervision
and examination by Federal or state banking or depository institution
authorities (including depository receipts issued by any such institution or
trust company as custodian with respect to any obligation referred to in the
first bullet point above or a portion of such obligation for the benefit of the
holders of such depository receipts); provided that at the time of the
investment or contractual commitment to invest therein (which shall be deemed to
be made again each time funds are reinvested following each Payment Date), the
commercial paper or other short-term senior unsecured debt obligations (other
than such obligations the rating of which is based on the credit of a person
other than such depository institution or trust company) of such depository
institution or trust company shall have a credit rating from each Rating Agency
in the highest investment category granted thereby;
 
(c) commercial paper (including commercial paper of any affiliate of Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee) having, at the time of
the investment or contractual commitment to invest therein, a rating from each
Rating Agency in the highest investment category granted thereby;
 
(d) investments in money market funds (including funds for which the Depositor,
the Servicer, the Indenture Trustee or the Owner Trustee or any of their
respective affiliates is investment manager or advisor) having a rating from
each of Moody’s and Standard & Poor’s in the highest investment category granted
thereby;
 
(e) bankers’ acceptances issued by any depository institution or trust company
referred to in clause (b) above;
 
(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (b); or
 
(g) any other investment with respect to which the Issuer, the Indenture Trustee
or the Servicer has received written notification from each Rating Agency that
the acquisition of such investment will satisfy the Rating Agency Condition.
 
“Eligible Servicer” means Hyundai Motor Finance Company or any other Person that
at the time of its appointment as Servicer (a) is servicing a portfolio of motor
vehicle retail installment sale contracts or motor vehicle installment loans,
(b) is legally qualified and has the capacity to service the Receivables, (c)
has demonstrated the ability professionally and competently to service a
portfolio of motor vehicle retail installment sale contracts or motor vehicle
installment loans similar to the Receivables with reasonable skill and care and
(iv) has a minimum net worth of $100,000,000.
 
7

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

 
“Fee Letter” means the letter regarding fees dated September 28, 2007 between
the Depositor, the Owner Trustee and HMFC.
 
“Financed Vehicle” means a new or used automobile, light-duty truck, van or
minivan, together with all accessions thereto, securing an Obligor’s
indebtedness under the related Contract.
 
“Fitch” means Fitch, Inc., and its successors.
 
“HMFC” means Hyundai Motor Finance Company, a California corporation, and its
successors.
 
“Indenture” means the Indenture, dated as of September 28, 2007, between the
Issuer and the Indenture Trustee, as amended, supplemented, amended and restated
or otherwise modified from time to time.
 
“Indenture Trustee” means the Person acting as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
 
“Initial Class A-1 Note Balance” means $201,000,000.00.
 
“Initial Class A-2a Note Balance” means $120,000,000.00.
 
“Initial Class A-2b Note Balance” means $79,000,000.00.
 
“Initial Class A-3a Note Balance” means $210,000,000.00.
 
“Initial Class A-3b Note Balance” means $71,000,000.00.
 
“Initial Class A-4 Note Balance” means $177,841,000.00.
 
“Initial Interest Rate Swap Agreement” means the ISDA Master Agreement, dated as
of the Closing Date, between the Initial Swap Counterparty and the Issuer, the
Schedule and the Credit Support Annex thereto, dated as of the Closing Date and,
the Confirmations thereto, each dated as of the Closing Date, and entered into
pursuant to such ISDA Master Agreement, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
 
“Initial Pool Balance” means, an amount equal to the aggregate Principal Balance
of the Receivables as of the Cutoff Date.
 
“Initial Swap Counterparty” means HSBC Bank USA, National Association, as the
swap counterparty under the Initial Interest Rate Swap Agreement.
 
“Insolvency Event” means, with respect to a specified Person, (a) the filing of
a decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of such Person’s affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
 
8

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

 
“Interest Distribution Account” means, the account designated as such,
established and maintained pursuant to Section 5.01(a)(iv).
 
“Interest Period” means, with respect to the Class A-1 Notes, Class A-2b Notes
and Class A-3b Notes, the period from and including the most recent Payment Date
on which interest has been paid (or, in the case of the first Payment Date, the
Closing Date) to but excluding the next succeeding Payment Date and, with
respect to the Class A-2a Notes, the Class A-3a Notes and the Class A-4 Notes,
the period from and including the 15th day of the calendar month (or, in the
case of the first Payment Date, from and including the Closing Date) to but
excluding the 15th day of the next calendar month.
 
“Interest Rate Swap Agreement” means the Initial Interest Rate Swap Agreement
and any Replacement Interest Rate Swap Agreement.
 
“Investment Earnings” means, with respect to any Payment Date, any investment
earnings (net of losses and investment expenses) on amounts on deposit in a
Trust Account.
 
“Issuer” means Hyundai Auto Receivables Trust 2007-A.
 
“LIBOR” means, with respect to any Interest Period, the London interbank offered
rate for deposits in U.S. dollars having a maturity of one month commencing on
the related LIBOR Determination Date which appeared on Reuters Telerate
successor page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date as reported by Bloomberg Professional(R) Service or any other page as may
replace that page on Bloomberg Professional(R) Service. If the rates used to
determine LIBOR do not appear on the Bloomberg Professional(R) Service, the
rates for that day will be determined on the basis of the rates at which
deposits in U.S. dollars, having a maturity of one month and in a principal
amount of not less than U.S. $1,000,000 are offered at approximately 11:00 a.m.
London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the reference banks. The Indenture Trustee will request the
principal London office of each of such reference banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that day
will be the arithmetic mean to the nearest 1/100,000 of 1.00% (0.0000001), with
five one-millionths of a percentage point rounded upward, of all such
quotations. If fewer than two such quotations are provided, the rate for that
day will be the arithmetic mean to the nearest 1/100,000 of 1.00% (0.0000001),
with five one-millionths of a percentage point rounded upward, of the offered
per annum rates that one or more leading banks in New York City, selected by the
Indenture Trustee (after consulting with the Servicer), are quoting as of
approximately 11:00 a.m., New York City time, on such LIBOR Determination Date
to leading European banks for United States dollar deposits for that maturity;
provided, that if the banks selected as aforesaid are not quoting as mentioned
in this sentence, LIBOR in effect for the applicable Interest Period will be
LIBOR in effect for the previous Interest Period. The reference banks are the
four major banks in the London interbank market selected by the Indenture
Trustee (after consultation with the Servicer).
 
9

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

 
“LIBOR Determination Date” means the second London Business Day prior to the
closing date with respect to the first payment date and, as to each subsequent
payment date, the second London Business Day prior to the immediately preceding
payment date.
 
“Lien” means a security interest, lien, charge, pledge, equity or encumbrance of
any kind, other than tax liens, mechanics’ liens and any liens that attach to
the respective Receivable by operation of law as a result of any act or omission
by the related Obligor.
 
“Liquidated Receivable” means a Receivable with respect to which the earliest of
the following shall have occurred: (a) the related Financed Vehicle has been
repossessed and liquidated, (b) the related Financed Vehicle has been
repossessed for 90 days or more and has not yet been liquidated, (c) the end of
the Collection Period in which the Receivable becomes more than 120 days past
due, or (d) the Servicer has determined in accordance with its collection
policies that all amounts that it expects to receive with respect to the
Receivable have been received.
 
“Liquidation Proceeds” means, with respect to any Liquidated Receivable, all
proceeds of the liquidation of such Liquidated Receivable, net of the sum of any
out-of-pocket expenses of the Servicer reasonably allocated to the auction,
repossession, transport, reconditioning and liquidation and any amounts required
by law to be remitted or allocated to the account of the Obligor on such
Liquidated Receivable.
 
“London Business Day” means any day other than a Saturday, a Sunday or a day on
which a commercial banking institution in London, England is authorized or
obligated by law or executive order to remain closed.
 
“Moody’s” means Moody’s Investors Service, Inc., and its successors.
 
“Net Swap Payment” means for the Interest Rate Swap Agreement, the net amount
with respect to regularly scheduled payments, if any, owed by the Issuer to the
Swap Counterparty on any Payment Date, including prior unpaid Net Swap Payments
and any interest accrued thereon, under such Interest Rate Swap Agreement;
provided, that “Net Swap Payments” do not include Swap Termination Payments.
 
“Net Swap Receipts” means, for the Interest Rate Swap Agreement, the net amounts
owed by the Swap Counterparty to the Issuer, if any, on any Swap Payment Date,
excluding any Swap Termination Payments.
 
“Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes.
 
10

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

 
“Note Balance” means, as of any date of determination, an amount equal to (a)
the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2a
Note Balance, (iii) the Initial Class A-2b Note Balance, (iv) the Initial
Class A-3a Note Balance, (v) the Initial Class A-3b Note Balance and (vi) the
Initial Class A-4 Note Balance less (b) all amounts distributed to Noteholders
on or prior to such date and allocable to principal thereon.
 
“Note Distribution Account” means the account designated as such, established
and maintained pursuant to Section 5.01(a)(ii).
 
“Note Pool Factor” means, with respect to each Class of Notes as of the close of
business on the last day of a Collection Period, a seven-digit decimal figure
equal to the Outstanding Amount of such Class of Notes (after giving effect to
any reductions thereof to be made on the immediately following Payment Date)
divided by the original Outstanding Amount of such Class of Notes. The Note Pool
Factor will be 1.0000000 as of the Closing Date; thereafter, the Note Pool
Factor will decline to reflect reductions in the Outstanding Amount of such
Class of Notes.
 
“Noteholders” means the Class A-1 Noteholders, the Class A-2 Noteholders, Class
A-3 Noteholders and the Class A-4 Noteholders.
 
“Obligor” means a person who obtained installment credit for the purchase of a
Financed Vehicle the terms of which are evidenced by a Contract, and any other
person obligated to make payments thereunder.
 
“Officers’ Certificate” means a certificate signed by (a) the chairman of the
board, any vice president, the controller or any assistant controller and (b)
the president, a treasurer, assistant treasurer, secretary or assistant
secretary of the Depositor or the Servicer, as appropriate.
 
“Opinion of Counsel” means one or more written opinions of counsel, who may be
an employee of or counsel to the Issuer, Seller or the Servicer, which counsel
shall be reasonably acceptable to the Indenture Trustee, the Owner Trustee or
the Rating Agencies, as applicable, and which shall be addressed to the Owner
Trustee and the Indenture Trustee.
 
“Other Assets” means any assets (or interests therein) (other than the Trust
Estate) conveyed or purported to be conveyed by the Depositor to another Person
or Persons other than the Issuer, whether by way of a sale, capital contribution
or by virtue of the granting of a lien.
 
“Outstanding Amount” means, as of any date of determination, the aggregate
principal amount of a Class of Notes outstanding as of such date of
determination.
 
“Owner Trustee” means Wilmington Trust Company, acting not in its individual
capacity but solely as owner trustee under the Trust Agreement.
 
“Payment Date” means, with respect to each Collection Period, the 15th day of
the following month or, if such day is not a Business Day, the immediately
following Business Day, commencing on October 15, 2007.
 
11

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

 
“Person” means any individual, corporation, limited liability company, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
 
“Physical Property” has the meaning assigned to such term in the definition of
“Delivery” above.
 
“Pool Balance” means, with respect to any Payment Date, an amount equal to the
aggregate Principal Balance of the Receivables at the end of the related
Collection Period, after giving effect to all payments of principal received
from Obligors and Purchased Amounts to be remitted by the Servicer for such
Collection Period and reduction to zero of the aggregate outstanding Principal
Balance of all Receivables that became Liquidated Receivables during such
Collection Period.
 
“Principal Balance” means, as of any time with respect to any Receivable, the
principal balance of such Receivable as of the close of business on the last day
of the preceding Collection Period under the terms of the Receivable determined
in accordance with the customary servicing practices.
 
“Principal Distribution Account” means that account designated as such
established and maintained pursuant to Section 5.01(a)(iv).
 
“Principal Distribution Amount” means, with respect to any Payment Date, an
amount no less than zero equal to the excess, if any, of (a) the aggregate
outstanding principal amount of the Notes immediately preceding such Payment
Date over (b)(i) the Adjusted Pool Balance as of the last day of the related
Collection Period minus (ii) the Target Overcollateralization Amount with
respect to such Payment Date; provided, however, that the Principal Distribution
Amount shall not exceed the sum of the aggregate outstanding principal amount of
all of the Notes on such Payment Date.
 
“Purchased Amount” means, with respect to any Receivable that became a Purchased
Receivable, the unpaid principal balance owed by the Obligor thereon plus
interest on such amount at the applicable APR to the last day of the Collection
Period of repurchase.
 
“Purchased Receivable” means a Receivable purchased as of the close of business
on the last day of a Collection Period by or on behalf of the Servicer pursuant
to Section 4.07 of this Agreement or by or on behalf of the Seller pursuant to
Section 3.03 of this Agreement or Section 7.02 of the Receivables Purchase
Agreement.
 
“Rating Agency” means Fitch, Moody’s or Standard & Poor’s, as the context may
require. If none of Fitch, Moody’s, Standard & Poor’s or a successor thereto
remains in existence, “Rating Agency” shall mean any nationally recognized
statistical rating organization or other comparable Person designated by the
Depositor and, written notice of which designation shall be given to the Owner
Trustee, the Indenture Trustee and the Servicer.
 
12

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

 
“Rating Agency Condition” means, with respect to any action, that each Rating
Agency shall have been given 10 days’ (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall not have notified the Issuer or the Indenture Trustee in writing
that such action will result in a reduction, withdrawal or down-grade of the
then-current rating of each class of Notes.
 
“Realized Losses” means, with respect to any Receivable that becomes a
Liquidated Receivable, the excess of the Principal Balance thereof over the
portion of related Liquidation Proceeds allocable to principal.
 
“Receivable” means any Contract listed on Schedule A (which Schedule may be in
the form of microfiche).
 
“Receivable Files” means the following documents with respect to each Financed
Vehicle:
 
(i) the fully executed original of each Receivable (together with any agreements
modifying each such Receivable, including any extension agreement);
 
(ii) the original credit application, or a copy thereof, fully executed by each
Obligor thereon;
 
(iii) the original certificate of title or such other documents evidencing the
security interest of the Seller in the related Financed Vehicle; and
 
(iv) any and all other documents that the Servicer shall have kept on file in
accordance with its customary procedures relating to Receivables, Obligors or
Financed Vehicles.
 
“Receivables Purchase Agreement” means the Receivables Purchase Agreement, dated
as of September 28, 2007, between the Seller and the Depositor, as amended,
supplemented, amended and restated or otherwise modified from time to time.
 
“Record Date” means, as to any Payment Date, the day immediately preceding such
Payment Date.
 
“Recoveries” means, with respect to any Receivable that becomes a Liquidated
Receivable, monies collected in respect thereof (other than Liquidation
Proceeds), from whatever source, net of the sum of any amounts expended (and not
otherwise reimbursed) by the Servicer for the account of the Obligor and any
amounts required by law to be remitted or allocated to the account of the
Obligor. 
 
13

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

 
“Replacement Interest Rate Swap Agreement” means any ISDA Master Agreement,
dated after the Closing Date, between the Replacement Swap Counterparty and the
Issuer, the Schedule and Credit Support Annex thereto, dated after the Closing
Date, and the Confirmations thereto, each dated after the Closing Date, and
entered into pursuant to such ISDA Master Agreement, and pursuant to the
conditions set forth in the Initial Interest Rate Swap Agreement, as the same
may be amended or supplemented from time to time in accordance with the terms
thereof.
 
“Replacement Swap Counterparty” means, with respect to any Swap Counterparty,
any Replacement Swap Counterparty under a Replacement Interest Rate Swap
Agreement that satisfies the conditions set forth in the Interest Rate Swap
Agreement.
 
“Reserve Account” means the account designated as such, established by the
Issuer and maintained by the Indenture Trustee pursuant to Section 5.01(a)(iii).
 
“Reserve Account Deposit” means $4,731,970.89.
 
“Reserve Account Required Amount” means with respect to any Payment Date, an
amount equal to 0.50% of the Adjusted Pool Balance as of the Cutoff Date;
provided, however, that in no event shall the Reserve Account Required Amount on
any Payment Date be more than the aggregate outstanding principal amount of the
Notes on such Payment Date (after giving effect to the allocation of principal
payments on such Payment Date).
 
