Exhibit 4.3


 




 





HSBC FINANCE CORPORATION,


as Servicer,


 


HSBC AUTOMOTIVE TRUST
[200   -   ],


as Issuer,


 


HSBC AUTO RECEIVABLES
CORPORATION,


as Seller,


 


[INDENTURE TRUSTEE],


as Indenture Trustee,


 


[OWNER TRUSTEE],


as Owner Trustee,


 


[ADMINISTRATOR],


as Administrator


 




 





SERIES SUPPLEMENT


 


Dated as of [            ,
200   ]


 


to the


 


INDENTURE


 


Dated as of [            ,
200   ]


 


to the


 


SALE AND SERVICING AGREEMENT


 


Dated as of [            ,
200   ]


 


and to the


 


AMENDED AND RESTATED TRUST
AGREEMENT


 


Dated as of [            ,
200   ]


 




 




















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I CREATION OF
  THE NOTES

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DESIGNATION.

  	
  1

  
	
  SECTION 1.02.

  	
  PLEDGE OF SERIES TRUST ESTATE.

  	
  1

  
	
  SECTION 1.03.

  	
  PAYMENTS AND COMPUTATIONS.

  	
  3

  
	
  SECTION 1.04.

  	
  DENOMINATIONS.

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE II DEFINITIONS

  	
  3

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  DEFINITIONS.

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  DISTRIBUTIONS AND STATEMENTS TO NOTEHOLDERS; SERIES SPECIFIC COVENANTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  TRUST ACCOUNTS.

  	
  12

  
	
  SECTION 3.02.

  	
  RESERVE ACCOUNT.

  	
  12

  
	
  SECTION 3.03.

  	
  DISTRIBUTIONS.

  	
  12

  
	
  SECTION 3.04.

  	
  STATEMENTS TO NOTEHOLDERS.

  	
  16

  
	
  SECTION 3.05.

  	
  REPORTING REQUIREMENTS.

  	
  18

  
	
  SECTION 3.06.

  	
  COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

  	
  19

  
	
  SECTION 3.07.

  	
  SPECIAL COVENANTS AND ACKNOWLEDGEMENTS.

  	
  19

  
	
  SECTION 3.08.

  	
  INCOME TAX CHARACTERIZATION.

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV EVENTS OF
  DEFAULT; REMEDIES

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  EVENTS OF DEFAULT.

  	
  19

  
	
  SECTION 4.02.

  	
  RIGHTS UPON EVENT OF DEFAULT.

  	
  21

  
	
  SECTION 4.03.

  	
  REMEDIES.

  	
  21

  
	
  SECTION 4.04.

  	
  PRIORITIES.

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE V PREPAYMENT,
  REDEMPTION AND SUBSTITUTION

  	
  24

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  OPTIONAL “CLEAN-UP” REDEMPTION.

  	
  24

  
	
  SECTION 5.02.

  	
  OPTIONAL SUBSTITUTION.

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI MISCELLANEOUS

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  RATIFICATION OF BASIC DOCUMENTS.

  	
  25

  
	
  SECTION 6.02.

  	
  COUNTERPARTS.

  	
  25

  
	
  SECTION 6.03.

  	
  GOVERNING LAW.

  	
  25

  
	
  SECTION 6.04.

  	
  AMENDMENTS WITHOUT CONSENT OF NOTEHOLDERS.

  	
  26

  
	
  SECTION 6.05.

  	
  AMENDMENTS WITH CONSENT OF THE NOTEHOLDERS.

  	
  27

  
	
  SECTION 6.06.

  	
  AUTHORITY TO REGISTER NOTES AND FILE REPORTS.

  	
  29

  
	
  SECTION 6.07.

  	
  AUTHORITY TO PERFORM DUTIES OF THE ISSUER.

  	
  29

  
	
  SECTION 6.08.

  	
  NOTICES.

  	
  29

  
	
  SECTION 6.09.

  	
  [THIRD-PARTY BENEFICIARY].

  	
  30

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  Eligibility Criteria

  	
   

  
	
  Schedule II

  	
  Schedule of Receivables

  	
   

  
	
  Exhibit A

  	
  Form of Servicer’s Certificate

  	
   

  
	
  Exhibit B

  	
  Forms of Notes

  	
   

  
				



 

















 


This Series Supplement,
dated as of [             ,
200   ], is by and among HSBC Finance Corporation, a Delaware
corporation, as Servicer (the “Servicer”), HSBC Automotive Trust 200  -  ,
a Delaware statutory trust, as Issuer (the “Issuer” or the “Trust”),
HSBC Auto Receivables Corporation, a Nevada corporation, as Seller (the “Seller”),
[Indenture Trustee], a [             
banking              ],
as trustee for the Noteholders (the “Indenture Trustee”), [Owner
Trustee], a [             
banking              ],
as owner trustee for the Certificateholders (the “Owner Trustee”), and
[Administrator], a [             
banking              ],
as administrator (the “Administrator”).


 


RECITALS


 


This Series Supplement
is executed and delivered by the parties hereto pursuant to Section 9.3 of
the Indenture (the “Indenture”) dated as of [             ,
200  ]among the Issuer, the Indenture Trustee and the Administrator and
pursuant to Section 3.2 of the Amended and Restated Trust Agreement (the “Trust Agreement”) dated as of              ,
200   ] between the Seller and the Owner Trustee. In the event
that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Indenture or the Trust
Agreement, the terms and provisions of this Series Supplement shall
govern.


 


ARTICLE I

CREATION OF THE NOTES


 


SECTION 1.01.      Designation.


 


(a)           There
is hereby created a series of Notes, substantially in the form of Exhibit B
hereto, to be issued pursuant to the Indenture and this Series Supplement
to be known as “HSBC Automotive Trust [200 - ], Series 200 - 
Notes” (as used herein, the “Notes”). The Notes shall be issued in four
classes (each, a “Class”):  [Class A-1
Notes] in an aggregate initial principal amount of [$             ]
(the “[Class A-1 Notes]”), [Class A-2] Notes in an aggregate
initial principal amount of [$         ]
(the “[Class A-2 Notes]”), [Class A-3 Notes] in an aggregate
initial principal amount of [$         ]
(the “[Class A-3 Notes]”), and [Class A-4 Notes] in an
aggregate initial principal amount of [$         ]
(the “[Class A-4 Notes]” and, together with the [Class A-1
Notes], the [Class A-2 Notes] and the [Class A-3 Notes], the “[Class A
Notes]”).


 


(b)           There
is hereby created a series of Certificates to be issued pursuant to the
Trust Agreement and this Series Supplement to be known as the “HSBC
Automotive Trust [200 - , Series 200 - ] Certificates”
(as used herein, the “Certificates”).


 


SECTION 1.02.      Pledge
of Series Trust Estate.


 


The Issuer hereby Grants
to the Indenture Trustee, for the benefit of the Secured Parties, all of the
Issuer’s right, title and interest (but none of its obligations) in and to all
personal property, whether now owned or hereafter acquired and whether general
intangibles, accounts, chattel paper, claims and causes of action, deposit
accounts, documents, goods, instruments, money or constituting other personal
property of any nature whatsoever, including, without limitation:  (a) each and every Receivable listed as
a Receivable on the Schedule of Receivables attached hereto as Schedule II
and all monies paid or payable thereon or in respect


 

















 


thereof after the
applicable Cut-off Date (including amounts due on or before the applicable
Cut-off Date but received by HAFI, HACI, HSBC Finance, the Seller, the Servicer
or the Issuer after the applicable Cut-off Date); (b) all security
interests in the related Financed Vehicles granted by Obligors pursuant to such
Receivables and any other interest of the Issuer in the related Financed
Vehicles; (c) all rights of HAFI against Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables; (d) any
proceeds and the right to receive proceeds with respect to such Receivables
repurchased by a Dealer pursuant to a Dealer Agreement; (e) all rights
under any Service Contracts on the related Financed Vehicles; (f) any
proceeds and the right to receive proceeds with respect to such Receivables
from claims under any Insurance Policies covering the related Financed Vehicles
or Obligors; (g) all funds on deposit from time to time in the Trust
Accounts (including all investments and proceeds thereof); (h) all rights
of the Seller in and to the Master Receivables Purchase Agreements and related
Receivables Purchase Agreement Supplements, including all delivery requirements
and representations and warranties and the cure and repurchase obligations of
HAFI, HACI or HSBC Finance, as applicable, under the Master Receivables
Purchase Agreements and such Receivables Purchase Agreement Supplements; (i) all
property (including the right to receive future Net Liquidation Proceeds) that
secures such Receivables and that has been, or at any time is, acquired by or
on behalf of the Issuer pursuant to liquidation of such Receivables; (j) all
items contained in the Receivable Files with respect to such Receivables and
any and all other documents that the Servicer, the Seller, HAFI or HACI keeps
on file in accordance with its customary procedures relating to such
Receivables, the related Financed Vehicles or Obligors; (k) all rights of the
Issuer in and to the Sale and Servicing Agreement and the Transfer Agreement or
Transfer Agreements (including all rights of the Seller under the Master
Receivables Purchase Agreements and related Receivables Purchase Agreement
Supplements assigned to the Issuer pursuant to the Sale and Servicing Agreement
and the related Transfer Agreement or Transfer Agreements); (l) one share of
the Class SV Preferred Stock of the Seller together with the exclusive
right to vote such share; and (m) all present and future (i) claims,
demands, causes and choses in action in respect of any or all of the foregoing,
and (ii) payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing, including all proceeds
of the conversion thereof, whether voluntary or involuntary, into cash or other
liquid property, cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, investment property, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every
kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing (collectively, the “Series Trust
Estate”).


 


The foregoing Grant is
made in trust to the Indenture Trustee for the benefit of the Secured Parties. The
Indenture Trustee hereby acknowledges such Grant, accepts the trust under the
Indenture and this Series Supplement in accordance with the provisions of
the Indenture and this Series Supplement and agrees to perform its
duties required in the Indenture and in this Series Supplement in
accordance with the provisions hereof and of the Indenture to the best of its
ability to the end that the interests of such parties, recognizing the
priorities of their respective interests, may be adequately and
effectively protected.


 


2

















 


SECTION 1.03.      Payments
and Computations.


 


All amounts to be paid or
deposited by any Person hereunder shall be paid or deposited in accordance with
the terms hereof no later than 12:00 noon (New York City time) on the day when
due in immediately available funds. Notwithstanding the foregoing, any amounts
required to be paid by the Indenture Trustee or the Administrator hereunder
shall be paid in accordance with the terms hereof no later than 3:00 p.m.
(New York City time) on the day when due, in immediately available funds.


 


SECTION 1.04.      Denominations.


 


The Notes of each Class shall
be issued in denominations of $100,000 and integral multiples of $1,000 in
excess thereof, except that one Note of each Class may be issued in a
denomination other than an integral multiple of $1,000.


 


ARTICLE II

DEFINITIONS


 


SECTION 2.01.      Definitions.


 


(a)           Whenever
used in this Series Supplement and when used in the Related Documents, the
following words and phrases shall have the following meanings, and the
definitions of such terms 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. Unless otherwise defined in this Series Supplement,
terms defined in the Basic Documents are used herein as therein defined. References
to sections, unless otherwise indicated, are to sections of this Series Supplement.
References to any Basic Document, or to any other agreement, document or other
record defined herein, shall mean such Basic Document or other record as from
time to time amended or supplemented.


 


“Aggregate Note Principal
Balance” means, (i) with respect to all of the Notes, as of any date, the
aggregate outstanding principal amount of all of the Notes on such date and (ii) with
respect to any Class of the Notes, as of any date, the aggregate
outstanding principal amount of all of the Notes of such Class on such
date.


 


“Aggregate Optimal Note
Principal Balance” means, with respect to any Distribution Date, the product of
(x) [    ]% and (y) the Pool Balance as of the
close of business on the last day of the prior Collection Period.


 


“Available Funds” means,
with respect to any Distribution Date and the related Collection Period, the
sum of (i) the Collections for such Collection Period, (ii) investment
earnings realized on the Collection Account and the Reserve Account during such
Collection Period, (iii) all Repurchase Amounts deposited in the
Collection Account during such Collection Period and (iv) all proceeds of
any liquidation, in whole or in part, of the assets of the Trust.


 


“Basic Documents” means
this Series Supplement, the Sale and Servicing Agreement, the Certificate
of Trust, the Trust Agreement, the Indenture, the Control Agreement, the Master
Receivables Purchase Agreements, [the Insurance Agreement, the Indemnification


 


3

















 


Agreement,] each
Transfer Agreement related to the Owner Trust Estate and all other documents
and certificates delivered therewith or pursuant thereto in connection with the
Notes or the Certificates.


