Exhibit 10.1


 


Execution Version


 


DEPOSIT ACCOUNT CONTROL AGREEMENT


 


This Deposit Account
Control Agreement (this “Agreement”) dated as of July 26, 2006, is made by and
among HSBC Automotive Trust (USA) 2006-2, as issuer (the “Issuer”), The Bank of
New York, as indenture trustee (the “Indenture Trustee”) under the Indenture
referred to below, and HSBC Bank USA, National Association, as administrator
and as bank (“HSBC” and, in its capacity as Administrator, the “Administrator”,
and in its capacity as bank, the “Bank”). Capitalized terms used but not
defined herein shall have the meaning assigned (including by reference therein)
in the Indenture dated as of July 26, 2006 (the “Indenture”) among the Issuer,
HSBC, as administrator, and the Indenture Trustee. All references herein to the
“UCC” shall mean the Uniform Commercial Code as in effect in the State of New
York.


 


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


 


(a)   The Bank has established account numbers 10-879533
(the “Collection Account”) and 10-879534 (the “Reserve Account”) in the name “HSBC
Bank USA, National Association, as Administrator on behalf of The Bank of New
York, as Indenture Trustee, in trust for the registered holders of HSBC
Automotive Trust (USA) 2006-2 Notes” (such accounts and any successor accounts
thereof, the “Deposit Accounts”) designated as the “Collection Account” and the
“Reserve Account”, respectively, pursuant to the Indenture. Except as provided
in Section 12 hereof, the Bank shall not change the name, account number or
designation of the Deposit Accounts without the prior written consent of the
Indenture Trustee and without prior written notice to the Servicer, which
notice shall state the proposed effective date of any such change;


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


Section 5.              Conflict with Other Agreements; Amendments.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
  Issuer:

  	
  HSBC Automotive Trust
  (USA) 2006-2

  c/o U.S. Bank Trust National
  Association

  209 South LaSalle Street, Suite 300

  Chicago, Illinois 60604

  Attention: Corporate
  Trust Services, HSBC Automotive Trust (USA) 2006-2

  Telephone Number:  (312) 325-8902

  Facsimile:  (312) 325-8905

  



 


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  Indenture Trustee:

  	
  The Bank of New York

  101 Barclay Street, 8 West ABS

  New York, New York
  10286

  Attention:
  Structured Finance, HSBC Automotive Trust (USA) 2006-2

  Telephone Number:  (212) 815-6019

  Facsimile:  (212) 815-2493

  
	
   

  	
   

  
	
  Bank:

  	
  HSBC Bank USA, National
  Association

  452 Fifth Avenue

  New York, New York
  10018

  Attention: Corporate
  Trust

  Telephone Number:  (212) 525-1367

  Facsimile:  (212) 525-1300

   

  
	
   

  	
   

  
	
  Servicer:

  	
  HSBC Finance
  Corporation

  2700 Sanders Road

  Prospect Heights, Illinois 60070

  Attention: Treasurer

  Telephone Number:  (847) 564-5000

  Facsimile:  (847) 205-7538

   

  



 


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


 


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


 


Section 13.            Limited Recourse.
 Notwithstanding any other provision contained herein or in any of the Basic
Documents, the liability of the Issuer to the Indenture Trustee and the Bank
hereunder is limited in recourse to the Series Trust Estate and to the extent
the proceeds of the Series Trust Estate, when applied in accordance with
Section 4.04 of the Series Supplement, dated as of July 26, 2006, among HSBC
Finance Corporation, as Servicer, the Issuer, HSBC Auto Receivables
Corporation, as seller, the Indenture Trustee, the Owner Trustee and the
Administrator, are insufficient to meet the obligations of the Issuer hereunder
in full, the Issuer shall have no further liability in respect of any such
outstanding obligations which shall thereupon extinguish and shall not
thereafter revive.


 


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


 


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


 


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


 


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


 


Section
18. Waiver of Jury Trial.    Each party to this Agreement hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement, the Notes
or the transactions contemplated hereby.


 


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


 


	
   

  	
  HSBC AUTOMOTIVE
  TRUST (USA) 2006-2,

  
	
   

  	
    as Issuer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. BANK TRUST
  NATIONAL

  
	
   

  	
   

  	
  ASSOCIATION,

  
	
   

  	
   

  	
  not in its
  individual capacity but

  
	
   

  	
   

  	
  solely as Owner
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Patricia M. Child

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patricia M.
  Child

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA,
  NATIONAL ASSOCIATION

  
	
   

  	
    not in its individual capacity, but solely
  as Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Susie Moy

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Susie Moy

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA,
  NATIONAL ASSOCIATION

  
	
   

  	
    not in its individual capacity, but solely
  as Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Susie Moy

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Susie Moy

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW
  YORK,

  
	
   

  	
    as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Alan Li

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Alan Li

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Treasurer