“Reserve Account Withdrawal Amount” means, with respect to each Payment Date,
the lesser of (x) the Available Amounts Shortfall with respect to such Payment
Date and (y) and the amount on deposit in the Reserve Account on such Payment
Date.
 
“Responsible Officer” means the chairman of the board, the president, any
executive vice president, any vice president, the treasurer, any assistant
treasurer, the secretary, or any assistant secretary of the Servicer.
 
“Scheduled Payment” means, with respect to each Receivable, the scheduled
monthly payment amount set forth in the related Contract and required to be paid
by the Obligor during each Collection Period.
 
“Securities” means the Notes and the Certificates.
 
“Securities Account Control Agreement” means the Securities Account Control
Agreement dated as of September 28, 2007 between the Trust, the Indenture
Trustee and the Securities Intermediary, as amended, supplemented, amended and
restated or otherwise modified from time to time.
 
“Securities Intermediary” means Citibank, N.A., in its capacity as the
securities intermediary in the Securities Account Control Agreement.
 
“Securityholders” means the Noteholders and/or the Certificateholders, as the
context may require.
 
14

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

 
“Seller” means HMFC and its successors in interest as seller of the Receivables
to the Depositor pursuant to the Receivables Purchase Agreement.
 
“Senior Swap Termination Payment” means any Swap Termination Payment owed by the
Issuer to the Swap Counterparty under an Interest Rate Swap Agreement arising
due to (1) the failure of the Issuer to make Net Swap Payments due under that
Interest Rate Swap Agreement, (2) illegality of performance under the Interest
Rate Swap Agreement, (3) the occurrence of bankruptcy or insolvency events with
respect to the Issuer, (4) an amendment and/or supplement is made to the
Indenture without the prior written consent of a Swap Counterparty if such
amendment and/or supplement would materially and adversely affect such Swap
Counterparty's interests under the related Interest Rate Swap Agreement and such
consent is required under the Indenture or (5) any liquidation of the Collateral
occurs following an Event of Default under the Indenture or the Notes are
otherwise redeemed or prepaid (other than in connection with an optional
purchase of Receivables pursuant to Section 9.01 of this Sale and Servicing
Agreement).
 
“Servicer” means HMFC, as the servicer of the Receivables, and each successor to
HMFC (in the same capacity) pursuant to Section 7.03 or 8.03.
 
“Servicer Termination Event” has the meaning set forth in Section 8.01.
 
“Servicer’s Certificate” means an Officers’ Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Exhibit C.
 
“Servicing Fee” means an amount equal to the product of the Servicing Fee Rate
and the aggregate Principal Balance of the Receivables as of the first day of
the related Collection Period.
 
“Servicing Fee Rate” means 1.00% per annum.
 
“Simple Interest Method” means the method of allocating the monthly payments
received with respect to a Receivable to interest in an amount equal to the
product of (a) the applicable APR, (b) the period of time (expressed as a
fraction of a year, based on the actual number of days in the calendar month and
365 days in the calendar year) elapsed since the preceding payment was made
under such Receivable and (c) the outstanding principal amount of such
Receivable, and allocating the remainder of each such monthly payment to
principal.
 
“Simple Interest Receivable” means any Receivable under which the portion of a
payment allocable to interest and the portion allocable to principal is
determined in accordance with the Simple Interest Method.
 
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc., and its successors.
 
15

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

 
“Stated Maturity Date” means, for each class of Notes, the respective date set
forth opposite such class of Notes in the table below or, if such date is not a
Business Day, the next succeeding Business Day:
 
Class
 
Stated Maturity Date
Class A-1 Notes
 
October 15, 2008
Class A-2a Notes
 
January 15, 2010
Class A-2b Notes
 
January 15, 2010
Class A-3a Notes
 
January 17, 2012
Class A-3b Notes
 
January 17, 2012
Class A-4 Notes
 
March 17, 2014

“Subordinated Swap Termination Payment” means any Swap Termination Payment owed
by the Issuer to the Swap Counterparty under an Interest Rate Swap Agreement
other than a Senior Swap Termination Payment.
 
“Swap Collateral Account” means a single, segregated trust account in the name
of the Indenture Trustee, which shall be designated as the “Swap Collateral
Account” which shall be held in trust for the benefit of the Noteholders
established pursuant to Section 5.09(e) of this Agreement.
 
“Swap Counterparty” means the Initial Swap Counterparty and any Replacement Swap
Counterparty.
 
“Swap Payment Date” means the date on which Net Swap Receipts or Net Swap
Payments, as applicable, are made pursuant to the Interest Rate Swap Agreement.
 
“Swap Replacement Proceeds” means any amounts received from a Replacement Swap
Counterparty in consideration for entering into a Replacement Interest Rate Swap
Agreement for a terminated Interest Rate Swap Agreement.
 
“Swap Termination Payment” means any payment due to the Swap Counterparty by the
Issuer or to the Issuer by the Swap Counterparty, including interest that may
accrue thereon, under the Interest Rate Swap Agreement due to a termination of
the Interest Rate Swap Agreement due to an “event of default” or “termination
event” under the Interest Rate Swap Agreement.
 
“Swap Termination Payment Account” means an Eligible Account held in the United
States in the name of the Indenture Trustee which shall be held in trust for the
benefit of the Noteholders and the Swap Counterparty pursuant to Section 5.09(b)
of this Agreement.
 
16

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

 
“Target Overcollateralization Amount” means, with respect to any Payment Date,
the greater of (a) 22.50% of the Adjusted Pool Balance, minus amounts on deposit
in the Reserve Account after withdrawals from the Reserve Account but prior to
deposits to the Reserve Account, in each case, on such Payment Date and (b)
1.25% of the Adjusted Pool Balance as of the Cut-off Date. Notwithstanding the
foregoing, the Target Overcollateralization Amount shall not exceed the Adjusted
Pool Balance on such Payment Date.
 
“Total Required Payment” means (a) with respect to any Payment Date prior to the
occurrence of an “Event of Default” under the Indenture which has resulted in
the acceleration of the Notes, the sum of (i) the Servicing Fee for the related
Collection Period and all unpaid Servicing Fees from prior Collection Periods,
(ii) unreimbursed Advances, (iii) the accrued and unpaid interest on the Notes,
(iv) an amount equal to the change in the Adjusted Pool Balance during the
related Collection Period, and (v) on or after the Stated Maturity Date of any
class of Notes, an amount necessary to reduce the outstanding principal amount
of such class of Notes to zero, and (b) with respect to any Payment Date
following the occurrence and during the continuation of an “Event of Default”
under the Indenture which has resulted in an acceleration of the Notes, until
the Payment Date on which the outstanding principal amount of all the Notes has
been paid in full, the sum of (i) the specified amounts payable to the Indenture
Trustee, (ii) the Servicing Fee for the related Collection Period and all unpaid
Servicing Fees from prior Collection Periods, (iii) unreimbursed Advances, (iv)
the accrued and unpaid interest on the Notes and (v) the amount necessary to
reduce the outstanding principal amount of all the Notes to zero.
 
“Trust” means the Issuer.
 
“Trust Account Property” means the Trust Accounts, all amounts and investments
held from time to time in any Trust Account and all proceeds of the foregoing.
 
“Trust Accounts” shall mean the Collection Account, the Swap Collateral Account,
the Note Distribution Account and the Reserve Account.
 
“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of
September 28, 2007, between the Depositor, the Administrator and the Owner
Trustee, as amended, supplemented, amended and restated or otherwise modified
from time to time.
 
“Trust Officer” means, in the case of the Indenture Trustee or any Officer
within the Corporate Trust Office of the Indenture Trustee, as the case may be,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject, in each case having direct
responsibility for the administration of the Indenture and, with respect to the
Owner Trustee, any officer in the Corporate Trust Administration Department of
the Owner Trustee with direct responsibility for the administration of the Trust
Agreement and the other Basic Documents on behalf of the Owner Trustee.
 
“UCC” means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
 
17

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

 
“Yield Supplement Overcollateralization Amount” means with respect to any
Payment Date, the dollar amount set forth next to such Payment Date on Schedule
B hereto.
 
Section 1.02 Other Definitional Provisions.
 
(a) Capitalized terms used herein that are not otherwise defined has the
meanings ascribed thereto in the Indenture or, if not defined therein, in the
Trust Agreement.
 
(b) All terms defined in this Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
 
(c) As used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any
such certificate or other document shall control.
 
(d) The words “hereof,” “herein,” “hereunder” and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; Article, Section, Schedule and Exhibit
references contained in this Agreement are references to Articles, Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified; “or”
shall include “and/or”; and the term “including” shall mean “including without
limitation”.
 
(e) The definitions contained in this Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.
 
(f) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
 
18

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

 
ARTICLE II.
 
CONVEYANCE OF RECEIVABLES
 
Section 2.01 Conveyance of Receivables. In consideration of the Issuer’s
delivery to or upon the order of the Depositor of $857,492,656.70, the
Certificates and such other amounts to be distributed to the Depositor on the
Closing Date, the Depositor does hereby sell, transfer, assign, set over and
otherwise convey to the Issuer, without recourse (subject to the obligations of
the Depositor set forth herein), all right, title and interest of the Depositor
in and to:
 
(a) the Receivables and all moneys received thereon after the Cutoff Date;
 
(b) the security interests in the Financed Vehicles and any accessions thereto
granted by Obligors pursuant to the Receivables and any other interest of the
Depositor in such Financed Vehicles;
 
(c) any Liquidation Proceeds and any other proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering the Financed Vehicles or the related Obligors,
including any vendor’s single interest or other collateral protection insurance
policy;
 
(d) any property that shall have secured a Receivable and shall have been
acquired by or on behalf of the Depositor, the Servicer or the Trust;
 
(e) all documents and other items contained in the Receivable Files;
 
(f) all of the Depositor’s rights (but not its obligations) under the
Receivables Purchase Agreement;
 
(g) all right, title and interest in the Trust Accounts and all funds,
securities or other assets credited from time to time to the Trust Accounts and
in all investments therein and proceeds thereof (including all Investment
Earnings thereon);
 
(h) any proceeds from any Receivable repurchased by a Dealer pursuant to a
Dealer Agreement; and
 
(i) the proceeds of any and all of the foregoing (collectively, with the assets
listed in clauses (a) through (h) above, the “Conveyed Assets”).
 
The Depositor and the Issuer agree that the purchase price for the Conveyed
Assets sold by the Depositor to the Issuer represents reasonably equivalent
value for the Conveyed Assets. It is the intention of the Depositor that the
transfer and assignment contemplated by this Agreement shall constitute a sale
of the Conveyed Assets from the Depositor to the Trust and the beneficial
interest in and title to the Receivables and the related property shall not be
part of the Depositor’s estate in the event of the filing of a bankruptcy
petition by or against the Depositor under any bankruptcy law. In the event
that, notwithstanding the intent of the Depositor, the transfer and assignment
contemplated hereby is held not to be a sale or is otherwise not effective to
sell the Conveyed Assets, this Agreement shall constitute a grant by the
Depositor to the Issuer of a security interest in all Conveyed Assets and all
accounts, money, chattel paper, securities, instruments, documents, deposit
accounts, uncertificated securities, general intangibles, contract rights, goods
and other property consisting of, arising from or relating to such Conveyed
Assets, for the benefit of the Securityholders.
 
19

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

 
ARTICLE III.

 
THE RECEIVABLES
 
Section 3.01 Representations and Warranties of the Seller.
 
(a) The Seller has made each of the representations and warranties set forth in
Exhibit A hereto under the Receivables Purchase Agreement and has consented to
the assignment by the Depositor to the Issuer of the Depositor’s rights with
respect thereto. Such representations and warranties speak as of the respective
dates set forth therein, but shall survive the sale, transfer and assignment of
the Receivables to the Issuer and the pledge of such Receivables to the
Indenture Trustee. Pursuant to Section 2.01 of this Agreement, the Depositor has
sold, assigned, transferred and conveyed to the Issuer, as part of the assets of
the Issuer, its rights under the Receivables Purchase Agreement, including the
representations and warranties of the Seller therein as set forth in Exhibit A,
upon which representations and warranties the Issuer relies in accepting the
Receivables and delivering the Securities, together with all rights of the
Depositor with respect to any breach thereof, including the right to require the
Seller to repurchase Receivables in accordance with the Receivables Purchase
Agreement. It is understood and agreed that the representations and warranties
referred to in this Section shall survive the sale and delivery of the
Receivables to the Issuer.
 
(b) The Seller hereby agrees that the Issuer shall have the right to enforce any
and all rights under the Receivables Purchase Agreement assigned to the Issuer
herein, including the right to cause the Seller to repurchase any Receivable
with respect to which it is in breach of any of its representations and
warranties set forth in Exhibit A, directly against the Seller as though the
Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall
not be obligated to exercise any such rights indirectly through the Depositor.
 
Section 3.02 Representations and Warranties of the Depositor. The Depositor
makes the following representations and warranties, on which the Issuer relies
in accepting the Receivables and delivering the Securities. Such representations
and warranties speak as of the execution and delivery of this Agreement and as
of the Closing Date, but shall survive the sale, transfer and assignment of the
Receivables by the Depositor to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture:
 
(a) This Agreement creates a valid and continuing security interest (as defined
in the UCC) in the Receivables in favor of the Issuer, which security interest
is prior to all other Liens, and is enforceable as such against creditors of and
purchasers from the Depositor.
 
(b) Each Receivable constitutes “chattel paper” within the meaning of the UCC.
 
20

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

 
(c) Immediately upon the transfer thereof from the Depositor to the Issuer
pursuant to this Agreement, the Issuer shall have good and marketable title to
each Receivable, free and clear of any Lien of any Person.
 
(d) The Depositor has caused, or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in the
appropriate jurisdiction under the applicable UCC in order to perfect the
security interest in the Receivables granted to the Issuer under this Agreement.
 
(e) Other than the security interest granted to the Issuer pursuant to this
Agreement, the Depositor has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Receivables. The Depositor has not
authorized the filing of and is not aware of any financing statements against
the Depositor that include a description of collateral describing the
Receivables other than any financing statement relating to the security interest
granted to the Issuer under this Agreement. The Depositor is not aware of any
judgment or tax lien filings against the Depositor.
 
(f) The Contracts that constitute or evidence the Receivables do not have any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Issuer, except for such marks or notations
indicating that they have been pledged, assigned or otherwise conveyed (i) to
the Depositor or the Indenture Trustee in accordance with the Basic Documents,
(ii) pursuant to the Second Amended and Restated Receivables Purchase Agreement,
dated as of July 23, 2002, as amended, among the Seller, Hyundai BC Funding
Corporation, Amsterdam Funding Corporation, Asset One Securitization, LLC,
Sheffield Receivables Corporation, Société Générale, ABN AMRO Bank N.V.,
Barclays Bank PLC, Park Avenue Receivables Company, LLC and JPMorgan Chase Bank,
N.A. and the Purchase and Sale Agreement dated as of January 17, 2000, as
amended, between the Seller and Hyundai BC Funding Corporation or (iii) to HMFC
in accordance with Dealer Agreements. All financing statements filed or to be
filed against the Depositor in favor of the Issuer in connection with this
Agreement describing the Receivables contain a statement to the following
effect: “A purchase of or security interest in any collateral described in this
financing statement, except as provided in the Sale and Servicing Agreement,
will violate the rights of the Issuer.”
 
Section 3.03 Repurchase upon Breach. Upon discovery by any party hereto of a
breach of any of the representations and warranties set forth in part (b) of
Exhibit A at the time such representations and warranties were made which
materially and adversely affects the interests of the Issuer or the Noteholders,
the party discovering such breach shall give prompt written notice thereof to
the other parties hereto; provided that the failure to give such notice shall
not affect any obligation of the Seller hereunder. If the Seller does not
correct or cure such breach prior to the end of the Collection Period which
includes the 60th day (or, if the Seller elects, an earlier date) after the date
that the Seller became aware or was notified of such breach, then the Seller
shall purchase any Receivable materially and adversely affected by such breach
from the Issuer on the Payment Date following the end of such Collection Period.
Any such purchase by the Seller shall be at a price equal to the Purchased
Amount. In consideration for such repurchase, the Seller shall make (or shall
cause to be made) a payment to the Issuer equal to the Purchased Amount by
depositing such amount into the Collection Account in accordance with Section
5.04 on such Payment Date. Upon payment of such Purchased Amount by the Seller,
the Issuer and the Indenture Trustee shall release and shall execute and deliver
such instruments of release, transfer or assignment, in each case without
recourse or representation, as shall be reasonably necessary to vest in the
Seller or its designee any Receivable repurchased pursuant hereto. It is
understood and agreed that the right to cause the Seller to purchase (or to
enforce the obligations of Seller under the Receivables Purchase Agreement to
purchase) any Receivable as described above shall constitute the sole remedy
respecting such breach available to the Issuer, the Noteholders, the Owner
Trustee, the Certificateholders and the Indenture Trustee. Neither the Owner
Trustee nor the Indenture Trustee will have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 3.03.
 