 


“Business Day” means a
day other than a Saturday, a Sunday or other day on which commercial banks
located in the states of Illinois or New York are authorized or obligated by
law to be closed.


 


“Certificate of Trust”
shall mean the Certificate of Trust filed for the Trust.


 


“Certificateholders”
means the holders of the Certificates.


 


“Class A Interest
Carryover Shortfall” means, with respect to any Distribution Date and each class of
Class A Notes, the sum of:  (i) the
excess of (a) the related Class A Interest Distributable Amount for
the preceding Distribution Date, over (b) the amount actually paid as
interest to the Class A Noteholders on such preceding Distribution Date
(under the Indenture [or the Note Policy]), plus (ii) interest
on such excess, to the extent permitted by law, at a rate per annum equal to
the related Note Rate with respect to the Class A Notes from such
preceding Distribution Date to but excluding the current Distribution Date.


 


“Class A Interest
Distributable Amount” means, with respect to any Distribution Date and each class of
Class A Notes, an amount equal to the sum of:  (i) the aggregate amount of interest
accrued on the Class A Notes at the related Note Rate from and including
the preceding Distribution Date (or, in the case of the initial Distribution
Date, from and including the Closing Date) to but excluding the current
Distribution Date plus (ii) the related Class A
Interest Carryover Shortfall for the current Distribution Date.


 


“Class A Noteholders”
means the Holders of the Class A Notes.


 


“Class A Additional
Principal Distributable Amount” means, with respect to a Distribution Date, the
positive excess, if any, of (i) the Aggregate Note Principal Balance after
giving effect to distribution of the Class A Minimum Principal
Distributable Amount on such Distribution Date pursuant to Section 3.03(a)(v) over
(ii) the Aggregate Optimal Note Principal Balance for such Distribution
Date.


 


“Class A Minimum
Principal Distributable Amount” means, with respect to any Distribution Date,
the greatest of (i) the least of (A) the Optimal Principal
Distributable Amount for such Distribution Date, (B) the excess of the
aggregate of the Principal Balances of the Receivables as of the last day of
the second preceding Collection Period, over the aggregate of the Principal
Balances of the Receivables as of the last day of the immediately preceding
Collection Period, and (C) the Aggregate Note Principal Balance, (ii) on
the Scheduled Maturity Date for any Class of the Notes, the amount
necessary to reduce the Aggregate Note Principal Balance of such Class to
zero, and (iii) the positive excess, if any, of the Aggregate Note
Principal Balance prior to making any distribution on such Distribution Date
over the Pool Balance as of the last day of the preceding Collection Period.


 


“Class A-1 Noteholders”
means the Holders of the Class A-1 Notes.


 


4

















 


“Class A-1 Scheduled
Maturity Date” means [        , 200 ].


 


“Class A-2
Noteholders” means the Holders of the Class A-2 Notes.


 


“Class A-2 Scheduled
Maturity Date” means [        , 200 ].


 


“Class A-3
Noteholders” means the Holders of the Class A-3 Notes.


 


“Class A-3 Scheduled
Maturity Date” means [        , 200 ].


 


“Class A-4
Noteholders” means the Holders of the Class A-4 Notes.


 


“Class A-4 Scheduled
Maturity Date” means [        , 200 ].


 


“Closing Date” means [        ,
200 ].


 


“Collection Account”
means the Eligible Account created pursuant to Section 3.01, which shall
be account no. [        ]
reference HSBC Auto [200 - ] Collection Account at the Administrator,
ABA No. [        ].


 


“Collections” has the
meaning assigned to such term in the Sale and Servicing Agreement.


 


“Control Agreement” means
the deposit account control agreement dated as of [        ,
200 ] among the Issuer, the Indenture Trustee, [               ]
and the Administrator.


 


“Controlling Party” means
[the Insurer, so long as no Insurer Default shall have occurred and be
continuing and] the Indenture Trustee for the benefit of and acting solely at
the direction of the Holders of a majority of the Outstanding Amount of the
Notes[, in the event an Insurer Default shall have occurred and be continuing].


 


“Corporate Trust Office”
means, (i) with respect to the Owner Trustee, the office of the Owner
Trustee, which at the time of execution of this Series Supplement is
[Address], Attention: [          ],
(ii) with respect to the Indenture Trustee, the corporate trust office of
the Indenture Trustee, which at the time of execution of this Series Supplement
is [Address] and (iii) with respect to the Administrator, the corporate
trust office of the Administrator, which at the time of execution of this Series Supplement
is [                 ].


 


“Cut-off Date” means,
with respect to the Receivables transferred and assigned to the Issuer on the
Closing Date, the close of business on [        ,
200 ].


 


“Definitive Notes” means
the Notes that have been certificated and fully registered in accordance with Section 2.12
of the Indenture.


 


“Determination Date” has
the meaning assigned to such term in the Sale and Servicing Agreement.


 


5

















 


“Distribution Date”
means, with respect to each Collection Period, the seventeenth day of the
calendar month next commencing after the last day of such Collection Period, or
if such day is not a Business Day, the immediately following Business Day,
commencing in [         200 ].


 


“Eligibility Criteria”
means the criteria for eligibility for Eligible Receivables set forth on Schedule I
hereto.


 


“Eligible Investments”
means, with respect to funds in the Collection Account and Reserve Account, “Eligible
Investments” as defined in the Sale and Servicing Agreement, except that (i) all
references in such definition to “rating satisfactory to the Rating Agency” or
words of similar import shall mean ratings of not less than “A-1+” or “AAA” by
Standard & Poor’s, “P-1” or “Aaa” by Moody’s Investors Service, “F1”
or “AAA” by Fitch, Inc., or the equivalent such ratings by another Rating
Agency (whichever is applicable), and (ii) unless otherwise agreed in
writing by the Rating Agencies [and the Insurer], all such investments shall
have maturities at the time of the acquisition thereof occurring no later than
the Business Day immediately preceding the Distribution Date following such
date of acquisition.


 


“Eligible Receivable”
means a Receivable that satisfies the Eligibility Criteria.


 


“Eligible Substitute
Receivable” means a Receivable substituted by the Servicer or HAFI pursuant to Section 5.02,
which on the date of such substitution must:


 


(i) have a
Principal Balance not substantially greater or less than the Principal Balance
of such elected substituted Receivable; 


 


(ii) have a
current Annual Percentage Rate of not less than the Annual Percentage Rate of
such elected substituted Receivable and not substantially greater than the
Annual Percentage Rate of such elected substituted Receivable; 


 


(iii) have a (A) remaining
term to maturity not more than six months earlier or later than the remaining
term to maturity of such elected substituted Receivable and (B) maturity
date not later than the last day of the Collection Period immediately preceding
the month in which the Final Scheduled Distribution Date occurs; 


 


(iv) satisfy
the Eligibility Criteria, to the extent such criteria do not pertain exclusively
to the Receivables transferred on the Closing Date; and


 


(v) be the
obligation of an Obligor whose credit profile is substantially similar to that
of the Obligor under the elected substituted Receivable;


 


provided, however,
that notwithstanding (i) through (v) above, an auto loan may qualify
as an Eligible Substitute Receivable if each of the Rating Agencies confirms
such substitution.


 


“Event of Default” shall
have the meaning assigned to such term in Section 4.01.


 


“Final Scheduled
Distribution Date” means [        , 200 ].


 


6

















 


“HACI” means HSBC Auto
Credit Inc., a Delaware corporation.


 


“HAFI” means HSBC Auto
Finance Inc., a Delaware corporation.


 


“HSBC Finance” means HSBC
Finance Corporation, a Delaware corporation.


 


[“Indemnification
Agreement” means the indemnification agreement dated as of           ,
200 , among the Insurer and the Underwriter.]


 


“Indenture” means the
indenture dated as of [        , 200 ]
among the Issuer, the Indenture Trustee and the Administrator, as supplemented
by this Series Supplement.


 


“Initial Reserve Account
Deposit” means [  ]% of the Pool Balance as of the Cut-off Date.


 


[Insurance Agreement”
means the Insurance and Indemnity Agreement, dated as of           ,
200 , among the Insurer, the Issuer, the Servicer, HAFI, HACI, the Seller
and the Indenture Trustee.]


 


[“Insured Principal
Balance Shortfall” shall mean, with respect to a Distribution Date, the
positive excess, if any, of the Aggregate Note Principal Balance with respect
to the Class A Notes (after giving effect to the distribution of the Class A
Minimum Principal Distributable Amount pursuant to Section 3.03(a)(v) on
such Distribution Date and after making any distribution pursuant to Section 3.03(b) on
such Distribution Date) over the Pool Balance as of the close of business on
the last day of the preceding Collection Period.]


 


[“Insurer” means
[Insurer], a           , or
any successor thereto, as issuer of the Note Policy. The Insurer shall be the
Support Provider for the Series 200    Notes.]


 


[“Insurer Default” means
the occurrence and continuance of any of the following events:


 


(a)           the
Insurer shall have failed to make a payment required under the Note Policy in
accordance with its terms;


 


(b)           the
Insurer shall have (i) filed a petition or commenced any case or
proceeding under any provision or chapter of the United States Bankruptcy Code
or any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (ii) made a general
assignment for the benefit of its creditors, or (iii) had an order for
relief entered against it under the United States Bankruptcy Code or any other
similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization which is final and nonappealable;
or


 


(c)           a
court of competent jurisdiction, the New York Department of Insurance or other
competent regulatory authority shall have entered a final and nonappealable
order, judgment or decree (i) appointing a custodian, trustee, agent or
receiver for the Insurer or for all or any material portion of its property or
(ii)


 


7

















 


authorizing the
taking of possession by a custodian, trustee, agent or receiver of the Insurer
(or the taking of possession of all or any material portion of the property of
the Insurer).]


 


“Interest Period” means,
with respect to any Distribution Date, the period from and including the prior
Distribution Date (or, in the case of the first Interest Period, from and
including the Closing Date) through (and including) the day preceding such
Distribution Date.


 


“Master Receivables
Purchase Agreements” means, collectively, (i) the Master Receivables
Purchase Agreement dated as of [        ,
200 ], between HAFI and the Seller, as such agreement may be amended
or supplemented from time to time, and (ii) the Master Receivables
Purchase Agreement dated as of [        ,
200 ], between HACI and the Seller, as such agreement may be amended
or supplemented from time to time.


 


“Note Rate” means the per
annum rate of interest due with respect to each Class of Notes as set
forth below for the respective Class of Notes:


 


[Class A-1 Notes]:  [       ]%


[Class A-2 Notes]:  [       ]%


[Class A-3 Notes]:  [       ]%


[Class A-4 Notes]:  [       ]%


 


Interest on the [Class A-1
Notes] will be calculated on the basis of a 360-day year and the actual number
of days elapsed in an applicable Interest Period. Interest on the [Class A-2],
[Class A-3] and [Class A-4 Notes] will be calculated on the basis of
a 360-day year consisting of twelve 30-day months. 


 


“Notes” or “[Class A
Notes]” means, collectively, the [Class A-1 Notes], the [Class A-2
Notes], the [Class A-3 Notes] and the [Class A-4 Notes].


 


“Optimal Principal
Distributable Amount” means, with respect to any Distribution Date, the excess,
if any, of (i) the Aggregate Note Principal Balance immediately prior to
such Distribution Date over (ii) the Aggregate Optimal Note Principal
Balance for such Distribution Date.


 


“Original Pool Balance”
means the aggregate of the Principal Balances of the Receivables as of the
Cut-off Date.


 


“Overcollaterization
Amount” means, as of any date of determination, the positive excess, if any, of
the Pool Balance over the Aggregate Note Principal Balance.


 


“Owner Trust Estate” has
the meaning assigned to such term in the Trust Agreement.


 


“Owner Trustee” means
[Owner Trustee], not in its individual capacity but solely as trustee under the
Trust Agreement, its successors-in-interest or any successor Owner Trustee
under the Trust Agreement.


 


8

















 


“Pledge” means the Grant
by the Issuer hereunder to the Indenture Trustee for the benefit of the Secured
Parties in accordance with Section 1.02 in and to the Series Trust
Estate.


 


“Pool Balance” means, as
of any date of determination, the aggregate of the outstanding Principal
Balances of the Receivables, unless otherwise specified, as of the close of
business on the preceding Business Day.


 


[“Premium” has the
meaning specified in the Insurance Agreement.]