21

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

 
ARTICLE IV.

 
ADMINISTRATION AND SERVICING OF RECEIVABLES
 
Section 4.01 Duties of Servicer. The Servicer, for the benefit of the Issuer and
the Indenture Trustee, shall manage, service, administer and make collections on
the Receivables and perform the other actions required of the Servicer under
this Agreement. The Servicer shall service the Receivables in accordance with
its customary servicing practices, using the degree of skill and attention that
the Servicer exercises with respect to all other comparable motor vehicle
receivables that it services for itself and others. The Servicer’s duties shall
include the collection and posting of all payments, responding to inquiries of
Obligors, investigating delinquencies, sending payment statements to Obligors,
reporting any required tax information to Obligors, monitoring the Collateral,
accounting for collections, furnishing monthly and annual statements to the
Owner Trustee and the Indenture Trustee with respect to distributions and
performing the other duties specified herein. The Servicer also shall administer
and enforce all rights of the holder of the Receivables under the Receivables
and the Dealer Agreements to the extent and in a manner consistent with its
customary practices. To the extent consistent with the standards, policies and
procedures otherwise required hereby and the Credit and Collection Policy, the
Servicer shall follow its customary standards, policies and procedures and shall
have full power and authority, acting alone, to do any and all things in
connection with the managing, servicing, administration and collection of the
Receivables that it may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Section 4.02, the Servicer is hereby
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders, or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments with respect to the Receivables and with respect to the
Financed Vehicles. The Servicer is hereby authorized to commence, in its own
name or in the name of the Issuer, the Indenture Trustee, the Owner Trustee, the
Certificateholders or the Noteholders, a legal proceeding to enforce a
Receivable pursuant to Section 4.03 or to commence or participate in any other
legal proceeding (including a bankruptcy proceeding) relating to or involving a
Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or
participates in any such legal proceeding in its own name, the Indenture Trustee
or the Issuer shall thereupon be deemed to have automatically assigned the
applicable Receivable to the Servicer solely for purposes of commencing or
participating in such proceeding as a party or claimant, and the Servicer is
authorized and empowered by the Indenture Trustee or the Issuer to execute and
deliver in the Indenture Trustee’s or the Issuer’s name any notices, demands,
claims, complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled to
enforce such Receivable, the Owner Trustee shall, at the Servicer’s expense and
direction, take steps to enforce such Receivable, including bringing suit in its
name or the name of the Issuer, the Indenture Trustee, the Certificateholders or
the Noteholders. The Owner Trustee and the Indenture Trustee shall upon the
written request of the Servicer furnish the Servicer with any powers of attorney
and other documents reasonably necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder.
 
22

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

 
Section 4.02 Collection of Receivable Payments; Modifications of Receivables.
 
(a) Consistent with the standards, policies and procedures required by this
Agreement, the Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Receivables as and when the
same shall become due, and shall follow such collection procedures as it follows
with respect to all comparable motor vehicle receivables that it services for
itself or others. The Servicer is authorized in its discretion to waive any
prepayment charge, late payment charge or any other similar fees that may be
collected in the ordinary course of servicing any Receivable.
 
(b) Subject to Section 4.06, the Servicer may grant extensions, rebates,
deferrals, amendments, modifications or adjustments on a Receivable in
accordance with its customary servicing practices; provided, however, that if
the Servicer (i) extends the date for final payment by the Obligor of any
Receivable beyond the last day of the Collection Period prior to the Class A-4
Maturity Date or (ii) reduces the APR or unpaid principal balance with respect
to any Receivable other than as required by applicable law, it will promptly
purchase such Receivable in the manner provided in Section 4.07.
 
Section 4.03 Realization upon Receivables. Consistent with the standards,
policies and procedures required by this Agreement and the Credit and Collection
Policy, the Servicer shall use reasonable efforts to repossess or otherwise
convert the ownership of and liquidate any Financed Vehicle securing a
Receivable with respect to which the Servicer shall have determined that
eventual payment in full is unlikely; provided, however, that the Servicer may
elect not to repossess a Financed Vehicle if in its good faith judgment it
determines that the proceeds ultimately recoverable with respect to such
Receivable would not be greater than the expense of such repossession. In
repossessing or otherwise converting the ownership of a Financed Vehicle and
liquidating a Receivable, the Servicer is authorized to follow such customary
practices and procedures as it shall deem necessary or advisable, consistent
with the standard of care required by Section 4.01, which practices and
procedures may include reasonable efforts to realize upon any recourse to
Dealers, the sale of the related Financed Vehicle at public or private sale, the
submission of claims under an insurance policy and other actions by the Servicer
in order to realize upon a Receivable; provided, however, that in any case in
which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with any repair or towards the repossession of such
Financed Vehicle unless it shall determine in its reasonable judgment that such
repair or repossession shall increase the related Liquidation Proceeds by an
amount materially greater than the expense for such repair or repossession. The
Servicer shall be entitled to recover all reasonable expenses incurred by it in
the course of repossessing and liquidating a Financed Vehicle into cash
proceeds, but only out of the cash proceeds of the sale of such Financed
Vehicle, any deficiency obtained from the related Obligor or any amounts
received from recourse to the related Dealer.
 
23

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

 
Section 4.04 [Reserved].
 
Section 4.05 Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Vehicle. The Servicer is hereby
authorized to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Vehicle, or for any other reason. In the event that the
assignment of a Receivable to the Issuer is insufficient, without a notation on
the related Financed Vehicle’s certificate of title, or without fulfilling any
additional administrative requirements under the laws of the state in which such
Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle in favor of the Issuer, the Servicer hereby agrees that the
designation of HMFC as the secured party on the certificate of title is in its
capacity as agent of the Issuer.
 
Section 4.06 Covenants of Servicer. By its execution and delivery of this
Agreement, the Servicer hereby covenants as follows (upon which covenants the
Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the
Receivables and delivering the applicable Securities):
 
(a) Liens in Force. The Servicer will not release the Financed Vehicle securing
any Receivable from the security interest granted by such Receivable in whole or
in part except (i) in the event of payment in full by or on behalf of the
Obligor thereunder or payment in full less a deficiency which the Servicer would
not attempt to collect in accordance with its customary servicing practices,
(ii) in connection with repossession and sale of the Financed Vehicle or (iii)
as may be required by an insurer in order to receive proceeds from any Insurance
Policy covering such Financed Vehicle;
 
(b) No Impairment. The Servicer shall do nothing to impair the rights of the
Trust in the property of the Trust;
 
(c) No Amendments. The Servicer shall (i) not extend the date for final payment
by the Obligor of any Receivable beyond the last day of the Collection Period
prior to the Class A-4 Maturity Date; or (ii) reduce the APR or unpaid principal
balance with respect to any Receivable other than as required by applicable law.
 
Section 4.07 Purchase of Receivables Upon Breach. Upon discovery by any party
hereto of a breach of any of the covenants set forth in Sections 4.02, 4.03,
4.05 or 4.06 which materially and adversely affects the interests of the Issuer
or the Noteholders, the party discovering such breach shall give prompt written
notice thereof to the other parties hereto; provided that the failure to give
such notice shall not affect any obligation of the Servicer under this Section
4.07. If the Servicer does not correct or cure such breach prior to the end of
the Collection Period which includes the 60th day (or, if the Servicer elects,
an earlier date) after the date that the Servicer became aware or was notified
of such breach, then the Servicer shall purchase any Receivable materially and
adversely affected by such breach from the Issuer on the Payment Date following
the end of such Collection Period. Any such purchase by the Servicer shall be at
a price equal to the Purchased Amount. In consideration for such repurchase, the
Servicer shall make (or shall cause to be made) a payment to the Issuer equal to
the Purchased Amount by depositing such amount into the Collection Account in
accordance with Section 5.04 on such Payment Date. Upon payment of such
Purchased Amount by the Servicer, the Issuer and the Indenture Trustee shall
release and shall execute and deliver such instruments of release, transfer or
assignment, in each case without recourse or representation, as shall be
reasonably necessary to vest in the Servicer or its designee any Receivable
repurchased pursuant hereto. It is understood and agreed that the obligation of
the Servicer to purchase any Receivable as described above shall constitute the
sole remedy respecting such breach available to the Issuer, the Swap
Counterparty, the Owner Trustee, the Certificateholders, the Noteholders and the
Indenture Trustee.
 
24

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

 
Section 4.08 Servicing Fee. The Servicing Fee shall be payable to the Servicer
on each Payment Date. The Servicing Fee shall be calculated on the basis of a
360-day year comprised of twelve 30-day months. In addition, the Servicer will
be entitled to retain all late fees, extension fees, non-sufficient funds
charges and any and all other administrative fees and expenses or similar
charges allowed by applicable law with respect to any Receivable. The Servicer
also will be entitled to receive investment earnings (net of investment losses
and expenses) on funds deposited in the Collection Account during each
Collection Period. The Servicer shall be required to pay all expenses incurred
by it in connection with its activities under this Agreement (including taxes
imposed on the Servicer and expenses incurred in connection with distributions
and reports made by the Servicer to the Owner Trustee and the Indenture
Trustee). The Servicer shall be required to pay all of the Indenture Trustee’s
fees, expenses, reimbursements and indemnifications.
 
Section 4.09 Servicer’s Certificate. The Servicer shall prepare and deliver to
the Owner Trustee, the Indenture Trustee, and the Depositor, with a copy to each
Rating Agency, two Business Days prior to each Payment Date a Servicer’s
Certificate containing all information necessary to make the distributions to be
made on the related Payment Date pursuant to Section 5.05 for the related
Collection Period and such Servicer’s Certificate shall be certified by a
Responsible Officer of the Servicer to the effect that the information provided
is complete and no Servicer Termination Events have occurred. If any defaults
have occurred, such Servicer’s Certificate will provide an explanation of such
Servicer Termination Events. Receivables to be purchased by the Servicer or to
be repurchased by the Seller and each Receivable that became a Liquidated
Receivable shall be identified by the Servicer by account number with respect to
such Receivable (as specified in the applicable Schedule of Receivables). At the
sole option of the Servicer, each Servicer’s Certificate may be delivered in
electronic or hard copy format.
 
25

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

 
Section 4.10 Annual Statement as to Compliance, Notice of Servicer Termination
Event.
 
(a) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, and
each Rating Agency, within 120 days after the end of the Servicer’s fiscal year
(or, in the case of the first such certificate, not later than April 30, 2008),
an Officer’s Certificate signed by a Responsible Officer of the Servicer,
stating that (i) a review of the activities of the Servicer during the preceding
12-month period (or such shorter period in the case of the first such Officer’s
Certificate) and of the performance of its obligations under this Agreement has
been made under such officer’s supervision and (ii) to such officer’s knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
 
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, and
each Rating Agency, promptly after having obtained knowledge thereof, written
notice in an Officer’s Certificate of any event that with the giving of notice
or lapse of time or both would become a Servicer Termination Event under Section
8.01.
 
Section 4.11 Compliance with Regulation AB. The Servicer agrees to perform all
duties and obligations applicable to or required of the Issuer set forth in
Appendix A attached hereto and made a part hereof in all respects and makes the
representations and warranties therein applicable to it.
 
Section 4.12 Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to representatives of the Owner Trustee,
the Indenture Trustee and the Certificateholders reasonable access to the
documentation regarding the Receivables and the related Trust property. The
Servicer will provide such access to any Noteholder only in such cases where the
Servicer shall be required by applicable statutes or regulations to permit a
Noteholder to review such documentation. In each case, access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
 
Section 4.13 Term of Servicer. The Servicer hereby covenants and agrees to act
as Servicer under, and for the term of, this Agreement, subject to the
provisions of Sections 7.03 and 7.06.
 
Section 4.14 Annual Independent Accountants’ Report. For so long as the Issuer
is subject to the reporting requirements under the Securities Exchange Act of
1934, as amended, the Servicer shall cause a firm of independent certified
public accountants, which may also render other services to the Servicer or its
Affiliates, to deliver to the Owner Trustee, the Indenture Trustee, and each
Rating Agency, within 120 days after the end of each fiscal year (or, in the
case of the first such report, not later than April 30, 2008), a report
addressed to the Board of Directors of the Servicer, the Owner Trustee, and the
Indenture Trustee, to the effect that such firm has audited the books and
records of the Servicer and issued its report thereon and that (a) such audit
was made in accordance with generally accepted auditing standards and
accordingly included such tests of the accounting records and such other
auditing procedures as such firm considered necessary in the circumstances and
(b) the firm is independent of the Depositor and the Servicer within the meaning
of the Code of Professional Ethics of the American Institute of Certified Public
Accountants.
 
26

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

 
Section 4.15 Reports to the Commission. The Servicer shall, or shall cause the
Depositor to, on behalf of the Issuer, execute and cause to be filed with the
Commission any periodic reports required to be filed with respect to the
issuance of the Notes under the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
The Depositor shall, at its expense, cooperate in any reasonable request made by
the Servicer in connection with such filings.
 
Section 4.16 Compensation of Indenture Trustee. The Servicer will:
 
(a) pay the Indenture Trustee (and any separate trustee or co-trustee appointed
pursuant to Section 6.10 of the Indenture (a “Separate Trustee”)) from time to
time reasonable compensation for all services rendered by the Indenture Trustee
or Separate Trustee, as the case may be, under the Indenture (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
 
(b) except as otherwise expressly provided in the Indenture, reimburse the
Indenture Trustee or any Separate Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture Trustee
or Separate Trustee, as the case may be, in accordance with any provision of the
Indenture (including the reasonable compensation, expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith;
 
(c) indemnify the Indenture Trustee and any Separate Trustee and their
respective agents for, and hold them harmless against, any losses, liability or
expense incurred without negligence or bad faith on their part, arising out of
or in connection with the acceptance or administration of the transactions
contemplated by the Indenture and the other Basic Documents, including the
reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers
or duties under the Indenture; and
 
(d) indemnify the Owner Trustee and its agents, successors, assigns and servants
in accordance with Section 8.02 of the Trust Agreement to the extent that
amounts thereunder have not been paid pursuant to Section 5.05 of this
Agreement.
 
27

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

 
ARTICLE V.
 
DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS
 
Section 5.01 Accounts.
 
(a) (i) On or prior to the Closing Date, the Servicer shall establish, or cause
to be established, an account with and in the name of the Indenture Trustee
(the “Collection Account”), which shall be maintained as an Eligible Account and
shall bear a designation clearly indicating that the amounts deposited thereto
are held for the benefit of the Noteholders.
 
(ii) The Issuer, for the benefit of the Noteholders, shall cause the Servicer to
establish with and maintain in the name of the Indenture Trustee an Eligible
Account (including the subaccounts referred to in clause (iv) below, the “Note
Distribution Account”), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Noteholders.
 
(iii) The Issuer, for the benefit of the Noteholders, shall cause the Servicer
to establish with and maintain in the name of the Indenture Trustee an Eligible
Account (the “Reserve Account”), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Noteholders.
 
(iv) The Issuer shall also cause to be established two administrative
subaccounts within the Note Distribution Account, which subaccounts shall be
designated the “Interest Distribution Account” and the “Principal Distribution
Account”, respectively. The Interest Distribution Account and the Principal
Distribution Account are established and maintained solely for administrative
purposes.
 
(v) Funds on deposit in the Reserve Account, shall be invested by the Indenture
Trustee in Eligible Investments selected in writing by the Servicer; provided,
however, that if the Servicer fails to select any Eligible Investment, such
funds shall remain uninvested. All such Eligible Investments shall be held by
the Indenture Trustee for the benefit of the Noteholders and/or the
Certificateholders, as applicable. Other than as permitted in writing by the
Rating Agencies, funds on deposit in the Reserve Account shall be invested in
Eligible Investments that will mature so that such funds will be available on
the next Payment Date. Funds deposited in the Reserve Account, upon the maturity
of any Eligible Investments on a day which immediately precedes a Payment Date,
are not required to be invested overnight.
 
(vi) Funds on deposit in the Swap Termination Payment Account (to the extent
such account is established under Section 5.09(b)) and the Collection Account
shall be invested by the Indenture Trustee in Eligible Investments selected in
writing by the Servicer; provided, however, that if the Servicer fails to select
any Eligible Investments, such funds shall remain uninvested. All such Eligible
Investments shall be held by the Indenture Trustee for the benefit of the
Noteholders and/or the Certificateholders, as applicable. Other than as
permitted in writing by the Rating Agencies, funds on deposit in the Swap
Termination Payment Account and the Collection Account shall be invested in
Eligible Investments that will mature so that such funds will be available on
the next Payment Date. Investment earnings on funds deposited in the Swap
Termination Payment Account and the Collection Account, net of losses and
investment expenses, shall be released to the Servicer on each Payment Date and
shall be the property of the Servicer.
 
28

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

 
(b) (i) The Indenture Trustee shall possess all right, title and interest in all
funds received and all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof. The Trust Accounts shall be under the sole dominion
and control of the Indenture Trustee for the benefit of the Noteholders and the
Certificateholders, as the case may be. If, at any time, a Trust Account ceases
to be an Eligible Account, the Indenture Trustee (or the Servicer on its behalf)
shall within ten (10) Business Days (or such longer period, not to exceed 15
calendar days, as to which each Rating Agency may consent) establish a new Trust
Account as an Eligible Account and shall transfer any cash or any investments
from the account that is no longer an Eligible Account to the Trust Account.
Neither the Servicer nor the Indenture Trustee shall in any way be held liable
by reason of any insufficiency in any Trust Account resulting from any
investment loss in any Eligible Investment.
 
(ii) The Servicer shall have the power, revocable by the Indenture Trustee or by
the Owner Trustee with the consent of the Indenture Trustee, to instruct the
Indenture Trustee in writing to make withdrawals and payments from the Trust
Accounts and the Certificate Deposit Account for the purpose of withdrawing any
amounts deposited in error into such accounts.
 
Section 5.02 Application of Collections. ii) All payments received from or on
behalf of an Obligor during each Collection Period with respect to each
Receivable (other than a Purchased Receivable) shall be applied to interest and
principal in accordance with the Simple Interest Method. The Servicer shall make
all deposits of Collections and other Available Amounts received into the
Collection Account on the second Business Day following receipt thereof.
However, so long as the Monthly Remittance Condition is satisfied, the Servicer
may retain such amounts received during a Collection Period until one Business
Day prior to the related Payment Date. The “Monthly Remittance Condition” shall
be deemed to be satisfied if (i) HMFC or one of its Affiliates is the Servicer,
(ii) no Servicer Termination Event has occurred and is continuing and (iii) HMFC
has a short-term debt rating of at least “Prime-1” from Moody’s, “A-1” from
Standard & Poor’s and “F-1” from Fitch. Notwithstanding the foregoing, the
Servicer may remit Collections to the Collection Account on any other alternate
remittance schedule (but not later than the Business Day prior to the related
Payment Date) if the Rating Agency Condition is satisfied with respect to such
alternate remittance schedule. Pending deposit into the Collection Account,
Collections may be commingled and used by the Servicer at its own risk and are
not required to be segregated from its own funds.
 
29

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

 
(b) The Indenture Trustee will promptly, on the day of receipt, deposit into the
Collection Account all Net Swap Receipts received by it on behalf of the Issuer
under the Interest Rate Swap Agreement in immediately available funds.
 
Section 5.03 Property of the Trust. All payments and other proceeds of any type
and from any source on or with respect to the Receivables shall be the property
of the Trust, subject to the Lien of the Indenture and the rights of the
Indenture Trustee thereunder.
 
Section 5.04 Purchased Amounts. The Servicer or the Seller shall deposit or
cause to be deposited in the Collection Account, on the Business Day preceding
each Payment Date, the aggregate Purchased Amount with respect to Purchased
Receivables and the Servicer shall deposit therein all amounts to be paid under
Section 4.07. Notice of this amount shall be provided in writing by the
applicable party to the Indenture Trustee.
 
Section 5.05 Distributions.
 
(a) The Servicer shall calculate all amounts required to be deposited pursuant
to this Section and deliver a Servicer’s Certificate two Business Days prior to
each Payment Date pursuant to Section 4.09.
 
(b) On each Payment Date, except as specified in Section 5.04(b) of the
Indenture, the Servicer shall instruct the Indenture Trustee in writing (based
on the information contained in the Servicer’s Certificate delivered two
Business Days prior to each Payment Date pursuant to Section 4.09) to make the
following deposits and distributions from Available Amounts on deposit in the
Collection Account, and to the extent of any Reserve Account Withdrawal Amount
from amounts withdrawn from the Reserve Account in the following order and
priority:
 
(i) to the Servicer, the Servicing Fee, including any unpaid Servicing Fees with
respect to one or more prior Collection Periods, and Advances not previously
reimbursed to the Servicer;
 
(ii) to the Swap Counterparty, the Net Swap Payment, if any, for such Payment
Date;
 
(iii) pro rata, (A) to the Swap Counterparty, any Senior Swap Termination
Payments for such Payment Date, and (B) to the Interest Distribution Account,
(a) the aggregate amount of interest accrued for the related Interest Period on
each of the Notes at their respective interest rates on the principal
outstanding as of the previous Payment Date after giving effect to all payments
of principal to the Noteholders on the preceding Payment Date; and (b) the
excess, if any, of the amount of interest payable to the Noteholders on those
prior Payment Dates over the amounts actually paid to the Noteholders on those
prior Payment Dates, plus interest on any such shortfall at their respective
interest rates to the extent permitted by law;
 
(iv) to the Principal Distribution Account, the Principal Distribution Amount;
 
30

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

 
(v) to the Reserve Account, from Available Amounts remaining, the amount, if
any, necessary to cause the amount on deposit in that account to equal the
Reserve Account Required Amount;
 
(vi) to the Swap Counterparty, any Subordinated Swap Termination Payment for
such Payment Date;
 
(vii) to the Indenture Trustee and the Owner Trustee, any reimbursements and
expenses, in each case to the extent such reimbursements and expenses have not
been previously paid by the Servicer and to the Securities Intermediary, any
accrued and unpaid indemnification expenses owed to it; and
 
(viii) any Available Amounts remaining, if any, to the Owner Trustee or its
agent, for deposit into the Certificate Distribution Account (as defined in the
Trust Agreement) and subsequent distribution to the Certificateholder pursuant
to Section 5.01 of the Trust Agreement.
 
Section 5.06 Reserve Account.
 
(a) On or prior to the Closing Date, the Issuer shall cause to be deposited an
amount equal to the Reserve Account Deposit into the Reserve Account from the
net proceeds of the sale of the Notes. The Reserve Account shall be an asset of
the Issuer.
 
(b) In the event that the Servicer’s Certificate states that there is an
Available Amounts Shortfall, then the Indenture Trustee shall, upon written
directions from the Servicer, withdraw the Reserve Account Withdrawal Amount
from the Reserve Account and deposit such Reserve Account Withdrawal Amount into
the Collection Account no later than 12:00 noon, New York City time, on the
Business Day prior to the related Payment Date.
 
(c) In the event that the amount on deposit in the Reserve Account (after giving
effect to all deposits thereto and withdrawals therefrom on such Business Day on
a Payment Date) is greater than the Reserve Account Required Amount on any
Payment Date, the Indenture Trustee shall distribute, upon written directions
from the Servicer, all such amounts to the Certificateholder as per the monthly
Servicer’s Certificate. Upon any such distribution to the Certificateholder, the
Noteholders shall have no further rights in, or claims to, such amounts.
 
(d) In the event that on any Payment Date the amount on deposit in the Reserve
Account shall be less than the Reserve Account Required Amount, the Available
Amounts remaining after the payment of the amounts set forth in Section
5.05(b)(i) through (x), up to an amount equal to such shortfall, shall be
deposited by the Indenture Trustee, upon written directions from the Servicer,
to the Reserve Account on such Payment Date.
 
31

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

 
(e) Subject to Section 9.01, amounts will continue to be applied pursuant to
Section 5.05 following the payment in full of the Outstanding Amount of Notes
until the Pool Balance is reduced to zero. Following the payment in full of the
aggregate Outstanding Amount of the Notes and the Certificates and of all other
amounts owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to the Noteholders and the termination of the Trust, any amount then
allocated to the Reserve Account shall be distributed to the Depositor.
 
Section 5.07 Statements to Securityholders. On each Payment Date, the Servicer
shall provide to the Indenture Trustee (with a copy to the Swap Counterparty and
each Rating Agency) for the Indenture Trustee to make available to each
Noteholder of record as of the most recent Record Date and to the Owner Trustee
for the Owner Trustee to forward to each Certificateholder of record as of the
most recent Record Date a statement substantially in the form of Exhibit B.
 
The Indenture Trustee may make any such statement which it is required to
provide to the Noteholders, including, without limitation, all information as
may be required to enable each Noteholder to prepare its respective federal and
state income tax returns (and, at its option, any additional files containing
the same information in an alternative format), via its internet web site
(initially located at www.sf.citidirect.com). In connection with providing
access to the Indenture Trustee’s website, the Indenture Trustee may require
registration and the acceptance of certain terms and conditions. The Indenture
Trustee shall have the right to change the way such statements are distributed
in order to make such distributions more convenient and/or more accessible to
the above parties and the Indenture Trustee shall provide timely and adequate
notification to the Noteholders regarding any such changes; provided, however,
that the Indenture Trustee will also mail copies of any such statements to any
requesting Noteholder who provides a written request.
 
Section 5.08 Advances by the Servicer. By the close of business on the day
required by Section 5.01 hereof, the Servicer may, in its sole discretion,
deposit into the Collection Account, out of its own funds, an Advance; provided,
however, that the Servicer shall not make any Advances with respect to Defaulted
Receivables.
 
Section 5.09 Interest Rate Swap Agreement.
 
(a) The Issuer shall enter into the Initial Interest Rate Swap Agreement with
the Initial Swap Counterparty. Subject to the requirements of this Section 5.09,
the Issuer may from time to time enter into one or more Replacement Interest
Rate Swap Agreements in the event that the Initial Interest Rate Swap Agreement
is terminated due to any “Termination Event” or “Event of Default” (each as
defined in the Initial Interest Rate Swap Agreement) prior to its scheduled
expiration and in accordance with the terms of such Interest Rate Swap
Agreement. Other than any Replacement Interest Rate Swap Agreement entered into
pursuant to this Section 5.09(a), the Issuer may not enter into any additional
interest rate swap agreements.
 
32

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

 
(b) In the event of any early termination of any Interest Rate Swap Agreement,
(i) upon written direction and notification of such early termination, the
Indenture Trustee shall establish the Swap Termination Payment Account, (ii) any
Swap Termination Payments received from the Swap Counterparty will be remitted
to the Swap Termination Payment Account and (iii) any Swap Replacement Proceeds
received from a Replacement Swap Counterparty will be remitted directly to the
Swap Counterparty; provided, that any such remittance to the Swap Counterparty
shall not exceed the amounts, if any, owed to the Swap Counterparty under the
Interest Rate Swap Agreement; provided, further that the Swap Counterparty shall
only receive Swap Replacement Proceeds if all Swap Termination Payments due from
the Swap Counterparty to the Issuer have been paid in full and if such amounts
have not been paid in full then the amount of Swap Replacement Proceeds
necessary to make up any deficiency shall be remitted to the Swap Termination
Payment Account.
 
(c) The Issuer shall promptly, following the early termination of any Initial
Interest Rate Swap Agreement due to an “Event of Default” or “Termination Event”
(each as defined in the Initial Interest Rate Swap Agreement) and in accordance
with the terms of such Interest Rate Swap Agreement, enter into a Replacement
Interest Rate Swap Agreement to the extent possible and practicable through
application of funds available in the Swap Termination Payment Account unless
entering into such Replacement Interest Rate Swap Agreement will cause the
Rating Agency Condition not to be satisfied.
 
(d) To the extent that (i) the funds available in the Swap Termination Payment
Account exceed the costs of entering into a Replacement Interest Rate Swap
Agreement or (ii) the Issuer determines not to replace the Initial Interest Rate
Swap Agreement and the Rating Agency Condition is met with respect to such
determination, the amounts in the Swap Termination Payment Account (other than
funds used to pay the costs of entering into a Replacement Interest Rate Swap
Agreement, if applicable) shall be included in Available Amounts and allocated
in accordance with the order of priority specified in Section 5.05(b) on the
following Payment Date. In any other situation, amounts on deposit in the Swap
Termination Payment Account at any time shall be invested pursuant to Section
5.01(a)(vi) and on each Payment Date after the creation of a Swap Termination
Payment Account, the funds therein shall be used to cover any shortfalls in the
amounts payable under clauses (i) through (vi) under Section 5.05(b), provided,
that in no event will the amount withdrawn from the Swap Termination Payment
Account on such Payment Date exceed the amount of Net Swap Receipts that would
have been required to be paid on such Payment Date under the terminated Interest
Rate Swap Transaction had there been no termination of such transaction. Any
amounts remaining in the Swap Termination Payment Account after payment in full
of the Class A-2b Notes and the Class A-3b Notes shall be included in Available
Amounts and allocated in accordance with the order of priority specified in
Section 5.05(b) on the following Payment Date.
 
(e) If the Swap Counterparty is required to post collateral under the terms of
the Interest Rate Swap Agreement, upon written direction and notification of
such requirement the Indenture Trustee shall establish the Swap Collateral
Account (the “Swap Collateral Account”) over which the Indenture Trustee shall
have exclusive control and the sole right of withdrawal, and in which no Person
other than the Indenture Trustee, the Swap Counterparty and the Noteholders
shall have any legal or beneficial interest. The Indenture Trustee shall deposit
all collateral received from the Swap Counterparty under the Interest Rate Swap
Agreement into the Swap Collateral Account. Any and all funds at any time on
deposit in, or otherwise to the credit of, the Swap Collateral Account shall be
held in trust by the Indenture Trustee for the benefit of the Swap Counterparty
and the Noteholders. The only permitted withdrawal from or application of funds
on deposit in, or otherwise to the credit of, the Swap Collateral Account shall
be (i) for application to obligations of the Swap Counterparty to the Issuer
under the Interest Rate Swap Agreement in accordance with the terms of the
Interest Rate Swap Agreement or (ii) to return collateral to the Swap
Counterparty when and as required by the Interest Rate Swap Agreement.
 
33

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

 
(f) If at any time the Interest Rate Swap Agreement becomes subject to early
termination due to the occurrence of an “Event of Default” or “Termination
Event” (as defined in the Interest Rate Swap Agreement), the Issuer and the
Indenture Trustee shall use reasonable efforts (following the expiration of any
applicable grace period) to enforce the rights of the Issuer thereunder as may
be permitted by the terms of the Interest Rate Swap Agreement and consistent
with the terms hereof. To the extent not fully paid from Swap Replacement
Proceeds, any Swap Termination Payment owed by the Issuer to the Swap
Counterparty under the Interest Rate Swap Agreement shall be payable to the Swap
Counterparty in installments made on each following Payment Date until paid in
full in accordance with the order of priority specified in Section 5.05(b). To
the extent that the Swap Replacement Proceeds exceed any such Swap Termination
Payments (or if there are no Swap Termination Payments due to the Swap
Counterparty), the Swap Replacement Proceeds in excess of such Swap Termination
Payments, if any, shall be included in Available Amounts and allocated and
applied in accordance with the order of priority specified in Section 5.05(b) on
the following Payment Date.
 
ARTICLE VI.

 
THE DEPOSITOR
 
Section 6.01 Representations of Depositor. The Depositor makes the following
representations on which the Issuer relies in accepting the Receivables and
delivering the Securities. Such representations speak as of the execution and
delivery of this Agreement and as of the Closing Date and shall survive the
sale, transfer and assignment of the Receivables by the Depositor to the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
 
(a) Organization and Good Standing. The Depositor is duly organized and validly
existing as a corporation in good standing under the laws of the State of
Delaware, with the corporate power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted.
 
(b) Due Qualification. The Depositor is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions where the failure to do so would materially
and adversely affect the Depositor’s ability to transfer the Receivables to the
Trust pursuant to this Agreement or the validity or enforceability of the
Receivables.
 