 


“Principal Balance
Shortfall” means, (i) with respect to a Distribution Date, the positive
excess, if any, of the Aggregate Note Principal Balance (after giving effect to
the distribution pursuant to Section 3.03(a)(v) on such Distribution
Date and prior to making any distribution pursuant to Section 3.03(b) on
such Distribution Date) over the Pool Balance as of the close of business on
the last day of the preceding Collection Period and (ii) with respect to
the Scheduled Maturity Date for any Class of the Notes, the outstanding
principal balance of such Class of the Notes (after giving effect to the
distribution pursuant to Section 3.03(a)(v)).


 


“Rating Agencies” means
Standard & Poor’s, Moody’s Investors Service and Fitch, Inc. If
any such organization or a successor does not maintain a rating on the Notes, “Rating
Agency” shall be a nationally recognized statistical rating organization or
other comparable Person designated by the Seller, notice of which designation
shall be given to the Administrator, the Indenture Trustee, the Owner Trustee
and the Servicer.


 


“Rating Agency Condition”
means, with respect to any action, written confirmation from each Rating Agency
rating the Notes that such action will not result in a reduction or withdrawal
of its then current rating of the Notes [(without consideration of the Notes
Policy)].


 


“Receivables” means each
receivable listed on the Schedule of Receivables, which (a) has not
been released from the Series Trust Estate as provided herein or in the
Indenture and (b) is not a Liquidated Receivable.


 


“Redemption Price” has
the meaning specified in Section 5.01.


 


“Related Documents” means
the Basic Documents and the Revolving Credit Agreement.


 


“Reserve Account” means
the Reserve Account, which shall be an Eligible Account created pursuant to Section 3.01
and which shall be account no. [      ],
reference HSBC Auto [200 - ] Reserve Account at the Administrator,
ABA No. [      ].


 


“Reserve Account Balance”
means, with respect to a Distribution Date, the amount on deposit in the
Reserve Account as of the close of business on the Business Day immediately
preceding such Distribution Date; provided, however, that such
determination shall be made immediately after the deposit to the Collection
Account effected pursuant to Section 5.1(c) of the Sale and Servicing
Agreement.


 


9

















 


“Reserve Account
Shortfall Amount” means, with respect to any Distribution Date, the excess
of:  (x) the Targeted Reserve Account
Balance for such Distribution Date over (y) the Reserve Account Balance for
such Distribution Date.


 


“Revolving Credit
Agreement” means the Revolving Credit Agreement, dated as of March 1,
1998, between HSBC Finance Corporation and the Seller.


 


“Sale and Servicing
Agreement” means the Sale and Servicing Agreement dated as of [        ,
200 ], among the Issuer, the Seller, the Servicer, the Indenture Trustee
and the Administrator, as such agreement may be amended or supplemented
from time to time.


 


“Scheduled Maturity Date”
means, with respect to the Class A-1 Notes, the Class A-1 Scheduled
Maturity Date, with respect to the Class A-2 Notes, the Class A-2
Scheduled Maturity Date, with respect to the Class A-3 Notes, the Class A-3
Scheduled Maturity Date and, with respect to the Class A-4 Notes, the Class A-4
Scheduled Maturity Date.


 


“Schedule of
Receivables” means, as to any date, the schedule of all retail installment
sales contracts held as part of the Series Trust Estate on such date.
The initial Schedule of Receivables is attached hereto as Schedule II.
The Schedule of Receivables will be amended from time to time to reflect
the removal of Receivables and the addition of any Eligible Substitute
Receivables to the Series Trust Estate.


 


“Secured Parties” means,
collectively, the Holders from time to time of the Notes [and the Insurer].


 


“Securities” means the
Notes and the Certificates.


 


“Series Supplement”
means this Series Supplement to the Indenture, Sale and Servicing
Agreement and the Trust Agreement.


 


“Series Support”
means, with respect to the Notes, the Certificates and the Reserve Account [and
the Note Policy].


 


“Series Trust Estate”
means the property Granted to the Indenture Trustee pursuant to Section 1.02.


 


“Servicer’s Certificate”
means, with respect to the Notes and Certificates, a report in substantially
the form of Exhibit A hereto (appropriately completed),
furnished by the Servicer to the Administrator, the Indenture Trustee and the
Owner Trustee pursuant to the Sale and Servicing Agreement. 


 


“Servicing Fee” means, (i) with
respect to the initial Collection Period, the fee payable to the Servicer for servicing rendered during
such Collection Period, which shall be equal to [$        ],
and (ii) with respect to any other Collection Period, the fee
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the
Aggregate Principal Balances of the Receivables determined as of the first day
of such Collection Period. For the avoidance of doubt, the


 


10

















 


Servicing Fee does
not include any administrative fees, expenses or charges paid by or on behalf
of Obligors during any Collection Period.


 


“Servicing Fee Rate”
means [    ]% per annum.


 


“Substitution Adjustment Amount” means, as to any Receivable for which
the Servicer elects to substitute pursuant to Section 5.02(a) and the
date on which a substitution thereof occurs pursuant to Section 5.02, the
sum of:


 


(i) the
excess, if any, of (a) the Principal Balance of such elected Receivable plus any amounts charged off by the Servicer with respect to
such elected Receivable as of the end of the related Collection Period
preceding the date of substitution (after the application of any principal
payments received on such elected Receivable on or before the date of the
substitution of the applicable Eligible Substitute Receivable or Receivables)
over (b) the aggregate Principal Balance of the applicable Eligible
Substitute Receivable or Receivables, plus


 


(ii) accrued and
unpaid interest to the end of such Collection Period computed on a daily basis
at the Annual Percentage Rate on the Principal Balance of such elected
Receivable outstanding from time to time.


 


[“Swap Agreement” means
the ISDA Master Agreement dated as of         ,
20   between the Issuer and the Swap Provider, including the Schedule thereto,
the Credit Support Annex thereto and the Confirmations relating to the Class A- 
Notes, and together with any replacement swap agreement thereafter approved by
the Controlling Party; provided, that no additional swap agreement shall
be a “Swap Agreement” for any Class under the Basic Documents for so long
as the Swap Agreement relating to such Class is outstanding without the
prior written consent of the Swap Provider.]


 


[“Swap Provider” means
[Swap Provider], together with any replacement Swap Provider thereafter
approved by the Controlling Party.]


 


[“Swap Termination
Payment” means payments due to the Swap Provider by the Issuer, including
interest that may accrue thereon, under each Swap Agreement due to a
termination of such Swap Agreement as a result of the occurrence of an “event
of default” or a “termination event” under such Swap Agreement.]


 


“Targeted Reserve Account
Balance” means, with respect to any Distribution Date, the lesser of: (i) the
greater of (a) [   ]% of the outstanding Pool Balance as of
the end of the related Collection Period, and (b) [$       
(   %] of the Pool Balance as of the Cut-off Date) and (ii) the
Aggregate Note Principal Balance.


 


“Trust Accounts” means
the Collection Account and the Reserve Account.


 


“Trust Agreement” means
the Trust Agreement, dated as of [        ,
200 ], between the Seller and the Owner Trustee, as amended and restated
as of [        , 200 ] and as
supplemented by this Series Supplement.


 


11

















 


“Underwriter” means [               ],
as representative of the underwriters named in the Underwriting Agreement.


 


ARTICLE III

DISTRIBUTIONS AND STATEMENTS TO

NOTEHOLDERS; SERIES SPECIFIC COVENANTS


 


SECTION 3.01.      Trust
Accounts.


 


(a)           The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Collection Account”) as a segregated trust
account in the Administrator’s corporate trust department, identified as the “Collection
Account for HSBC Automotive Trust [200 - ], in trust for the Secured
Parties.”  The Administrator shall make
or permit withdrawals from the Collection Account only as provided in this Series Supplement.


 


(b)           The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Reserve Account”) as a segregated trust
account in the Administrator’s corporate trust department, identified as the “Reserve
Account for HSBC Automotive Trust [200 - ], in trust for the Secured
Parties.”  The Administrator shall make
or permit withdrawals from the Reserve Account only as provided in this Series Supplement.
On the Closing Date, the Reserve Account will be funded with the Initial
Reserve Account Deposit.


 


(c)           In
the event that any Trust Account ceases to be an Eligible Account, the
Administrator, within five Business Days, shall establish such Trust Account as
a new account which is an Eligible Account. No withdrawals may be made of
funds in any Trust Account except as provided in this Series Supplement. Except
as specifically provided in this Series Supplement, funds in the Trust
Accounts shall not be commingled with any other moneys. All moneys deposited
from time to time in each of the Trust Accounts shall be invested and
reinvested by the Administrator in Eligible Investments selected in writing by
the Servicer (pursuant to standing instructions or otherwise) which, absent any
instruction, shall be investments of the type specified in clause (d) of
the definition of Eligible Investments. The provisions of Section 5.1 of
the Sale and Servicing Agreement shall apply to the investment of funds in the
Trust Accounts.


 


SECTION 3.02.      Reserve
Account.


 


On the earlier of (x) the
maturity date of the Notes (whether by acceleration or otherwise), and (y) the
Final Scheduled Distribution Date, the amount on deposit in the Reserve Account
shall be withdrawn from the Reserve Account and distributed in accordance with Section 4.04.


 


SECTION 3.03.      Distributions.


 


(a)           On
each Distribution Date, the Administrator shall (based solely on the
information contained in the Servicer’s Certificate delivered with respect to
such Distribution Date) distribute the following amounts from and, to the
extent of, Available Funds with respect to the Collection Period immediately
preceding such Distribution Date, in the following order of priority:


 


12

















 


(i)            [to the
Swap Provider, net payments, if any, and Swap Termination Payments (so long as
the Swap Provider is not the defaulting party or the sole affected party under
the Swap Agreement with respect to such Swap Termination Payments), if any, due
to it under the Swap Agreement;]


 


(ii)           to the
Servicer, if HSBC Finance is no longer acting as Servicer, the Servicing Fee
for the related Collection Period;


 


(iii)          to
the Indenture Trustee, the Administrator[, the Delaware Trustee] and the Owner
Trustee, any accrued and unpaid fees and any unreimbursed costs and expenses
(including to any successor Servicer, reasonable transition expenses in an
amount not to exceed $[      ] per servicing
transfer), in each case, to the extent such fees have not been previously paid
by the Servicer or the Seller;


 


(iv)          to the Class A
Noteholders in proportion to the interest due on each Class of Notes, the Class A
Interest Distributable Amount;


 


(v)           to the Class A
Noteholders, the Class A Minimum Principal Distributable Amount;


 


(vi)          [to the
Insurer, any amounts owing to the Insurer under the Insurance Agreement that
have not yet been paid, including, without limitation, the Premium (as defined
in the Insurance Agreement);]


 


(vii)         to
the Reserve Account, the Reserve Account Shortfall Amount, if any;


 


(viii)        to
the Class A Noteholders, the Class A Additional Principal
Distributable Amount;


 


(ix)           to the
Indenture Trustee, the Administrator[, the Delaware Trustee] and the Owner
Trustee, any accrued and unpaid indemnity amounts, in each case, to the extent
such amounts have not been previously paid by the Servicer or the Seller;


 


(x)            if HSBC
Finance is acting as the Servicer, the Servicing Fee for the related Collection
Period (unless the Servicer has retained such amount in accordance with Section 4.8
of the Sale and Servicing Agreement) or if a successor Servicer has been
appointed, reasonable transition expenses in excess of the amounts paid in
priority (i) above; 


 


(xi)           [to the
Swap Provider, any Swap Termination Payments to the extent not already paid
pursuant to priority (i) above;] and


 


(xii)          to
the holders of the Certificates, any remaining Available Funds.


 


Amounts to be distributed
in reduction of the outstanding principal balance of the Class A Notes
pursuant to Section 3.03(a)(v) or (viii) or Section 3.03(b) shall
be distributed in reduction of the


 


13

















 


outstanding principal
balance of the Class A-1 Notes until the principal balance of the Class A-1
Notes is reduced to zero; thereafter such amount shall be distributed in
reduction of the outstanding principal balance of the Class A-2 Notes
until the principal balance of the Class A-2 Notes is reduced to zero;
thereafter such amount shall be distributed in reduction of the outstanding
principal balance of the Class A-3 Notes until the principal balance of
the Class A-3 Notes is reduced to zero; and thereafter such amount shall
be distributed in reduction of the outstanding principal balance of the Class A-4
Notes until the principal balance of the Class A-4 Notes is reduced to
zero.