34

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

 
(c) Power and Authority. The Depositor has the corporate power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out their respective terms; the Depositor has full power
and authority to sell and assign the property to be sold and assigned to and
deposited with the Issuer, and the Depositor shall have duly authorized such
sale and assignment to the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the other Basic
Documents to which the Depositor is a party have been and will be duly
authorized by the Depositor by all necessary corporate action.
 
(d) Binding Obligation. This Agreement and the other Basic Documents to which
the Depositor is a party, when duly executed and delivered by the other parties
hereto and thereto, shall constitute legal, valid and binding obligations of the
Depositor, enforceable against the Depositor in accordance with their respective
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or similar laws now or hereafter in effect relating
to or affecting creditors’ rights generally and to general principles of equity
(whether applied in a proceeding at law or in equity).
 
(e) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents and the fulfillment of the terms of this
Agreement and the other Basic Documents shall not conflict with, result in any
breach of any of the terms or provisions of or constitute (with or without
notice or lapse of time, or both) a default under, the certificate of
incorporation or bylaws of the Depositor, or any indenture, agreement, mortgage,
deed of trust or other instrument to which the Depositor is a party or by which
it is bound; or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, other than this Agreement and the other Basic
Documents; or violate any law, order, rule or regulation applicable to the
Depositor of any court or federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or its properties. There shall be no breach of the representations and
warranties in this paragraph resulting from any of the foregoing breaches,
violations, Liens or other matters which, individually or in the aggregate,
would not materially and adversely affect the Depositor’s ability to perform its
obligations under the Basic Documents.
 
(f) No Proceedings. There are no proceedings or investigations pending or, to
the Depositor’s knowledge, threatened, against the Depositor before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Depositor or its properties: (i)
asserting the invalidity of this Agreement or any other Basic Document; (ii)
seeking to prevent the issuance of the Notes or the Certificates or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document; (iii) seeking any determination or ruling that would
materially and adversely affect the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
other Basic Document; or (iv) seeking to adversely affect the federal income tax
attributes of the Trust, the Notes or the Certificates.
 
35

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

 
(g) No Consents. The Depositor is not required to obtain the consent of any
other party or any consent, license, approval, registration, authorization, or
declaration of or with any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or any other Basic Document to which it is a party that has
not already been obtained, other than (i) UCC filings and (ii) consents,
licenses, approvals, registrations, authorizations or declarations which, if not
obtained or made, would not have a material adverse effect on the enforceability
or collectibility of the Receivables or would not materially and adversely
affect the ability of the Depositor to perform its obligations under the Basic
Documents.
 
Section 6.02 Corporate Existence. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises under the laws of the jurisdiction of its incorporation and will
obtain and preserve its qualification to do business in each jurisdiction in
which the failure to be so qualified would materially and adversely affect the
validity and enforceability of this Agreement, the Basic Documents, the proper
administration of this Agreement or the transactions contemplated hereby. In
addition, all transactions and dealings between the Depositor and its Affiliates
will be conducted on an arm’s-length basis.
 
Section 6.03 Liability of Depositor.
 
(a) The Depositor shall be liable in accordance herewith only to the extent of
the obligations specifically undertaken by the Depositor under this Agreement
(which shall not include distributions on account of the Notes or the
Certificates).
 
(b) The Issuer, the Servicer, the Indenture Trustee and the Owner Trustee, by
entering into or accepting this Agreement, acknowledge and agree that they have
no right, title or interest in or to the Other Assets of the Depositor. To the
extent that, notwithstanding the agreements and provisions contained in the
preceding sentence, the Issuer, the Servicer, the Indenture Trustee or the Owner
Trustee either (i) asserts an interest or claim to, or benefit from, Other
Assets, or (ii) is deemed to have any such interest, claim to, or benefit in or
from Other Assets, whether by operation of law, legal process, pursuant to
applicable provisions of insolvency laws or otherwise (including by virtue of
Section 1111(b) of the Bankruptcy Code or any successor provision having similar
effect under the Bankruptcy Code), then the Issuer, the Servicer, the Indenture
Trustee or the Owner Trustee further acknowledges and agrees that any such
interest, claim or benefit in or from Other Assets is and will be expressly
subordinated to the indefeasible payment in full, which, under the terms of the
relevant documents relating to the securitization or conveyance of such Other
Assets, are entitled to be paid from, entitled to the benefits of, or otherwise
secured by such Other Assets (whether or not any such entitlement or security
interest is legally perfected or otherwise entitled to a priority of
distributions or application under applicable law, including insolvency laws,
and whether or not asserted against the Depositor), including the payment of
post-petition interest on such other obligations and liabilities. This
subordination agreement will be deemed a subordination agreement within the
meaning of Section 510(a) of the Bankruptcy Code. The Issuer, the Servicer, the
Indenture Trustee and the Owner Trustee each further acknowledges and agrees
that no adequate remedy at law exists for a breach of this Section 6.03(b) and
the terms of this Section 6.03(b) may be enforced by an action for specific
performance. The provisions of this Section 6.03(b) will be for the third party
benefit of those entitled to rely thereon and will survive the termination of
this Agreement.
 
36

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

 
Section 6.04 Merger or Consolidation of, or Assumption of the Obligations of,
Depositor. Any Person (a) into which the Depositor may be merged or
consolidated, (b) resulting from any merger, conversion, or consolidation to
which the Depositor is a party, (c) succeeding to the business of the Depositor,
or (d) more than 50% of the voting stock or voting power and 50% or more of the
economic equity of which is owned directly or indirectly by any affiliate of
HMFC, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Depositor under this Agreement,
will be the successor to the Depositor under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement. Notwithstanding the foregoing, if the Depositor
enters into any of the foregoing transactions and is not the surviving entity,
(x) the Depositor shall deliver to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such merger, conversion,
consolidation or succession and such agreement of assumption comply with this
Section 6.04 and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with and (y) the
Depositor will deliver to the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Issuer and the
Indenture Trustee, respectively, in the Receivables, and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action is necessary to preserve and protect such interest. It shall be a
condition precedent to any of the foregoing transactions that (1) each Rating
Agency will be notified of any merger, consolidation or succession pursuant to
this Section 6.04 and each Rating Agency shall notify the Indenture Trustee in
writing that such merger, consolidation or succession shall not result in a
reduction, withdrawal or downgrade of the then-current rating of each class of
Notes and (2) the organizational documents of the surviving entity shall contain
bankruptcy remoteness protections that are not materially less favorable to the
Noteholders than those contained in the Certificate of Incorporation and Bylaws
of the Depositor.
 
Section 6.05 Amendment of Depositor’s Organizational Documents. The Depositor
shall not amend its organizational documents except in accordance with the
provisions thereof.
 
ARTICLE VII.

 
THE SERVICER
 
Section 7.01 Representations of Servicer. The Servicer makes the following
representations upon which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations speak as of the execution and delivery of this
Agreement and as of the Closing Date and shall survive the sale of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
 
37

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

 
(a) Organization and Good Standing. The Servicer is duly organized and validly
existing as a corporation in good standing under the laws of the State of its
incorporation, with the corporate power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted, and had at all relevant times, and has, the corporate
power, authority and legal right to acquire, own, and service the Receivables.
 
(b) Due Qualification. The Servicer is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions where the failure to do so would materially
and adversely affect the Servicer’s ability to acquire, own and service the
Receivables.
 
(c) Power and Authority. The Servicer has the power and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a party and
to carry out their respective terms; and the execution, delivery and performance
of this Agreement and the other Basic Documents to which it is a party have been
duly authorized by the Servicer by all necessary corporate action.
 
(d) Binding Obligation. This Agreement and the other Basic Documents to which it
is a party constitute legal, valid and binding obligations of the Servicer,
enforceable against the Servicer in accordance with their respective terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and to general principles of equity whether applied in a
proceeding in equity or at law.
 
(e) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which it is a party and the
fulfillment of their respective terms shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the articles of incorporation
or bylaws of the Servicer, or any indenture, agreement, mortgage, deed of trust
or other instrument to which the Servicer is a party or by which it is bound; or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, other than this Agreement and the other Basic Documents, or
violate any law, order, rule or regulation applicable to the Servicer of any
court or federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any of its
properties. There shall be no breach of the representations and warranties in
this paragraph resulting from any of the foregoing breaches, violations, Liens
or other matters which, individually or in the aggregate, would not materially
and adversely affect the Servicer’s ability to perform its obligations under the
Basic Documents.
 
(f) No Proceedings. There are no proceedings or investigations pending or, to
the Servicer’s knowledge, threatened, against the Servicer before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over the Servicer or its properties: (i)
asserting the invalidity of this Agreement or any of the other Basic Documents;
(ii) seeking to prevent the issuance of the Securities or the consummation of
any of the transactions contemplated by this Agreement or any of the other Basic
Documents; (iii) seeking any determination or ruling that would materially and
adversely affect the performance by the Servicer of its obligations under, or
the validity or enforceability of, this Agreement or any of the other Basic
Documents; or (iv) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Securities.
 
38

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

 
(g) No Consents. The Servicer is not required to obtain the consent of any other
party or any consent, license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, other than (i) UCC filings and (ii) consents, licenses, approvals,
registrations, authorizations or declarations which, if not obtained or made,
would not have a material adverse effect on the enforceability or collectibility
of the Receivables or would not materially and adversely affect the ability of
the Servicer to perform its obligations under the Basic Documents.
 
Section 7.02 Indemnities of Servicer. The Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer and the representations made by the Servicer under this Agreement:
 
(a) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner
Trustee, the Indenture Trustee, the Securityholders and the Depositor and any of
the officers, directors, employees and agents of the Issuer, the Owner Trustee
and the Indenture Trustee from and against any and all costs, expenses, losses,
damages, claims and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of a Financed
Vehicle, excluding any losses incurred in connection with the sale of any
repossessed Financed Vehicles in compliance with the terms of this Agreement.
 
(b) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner
Trustee, the Indenture Trustee and the Depositor and their respective officers,
directors, agents and employees, and the Securityholders, from and against any
taxes that may at any time be asserted against any of such parties with respect
to the transactions contemplated in this Agreement, including any sales, gross
receipts, tangible or intangible personal property, privilege or license taxes
(but not including any federal or other income taxes, including franchise taxes
asserted with respect to, and as of the date of, the transfer of the Receivables
to the Trust or the issuance and original sale of the Securities), and any costs
and expenses in defending against the same.
 
(c) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner
Trustee, the Indenture Trustee, the Depositor, the Securityholders and any of
the officers, directors, employees or agents of the Issuer, the Owner Trustee
and the Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such Person
through, the negligence, misfeasance or bad faith of the Servicer in the
performance of its duties or by failure to perform its obligations under this
Agreement or by reason of reckless disregard of its obligations and duties under
this Agreement.
 
(d) The Servicer shall compensate and indemnify the Indenture Trustee to the
extent provided in Section 6.07 of the Indenture.
 
39

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

 
For purposes of this Section, in the event of the termination of the rights and
obligations of HMFC (or any successor thereto pursuant to Section 7.03) as
Servicer pursuant to Section 8.02, or the resignation by such Servicer pursuant
to this Agreement, such Servicer shall be deemed to be the Servicer pending
appointment of a successor Servicer (other than the Indenture Trustee) pursuant
to Section 8.03.
 
Indemnification under this Section shall survive the resignation or removal of
the Servicer or the termination of this Agreement, and shall include reasonable
fees and expenses of counsel and reasonable expenses of litigation. If the
Servicer shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any of
such amounts from others, such Person shall promptly repay such amounts to the
Servicer, without interest. The Servicer shall pay all amounts due, pursuant to
this Section, with respect to the Indenture Trustee and Owner Trustee as set
forth in Section 5.05(b)(xi).
 
Section 7.03 Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. The Servicer shall not merge or consolidate with any other Person,
convey, transfer or lease substantially all its assets as an entirety to another
Person, or permit any other Person to become the successor to the Servicer’s
business unless, after such merger, consolidation, conveyance, transfer, lease
or succession, the successor or surviving entity shall be capable of fulfilling
the duties of the Servicer contained in this Agreement. Any Person (a) into
which the Servicer may be merged or consolidated, (b) resulting from any merger
or consolidation to which the Servicer shall be a party, (c) that acquires by
conveyance, transfer or lease substantially all of the assets of the Servicer or
(d) succeeding to the business of the Servicer, which Person shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement, shall be the successor to the Servicer under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties to this Agreement. The Servicer shall provide notice of any merger,
consolidation or succession pursuant to this Section 7.03 to the Owner Trustee,
the Indenture Trustee and each Rating Agency. Notwithstanding the foregoing, the
Servicer shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Servicer’s business unless (a)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time or both, would become a Servicer Termination Event shall have occurred, (b)
the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee
an Officer’s Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 7.03 and that all conditions precedent provided for in this
Agreement relating to such transaction have been complied with and (c) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel stating that either (i) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Trust and the
Indenture Trustee, respectively, in the assets of the Trust and reciting the
details of such filings or (ii) no such action shall be necessary to preserve
and protect such interest.
 
40

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

 
Section 7.04 Limitation on Liability of Servicer and Others. None of the
Servicer or any of its directors, officers, employees or agents shall be under
any liability to the Issuer, the Depositor, the Indenture Trustee, the Owner
Trustee, the Noteholders, the Swap Counterparty or the Certificateholders,
except as provided in this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; provided, however,
that this provision shall not protect the Servicer or any such Person against
any liability that would otherwise be imposed by reason of a breach of this
Agreement or willful misfeasance or bad faith in the performance of duties. The
Servicer and any director, officer, employee or agent of the Servicer may
conclusively rely in good faith on the written advice of counsel or on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising under this Agreement.
 
Section 7.05 Delegation of Duties. The Servicer may, at any time without notice
or consent, delegate (a) any or all of its duties (including, without
limitation, its duties as custodian) under the Basic Documents to any of its
Affiliates or (b) specific duties to sub-contractors who are in the business of
performing such duties; provided, however, that Servicer shall give the Rating
Agencies then rating the Notes at least 10 Business Days’ written notice prior
to any delegation that the Servicer reasonably believes to be of a material
aspect of the Servicer’s servicing duties. The fees and expenses of any
subservicer shall be as agreed between the Servicer and such subservicer from
time to time, and none of the Owner Trustee, the Indenture Trustee, the Issuer
or the Securityholders shall have any responsibility thereof.
 
Section 7.06 Servicer Not to Resign.
 
(a) Subject to the provisions of Section 7.03, the Servicer shall not resign
from the obligations and duties imposed on it by this Agreement as Servicer
except upon a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law.
 
(b) Notice of any determination that the performance by the Servicer of its
duties hereunder is no longer permitted under applicable law shall be
communicated to the Owner Trustee and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered by the Servicer to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No resignation of the Servicer
shall become effective until a successor shall have assumed the responsibilities
and obligations of the Servicer in accordance with Section 8.03. If no successor
Servicer has been appointed within 30 days of resignation or removal, the
Servicer, as the case may be, may petition any court of competent jurisdiction
for such appointment.
 
41

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

 
ARTICLE VIII.

 
DEFAULT
 
Section 8.01 Servicer Termination Events. For purposes of this Agreement, the
occurrence and continuance of any of the following shall constitute a “Servicer
Termination Event”:
 
(a) Any failure by the Servicer to deposit into any Account any proceeds or
payment required to be so delivered or to direct the Indenture Trustee to make
the required payment from any Account under the terms of this Agreement that
continues unremedied for a period of five Business days after written notice is
received by the Servicer or after discovery of such failure by a Responsible
Officer of the Servicer;
 
(b) Failure on the part of the Servicer duly to observe or perform, in any
material respect, any covenants or agreements of the Servicer set forth in this
Agreement, which failure (i) materially and adversely affects the rights of the
Securityholders and (ii) continues unremedied for a period of 60 days after
discovery of such failure by a Responsible Officer of the Servicer or after the
date on which written notice of such failure requiring the same to be remedied
shall have been given to the Servicer by any of the Owner Trustee, the Indenture
Trustee or Noteholders evidencing not less than 50% of the Outstanding Amounts
of the Notes; or
 
(c) The occurrence of an Insolvency Event with respect to the Servicer.
 
provided, however, that a delay or failure of performance referred to under
clauses (a) above for a period of 10 days or clause (b) above for a period of 30
days will not constitute a Servicer Termination Event if such delay or failure
was caused by force majeure or other similar occurrence.
 
Section 8.02 Consequences of a Servicer Termination Event. If a Servicer
Termination Event shall occur, the Indenture Trustee or Noteholders evidencing
more than 50% of the voting interests of the Notes may, by notice given in
writing to the Servicer (and to the Indenture Trustee, the Owner Trustee, the
Swap Counterparty and the Depositor if given by such Noteholders), terminate all
of the rights and obligations of the Servicer under this Agreement. On or after
the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement
automatically shall pass to, be vested in and become obligations and
responsibilities of the successor Servicer; provided, however, that the
successor Servicer shall have no liability with respect to any obligation that
was required to be performed by the terminated Servicer prior to the date that
the successor Servicer becomes the Servicer or any claim of a third party based
on any alleged action or inaction of the terminated Servicer. The successor
Servicer is authorized and empowered by this Agreement to execute and deliver,
on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Receivables
and related documents to show the Indenture Trustee (or the Owner Trustee if the
Notes have been paid in full) as lienholder or secured party on the related
certificates of title of the Financed Vehicles or otherwise. The terminated
Servicer agrees to cooperate with the successor Servicer in effecting the
termination of the responsibilities and rights of the terminated Servicer under
this Agreement, including the transfer to the successor Servicer for
administration by it of all money and property held by the Servicer with respect
to the Receivables and other records relating to the Receivables, including any
portion of the Receivables File held by the Servicer and a computer tape in
readable form as of the most recent Business Day containing all information
necessary to enable the successor Servicer to service the Receivables. The
terminated Servicer shall also provide the successor Servicer access to Servicer
personnel and computer records in order to facilitate the orderly and efficient
transfer of servicing duties.
 
42

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

 
Section 8.03 Appointment of Successor Servicer.
 
(a) On and after the time the Servicer receives a notice of termination pursuant
to Section 8.02 or upon the resignation of the Servicer pursuant to Section
7.06, the Indenture Trustee or the Noteholders evidencing more than 50% of the
voting interests of the Notes shall appoint a successor Servicer which shall be
the successor in all respects to the Servicer in its capacity as Servicer under
this Agreement and shall be subject to all the rights, responsibilities,
restrictions, duties, liabilities and termination provisions relating to the
Servicer under this Agreement, except as otherwise stated herein. The Depositor,
the Owner Trustee, the Indenture Trustee and such successor Servicer shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. In the event that the Indenture Trustee and the Noteholders
are unable to appoint a successor within thirty (30) days of the date of the
related notice of termination, the Indenture Trustee may petition a court of
competent jurisdiction to appoint a successor Servicer. If a successor Servicer
is acting as Servicer hereunder, it shall be subject to termination under
Section 8.02 upon the occurrence of any Servicer Termination Event after its
appointment as successor Servicer. The original Servicer shall pay any and all
fees and expenses incurred as a result of a transfer of servicing.
 
(b) The Noteholders evidencing more than 50% of the voting interests of the
Notes shall have no liability to the Owner Trustee, the Indenture Trustee, the
Servicer, the Depositor, any Noteholders, any Certificateholders or any other
Person if it exercises its right to appoint a successor to the Servicer. Pending
appointment pursuant to the preceding paragraph, the outgoing Servicer shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment.
 
(c) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, and shall be entitled to the Servicing Fee
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
 
Section 8.04 Notification to Securityholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII, the
Administrator shall give prompt written notice thereof to the
Certificateholders, and the Indenture Trustee shall give prompt written notice
thereof to the Noteholders and each Rating Agency.
 
43

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

 
Section 8.05 Waiver of Past Defaults. The Noteholders evidencing more than 50%
of the voting interests of the Notes may, on behalf of all Securityholders,
waive in writing any default by the Servicer in the performance of its
obligations hereunder and its consequences, except a default in making any
required deposits to or payments from any of the Trust Accounts in accordance
with this Agreement. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Termination Event arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
 
ARTICLE IX.

 
TERMINATION
 
Section 9.01 Optional Purchase of All Receivables.
 
(a) On each Determination Date as of which the Pool Balance is equal to or less
than 10% of the Initial Pool Balance, the Servicer shall have the option to
purchase the Receivables. To exercise such option, the Servicer shall deposit to
the Collection Account pursuant to Section 5.04 an amount equal to the aggregate
Purchased Amount for the Receivables plus all amounts owing to the Swap
Counterparty as of the related Determination Date and shall succeed to all
interests in and to the Receivables. The exercise of such option shall effect a
redemption, in whole but not in part, of all outstanding Notes.
 
(b) As described in Article IX of the Trust Agreement, notice of any termination
of the Trust shall be given by the Servicer to the Owner Trustee and the
Indenture Trustee as soon as practicable after the Servicer has received notice
thereof.
 
(c) Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, the Certificateholders will
succeed to the rights of the Noteholders hereunder and the Trust will succeed to
the rights of, and assume the obligations to make payments to Certificateholders
of, the Indenture Trustee pursuant to this Agreement.
 
ARTICLE X.

 
MISCELLANEOUS
 
Section 10.01 Amendment.
 
(a) This Agreement may be amended by the Depositor and the Servicer, but without
the consent of the Indenture Trustee, the Owner Trustee, the Swap Counterparty,
any of the Noteholders or the Certificateholders, to cure any ambiguity, to
correct or supplement any provisions in this Agreement, or for the purpose of
correcting any inconsistency with the Prospectus dated September 18, 2007 or the
Prospectus Supplement dated September 21, 2007, or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, that such action shall not materially
and adversely affect the interests of any Noteholder or Certificateholder, and
the Indenture Trustee shall have received notification from each Rating Agency
that such action will not result in a reduction, withdrawal or downgrade of the
then-current rating of each class of Notes; provided, further, that such
amendment shall not materially and adversely affect the rights or obligations of
the Swap Counterparty under this Agreement unless the Swap Counterparty shall
have consented in writing to such amendment.
 
44

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

 
(b) This Agreement may also be amended from time to time by the Depositor, the
Servicer and the Issuer, with the prior written consent of the Indenture Trustee
and Noteholders holding not less than a majority of the Outstanding Amount of
the Notes, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Securityholders; provided, however, that no such
amendment shall (i) reduce the interest rate or principal amount of any Note or
delay the Stated Maturity Date of any Note without the consent of the Holder of
such Note, (ii) reduce the aforesaid percentage of the Outstanding Amount of the
Notes, the Securityholders of which are required to consent to any such
amendment, without the consent of the Noteholders holding all Outstanding Notes
and Certificateholders holding all outstanding Certificates or (iii) materially
and adversely affect the rights or obligations of the Swap Counterparty under
this Agreement unless the Swap Counterparty shall have consented in writing to
such amendment.
 
Promptly after the execution of any amendment or consent, the Administrator
shall furnish written notification of the substance of such amendment or consent
to each Securityholder, the Indenture Trustee and each Rating Agency.
 
It shall not be necessary for the consent of Securityholders pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof.
 
Prior to the execution of any amendment to this Agreement, the Owner Trustee, on
behalf of the Issuer, and the Indenture Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 10.02(i)(A). The Owner Trustee, on behalf of the Issuer, and the
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment that affects the Owner Trustee’s or the Indenture Trustee’s, as
applicable, own rights, duties or immunities under this Agreement or otherwise.
 
Section 10.02 Protection of Title to Trust.
 
(a) The Servicer shall file such financing statements and cause to be filed such
continuation statements, all in such a manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and the Indenture Trustee in the Receivables and the proceeds thereof.
The Servicer shall deliver or cause to be delivered to the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above as soon as available following such filing.
 
45

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

 
(b) Neither the Depositor nor the Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
insufficient within the meaning of Section 9-503 of the UCC, unless it shall
have given the Owner Trustee and the Indenture Trustee at least five days’ prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
 
(c) The Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
 
(d) The Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of each such Receivable, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on or with respect to each such Receivable and the
amounts from time to time deposited in the Collection Account in respect of each
such Receivable.
 
(e) The Servicer shall maintain its computer systems so that, from and after the
time of sale under this Agreement of the Receivables, the Servicer’s master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of the Issuer in such Receivable and that
such Receivable is owned by the Issuer and has been pledged to the Indenture
Trustee. Indication of the Issuer’s interest in a Receivable shall be deleted
from or modified on the Servicer’s computer systems when, and only when, the
related Receivable shall have been paid in full or repurchased.
 
(f) If at any time the Depositor or the Servicer shall propose to sell, grant a
security interest in or otherwise transfer any interest in motor vehicle
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.
 
(g) The Servicer shall permit the Indenture Trustee and its agents upon
reasonable notice and at any time during normal business hours to inspect, audit
and make copies of and abstracts from the Servicer’s records regarding any
Receivable.
 
(h) Upon request, the Servicer shall furnish to the Owner Trustee or the
Indenture Trustee, within fifteen Business Days, a list of all Receivables (by
contract number and name of Obligor) then held as part of the Trust, together
with a reconciliation of such list to the Schedule of Receivables and to each of
the Servicer’s Certificates furnished prior to such request indicating removal
of Receivables from the Trust.
 
46

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

 
(i) Upon request, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
 
(i) promptly after the execution and delivery of this Agreement and each
amendment hereto, an Opinion of Counsel stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements have
been filed that are necessary to fully preserve and protect the interest of the
Trust and the Indenture Trustee in the Receivables, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest; and
 
(ii) within 90 days after the beginning of each calendar year beginning with the
first calendar year beginning more than three months after the Cutoff Date, an
Opinion of Counsel, dated as of a date during such 90-day period, stating that,
in the opinion of such counsel, either (A) all financing statements and
continuation statements have been filed that are necessary to fully preserve and
protect the interest of the Trust and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) no such action shall be
necessary to preserve and protect such interest.
 
(j) Restrictions on Liens. The Servicer shall not (i) create, incur or suffer to
exist, or agree to create, incur or suffer to exist, or consent to or permit in
the future (upon the occurrence of a contingency or otherwise) the creation,
incurrence or existence of any Lien on or restriction on transferability of any
Receivable except for the Lien of the Indenture and the restrictions on
transferability imposed by this Agreement or (ii) file any UCC financing
statements in any jurisdiction that names HMFC, the Servicer or the Depositor as
a debtor, and any Person other than the Depositor, the Indenture Trustee or the
Issuer as a secured party, or sign any security agreement authorizing any
secured party thereunder to file any such financing statement with respect to
the Receivables or the related property.
 
Each Opinion of Counsel referred to in clause (A) or (B) above shall specify any
action necessary (as of the date of such opinion) to be taken in the following
year to preserve and protect such interest.
 
Section 10.03 Notices. All demands, notices, communications and instructions
upon or to the Depositor, the Servicer, the Issuer, the Owner Trustee, the
Indenture Trustee or any Rating Agency under this Agreement shall be in writing,
personally delivered, faxed and followed by first class mail, or mailed by
certified mail, return receipt requested (or with respect to any Rating Agency,
electronically delivered), and shall be deemed to have been duly given upon
receipt (a) in the case of the Depositor, to 10550 Talbert Avenue, Fountain
Valley, California 92708, Attention: Vice President and Secretary, with a copy
to General Counsel; (b) in the case of the Servicer and HMFC, to 10550 Talbert
Avenue, Fountain Valley, California 92708, Attention: Vice President, Finance;
(c)  in the case of the Issuer or the Owner Trustee, at the Corporate Trust
Office (as defined in the Trust Agreement); (d) in the case of Moody’s, to
99 Church Street, New York, New York 10007, Attention: ABS Monitoring
Department; (e) in the case of the Indenture Trustee, at the Corporate Trust
Office (as defined in the Indenture); (f) in the case of Standard & Poor’s, via
electronic delivery to Servicer_reports@sandp.com or at the following address:
55 Water Street (40th Floor), New York, New York 10041, Attention: ABS
Surveillance Department; and (g) in the case of Fitch, to One State Street
Plaza, New York, New York 10004; or, as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
 
47

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

 
Section 10.04 Assignment by the Depositor or the Servicer. Notwithstanding
anything to the contrary contained herein, except as provided in Sections 6.04
and 7.03 herein and as provided in the provisions of this Agreement concerning
the resignation of the Servicer, this Agreement may not be assigned by the
Depositor or the Servicer.
 
Section 10.05 Limitations on Rights of Others. The provisions of this Agreement
are solely for the benefit of the Depositor, the Servicer, the Issuer, the Owner
Trustee, the Certificateholders, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
 
Section 10.06 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, 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 10.07 Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
 
Section 10.08 Headings. The headings of the various Articles and Sections herein
are for convenience of reference only and shall not define or limit any of the
terms or provisions hereof.
 
Section 10.09 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
 
Section 10.10 Assignment by Issuer. The Depositor hereby acknowledges and
consents to any mortgage, pledge, assignment and grant of a security interest by
the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of all right, title and interest of the Issuer in, to and under
the Receivables or the assignment of any or all of the Issuer’s rights and
obligations hereunder to the Indenture Trustee.
 
48

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

 
Section 10.11 Nonpetition Covenants. Notwithstanding any prior termination of
this Agreement, the parties hereto shall not, prior to the date that is one year
and one day after the termination of this Agreement with respect to the Issuer
or the Depositor, acquiesce, petition or otherwise invoke or cause the Issuer or
the Depositor to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer or the Depositor
under any federal or state bankruptcy, insolvency or similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or the Depositor or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the Issuer
or the Depositor.
 
Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee.
 
(a) Notwithstanding anything contained herein to the contrary, this Agreement
has been executed 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, except as expressly
provided in the Trust Agreement, as Owner Trustee of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer in accordance with the priorities set forth
herein. For all purposes of this Agreement, in the performance of its duties or
obligations hereunder or 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 VI, VII and VIII of the Trust
Agreement.
 
(b) Notwithstanding anything contained herein to the contrary, this Agreement
has been accepted by Citibank, N.A., not in its individual capacity but solely
as Indenture Trustee, and in no event shall Citibank, N.A. have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer in accordance with the priorities set forth herein.
 
Section 10.13 Limitation of Rights. All of the rights of the Swap Counterparty
in, to and under this Agreement (including, but not limited to, all of the Swap
Counterparty’s rights as a third party beneficiary of this Agreement and all of
the Swap Counterparty’s rights to receive notice of any action hereunder and to
give or withhold consent to any action hereunder) shall terminate upon the
termination of the Interest Rate Swap Agreement in accordance with the terms
thereof and the payment in full of all amounts owing to the Swap Counterparty
under such Interest Rate Swap Agreement.
 
[SIGNATURE PAGE FOLLOWS]

49

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

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

        HYUNDAI AUTO RECEIVABLES TRUST 2007-A         By: 
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee 
       
   
   
  By:   /s/ J. Christopher Murphy  

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

Name: J. Christopher Murphy   Title: Financial Services Officer

 
 
S-1

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

 

       
HYUNDAI ABS FUNDING CORPORATION,
as Depositor
 
   
   
  By:   /s/ Min Sok Randy Park  

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

Name: Min Sok Randy Park   Title: Vice President and Secretary

S-2

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

 
 

       
HYUNDAI MOTOR FINANCE COMPANY,
as Servicer and Seller
 
   
   
  By:   /s/ Dae Kwon Ko  

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

Name: Dae Kwon Ko   Title: Treasurer

S-3

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

 
 

       
CITIBANK, N.A.,
not in its individual capacity
but solely as Indenture Trustee
 
   
   
  By:   /s/ Karen Schluter  

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

Name: Karen Schluter   Title: Vice President

S-4

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

 
EXHIBIT A
 
Representations and Warranties of Hyundai Motor Finance Company
Under Section 3.02 of the Receivables Purchase Agreement
 
Terms used in this Exhibit A shall have the meanings assigned to them in the
Receivables Purchase Agreement, dated as of September 28, 2007 (the “Receivables
Purchase Agreement”), between Hyundai Motor Finance Company as Seller (the
“Seller”) and Hyundai ABS Funding Corporation as depositor (the “Depositor”).
Terms not defined in the Receivables Purchase Agreement shall have the meanings
assigned to them in the Sale and Servicing Agreement.
 
(a) The Seller hereby represents and warrants as follows to the Depositor and
the Indenture Trustee as of the date hereof and as of the Closing Date:
 
(i) Organization and Good Standing. The Seller has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of California, with the corporate power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted.
 
(ii) Due Qualification. The Seller is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions where the failure to do so would materially and
adversely affect the Seller’s ability to acquire, own and service the
Receivables.
 