 


(b)           If
on a Determination Date, the Servicer’s Certificate delivered with respect to
the related Distribution Date indicates that (i) the amount of Available
Funds with respect to such Distribution Date is not sufficient, when
distributed in accordance with Section 3.03(a), to cause the amounts
specified in Section 3.03(a)(i), (ii), (iii) and (iv) with
respect to such Distribution Date to be paid in full; or (ii) if after
giving effect to the distribution of Available Funds pursuant to Section 3.03(a)(v) on
a Distribution Date there exists a Principal Balance Shortfall, the
Administrator shall withdraw from the Reserve Account and distribute as follows
an amount up to the amount which when distributed, first in
accordance with Section 3.03(a)(i), (ii), (iii) and (iv); and second, in reduction of the outstanding principal balance of
the Class A Notes, but only to the extent necessary to eliminate the
Principal Balance Shortfall, shall cause the amounts specified in Section 3.03(a)(i),
(ii), (iii) and (iv) to be paid in full and such Principal Balance
Shortfall to be eliminated.


 


(c)           [If
on a Determination Date, the Servicer’s Certificate delivered with respect to
the related Distribution Date indicates that (i) the amount of Available
Funds with respect to such Distribution Date together with amounts to be
distributed pursuant to Section 3.03(b) is less than the sum of the
amounts required to be distributed pursuant to clauses (i) through (iv) of
paragraph (a) above on such Distribution Date or (ii) there exists an
Insured Principal Balance Shortfall on such Distribution Date, the Indenture
Trustee shall present a notice for payment to the Insurer pursuant to the terms
of the Note Policy to (A) in the case of (i), ensure timely payment in
full on such Distribution Date of the Class A Interest Distributable
Amount for such Distribution Date and (B) in the case of (ii), reduce the
outstanding principal balance of the Class A Notes on such Distribution
Date to the extent necessary to eliminate the Insured Principal Balance
Shortfall for such Distribution Date. If on the Determination Date immediately
preceding a Scheduled Maturity Date, the Servicer’s Certificate delivered with
respect to such Scheduled Maturity Date indicates that Available Funds with
respect to such Distribution Date when distributed in accordance with Section 3.03(a),
together with amounts to be distributed pursuant to Section 3.03(b) are
insufficient to (A) pay the outstanding principal balance of the Class A-1
Notes on the Class A-1 Scheduled Maturity Date, (B) pay the
outstanding principal balance of the Class A-2 Notes on the Class A-2
Scheduled Maturity Date, (C) pay the outstanding principal balance of the Class A-3
Notes on the Class A-3 Scheduled Maturity Date or (D) pay the
outstanding principal balance of the Class A-4 Notes on the Class A-4
Scheduled Maturity Date, the Indenture Trustee shall present a notice for
payment to the Insurer pursuant to the terms of the Note Policy to ensure timely
payment in full of all principal with respect to (A) the Class A-1
Notes on the Class A-1 Scheduled Maturity Date, (B) the Class A-2
Notes on the Class A-2 Scheduled Maturity Date, (C) the Class A-3
Notes on the Class A-3 Scheduled Maturity Date and (D) the Class A-4
Notes on the Class A-4 Scheduled Maturity Date. Amounts paid by the
Insurer to the Indenture Trustee pursuant to a notice for payment


 


14

















 


submitted under this paragraph shall be paid by the
Indenture Trustee to the Noteholders on the related Distribution Date. The
Indenture Trustee shall enforce on behalf of the Noteholders the obligations of
the Insurer under the Note Policy. Notwithstanding any other provision of this Series Supplement
or any other Basic Document, the Noteholders are not entitled to institute
proceedings directly against the Insurer.]


 


(d)           [If
the Indenture Trustee has received an Order (as defined in the Note Policy)
that any amount guaranteed by the Note Policy paid on the Notes has been
avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Insurer, shall comply
with the provisions of the Note Policy to obtain payment by the Insurer of such
avoided payment, and shall, at the time it provides notice to the Insurer,
notify the Noteholders by mail that, in the event that any Noteholder’s payment
is so recoverable, such Noteholder will be entitled to payment pursuant to the
terms of the Note Policy. Pursuant to the terms of the Note Policy and in
accordance with the Order (as defined in the Note Policy), the Insurer will
make such payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order (as defined in
the Note Policy) and not to the Indenture Trustee or any Noteholder directly
(unless a Noteholder has previously paid such payment to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy, in which case the
Insurer will make such payment to the Indenture Trustee for distribution to
such Noteholder upon proof of such payment reasonably satisfactory to the
Insurer).]


 


(e)           Each
Certificateholder, by its acceptance of its Certificate will be deemed to have
consented to the provisions of paragraph (a) above relating to the
priority of distributions, and will be further deemed to have acknowledged that
no property rights in any amount or the proceeds of any such amount shall vest
in such Certificateholder until such amounts have been distributed to such
Certificateholder in accordance with the terms of the Trust Agreement and this Series Supplement;
provided, that the foregoing shall not restrict the right of any
Certificateholder, upon compliance with the provisions hereof, from seeking to
compel the performance of the provisions hereof by the parties hereto. Each
Certificateholder, by acceptance of its Certificate, further specifically
acknowledges that it has no right to or interest in any monies at any time held
in the Reserve Account, such monies being held in trust for the benefit of the
Secured Parties.


 


(f)            Amounts
on deposit in the Reserve Account on any Distribution Date (after giving effect
to all distributions made on such Distribution Date) in excess of the Targeted
Reserve Account Balance for such Distribution Date shall be released first, to
the Servicer for any Servicing Fees then due and unpaid pursuant to Section 3.03(a)(x),
and any remainder shall be paid to the holders of the Certificates.


 


(g)           In
the event that the Reserve Account is maintained with an institution other than
the Administrator, the Servicer shall instruct and cause such institution to
transfer the amounts to be distributed therefrom in accordance with Section 3.03(b) to
the Administrator for distribution pursuant to Section 3.03(a) one
Business Day prior to the related Distribution Date.


 


(h)           Unless
Definitive Notes are issued pursuant to Section 2.12 of the Indenture,
with respect to Notes registered on the related Record Date in the name of a nominee


 


15

















 


of the Clearing Agency, payment will be made by wire
transfer to an account designated by such nominee, without presentation or
surrender of the Notes or the making of any notation thereon.


 


(i)            If
not theretofore paid in full, all amounts outstanding with respect to the Class A-1
Notes shall be due and payable on the Class A-1 Scheduled Maturity Date;
if not theretofore paid in full, all amounts outstanding with respect to the Class A-2
Notes shall be due and payable on the Class A-2 Scheduled Maturity Date;
if not theretofore paid in full, all amounts outstanding with respect to the Class A-3
Notes shall be due and payable on the Class A-3 Scheduled Maturity Date;
and if not theretofore paid in full, all amounts outstanding with respect to
the Class A-4 Notes shall be due and payable on the Class A-4
Scheduled Maturity Date.


 


SECTION 3.04.      Statements
to Noteholders.


 


(a)           On
or prior to each Determination Date, the Servicer shall deliver, and cause to
be delivered via access to its or its Affiliate’s website address, to the
Indenture Trustee and the Administrator (with a copy to the Rating Agencies)
with an instruction for the Administrator to forward to each Noteholder of
record, and to each Certificateholder of record, a statement setting forth at
least the following information as to the Notes to the extent applicable:


 


(i)            the
amount of such distribution allocable to interest on or with respect to each Class of
Notes;


 


(ii)           the amount
of such distribution allocable to principal of each Class of Notes;


 


(iii)          the
aggregate outstanding principal amount of each Class of the Notes after
giving effect to payments allocated to principal reported under (ii) above;


 


(iv)          the current
Note Rate applicable to each Class of Notes;


 


(v)           the Class A
Interest Carryover Shortfall, if any, with respect to each Class of Notes;


 


(vi)          the Pool
Balance at the beginning of the related Collection Period;


 


(vii)         the
Pool Balance at the end of the related Collection Period;


 


(viii)        the
amount of Collections for the related Collection Period;


 


(ix)           the amount
of Collections allocable to principal payments on the Receivables for the
related Collection Period;


 


(x)            the Net
Liquidation Proceeds for such Collection Period;


 


(xi)           the
principal amount of Receivables which were repurchased during the related
Collection Period;


 


16

















 


(xii)          the
Substitution Adjustment Amount for the related Collection Period;


 


(xiii)         the
weighted average coupon of the Receivables;


 


(xiv)        the
weighted average remaining maturity of the Receivables;


 


(xv)         the
Collection Account and Reserve Account investment income for the related
Collection Period;


 


(xvi)        the
beginning Reserve Account Balance;


 


(xvii)       the
Targeted Reserve Account Balance;


 


(xviii)      the
Reserve Account Shortfall Amount, if any, for such Distribution Date;


 


(xix)         the
Reserve Account deposit, if any, for such Distribution Date;


 


(xx)          the release
from the Reserve Account pursuant to Section [3.03(f)], if any, for such
Distribution Date;


 


(xxi)         the
ending Reserve Account Balance;


 


(xxii)        the
Overcollateralization Amount prior to payments allocated to principal under
(ii) above;


 


(xxiii)       the
Overcollateralization Amount after giving effect to payments allocated to
principal under (ii) above;


 


(xxiv)       the
amount of the Servicing Fee paid to the Servicer with respect to the related
Collection Period;


 


(xxv)        [the
amount received from the Swap Provider under the Swap Agreement, including net
Swap Payments and Swap Termination Payments, if any];


 


(xxvi)       [the
amount received from the Insurer under the Insurance Agreement, if any];


 


(xxvii)      [the
amount paid to the Swap Provider under the Swap Agreement, including net Swap
Payments and Swap Termination Payments, if any];


 


(xxviii)     
[the amount paid to the Insurer under the Insurance Agreement, including
premiums];


 


(xxix)       the
Principal Balance and percentage of the Pool Balance of Receivables that are
one payment delinquent;


 


17

















 


(xxx)        the
Principal Balance and percentage of the Pool Balance of Receivables that are
two payments delinquent;


 


(xxxi)       the
Principal Balance and percentage of the Pool Balance of Receivables that are
three or more payments delinquent;


 


(xxxii)      the
Principal Balance and percentage of the Pool Balance of Receivables that are
two or more payments delinquent;


 


(xxxiii)     
the Principal Balance and percentage of the Pool Balance of repossessed
vehicles;


 


(xxxiv)     
the Principal Balance of Receivables that were extended or modified (and
delinquency reset) during the related Collection Period; and


 


(xxxv)      
the Principal Balance of Receivables that were extended or modified (and
delinquency reset) during the related Collection Period as a percentage of the
Pool Balance at the end of such Collection Period.


 


Each amount set forth
pursuant to paragraphs (i) and (ii) above shall be expressed as a
dollar amount per $1,000 of the initial principal balance of the applicable Class of
Notes.


 


(b)           [The
Administrator may, but is not obligated to, make available to the parties
hereto and to each of the Noteholders, via the Administrator’s internet
website, all information referred to in this Section 3.04 available each
month and, with the consent or at the direction of the Seller, such other
information regarding the Notes and/or the Receivables as the Administrator may have
in its possession, but only with the use of a password provided by the
Administrator.


 


The Administrator’s
internet website, if applicable, shall be specified by the Administrator from
time to time in writing to the parties hereto and the Noteholders. In
connection with providing access to the Administrator’s internet website, the
Administrator may require registration and the acceptance of a disclaimer.
The Administrator shall not be liable for its dissemination of information in
accordance with this Series Supplement.]


 


SECTION 3.05.      Reporting
Requirements.


 


(a)           The
Servicer’s Certificate shall be in the form attached as Exhibit A
hereto.


 


(b)           By
January 31 of each calendar year, commencing January 31, [200 ],
the Servicer on behalf of the Issuer shall prepare and distribute to the
Administrator and the Indenture Trustee a statement containing such information
as is required to be provided by an issuer of indebtedness under the Code and
such other customary information as is necessary to enable the Noteholders to
prepare their tax returns.


 


(c)           If
an Event of Default occurs and is continuing and if it is either known by, or
written notice of the existence thereof has been delivered to, a Responsible
Officer of the


 


18

















 


Administrator or the Indenture Trustee, the
Administrator or the Indenture Trustee, as the case may be, shall mail to
each Noteholder notice of the Default within 30 days after such knowledge or
notice occurs.


 


SECTION 3.06.      Compliance
With Withholding Requirements.


 


Notwithstanding any other
provisions of this Series Supplement or the Indenture to the contrary, the
Administrator and the Indenture Trustee shall comply with all federal
withholding requirements respecting payments (or advances thereof) to the
Noteholders as may be applicable to instruments constituting indebtedness
for federal income tax purposes. Any amounts so withheld shall be treated as
having been paid to the applicable Noteholders for all purposes of the
Indenture. In no event shall the consent of any Noteholder be required for any
such withholding.