(iii) Power and Authority. The Seller has the power and authority to execute and
deliver this Agreement and the other Basic Documents to which it is a party and
to carry out their respective terms; the Seller had at all relevant times, and
has, full power, authority and legal right to sell, transfer and assign the
property sold, transferred and assigned to the Depositor hereby and has duly
authorized such sale, transfer and assignment to the Depositor by all necessary
corporate action; and the execution, delivery and performance of this Agreement
and the other Basic Documents to which the Seller is a party have been duly
authorized by the Seller by all necessary corporate action.
 
(iv) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which the Seller is a party and the
fulfillment of their respective terms do not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, the articles of incorporation or bylaws
of the Seller, or any indenture, agreement or other instrument to which the
Seller is a party or by which it is bound, or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than this Agreement), or
violate any law or, to the best of the Seller’s knowledge, any order, rule or
regulation applicable to the Seller of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties. There shall be no breach
of the representations and warranties in this paragraph resulting from any of
the foregoing breaches, violations, Liens or other matters which, individually
or in the aggregate, would not materially and adversely affect the Seller’s
ability to perform its obligations under the Basic Documents.
 
Exhibit A-1

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

 
(v) No Proceedings. There are no proceedings or investigations pending or, to
the Seller’s knowledge, threatened against the Seller before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Seller or its properties (i) asserting the
invalidity of this Agreement or any other Basic Document to which the Seller is
a party, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any other Basic Document to which the Seller
is a party or (iii) seeking any determination or ruling that would materially
and adversely affect the performance by the Seller of its obligations under, or
the validity or enforceability of, this Agreement or any other Basic Document to
which the Seller is a party.
 
(vi) Valid Sale, Binding Obligation. This Agreement and the other Basic
Documents to which the Seller is a party, when duly executed and delivered by
the other parties hereto and thereto, shall constitute legal, valid and binding
obligations of the Seller, enforceable against the Seller in accordance with
their respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization and similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally and to general
principles of equity (whether applied in a proceeding at law or in equity).
 
(vii) Chief Executive Office. The chief executive office of the Seller is
located at 10550 Talbert Avenue, Fountain Valley, California 92708.
 
(viii) No Consents. The Seller is not required to obtain the consent of any
other party or any consent, license, approval, registration, authorization, or
declaration of or with any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or any other Basic Document to which it is a
party that has not already been obtained, other than (i) UCC filings and
(ii) consents, licenses, approvals, registrations, authorizations or
declarations which, if not obtained or made, would not have a material adverse
effect on the enforceability or collectibility of the Receivables or would not
materially and adversely affect the ability of the Depositor to perform its
obligations under the Basic Documents.
 
Exhibit A-2

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

 
(ix) Ordinary Course. The transactions contemplated by this Agreement and the
other Basic Documents to which the Seller is a party are in the ordinary course
of the Seller’s business.
 
(x) Solvency. The Seller is not insolvent, nor will the Seller be made insolvent
by the transfer of the Receivables, nor does the Seller contemplate any pending
insolvency.
 
(xi) Creditors. The Seller represents and warrants that it did not sell the
Receivables to the Depositor with any intent to hinder, delay or defraud any of
its creditors.
 
(xii) No Notice. The Seller represents and warrants that it acquired title to
the Receivables in good faith, without notice of any adverse claim.
 
(xiii) Bulk Transfer. The Seller represents and warrants that the transfer,
assignment and conveyance of the Receivables by the Seller pursuant to this
Agreement are not subject to the bulk transfer laws or any similar statutory
provisions in effect in any applicable jurisdiction.
 
(b) The Seller makes the following representations and warranties with respect
to the Receivables, on which the Depositor relies in accepting the Receivables
and in transferring the Receivables to the Issuer under the Sale and Servicing
Agreement, and on which the Issuer relies in pledging the same to the Indenture
Trustee. Such representations and warranties speak as of the execution and
delivery of this Agreement or as of the Cutoff Date as applicable, but shall
survive the sale, transfer and assignment of the Receivables to the Depositor,
the subsequent sale, transfer and assignment of the Receivables by the Depositor
to the Issuer pursuant to the Sale and Servicing Agreement and the pledge of the
Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture.
 
(i) Characteristics of Receivables. Each Receivable (A) was originated in the
United States of America by a Dealer located in the United States of America for
the retail sale of a Financed Vehicle in the ordinary course of such Dealer’s
business and satisfied the Seller’s Credit and Collection Policy as of the date
of origination of the related Receivable, is payable in United States dollars,
has been fully and properly executed by the parties thereto, has been purchased
by the Seller from such Dealer under an existing Dealer Agreement and has been
validly assigned by such Dealer to the Seller, (B) has created or shall create a
valid, subsisting and enforceable first priority security interest in favor of
the Seller in the Financed Vehicle, which security interest is assignable by the
Seller to the Depositor, by the Depositor to the Issuer, and by the Issuer to
the Indenture Trustee, (C) contains customary and enforceable provisions such
that the rights and remedies of the holder thereof are adequate for realization
against the collateral of the benefits of the security, (D) provides for fixed
level monthly payments (provided that the payment in the last month of the term
of the Receivable may be insignificantly different from the level payments) that
fully amortize the Amount Financed by maturity and yield interest at the APR,
(E) amortizes using the simple interest method and (F) has an Obligor which is
not an affiliate of HMFC, is not a government or governmental subdivision or
agency and is not shown on the Servicer’s records as a debtor in a pending
bankruptcy proceeding.
 
Exhibit A-3

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

 
(ii) Compliance with Law. Each Receivable and the sale of the related Financed
Vehicle complied at the time it was originated or made, and at the time of
execution of this Agreement complies, in all material respects with all
requirements of applicable federal, state and local laws, rulings and
regulations thereunder, including usury laws, the Federal Truth-in-Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board’s
Regulations “B” and “Z”, the Servicemembers Civil Relief Act, the
Gramm-Leach-Bliley Act, state adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
 
(iii) Binding Obligation. Each Receivable represents the genuine, legal, valid
and binding payment obligation of the Obligor thereon, enforceable by the holder
thereof in accordance with its terms, except (A) as enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
the enforcement of creditors’ rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether such enforceability
is considered in a proceeding in equity or at law and (B) as such Receivable may
be modified by the application after the Transfer Date of the Servicemembers
Civil Relief Act.
 
(iv) No Government Obligor. No Receivable is due from the United States of
America or any State or any agency, department, subdivision or instrumentality
thereof.
 
(v) Obligor Bankruptcy. According to the records of the Seller, as of the Cutoff
Date, no Obligor is the subject of a bankruptcy proceeding.
 
(vi) Schedule of Receivables. The information set forth in Schedule A to this
Agreement is true and correct in all material respects as of the close of
business on the Cutoff Date.
 
(vii) Marking Records. By the Closing Date, the Seller will have caused its
computer and accounting records relating to each Receivable to be clearly and
unambiguously marked to show that the Receivables have been sold to the
Depositor by the Seller and transferred and assigned by the Depositor to the
Issuer in accordance with the terms of the Sale and Servicing Agreement and
pledged by the Issuer to the Indenture Trustee in accordance with the terms of
the Indenture.
 
Exhibit A-4

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

 
(viii) Computer Tape. The computer tape regarding the Receivables made available
by the Seller to the Depositor is complete and accurate in all respects as of
the Transfer Date.
 
(ix) No Adverse Selection. No selection procedures believed by the Seller to be
adverse to the Noteholders were utilized in selecting the Receivables.
 
(x) Chattel Paper. Each Receivable constitutes chattel paper within the meaning
of the UCC as in effect in the state of origination.
 
(xi) One Original. There is only one executed original of each Receivable.
 
(xii) Receivables in Force. No Receivable has been satisfied, subordinated or
rescinded, nor has any Financed Vehicle been released from the Lien of the
related Receivable in whole or in part. None of the terms of any Receivable has
been waived, altered or modified in any respect since its origination, except by
instruments or documents identified in the related Receivable File.
 
(xiii) Lawful Assignment. No Receivable has been originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Receivable under this
Agreement, the Sale and Servicing Agreement or the pledge of such Receivable
under the Indenture.
 
(xiv) Title. It is the intention of the Seller that the transfers and
assignments herein contemplated constitute sales of the Receivables from the
Seller to the Depositor and that the beneficial interest in and title to the
Receivables not be part of the debtor’s estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable, other than the Receivables identified in the Reconveyance Documents,
has been sold, transferred, assigned or pledged by the Seller to any Person
other than to the Depositor or pursuant to this Agreement (or by the Depositor
to any other Person other than to the Issuer pursuant to the Sale and Servicing
Agreement). Except with respect to the Liens under the Conduit Documents (which
such Liens shall be released in accordance with provisions of the Reconveyance
Documents), immediately prior to the transfers and assignments herein
contemplated, the Seller has good and marketable title to each Receivable free
and clear of all Liens, and, immediately upon the transfer thereof, the
Depositor shall have good and marketable title to each Receivable, free and
clear of all Liens and, immediately upon the transfer thereof from the Depositor
to the Issuer pursuant to the Sale and Servicing Agreement, the Issuer shall
have good and marketable title to each Receivable, free and clear of all Liens
and, immediately upon the pledge thereof from the Issuer to the Indenture
Trustee pursuant to the Indenture, the Indenture Trustee shall have a first
priority perfected security interest in each Receivable.
 
Exhibit A-5

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

 
(xv) Security Interest in Financed Vehicle. Immediately prior to its sale,
assignment and transfer to the Depositor pursuant to this Agreement, each
Receivable shall be secured by a validly perfected first priority security
interest in the related Financed Vehicle in favor of the Seller as secured
party, or all necessary and appropriate actions have been commenced that will
result in the valid perfection of a first priority security interest in such
Financed Vehicle in favor of the Seller as secured party.
 
(xvi) All Filings Made. All filings (including UCC filings, except for UCC
releases required to be filed in accordance with the Reconveyance Documents)
required to be made in any jurisdiction to give the Issuer a first perfected
ownership interest in the Receivables and the Indenture Trustee a first priority
perfected security interest in the Receivables have been made.
 
(xvii) No Defenses. No Receivable is subject to any right of rescission, setoff,
counterclaim, dispute or defense, including the defense of usury, whether
arising out of transactions concerning the Receivable or otherwise, and the
operation of any terms of the Receivable or the exercise by the Seller or the
Obligor of any right under the Receivable will not render the Receivable
unenforceable in whole or in part, and no such right of rescission, setoff,
counterclaim, dispute or defense, including the defense of usury, has been
asserted with respect thereto.
 
(xviii) No Default. As of the Cutoff Date, the Servicer’s accounting records did
not disclose that there was any default, breach, violation or event permitting
acceleration under the terms of any Receivable (other than payment delinquencies
of not more than 30 days), or that any condition exists or event has occurred
and is continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the terms of
any Receivable, and there has been no waiver of any of the foregoing.
 
(xix) Insurance. The Seller, in accordance with its customary procedures, has
determined at the origination of the Receivable that the Obligor had obtained
physical damage insurance covering the related Finance Vehicle at that time and,
under the terms of each Receivable, the Obligor is required to maintain physical
damage insurance covering the related Financed Vehicle and to name the Seller as
a loss payee.
 
(xx) Final Scheduled Maturity Date. No Receivable has a final scheduled payment
date after January 19, 2010.
 
Exhibit A-6

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

 
(xxi) Certain Characteristics of the Receivables. As of the applicable Cutoff
Date, (A) each Receivable had an original maturity of not less than 12 or more
than 72 months and (B) no Receivable was more than 30 days past due as of the
Cutoff Date.
 
(xxii) No Foreign Obligor. All of the Receivables were originated in the United
States of America.
 
(xxiii) No Extensions. The number or timing of scheduled payments has not been
changed on any Receivable on or before the Cutoff Date, except as reflected on
the computer tape delivered in connection with the sale of the Receivables.
 
(xxiv) [Reserved]
 
(xxv) [Reserved]
 
(xxvi) No Fleet Sales. No Receivable has been included in a “fleet” sale (i.e.,
a sale to any single Obligor of more than five Financed Vehicles).
 
(xxvii) Receivable Files. The Servicer has in its possession all original copies
of documents or instruments that constitute or evidence the Receivables. The
Receivable Files that constitute or evidence the Receivables do not have any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed by the Seller to any Person other than the Depositor, except for such
Liens as have been released on or before the Closing Date. All financing
statements filed or to be filed against the Seller in favor of the Depositor in
connection herewith describing the Receivables contain a statement to the
following effect: “A purchase of or security interest in any collateral
described in this financing statement, except as provided in the Receivables
Purchase Agreement, will violate the rights of the Depositor.”
 
(xxviii) No Fraud or Misrepresentation. Each Receivable was originated by a
Dealer and was sold by the Dealer to the Seller, to the best of the Seller’s
knowledge, without fraud or misrepresentation on the part of such Dealer in
either case.
 
(xxix) Receivables Not Assumable. No Receivable is assumable by another person
in a manner which would release the Obligor thereof from such Obligor’s
obligations to the Seller with respect to such Receivable.
 
(xxx) No Impairment. The Seller has not done anything to convey any right to any
person that would result in such person having a right to payments due under a
Receivable or otherwise to impair the rights of the Depositor in any Receivable
or the proceeds thereof.
 
Exhibit A-7

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

 
(xxxi) [Reserved].
 
(xxxii) No Corporate Obligor. All of the Receivables are due from Obligors who
are natural persons.
 
(xxxiii) No Liens. According to the Servicer’s records as of the Cutoff Date, no
liens or claims have been filed for work, labor, or materials relating to a
Financed Vehicle that are prior to, or equal or coordinate with the security
interest in the Financed Vehicles granted by the related Receivable.
 
(xxxiv) [Reserved].
 
(xxxv) APR. No Receivable has an APR of less than 0.00% and the weighted average
coupon on the pool of Receivables is at least 7.833%.
 
(xxxvi) Remaining Term. Each Receivable has a remaining term of at least 4
months and no more than 72 months.
 
(xxxvii) Original Term. The weighted average original term for the Receivables
is at least 63.67 months.
 
(xxxviii) Remaining Balance. Each Receivable has a remaining balance of at least
$2,004.65 and not greater than $49,261.30.
 
(xxxix) New Vehicles. At least 96.14% of the aggregate principal balance of the
Receivables is secured by Financed Vehicles which were new at the date of
origination.
 
(xl) [Reserved].
 
(xli) No Repossessions. No Financed Vehicle has been repossessed on or prior to
the applicable Cutoff Date.
 
(xlii) [Reserved].
 
(xliii) [Reserved].
 
(xliv) Dealer Agreements. Each Dealer from whom the Seller purchases Receivables
has entered into a Dealer Agreement with the Seller providing for the sale of
Receivables from time to time by such Dealer to the Seller.
 
(xlv) Receivable Obligations. To the best of the Seller’s knowledge, no notice
to or consent from any Obligor is necessary to effect the acquisition of the
Receivables by the Issuer.
 
(xlvi) [Reserved].
 
Exhibit A-8

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

 
(xlvii) Computer Tape. The computer tape from which the selection of the
Receivables being acquired on the Closing Date was made available to the
accountants that are providing a comfort letter to the Noteholders in connection
with the numerical information regarding the Receivables and the Notes.
 
(xlviii) No Future Disbursement. At the time each Receivable was acquired from
the Dealer, the Amount Financed was fully disbursed. There is no requirement for
future advances of principal thereunder, and, other than in connection with
Dealer participations, all fees and expenses in connection with the origination
of such Receivable have been paid.
 
(xlix) [Reserved].
 
(l) [Reserved].
 
(li) [Reserved].
 
(lii) [Reserved].
 
(liii) [Reserved].
 
(liv) No Consumer Leases. No Receivable constitutes a “consumer lease” under
either (a) the UCC as in effect in the jurisdiction whose law governs the
Receivable or (b) the Consumer Leasing Act, 15 USC 1667.
 
(lv) Balance as of Cutoff Date. The aggregate principal balance of the
Receivables as of the Cutoff Date is equal to $966,593,567.98.
 