 


SECTION 3.07.      Special
Covenants and Acknowledgements.


 


With respect to the
Notes, the Issuer hereby represents and warrants, as of the Closing Date:


 


(i)            Valid
Pledge. It is the intention of the Issuer that the Pledge herein
contemplated hereby constitutes the Grant of a perfected, first priority
security interest in the Series Trust Estate to the Indenture Trustee for
the benefit of the Secured Parties.


 


(ii)           Governmental
Authorization. Other than the filing of the financing statements required
hereunder, no authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Issuer of this Series Supplement,
the Indenture, and each Related Document to which it is a party.


 


SECTION 3.08.      Income
Tax Characterization.


 


For purposes of
federal income, state and local income and franchise and any other income
taxes, the parties to this Series Supplement, and each owner of a
beneficial interest in the Notes by acceptance of such interest, agree to treat
the Notes as indebtedness and hereby instruct the Indenture Trustee to treat
the Notes as indebtedness for federal and state tax reporting purposes.


 


ARTICLE IV

EVENTS OF DEFAULT; REMEDIES


 


SECTION 4.01.      Events
of Default.


 


“Event of Default”,
wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


19

















 


(i)            default
in the payment of any interest on any Note when the same becomes due and
payable, and such default shall continue for a period of five calendar days; or


 


(ii)           default in
the payment of the outstanding principal balance of any Class of Notes on
the related Scheduled Maturity Date, which default shall continue for a period
of five calendar days; or


 


(iii)          the
Aggregate Note Principal Balance on any Distribution Date exceeds the Pool
Balance as of the last day of the prior Collection Period after the application
of all Available Funds and after making any distribution pursuant to Section 3.03(b);
or


 


(iv)          default in
the observance or performance of any covenant or agreement of the Issuer made
in the Related Documents (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section specifically
dealt with), or any representation or warranty of the Issuer made in the
Related Documents or in any certificate or other writing or record delivered
pursuant thereto or in connection therewith proving to have been incorrect in
any material respect as of the time when the same shall have been made and has a
material adverse effect on the Noteholders, and such default shall continue or
not be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 60 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or the
Administrator or to the Issuer and the Indenture Trustee by the Holders of at
least 25% of the Outstanding Amount of the Notes, a written notice specifying
such default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or


 


(v)           the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of the Issuer or any substantial part of the Series Trust
Estate 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 of the Issuer or for any substantial part of the Series Trust
Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and
such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or


 


(vi)          the
commencement by the Issuer 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 the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Series Trust Estate, or the making by the
Issuer of any general assignment for


 


20

















 


the benefit of creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.


 


SECTION 4.02.      Rights
Upon Event of Default.


 


(a)           If
an Event of Default shall have occurred and be continuing, [(i) so long as
no Insurer Default has occurred and is continuing, the Indenture Trustee, if so
instructed by the Insurer shall and (ii) in the event an Insurer Default
shall have occurred and be continuing,] the Indenture Trustee may, or if so
requested in writing by Holders holding Notes representing at least 66-2/3% of
the Outstanding Amount of the Notes shall, declare by written notice to the
Issuer that the Notes have become due and payable, whereupon they shall become,
immediately due and payable at 100% of the outstanding principal balance of the
Notes and accrued interest thereon (together with interest accrued at the
relevant Note Rate on such overdue interest).


 


(b)           At
any time after such declaration of acceleration of maturity has been made and
before a judgment or decree for payment of the money due has been obtained by
the Indenture Trustee, the Controlling Party, by written notice to the Issuer
and the Servicer, may rescind and annul such declaration and its
consequences if:


 


(i)            the
Issuer has paid or deposited with the Indenture Trustee (or the Administrator
on behalf of the Indenture Trustee) a sum sufficient to pay:


 


(A)          all
payments of principal and interest on all Notes and all other amounts that
would then be due hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and


 


(B)           all sums
paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents and counsel; and


 


(ii)           all Events
of Default, other than the nonpayment of the principal of the Notes that has
become due solely by such acceleration, have been cured or waived as provided
in Section 5.9 of the Indenture.


 


No such rescission shall
affect any subsequent default or impair any right consequent thereto.


 


SECTION 4.03.      Remedies.


 


If an Event of Default
shall have occurred and be continuing, [or, if at such time as there are no
Notes Outstanding there remain sums due to the Insurer pursuant to the
Insurance Agreement (a) so long as no Insurer Default has occurred and is
continuing, the Indenture Trustee, if so instructed by the Insurer, subject to Section 11.17
of the Indenture, shall and (b) in the event an Insurer Default shall have
occurred and be continuing,] the Indenture Trustee, subject to Section 11.17
of the Indenture, may exercise any of the remedies specified in Article V
of the Indenture and, in addition, may do one or more of the following:


 


21

















 


(i)            institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under the Indenture with
respect thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;


 


(ii)           institute
Proceedings from time to time for the complete or partial foreclosure of the
Indenture with respect to the Series Trust Estate;


 


(iii)          exercise
any remedies of a secured party under the UCC and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture Trustee
and the Holders of the Notes; and


 


(iv)          sell the Series Trust
Estate or any portion thereof or rights or interest therein, at one or more
public or private sales called and conducted in any manner permitted by law; provided,
however, that the Indenture Trustee may not sell or otherwise
liquidate the Series Trust Estate following an Event of Default unless:


 


(x)            the
proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such Notes
for principal and interest, or


 


(y)           the
Indenture Trustee determines that the Series Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of [the
Insurer (if the Insurer is the Controlling Party) or, if an Insurer Default
shall have occurred and be continuing,] the Holders of 66-2/3% of the
Outstanding Amount of the Notes, or


 


(z)            if the
provisions of neither subparagraph (x) nor subparagraph (y) are satisfied, if
the Indenture Trustee obtains the consent of [or at the direction of the
Insurer (for so long as the Insurer is the Controlling Party), or] the Holders
of 100% of the Outstanding Amount of the Notes[, if the Insurer is not the
Controlling Party].


 


In determining such
sufficiency or insufficiency with respect to clause (y), the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Series Trust Estate for
such purpose. Any reasonable costs and expenses incurred by the Indenture
Trustee in obtaining such opinion shall be costs and expenses of the Indenture
Trustee pursuant to Section 3.03(a)(iii) of this Series Supplement.


 


SECTION 4.04.      Priorities.


 


(a)           On
and after the maturity date of the Notes (by acceleration or otherwise),
including, without limitation, on and after the Final Scheduled Distribution
Date, all Available


 


22

















 


Funds, all amounts on deposit in the Reserve Account
withdrawn in accordance with Section 3.02 and any proceeds of the
liquidation of all or any portion of the Series Trust Estate pursuant to Section 4.03(iv) (which
proceeds the Indenture Trustee shall remit to the Administrator), shall be
applied by the Administrator on the date of distribution in the following order
of priority:


 


FIRST:            [to
the Swap Provider, net payments, if any, and Swap Termination Payments (so long
as the Swap Provider is not the defaulting party or the sole affected party
under the Swap Agreement with respect to such Swap Termination Payments), if
any, due to it under the Swap Agreement;]


 


SECOND:       to
the Servicer, if HSBC Finance is no longer acting as Servicer, the Servicing
Fee for the related Collection Period;


 


THIRD:          to
the Indenture Trustee, the Administrator[, the Delaware Trustee] and the Owner
Trustee, any accrued and unpaid fees and any unreimbursed costs and expenses
(including to any successor Servicer, reasonable transition expenses in an amount
not to exceed $[      ] per servicing transfer),
in each case, to the extent such fees have not been previously paid by the
Servicer or the Seller;


 


FOURTH:      to
Class A Noteholders for amounts due and unpaid on the Class A Notes
for interest, pro  rata, in accordance with the amounts due and
payable on the Class A Notes on the date of distribution for interest
without preference or priority of any kind;


 


FIFTH:           to
the Class A Noteholders for amounts due and unpaid on the Class A
Notes for principal, pro  rata, in accordance with the respective
aggregate outstanding principal balance of each Class of Class A
Notes without preference or priority of any kind;


 


SIXTH:           [to
the Insurer for amounts due and unpaid under the Insurance Agreement pursuant
to priority (vi) of Section 3.03(a);]


 


SEVENTH:     to
the Indenture Trustee, the Administrator[, the Delaware Trustee] and the Owner
Trustee, any accrued and unpaid indemnity amounts, in each case, to the extent
such fees have not been previously paid by the Servicer or the Seller;


 


EIGHTH:        to
the Servicer, if HSBC Finance is acting as Servicer, for any Servicing Fees
then due and unpaid; 


 


NINTH:          [to
the Swap Provider, for Swap Termination Payments due and unpaid pursuant to
priorities (i) and (xi) of Section 3.03(a) and priority FIRST
above;] and


 


TENTH:         to
the Certificateholders, any remaining Available Funds.


 


23

















 


(b)           The
Administrator may fix a record date and distribution date for any payment
to Noteholders pursuant to this Section 4.04. At least 15 days before such
record date, the Administrator shall mail to the Noteholders a notice that
states the record date, the distribution date and the amount to be paid.


 


ARTICLE V

PREPAYMENT, REDEMPTION AND SUBSTITUTION


 


SECTION 5.01.      Optional
“Clean-Up” Redemption.


 


On any Distribution Date
occurring on or after the date upon which the Pool Balance shall have been
reduced to an amount which is less than or equal to 10% of the Original Pool
Balance, the Servicer and HAFI shall each have the option to purchase the
outstanding Receivables at a price equal to the aggregate Repurchase Amount for
such Receivables; provided, however, such aggregate Repurchase
Amount shall not be less than the then Aggregate Note Principal Balance, plus
all accrued and unpaid interest thereon and all fees and other amounts owing to
the Administrator, the Indenture Trustee, the Owner Trustee and the Servicer
(if other than HSBC Finance) under the Related Documents [and the Insurer under
the Insurance Agreement] (the “Redemption Price”). The Servicer or HAFI
shall give the Servicer (if other than HSBC Finance), [the Insurer,] the
Administrator, the Indenture Trustee and the Owner Trustee at least 10 days
irrevocable prior written notice of the date on which the Servicer or HAFI, as
applicable, intends to exercise such option to purchase. Not later than 12:00 P.M.,
New York City time, on the day prior to such Distribution Date, the Servicer or
HAFI, as applicable, shall deposit such amount in the Collection Account in
immediately available funds for distribution pursuant to Section 3.03. Such
purchase option is subject to payment in full of the aggregate Repurchase
Amount described herein.


 


SECTION 5.02.      Optional
Substitution.


 


(a)           At
any time the Servicer and HAFI shall each have the right, in their respective
sole discretion, but not the obligation, to elect (by written notice sent to
the Indenture Trustee and the Owner Trustee) to substitute in the place of any
Receivable an Eligible Substitute Receivable or Receivables; provided that the
aggregate Principal Balance of all Eligible Substitute Receivables substituted
pursuant to this Section shall not exceed 2% of the Pool Balance as of the
initial Cut-off Date; provided further that prior to any such substitution the
Servicer shall give written notice to each Rating Agency of any such
substitution.


 


(b)           For
any Collection Period during which the Servicer or HAFI substitutes one or more
Eligible Substitute Receivables, the Servicer shall determine the Substitution
Adjustment Amount. The Servicer or HAFI, as applicable, shall deposit the
Substitution Adjustment Amount in the Collection Account no later than the
Business Day immediately preceding the Distribution Date in the month following
the end of the Collection Period in which such substitution occurs. The
Servicer shall amend the Schedule of Receivables to reflect the removal of
any Receivable for which the Servicer or HAFI has made a substitution election
pursuant to Section 5.02(a) from the terms of this Agreement and the
substitution of the Eligible Substitute Receivable or Receivables. Upon such
substitution, the Eligible Substitute Receivable or Receivables shall be
subject to the terms of this Agreement in all respects, and the Seller shall


 


24

















 


be deemed to have represented that each such Eligible
Substitute Receivable or Receivables, as of the date of substitution, satisfies
the Eligibility Criteria, to the extent such criteria do not pertain
exclusively to the Receivables transferred on the Closing Date. The Indenture
Trustee and the Owner Trustee shall, upon receipt by each of the Indenture Trustee
and the Owner Trustee of an officer’s certificate from an officer of the
Servicer certifying that the conditions in this Section 5.02(b) have
been satisfied, take any action requested by the Servicer or HAFI, as the case may be,
to effect the reconveyance of such Receivable for which the Servicer or HAFI,
as the case may be, has made a substitution election so removed from the Series Trust
Estate to the Servicer or HAFI, as the case may be. The procedures applied
by the Servicer or HAFI in selecting each Eligible Substitute Receivable shall
not be adverse to the interests of the Noteholders and shall be comparable to
the selection procedures applicable to the Receivables originally conveyed
hereunder.


 


(c)           In
the case of a substitution pursuant to this Section, upon receipt by the
Indenture Trustee of (i) a Servicer’s Certificate to the effect that the
Substitution Adjustment Amount, if any, has been so deposited in the Collection
Account and (ii) an Officer’s Certificate reciting the transfer and
assignment of the Eligible Substitute Receivable(s) to the Indenture Trustee,
the Indenture Trustee shall execute and deliver such instrument of transfer or
assignment presented to it by the Servicer, in each case without recourse, as
shall be necessary to vest in the Servicer or HAFI, as applicable, legal and
beneficial ownership of such Receivable for which the Servicer has made a
substitution election (including any property acquired in respect thereof or
proceeds of any insurance policy with respect thereto).


 


ARTICLE VI

MISCELLANEOUS


 


SECTION 6.01.      Ratification
of Basic Documents.


 


Each of the Basic
Documents (to the extent appropriate, as supplemented by this Series Supplement)
is in all respects ratified and confirmed and each of the Basic Documents, as
so supplemented by this Series Supplement shall be read, taken and
construed as one and the same instrument.


 


SECTION 6.02.      Counterparts.


 


This Series Supplement
may be executed in one or more counterparts, each of which so executed
shall be deemed to be an original, but all of which shall together constitute
but one and the same instrument.


 


SECTION 6.03.      GOVERNING
LAW.


 


THIS SERIES SUPPLEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS WHICH WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.


 


25

















 


SECTION 6.04.      Amendments
Without Consent of Noteholders.


 


(a)           Without
the consent of the Noteholders [but with the prior written consent of the
Insurer (for so long as it is the Controlling Party)] and with prior written
notice to the Rating Agencies, as evidenced in writing to the Administrator,
the Indenture Trustee and the Issuer, when authorized by an Issuer Order, at
any time and from time to time, the parties hereto may enter into one or
more amendments hereto, in form satisfactory to the Administrator, the
Indenture Trustee, the Owner Trustee [and the Insurer (so long as no Insurer
Default has occurred and is continuing)], for any of the following purposes:


 


(i)            to
correct or amplify the description of any property at any time subject to the
lien of the Indenture as supplemented by this Series Supplement, or better
to assure, convey and confirm unto the Indenture Trustee, if any, any property
subject or required to be subjected to the lien of the Indenture as
supplemented by this Series Supplement, or subject to the lien of the
Indenture as supplemented by this Series Supplement additional property;


 


(ii)           to
evidence the succession, in compliance with the applicable provisions hereof,
of another person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;


 


(iii)          to
add to the covenants of the Issuer, for the benefit of the Noteholders, or to
surrender any right or power herein conferred upon the Issuer;


 


(iv)          to convey,
transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee, if any;


 


(v)           to cure
any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under the Indenture, the Trust
Agreement or in this Series Supplement; provided that such action
shall not adversely affect the interests of the Noteholders;


 


(vi)          to evidence
and provide for the acceptance of the appointment hereunder and under the
Indenture by a successor indenture trustee with respect to the Notes and to add
to or change any of the provisions of the Indenture or of this Series Supplement
as shall be necessary to facilitate the administration of the trusts hereunder
by more than one indenture trustee, pursuant to the requirements of Article V
of the Indenture; or


 


(vii)         to
modify, eliminate or add to the provisions of the Indenture or of this Series Supplement
to such extent as shall be necessary to effect the qualification of the
Indenture under the TIA or under any similar federal statute hereafter enacted
and to add to the Indenture such other provisions as may be expressly
required by the TIA.


 


26

















 


Each of the
Administrator, the Indenture Trustee and the Owner Trustee is hereby authorized
to join in the execution of any amendment and to make any further appropriate
agreements and stipulations that may be therein contained.


 


(b)           Except
as otherwise provided herein, the Issuer, the Indenture Trustee and the
Administrator, when authorized by an Issuer Order, may, also without the
consent of any of the Noteholders and with prior written notice to the Rating
Agencies by the Issuer, as evidenced in writing to the Indenture Trustee and
the Administrator, enter into an amendment hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, the Indenture or of this Series Supplement of modifying in any manner
the rights of the Noteholders under the Indenture or under this Series Supplement;
provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.


 


SECTION 6.05.      Amendments
With Consent of the Noteholders.


 


Except as otherwise
provided herein, the Issuer, the Indenture Trustee and the Administrator, when
authorized by an Issuer Order provided by the Servicer, also may, with prior
written notice to the Rating Agencies and with the consent of [the Insurer (so
long as no Insurer Default has occurred and is continuing) and] the Holders of
not less than a majority of the Outstanding Amount of each Class of
affected Notes, by Act of such Holders delivered to the Issuer, the Indenture
Trustee and the Administrator, enter into an amendment hereto for the purpose
of adding any provisions to, or changing in any manner or eliminating any of
the provisions of, this Series Supplement or of modifying in any manner
the rights of the Noteholders under the Indenture or under this Series Supplement;
provided, however, that no such amendment shall [materially and
adversely affect the Insurer without the prior written consent of the Insurer
and no such amendment shall], without the consent of the Holder of each
Outstanding Note affected thereby:


 


(i)            change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon, change the
provision of the Indenture relating to the application of collections on, or
the proceeds of the sale of, all or any portion of any Series Trust Estate
to payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable;


 


(ii)           impair the
right to institute suit for the enforcement of the provisions of the Indenture
requiring the application of funds available therefor, as provided in Article V
of the Indenture, to the payment of any such amount due on the Notes on or
after the respective due dates thereof;


 


(iii)          reduce
the percentage of the Outstanding Amount of the Notes, the consent of the
Holders of which is required for this Series Supplement, or the consent of
the Holders of which is required for any waiver of compliance with certain
provisions of the Indenture or certain defaults hereunder and their
consequences provided for in the Indenture;


 


27

















 


(iv)          modify or
alter the provisions of the proviso to the definition of the term “Outstanding”;


 


(v)           reduce the
percentage of the Outstanding Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Series Trust
Estate pursuant to the Indenture;


 


(vi)          modify any
provision of this Section except to increase any percentage specified
herein or to provide that certain additional provisions of the Indenture or the
Basic Documents cannot be modified or waived without the consent of the Holder
of each Outstanding Note affected thereby;


 


(vii)         modify
any of the provisions of the Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Holders of Notes to the benefit of any provisions for the mandatory redemption
of the Notes contained herein; or


 


(viii)        permit
the creation of any lien ranking prior to or on a parity with the lien of the
Indenture with respect to any part of the Series Trust Estate or,
except as otherwise permitted or contemplated herein or the Related Documents,
terminate the lien of the Indenture on any property at any time subject hereto
or deprive the Holder of any Note of the security provided by the lien of the
Indenture.


 


It shall not be necessary
for any Act of Noteholders under this Section to approve the particular form of
an amendment to this Series Supplement, but it shall be sufficient if such
Act shall approve the substance thereof.


 


Promptly after the
execution by the Issuer, the Indenture Trustee and the Administrator of an
amendment to this Series Supplement, the Administrator shall, upon written
instruction from the Issuer or the Indenture Trustee, mail to the Noteholders a
notice setting forth in general terms the substance hereof. Any failure of the
Administrator to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any amendment to this Series Supplement.


 


Prior to the execution of
any amendment to this Series Supplement, the Indenture Trustee, the
Administrator and the Owner Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized and permitted by this Series Supplement. The Indenture Trustee,
the Administrator and the Owner Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Indenture Trustee’s, the
Administrator’s or the Owner Trustee’s, as the case may be, own rights,
duties or immunities under this Series Supplement.


 


By its acceptance of its
interest in the Notes, each owner of a beneficial interest in a Note shall be
deemed to have agreed that prior to the date which is one year and one day
after the termination of the Indenture, such Person shall not acquiesce,
petition or otherwise invoke or


 


28

















 


cause the Issuer
or the Seller to invoke the process of any governmental authority for the
purpose of commencing or sustaining a case against the Seller or Issuer under
any federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of or for the Issuer or the Seller or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of the
Issuer or the Seller.


 


SECTION 6.06.      Authority
to Register Notes and File Reports.


 


The Issuer hereby
authorizes the Seller (and, at the Seller’s direction, the Servicer) to prepare
and execute on behalf of the Issuer, filings with the Securities and Exchange
Commission and any applicable state agencies of documents required to register or
qualify the Notes for public distribution and to file, on a periodic basis or
as otherwise may be required, such documents or records as may be
required by rules and regulations prescribed by such authorities.


 


SECTION 6.07.      Authority
to Perform Duties of the Issuer.


 


(a)           The
Issuer hereby designates the Servicer its agent and attorney-in-fact to execute
or otherwise authenticate any financing statement, continuation statement or
other instrument or record required by the Indenture Trustee pursuant to Section 3.5
of the Indenture; provided that such designation shall not be deemed to
create a duty in the Indenture Trustee to monitor the compliance of the
Servicer with respect to its duties under Section 3.5 of the Indenture or
the adequacy of any financing statement, continuation statement or other
instrument or record prepared by the Servicer.


 


(b)           The
Issuer hereby appoints the Servicer to assist the Issuer in performing its
duties under the Related Documents, including, but not limited to,
Sections 2.13 and 3.9 of the Indenture, and the Servicer hereby accepts
such appointment.


 


SECTION 6.08.      Notices.


 


All demands, notices and
communications upon or to the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Administrator shall be in writing, personally
delivered, or mailed by certified mail, or sent by confirmed telecopier
transmission and shall be deemed to have been duly given upon receipt (a) in
the case of the Seller, to HSBC Auto Receivables Corporation, 1111 Town Center
Drive, Las Vegas, Nevada 89144, with a copy to HSBC Finance Corporation, 2700
Sanders Road, Prospect Heights, Illinois, 60070, Attention:  Treasurer, Telecopier # (847) 205-7538, (b) in
the case of the Servicer, if HSBC Finance Corporation is the Servicer, to HSBC
Finance Corporation, 2700 Sanders Road, Prospect Heights, Illinois 60070,  Attention: Treasurer, Telecopier # (847)
205-7538, (c) in the case of the Issuer, at the Corporate Trust Office of
the Owner Trustee, Telecopier # (   )    -    ,
(d) in the case of the Owner Trustee, at its Corporate Trust Office,
Telecopier # (   )    -    , (e) in
the case of the Indenture Trustee, at the Corporate Trust Office of the
Indenture Trustee, Attention: Corporate Trust Office-HSBC Automotive Trust [200 - ,
Telecopier # (   )    -    ],
(f) [in the case of the Insurer, to [Insurer], [Address], Attention:  [        ,
Telecopier # (   )     -    ],
and (g)] in the case of the Administrator, at the Corporate Trust Office of the


 


29

















 


Administrator,
Attention: [        , Telecopier # (   )
    -    ]. Any notice required or
permitted to be mailed to a Noteholder or Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown
in the Certificate Register or Note Register, as applicable. Any notice so
mailed within the time prescribed in the Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder or
Noteholder shall receive such notice.


 


SECTION 6.09.      [Third-Party
Beneficiary].


 


[The parties hereto agree
that the Insurer is a third-party beneficiary hereof and the Insurer shall be
entitled to rely upon and directly enforce the provisions of this Series Supplement.
Nothing in this Series Supplement, express or implied, shall give to any
Person, other than the parties hereto and their successors hereunder and the
Insurer and its successors any benefit or any legal or equitable right, remedy
or claim under this Series Supplement.]