Exhibit A-9

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

 
EXHIBIT B
 
Form of Record Date Statement
 
Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
   
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
I. ORIGINAL DEAL PARAMETERS
 
Cut off Date:
August 18, 2007
Closing Date:
September 28, 2007

 

   
Dollars
 
Units
 
WAC
 
WAM
 
Original Pool Balance:
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]

 

                           
Dollar Amount
 
% of Pool
 
Spread
 
Note Rate
 
Final Payment Date
 
Class A-1 Notes Fixed
 
$
[_____________
]
 
[_____
]
       
[_____
]
 
[_____
]
Class A-2a Notes Fixed
 
$
[_____________
]
 
[_____
]
       
[_____
]
 
[_____
]
Class A-2b Notes Floater
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-3a Notes Fixed
 
$
[_____________
]
 
[_____
]
       
[_____
]
 
[_____
]
Class A-3b Notes Floater
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-4 Notes Fixed
 
$
[_____________
]
 
[_____
]
       
[_____
]
 
[_____
]
Total Securities
 
$
[_____________
]
 
[_____
]
                 
Overcollateralization
 
$
[_____________
]
 
[_____
]
                 
YSOA
 
$
[_____________
]
 
[_____
]
                 
Total Original Pool Balance
 
$
[_____________
]
 
[_____
]
                 

II. POOL BALANCE AND PORTFOLIO INFORMATION

 

   
Beginning of Period
 
Ending of Period
         
Balance
 
Pool Factor
 
Balance
 
Pool Factor
 
Change
 
Class A-1 Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-2a Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-2b Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-3a Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-3b Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Class A-4 Notes
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
Total Securities
 
$
[_____________
]
 
[_____
]
 
[_____
]
 
[_____
]
 
[_____
]
                                 
Weighted Avg. Coupon (WAC)
   
[_____]
   
[_____]
       
Weighted Avg. Remaining Maturity (WARM)
   
[_____]
   
[_____]
       
Pool Receivables Balance
 
$
[_____________
]
     
$
[_____________
]
           
Remaining Number of Receivables
   
[_____]
   
[_____]
       
Adjusted Pool Balance
 
$
[_____________
]
     
$
[_____________
]
           

 
 
Exhibit B-1

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

 
Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
         
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
III. COLLECTIONS
 

 
Principal:
       
Principal Collections
 
$
[_____________
]
Repurchased Contract Proceeds Related to Principal
 
$
[_____________
]
Recoveries/Liquidation Proceeds
 
$
[_____________
]
Total Principal Collections
 
$
[_____________
]
         
Interest:
       
Interest Collections
 
$
[_____________
]
Late Fees & Other Charges
 
$
[_____________
]
Interest on Repurchase Principal
 
$
[_____________
]
Total Interest Collections
 
$
[_____________
]
         
Collection Account Interest
 
$
[_____________
]
Reserve Account Interest
 
$
[_____________
]
Servicer Advances
 
$
[_____________
]
Swap Collections
 
$
[_____________
]
         
Total Collections
 
$
[_____________
]

 
 
Exhibit B-2

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

Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
         
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
IV. DISTRIBUTIONS

 
Total Collections
 
$
[_____________
]
Reserve Account Release
 
$
[_____________
]
Reserve Account Draw
 
$
[_____________
]
Total Available for Distribution
 
$
[_____________
]

 

   
Amount Due
 
Amount Paid
     
1. Servicing Fee @1.00%:
             
Servicing Fee Due
 
$
[_____________
]
$
[_____________
]
$
[_____________
]
Collection Account Interest
             
$
[_____________
]
Late Fees & Other Charges
             
$
[_____________
]
Total due to Servicer
             
$
[_____________
]
                     
2. Swap Counterparty:
                   
Net Swap Payment
             
$
[_____________
]
Senior Swap Termination Payment
             
$
[_____________
]
Total Senior Swap Payments
             
$
[_____________
]
                     
3. Noteholders Interest:
                   
Class A-1 Notes
 
$
[_____________
]
$
[_____________
]
     
Class A-2a Notes
 
$
[_____________
]
$
[_____________
]
     
Class A-2b Notes
 
$
[_____________
]
$
[_____________
]
     
Class A-3a Notes
 
$
[_____________
]
$
[_____________
]
     
Class A-3b Notes
 
$
[_____________
]
$
[_____________
]
     
Class A-4 Notes
 
$
[_____________
]
$
[_____________
]
     
Total Class A interest:
 
$
[_____________
]
$
[_____________
]
$
[_____________
]
Available Funds Remaining
             
$
[_____________
]
4. Principal Distribution Amount:
     
$
[_____________
]

 

   
Distributable Amount
 
Paid Amount
     
Class A-1 Notes
       
$
[_____________
]
     
Class A-2a Notes
       
$
[_____________
]
     
Class A-2b Notes
       
$
[_____________
]
     
Class A-3a Notes
       
$
[_____________
]
     
Class A-3b Notes
       
$
[_____________
]
     
Class A-4 Notes
       
$
[_____________
]
     
Total Noteholders Principal
 
$
[_____________
]
$
[_____________
]
                           
5. Available Amounts Remaining to reserve account
     
$
[_____________
]
6. Subordinated Swap Termination Payment
     
$
[_____________
]
7. Trustee Expenses
             
$
[_____________
]
8. Remaining Available Collections Released to Certificateholder
     
$
[_____________
]

 
Exhibit B-3

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

Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
         
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
V. YIELD SUPPLEMENT OVERCOLLATERALIZATION AMOUNT (YSOA)

 
Beginning Period Required Amount
 
$
[_____________
]
Beginning Period Amount
 
$
[_____________
]
Current Period Amortization
 
$
[_____________
]
Ending Period Required Amount
 
$
[_____________
]
Ending Period Amount
 
$
[_____________
]
Next Distribution Date Required Amount
 
$
[_____________
]

VI. RESERVE ACCOUNT

 
Reserve Percentage of Initial Adjusted Pool Balance
   
[_____________]
%
Beginning Period Required Amount
 
$
[_____________
]
Beginning Period Amount
 
$
[_____________
]
Current Period Release to Collection Account
 
$
[_____________
]
Current Period Deposit
 
$
[_____________
]
Current Period Release to Depositor
 
$
[_____________
]
Ending Period Required Amount (0.5% of APB of cut-off date)
 
$
[_____________
]
Ending Period Amount
 
$
[_____________
]

VII. OVERCOLLATERALIZATION

 
Overcollateralization Target
   
[_____]
%
Overcollateralization Floor
   
[_____]
%

 

   
Beginning
 
Ending
 
Target
 
Overcollateralization Amount
 
$
[_____________
]
$
[_____________
]
$
[_____________
]
Overcollateralization as a % of Original Pool (unadjusted)
   
[_____
]
 
[_____
]
 
[_____
]
Overcollateralization as a % of Current Pool (unadjusted)
   
[_____
]
 
[_____
]
 
[_____
]

 
 
Exhibit B-4

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

Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
         
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
VIII. DELINQUENCY AND NET LOSS ACTIVITY

 

   
Units Percent
 
Units
 
Dollars Percent
 
Dollar Amount
 
Current
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
30 - 59 Days
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
60 - 89 Days
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
90 + Days
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
Total
         
[_____
]
     
$
[_____________
]
                           
Delinquent Receivables 60 + days past due
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
Delinquency Ratio 60+ for 1st Preceding Collection Period
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
Delinquency Ratio 60+ for 2nd Preceding Collection Period
   
[_____
]
 
[_____
]
 
[_____
]
$
[_____________
]
Three-Month Average Delinquency Ratio
   
[_____
]
       
[_____
]
                                 
Repossession in Current Period
         
[_____
]
     
$
[_____________
]
Repossession Inventory
         
[_____
]
     
$
[_____________
]
                           
Charge-Offs
                         
Gross Principal of Charge-Off for Current Period
                   
$
[_____________
]
Recoveries
                   
$
[_____________
]
Net Charge-offs for Current Period
                   
$
[_____________
]
                           
Beginning Pool Balance for Current Period
                   
$
[_____________
]
                           
Net Loss Ratio
                     
[_____
]
Net Loss Ratio for 1st Preceding Collection Period
                     
[_____
]
Net Loss Ratio for 2nd Preceding Collection Period
                     
[_____
]
Three-Month Average Net Loss Ratio for Current Period
                     
[_____
]
                           
Cumulative Net Losses for All Periods
                   
$
[_____________
]
Cumulative Net Losses as a % of Initial Pool Balance
                     
[_____
]
                           
Principal Balance of Extensions
                   
$
[_____________
]
Number of Extensions
                     
[_____
]

Exhibit B-5

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

Hyundai Auto Receivables Trust 2007-A

Monthly Servicing Report
         
Collection Period
       
[_____]
1 Month LIBOR
[_____]
Distribution Date
[_____]
Transaction Month
[_____]
30/360 Days
[_____]
Actual/360 Days
[_____]

 
The undersigned hereby certifies that the foregoing information is complete and
that no Servicer Termination Event has occurred.
 

       
HYUNDAI MOTOR FINANCE COMPANY,
as Servicer
 
   
   
  By:    

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

Name: [_____]  
Title: [_____]
Date: [_____]

 
Exhibit B-6

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

 
EXHIBIT C
 
Form of Servicer’s Certificate
 
Collection Period: ________________
Distribution Date: ________________
 
Hyundai Auto Receivables Trust 2007-A
 
The undersigned certifies that he is an officer of Hyundai Motor Finance
Company, a California corporation (“HMFC”), and that as such he is duly
authorized to execute and deliver this certificate on behalf of HMFC pursuant to
Section 4.09 of the Sale and Servicing Agreement dated September 28, 2007 among
Hyundai Auto Receivables Trust 2007-A, as Issuer, Hyundai ABS Funding
Corporation, as Depositor, HMFC, as Seller and Servicer and Citibank, N.A.,
as Indenture Trustee (the “Sale and Servicing Agreement”) (all capitalized terms
used herein without definition have the respective meanings specified in the
Sale and Servicing Agreement) and further certifies that:
 
1. The Servicer’s report for the period from _________ to _________ attached to
this certificate is complete and accurate and contains all information required
by Section 4.09 of the Sale and Servicing Agreement; and
 
2. As of _____________, no Servicer Termination Events have occurred.
 
IN WITNESS WHEREOF, I have fixed hereunto my signature this ___ day of
___________.
 

       
HYUNDAI MOTOR FINANCE COMPANY,
as Servicer
 
   
   
  By:    

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

Name:   Title:

 
 
Exhibit C-1

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

 
SCHEDULE A
 
Schedule of Receivables
 
[Delivered to the Trust at Closing]
 
Schedule A-1

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

SCHEDULE B
 
Yield Supplement Overcollateralization Amount
 
With respect to any Payment Date, the “Yield Supplement Overcollateralization
Amount” is the amount specified below:
 
Payment Date
 
Yield Supplement
Overcollateralization Amount
 
Closing Date 
 
$
20,199,390.93
 
October 2007
 
$
19,433,352.54
 
November 2007
 
$
18,681,385.25
 
December 2007
 
$
17,943,605.87
 
January 2008
 
$
17,220,131.99
 
February 2008
 
$
16,511,082.00
 
March 2008
 
$
15,816,574.92
 
April 2008
 
$
15,136,730.76
 
May 2008
 
$
14,471,669.73
 
June 2008
 
$
13,821,512.25
 
July 2008
 
$
13,186,377.81
 
August 2008
 
$
12,566,388.60
 
September 2008
 
$
11,961,660.67
 
October 2008
 
$
11,372,316.44
 
November 2008
 
$
10,798,472.89
 
December 2008
 
$
10,240,253.13
 
January 2009
 
$
9,697,775.70
 
February 2009
 
$
9,171,155.10
 
March 2009
 
$
8,660,510.64
 
April 2009
 
$
8,165,966.73
 
May 2009
 
$
7,687,643.29
 
June 2009
 
$
7,225,644.23
 
July 2009
 
$
6,780,047.37
 
August 2009
 
$
6,350,960.16
 
September 2009
 
$
5,938,494.19
 
October 2009
 
$
5,542,768.59
 
November 2009
 
$
5,163,889.80
 
December 2009
 
$
4,801,946.21
 
January 2010
 
$
4,456,872.29
 
February 2010
 
$
4,128,653.73
 
March 2010
 
$
3,817,289.76
 
April 2010
 
$
3,522,721.91
 
May 2010
 
$
3,244,956.48
 
June 2010
 
$
2,983,745.14
 

 
 
Schedule B-1

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

 
 

Payment Date  
Yield Supplement
Overcollateralization Amount
 
July 2010
 
$
2,738,376.62
 
August 2010
 
$
2,507,330.70
 
September 2010
 
$
2,289,254.54
 
October 2010
 
$
2,083,266.42
 
November 2010
 
$
1,888,384.09
 
December 2010
 
$
1,704,667.80
 
January 2011
 
$
1,531,915.50
 
February 2011
 
$
1,369,873.93
 
March 2011
 
$
1,218,253.88
 
April 2011
 
$
1,076,702.20
 
May 2011
 
$
945,249.00
 
June 2011
 
$
823,882.12
 
July 2011
 
$
712,520.87
 
August 2011
 
$
610,991.82
 
September 2011
 
$
519,156.34
 
October 2011
 
$
436,917.62
 
November 2011
 
$
364,167.38
 
December 2011
 
$
300,889.19
 
January 2012
 
$
246,483.41
 
February 2012
 
$
200,217.59
 
March 2012
 
$
161,230.56
 
April 2012
 
$
128,506.04
 
May 2012
 
$
101,860.56
 
June 2012
 
$
80,767.42
 
July 2012
 
$
64,208.19
 
August 2012
 
$
51,074.18
 
September 2012
 
$
40,520.08
 
October 2012
 
$
31,980.08
 
November 2012
 
$
24,674.76
 
December 2012
 
$
18,607.01
 
January 2013
 
$
13,679.08
 
February 2013
 
$
9,744.11
 
March 2013
 
$
6,642.49
 
April 2013
 
$
4,212.15
 
May 2013
 
$
2,426.14
 
June 2013
 
$
1,234.69
 
July 2013
 
$
523.39
 
August 2013
 
$
149.33
 
September 2013
 
$
0.00
 

 
Schedule B-2

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

APPENDIX A
 
REGULATION AB REPRESENTATIONS, WARRANTIES AND COVENANTS
 
PART I

DEFINED TERMS

Section 1.01. As used in this Appendix A, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined); unless otherwise defined herein, terms
used in this Appendix A that are defined in the Agreement to which this Appendix
A is attached shall have the same meanings herein as in the Agreement:
 
"Regulation AB": Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
 
"Securities Act": The Securities Act of 1933, as amended.
 
PART II

 
COMPLIANCE WITH REGULATION AB

Section 2.01. Intent of the Parties; Reasonableness.

Each of the Issuer, the Depositor, the Seller, the Servicer and the Indenture
Trustee acknowledges and agrees that the purpose of Part II of this Appendix A
is to facilitate compliance by the Issuer, the Depositor, the Seller, the
Servicer and the Indenture Trustee with the provisions of Regulation AB and the
related rules and regulations of the Commission.
 
Neither the Issuer nor the Seller shall exercise its right to request delivery
of information, reports or other performance under these provisions for purposes
other than compliance with Regulation AB. Each of the Issuer, the Seller and the
Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise. For so long as the Issuer
is subject to the reporting requirements under the Securities Exchange Act of
1934, as amended, each of the Issuer, the Depositor, the Seller, the Servicer
and the Indenture Trustee hereby agrees to reasonably comply with all reasonable
requests made by any of the other parties hereto (including any of its assignees
or designees), as the case may be, in good faith for delivery of such
information or reports, including, without limitation, any Servicer compliance
statements and reports (solely with respect to the Servicer), and assessments of
compliance and attestation, as may be required under the then-current
interpretations of Regulation AB. The servicing criteria to be addressed in the
Indenture Trustee’s assessment of compliance and attestation shall be set forth
on Schedule I attached hereto and such assessments of compliance and
attestations shall be provided by March 15th and shall only be required for
years in which a 10-K is required to be filed.
 
Appendix A-1

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

SCHEDULE I
 
Servicing Criteria To Be Addressed In Assessment Of Compliance

The assessment of compliance to be delivered by the Indenture Trustee, shall
address, at a minimum, the criteria identified as below as “Applicable Servicing
Criteria”:

Reference
 
Criteria
         
Cash Collection and Administration
     
1122(d)(2)(ii)
 
Disbursements made via wire transfer on behalf of an obligor or to an investor
are made only by authorized personnel.
         
Investor Remittances and Reporting
     
1122(d)(3)(ii)
 
Amounts due to investors are allocated and remitted in accordance with
timeframes, distribution priority and other terms set forth in the transaction
agreements.*
     
1122(d)(3)(iii)
 
Disbursements made to an investor are posted within two business days to the
Servicer’s investor records, or such other number of days specified in the
transaction agreements.
     
1122(d)(3)(iv)
 
Amounts remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.

* Solely with respect to remittances
 
Schedule I-1

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