 


[Reminder of page intentionally left blank]


 


30

















 


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


 


	
   

  	
  HSBC FINANCE CORPORATION,

  
	
   

  	
     as
  Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC AUTOMOTIVE TRUST 200 - ,

  
	
   

  	
     as
  Issuer

  
	
   

  	
     by
  [Owner Trustee], not in its

  
	
   

  	
     individual capacity but solely as Owner
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Name:

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC AUTO RECEIVABLES CORPORATION,

  
	
   

  	
     as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [INDENTURE TRUSTEE],

  
	
   

  	
     as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							



 

















 


	
   

  	
  [OWNER TRUSTEE],

  
	
   

  	
     not in its individual capacity but solely
  as Owner

  
	
   

  	
     Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [ADMINISTRATOR],

  
	
   

  	
     as Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					



 


[Signature Page for Series Supplement]


 

















 


Schedule I


 


Eligibility Criteria


 


“Eligible Receivable”
means a Receivable with respect to which each of the following is true as of
the Closing Date:


 


(a)           that
(i) was originated directly by HACI with the consumer or was originated by
a Dealer for the retail sale of a Financed Vehicle in the ordinary course of
such Dealer’s business and (A) in the case of a receivable originated by
HACI, such entity had all necessary licenses and permits to originate
receivables in the state where such entity was located, and, (B) in the
case of a Dealer originated receivable, such Dealer had all necessary licenses
and permits to originate receivables in the state where such Dealer was
located, and such receivable was purchased by HAFI from such Dealer under an
existing Dealer Agreement with HAFI, and (C) in the case of a Dealer
originated receivable or a receivable originated by HACI, such receivable was
purchased (x) by HARC pursuant to the terms of the Master Receivables
Purchase Agreements and (y) by the Issuer pursuant to the Sale and
Servicing Agreement; and each Receivable was validly assigned (1) if Dealer
originated, by such Dealer to HAFI, (2) by HAFI or HACI, as applicable, to
HARC pursuant to the terms of the Master Receivables Purchase Agreements, (3) by
HARC to the Issuer pursuant to the Sale and Servicing Agreement and (4) by
the Issuer to the Indenture Trustee pursuant to the Indenture, (ii) was
fully and properly executed by the parties thereto, (iii) contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for realization against the collateral security,
and (iv) is fully amortizing and provides for level monthly payments (provided
that the payment in the first Collection Period and the final Collection Period
of the term of the Receivable may be minimally different from the level
payment) which, if made when due, shall fully amortize the Amount Financed over
the original term;


 


(b)           that
was originated without any fraud or material misrepresentation on the part of
a Dealer, the Obligor, HAFI or HACI, as applicable;


 


(c)           with
respect to which all requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation, 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, as amended, and 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) in respect of all of the
Receivables, each and every sale of Financed Vehicles and the sale of any
physical damage, loss, credit life and credit accident and health insurance and
any extended service contracts, have been complied with in all material
respects, and each Receivable and the sale of the Financed Vehicle evidenced by
each Receivable and the sale of any physical damage, loss, credit life and
credit accident and health insurance and any extended service contracts
complied at the time it was originated or made and now complies in all material
respects with all applicable legal requirements;


 


I-1

















 


(d)           that
was originated in, and the related Obligor is a resident of, the United States
of America and, at the time of origination materially conformed to all
underwriting and funding guidelines of HAFI applicable thereto and that has
been serviced in material conformity with procedures applicable to receivables
that are serviced by the Servicer for its own account;


 


(e)           which
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 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 of the Servicemembers Civil Relief Act, as amended;
and all parties thereto had full legal capacity to execute and deliver such
Receivable and all other documents related thereto and to grant the security
interest purported to be granted thereby;


 


(f)            which
is not due from the United States of America or any state or from any agency,
department, subdivision or instrumentality thereof;


 


(g)           which,
as of the Cut-off Date, (i) had an original term of not more than   
months, (ii) has a remaining term of not more than    months, (iii) had
a remaining Amount Financed of at least $      and not
more than $     , (iv) had an Annual Percentage
Rate of at least    % and not more than    %, (v) was
not more than 30 days contractually delinquent, (vi) no funds have been
advanced by the Issuer, the Servicer, HAFI, HACI, any Dealer, or anyone acting
on behalf of any of them in order to cause such Receivable to qualify under subclause
(iv) of this clause (g) and (vii) had no provision
thereof waived, altered or modified in any respect since its origination;


 


(h)           with
respect to which the information pertaining to such Receivable set forth in
each Schedule of Receivables is true and correct in all material respects;


 


(i)            with
respect to which HAFI will have caused the portions of HAFI’s and the Servicer’s
servicing records relating to such Receivable to be clearly and unambiguously
marked to show that such Receivable has been transferred by HAFI or HACI to
HARC in accordance with the terms of the Master Receivables Purchase Agreements
and by HARC to the Issuer pursuant to the Sale and Servicing Agreement, and by
the Issuer to the Indenture Trustee pursuant to the Indenture;


 


(j)            with
respect to which the computer tape or listing to be made available by HAFI to
HARC, the Servicer or the Indenture Trustee is complete and accurate and
includes a description of the same Receivables that are, or will be, described
in the related Schedule of Receivables;


 


(k)           which
constitutes tangible chattel paper within the meaning of the UCC;


 


(l)            of
which there is only one original executed copy;


 


(m)          with
respect to which there exists a Receivable File and such Receivable File
contains, without limitation, (a) a fully executed original of the
Contract or an electronic


 


I-2

















 


copy thereof, (b) a
certificate of insurance, application form for insurance signed by the
Obligor, or a signed representation letter from the relevant Obligor named
pursuant to which the Obligor has agreed to obtain physical damage insurance
for the related Financed Vehicle, (c) the original Lien Certificate or
application therefor, or a physical or electronic copy thereof, showing HAFI or
HACI, as applicable, as first lienholder (which, for Financed Vehicles
registered in states that issue confirmation of the lienholder’s interest
electronically, the “Lien Certificate” may consist of notification of an
electronic recordation, by either a third party service provider or the
relevant Registrar of Titles of the applicable state, which indicates that the
lien of the secured party on the Financed Vehicle is recorded on the original
certificate of title on the electronic lien and title system of the applicable
state) and (d) an original credit application, or a physical or electronic
copy thereof, signed by the Obligor; and (x) each of the documents relating thereto
which is required to be signed by the Obligor has been signed by the Obligor in
the appropriate spaces and (y) all blanks on any form relating
thereto to be completed have been properly filled in and each form has
otherwise been correctly prepared; and, notwithstanding the above, with respect
to which, a copy of the complete Receivable File for such Receivable, which
fulfills the documentation requirements of HAFI as in effect at the time of
purchase is in the possession of the Servicer or Subservicer;


 


(n)           which
has not been satisfied, subordinated or rescinded, and the Financed Vehicle
securing such Receivable has not been released from the lien of such Receivable
in whole or in part;


 


(o)           which
was not originated in, and is not 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 and with respect to which there is no agreement
with any account debtor that prohibits, restricts or conditions the assignment
of any portion of such Receivable;


 


(p)           which
has not been sold, transferred, assigned or pledged to any Person other than to
(i) HAFI by a Dealer, (ii) HARC by HAFI or HACI, as applicable,
pursuant to the terms of the Master Receivables Purchase Agreements, (iii) the
Issuer by HARC pursuant to the terms of the Sale and Servicing Agreement and (iv) the
Indenture Trustee by the Issuer pursuant to the terms of the Indenture. No
Dealer has a participation in, or other right to receive, proceeds of any
Receivable. Neither HAFI nor HACI, as applicable, HARC nor the Issuer has taken
any action to convey any right to any Person that would result in such Person
having a right to payments received under the related Insurance Policy or the
related Dealer Agreement or Dealer Assignment or to payments due under such
Receivable;


 


(q)           which
creates a valid, binding and enforceable first priority security interest in
favor of HAFI or HACI, as applicable, in the Financed Vehicle;


 


(r)            which
is secured by an enforceable and perfected first priority security interest in
the Financed Vehicle in favor of HAFI or HACI, as applicable, as secured party,
which security interest is prior to all other Liens upon and security interests
in such Financed Vehicle which now exist or may hereafter arise or be
created (except, as to priority, for any Lien for taxes, labor or materials
affecting a Financed Vehicle); and, with respect to which there are no Liens or
claims for taxes, work, labor or materials affecting the related Financed Vehicle
which are or may be Liens prior or equal to the lien of such Receivable;


 


I-3

















 


(s)           as
to which the Seller has not authorized the filing of, and is not aware of any
financing statements against the Seller that include a description of the
collateral covering such Receivable, other than any financing statements (i) relating
to the sale of such Receivable by HARC to the Issuer pursuant to the terms of
the Sale and Servicing Agreement, or (ii) that have been terminated;


 


(t)            as
to which all filings (including, without limitation, UCC filings) required to
be made by any Person and actions required to be taken or performed by any
Person in any jurisdiction to give the Indenture Trustee a first priority
perfected lien on, or ownership interest in, the Receivables and the proceeds
thereof have been made, taken or performed;


 


(u)           as
to which, immediately prior to the transfer and assignment of such Receivable
by the Seller pursuant to the Sale and Servicing Agreement, the Seller has good
and marketable title thereto, free and clear of any and all liens, claims or
encumbrances of any person;


 


(v)           as
to which HAFI or HACI, as applicable, HARC or the Issuer has not done anything
to convey any right to any Person that would result in such Person having a
right to payments due under such Receivable or otherwise to impair the rights
of the Indenture Trustee, the Noteholders[, the Insurer] or the
Certificateholders in such Receivable or the proceeds thereof;


 


(w)          which
is not assumable by another Person in a manner which would release the Obligor
thereof from such Obligor’s obligations with respect to such Receivable;


 


(x)            which
is not subject to any right of rescission, setoff, counterclaim or defense and
no such right has been asserted or threatened with respect thereto;


 


(y)           except
for payment delinquencies continuing for a period of not more than 30 days as
of the applicable Cut-Off Date, the Seller has no knowledge that a default,
breach, violation or event permitting acceleration under the terms of the
Receivable existed as of the applicable Cut-Off Date or that any
continuing condition that with notice or lapse of time, or both, would
constitute a default, breach, violation or event permitting acceleration under
the terms of the Receivable had arisen as of the applicable Cut-Off Date and
the Seller has not waived any of the foregoing;


 


(z)            at
the time of the origination of which, the related Financed Vehicle was covered
by a comprehensive and collision insurance policy (i) in an amount at
least equal to the lesser of (a) its maximum insurable value and (b) the
principal amount due from the Obligor thereunder, (ii) naming HAFI or
HACI, as applicable, and its successors and assigns as loss payee and (iii) insuring
against loss and damage due to fire, theft, transportation, collision and other
risks generally covered by comprehensive and collision coverage and with
respect to which the Obligor is required to maintain physical loss and damage
insurance, naming HAFI or HACI, as applicable, and its successors and assigns
as additional insured parties, and such Receivable permits the holder thereof
to obtain physical loss and damage insurance at the expense of the Obligor if
the Obligor fails to do so;


 


(aa)         with
respect to which the following is true:


 


I-4

















 


The Lien Certificate for
the related Financed Vehicle shows, or if a new or replacement Lien Certificate
is being applied for with respect to such Financed Vehicle the Lien Certificate
will be received within [270] days of the Closing Date and will show, HAFI or
HACI, as applicable, named as the original secured party under such Receivable
and, accordingly, HAFI or HACI, as applicable, will be the holder of a first
priority security interest in such Financed Vehicle. With respect to each
Receivable for which the Lien Certificate has not yet been returned from the
Registrar of Titles, HAFI has either applied for or received written evidence
from the related Dealer or the Obligor that such Lien Certificate showing HAFI
or HACI, as applicable, as first lienholder has been applied for. If the
Receivable was originated in a state in which a filing or recording is required
of the secured party to perfect a security interest in motor vehicles, such
filings or recordings have been duly made to show HAFI or HACI, as applicable,
named as the original secured party under the related Receivable; 


 


(bb)         with
respect to which the related Contract contains no mark or notation indicating
that such Contract has been sold or pledged by the Seller to any person other
than the Issuer;


 


(cc)         as
to which no selection procedures adverse to the Noteholders or the
Certificateholder have been utilized in selecting such Receivable from all
other similar Receivables purchased by HAFI or originated by HACI;


 


(dd)         as
to which, as of the Cut-off Date, no Obligor had been identified on the records
of HAFI as being the subject of a current bankruptcy proceeding; and


 


(ee)         as
to which all funds have been fully advanced
to or on behalf of the related Obligor in accordance with its terms.


 


I-5

















 


Schedule II


 


Schedule of
Receivables on File in Electronic Form

at Dewey Ballantine LLP


 


II-1

















 


Exhibit A


 


Form of
Servicer’s Certificate


 


HSBC
Automotive Trust 200 - 


 


Class A-1 Notes:     %


Class A-2 Notes:     %


Class A-3 Notes:     %


Class A-4 Notes:     %


 


Servicer’s Certificate


(Delivered pursuant to Section 4.9
of


the Sale and Servicing
Agreement)


 


Collection Period Beginning


Collection Period Ending


Previous Distribution Date


Distribution Date


Days in Interest Period


Months Since Closing


 


I. COLLECTION PERIOD POOL BALANCE
CALCULATION:


 


Beginning of Collection Period Pool Balance


Principal Receivables Added


Monthly Principal Amounts:


  Principal Payments Received for
the Collection Period


  Liquidated Receivables for the
Collection Period


  Principal Amount of Repurchased
Receivables for the Collection Period


End of Collection Period Pool Balance


End of Collection Period Pool Factor


 


II. COLLECTION PERIOD NOTEHOLDER
CALCULATIONS:


 


	
  (a) Class A-1

  
	
  A. 
  Information regarding distributions

  
	
  1.

  	
  Total distribution per $1,000

  
	
  2.

  	
  Principal distribution per $1,000

  
	
  3.

  	
  Interest distribution per $1,000

  
	
   

  	
   

  
	
  B. Calculation of Class A-1 interest
  due

  
	
  1.

  	
  Class A-1 related Note Rate

  
	
  2.

  	
  Class A-1 note balance - beginning of
  period

  
	
  3.

  	
  Interest accrual convention

  
	
  4.

  	
  Days in Interest Period

  
	
  5.

  	
  Class A-1 interest due - current
  period

  



 


A-1

















 


	
  6.

  	
  Class A Interest Carryover Shortfall
  with respect to Class A-1

  
	
  7.

  	
  Class A-1 interest paid

  
	
  8.

  	
  Class A-1 unpaid interest with respect
  to the Distribution Date

  
	
   

  	
   

  
	
  C. Calculation of Class A-1 principal
  balance

  
	
  1.

  	
  Class A-1 note balance - beginning of
  period

  
	
  2.

  	
  Class A-1 minimum principal
  distributable amount - due

  
	
  3.

  	
  Class A-1 additional principal
  distributable amount - due

  
	
  4.

  	
  Class A-1 minimum principal
  distributable amount - paid

  
	
  5.

  	
  Class A-1 additional principal
  distributable amount - paid

  
	
  6.

  	
  Class A-1 note balance - end of period

  
	
  7.

  	
  Class A-1 notes as a percentage of the
  total Notes outstanding on the Distribution Date

  
	
  8.

  	
  Class A-1 notes as a percentage of the
  Pool Balance on the Distribution Date

  
	
   

  	
   

  
	
  (b) Class A-2

  
	
  A. 
  Information Regarding Distributions

  
	
  1.

  	
  Total distribution per $1,000

  
	
  2.

  	
  Principal distribution per $1,000

  
	
  3.

  	
  Interest distribution per $1,000

  
	
   

  	
   

  
	
  B. Calculation of Class A-2 interest
  due

  
	
  1.

  	
  Class A-2 related Note Rate

  
	
  2.

  	
  Class A-2 note balance - beginning of
  period

  
	
  3.

  	
  Interest accrual convention

  
	
  4.

  	
  Days in Interest Period

  
	
  5.

  	
  Class A-2 interest due - current
  period

  
	
  6.

  	
  Class A Interest Carryover Shortfall
  with respect to Class A-2

  
	
  7.

  	
  Class A-2 interest paid

  
	
  8.

  	
  Class A-2 unpaid interest with respect
  to the Distribution Date

  
	
   

  	
   

  
	
  C. Calculation of Class A-2 principal
  balance

  
	
  1.

  	
  Class A-2 note balance - beginning of
  period

  
	
  2.

  	
  Class A-2 minimum principal
  distributable amount - due

  
	
  3.

  	
  Class A-2 additional principal
  distributable amount - due

  
	
  4.

  	
  Class A-2 minimum principal
  distributable amount - paid

  
	
  5.

  	
  Class A-2 additional principal
  distributable amount - paid

  
	
  6.

  	
  Class A-2 note balance - end of period

  
	
  7.

  	
  Class A-2 notes as a percentage of the
  total Notes outstanding on the Distribution Date

  
	
  8.

  	
  Class A-2 notes as a percentage of the
  Pool Balance on the Distribution Date

  
	
  9.

  	
  Class A-1 and A-2 notes as a
  percentage of the Pool Balance on the Distribution Date

  
	
   

  	
   

  
	
  (c) Class A-3

  
	
  A. 
  Information Regarding Distributions

  
	
  1.

  	
  Total distribution per $1,000

  
	
  2.

  	
  Principal distribution per $1,000

  
	
  3.

  	
  Interest distribution per $1,000

  



 


A-2

















 


	
  B. Calculation of Class A-3 interest
  Due

  
	
  1.

  	
  Class A-3 related Note Rate

  
	
  2.

  	
  Class A-3 note balance - beginning of
  period

  
	
  3.

  	
  Interest accrual convention

  
	
  4.

  	
  Days in Interest Period

  
	
  5.

  	
  Class A-3 interest due - current
  period

  
	
  6.

  	
  Class A Interest Carryover Shortfall
  with respect to Class A-3

  
	
  7.

  	
  Class A-3 interest paid

  
	
  8.

  	
  Class A-3 unpaid interest with respect
  to the Distribution Date

  
	
   

  	
   

  
	
  C. Calculation of Class A-3 principal
  balance

  
	
  1.

  	
  Class A-3 note balance - beginning of
  period

  
	
  2.

  	
  Class A-3 minimum principal
  distributable amount - due

  
	
  3.

  	
  Class A-3 additional principal
  distributable amount - due

  
	
  4.

  	
  Class A-3 minimum principal
  distributable amount - paid

  
	
  5.

  	
  Class A-3 additional principal
  distributable amount - paid

  
	
  6.

  	
  Class A-3 note balance - end of period

  
	
  7.

  	
  Class A-3 notes as a percentage of the
  total Notes outstanding on the Distribution Date

  
	
  8.

  	
  Class A-3 notes as a percentage of the
  Pool Balance on the Distribution Date

  
	
  9.

  	
  Class A-1, A-2 and A-3 notes as a
  percentage of the Pool Balance on the Distribution Date

  
	
   

  	
   

  
	
  (d) Class A-4

  
	
  A. 
  Information Regarding Distributions

  
	
  1.

  	
  Total distribution per $1,000

  
	
  2.

  	
  Principal distribution per $1,000

  
	
  3.

  	
  Interest distribution per $1,000

  
	
   

  	
   

  
	
  B. Calculation of Class A-4 Interest
  Due

  
	
  1.

  	
  Class A-4 related Note Rate

  
	
  2.

  	
  Class A-4 principal balance -
  beginning of period

  
	
  3.

  	
  Interest accrual convention

  
	
  4.

  	
  Days in Interest Period

  
	
  5.

  	
  Class A-4 interest due - current
  period

  
	
  6.

  	
  Class A Interest Carryover Shortfall
  with respect to Class A-4

  
	
  7.

  	
  Class A-4 interest paid

  
	
  8.

  	
  Class A-4 unpaid interest with respect
  to the Distribution Date

  
	
   

  	
   

  
	
  C. Calculation of Class A-4 principal
  balance

  
	
  1.

  	
  Class A-4 note balance - beginning of
  period

  
	
  2.

  	
  Class A-4 minimum principal
  distributable amount - due

  
	
  3.

  	
  Class A-4 additional principal
  distributable amount - due

  
	
  4.

  	
  Class A-4 minimum principal
  distributable amount - paid

  
	
  5.

  	
  Class A-4 additional principal
  distributable amount - paid

  
	
  6.

  	
  Class A-4 note balance - end of period

  
	
  7.

  	
  Class A-4. notes as a percentage of
  the total Notes outstanding on the Distribution Date

  



 


A-3

















 


	
  8.

  	
  Class A-4 Notes as a percentage of the
  Pool Balance on the Distribution Date

  
	
  9.

  	
  Class A-1, A-2, A-3 and A-4 notes as a
  percentage of the Pool Balance on the Distribution 

  
	
  Date

  



 


III. PRINCIPAL DISTRIBUTABLE AMOUNT
CALCULATION


 


 Aggregate Optimal Note Principal
Balance for the Distribution Date:


   Pool Balance as of the end of
the Collection Period


   Factor


Aggregate Optimal Note Principal Balance for the Distribution Date


 


Optimal Principal Distributable Amount for
the Distribution Date:


   The excess, if any, of


     (x) Aggregate Note Principal
Balance over


     (y) Aggregate Optimal Note
Principal Balance for such Distribution Date


Optimal Principal Distributable Amount


 


Class A Minimum Principal Distributable
Amount:


   Greater of (a), (b), or (c):


   (a) The lesser of:


        (i) Optimal
Principal Distributable Amount


        (ii) BOM Principal
Balance less EOM Principal Balance


        (iii) Aggregate Note
Principal Balance


   (b) The amount necessary
on a Note’s Scheduled Maturity Date to bring the Note’s


         Aggregate Note Principal Balance to zero


   (c) The excess of the
Aggregate Note Principal Balance over the


         Pool Balance


Class A Minimum Principal Distributable Amount


 


Class A Additional Principal
Distributable Amount


   Excess of:


     (i) Aggregate Note
Principal Balance


          Less:  Class A Minimum Principal Distributable
Amount paid over


     (ii) Aggregate Optimal
Note Principal Balance


Class A Additional Principal Distributable Amount


 


IV.  RESERVE ACCOUNT RECONCILIATION


 


Beginning Reserve Account Balance


Targeted Reserve Account Balance


Reserve Account Shortfall


Reserve Account Deposit


Reserve Account Release


Ending Reserve Account Balance


Ending Reserve Account Balance as a percentage of the Ending Pool
Balance


 


V. OVERCOLLATERALIZATION CALCULATION


 


Overcollateralization Amount prior to
payments allocated to principal


Overcollateralization Amount after giving
effect to payments allocated to principal


 


A-4

















 


Ending Overcollateralization
Amount as a percentage of the Ending Pool Balance


 


VI. RECONCILIATION OF COLLECTION ACCOUNT


 


 (A) Available
Funds (Sect. 2.01(a))


i. Collected Funds


   (a)  Collections On
Receivables


   (b)  Net Liquidation
Proceeds


   (c)  Substitution
Adjustment Amounts


Total Collected Funds


ii. Collection and Reserve Account investment income


iii. Repurchase Amounts deposited in the Collection Account


iv. Proceeds of any liquidation of the Trust


Available Funds for distribution


 


Distributions (Sect. 3.03)


 


(A) Available Funds


 


[(B)  Swap Provider net payments and Swap Termination Payments (so
long as the Swap Provider is not the defaulting party thereunder)]


 


[(B)  Amounts received form the Insurer]


 


(B) Servicing Fee


i. Servicing Fee (If HSBC Finance no longer the Servicer)


 


(C) Unpaid Administrator, and Indenture and Owner Trustee fees


Remaining available funds for interest distribution


 


(D) Class A Interest Distributable Amount paid


i. Class A-1 interest paid


ii. Class A-2 interest paid


iii. Class A-3 interest paid


iv. Class A-4 interest paid


Total Class A Interest Distributable Amount paid


Remaining Available Funds for principal distribution


 


(E) Class A Minimum Principal Distributable Amount paid


i. Class A-1 minimum principal paid


ii. Class A-2 minimum principal paid


iii. Class A-3 minimum principal paid


iv. Class A-4 minimum principal paid


Class A Minimum Principal Distributable Amount paid


Remaining funds


 


[(F)  Amounts owing to the Insurer


Remaining Funds]


 


A-5

















 


(G) Reserve Account Shortfall Amount - deposited


Remaining funds


 


(H) Class A Additional Principal Distributable Amount


i. Class A-1 additional principal distributable amount


ii. Class A-2 additional principal distributable amount


iii. Class A-3 additional principal distributable amount


iv. Class A-4 additional principal distributable amount


Class A Additional Principal Distributable Amount - paid


Remaining funds


 


(I) Amount released from Reserve Account


Remaining funds


 


(J) Unpaid Administrator, and Indenture and Owner Trustee indemnity
expenses


Remaining funds


 


[(K) Swap Termination Payments to the extent not already paid


Remaining funds]


 


(K) Servicing Fee (If HSBC Finance Is Servicer)


 


(L) Remaining Available Funds for distribution to Certificateholders


 


VII. OTHER STATISTICS


 


Delinquency


A. One payment delinquent - $


   % of Principal Receivables


B. Two payments delinquent - $


   % of Principal Receivables


C. Three or more payments delinquent - $


   % of Principal Receivables


D. Two or more payments delinquent - $


   % of Principal Receivables


 


E. Principal Balance of Receivables that were extended
or modified (and delinquency reset) during   the
related Collection Period - $


 


F. Principal Balance of Receivables that were extended
or modified (and delinquency reset) during the related Collection Period was   %
of the Pool Balance at the end of such Collection Period


 


G. Repossessed Vehicles


   % of Principal Receivables


 


H. Cumulative Net Loss Percentage


 


I. The weighted average coupon (WAC) was equal to


 


A-6

















 


J. The weighted average remaining maturity (WARM) was equal to


 


A-7

















 


Exhibit B


 


Forms of Notes


 


B-1