Exhibit
4.2


Execution
Copy


 


AMENDED AND
RESTATED


TRUST AGREEMENT


 


between


HSBC AUTO
RECEIVABLES CORPORATION,


and


U.S.
BANK TRUST NATIONAL ASSOCIATION


Owner Trustee


 


Dated as of November 1,
2006















 


TABLE OF CONTENTS


	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Capitalized Terms

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Other Definitional Provisions

  	
   

  	
  3

  
	
  Section 1.3.

  	
   

  	
  Action by or Consent of Noteholders and
  Certificateholders

  	
   

  	
  3

  
	
  Section 1.4.

  	
   

  	
  Material Adverse Effect

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II Organization

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Name

  	
   

  	
  4

  
	
  Section 2.2.

  	
   

  	
  Office

  	
   

  	
  4

  
	
  Section 2.3.

  	
   

  	
  Purposes and Powers

  	
   

  	
  4

  
	
  Section 2.4.

  	
   

  	
  Appointment of Owner Trustee

  	
   

  	
  5

  
	
  Section 2.5.

  	
   

  	
  Initial Capital Contribution of Owner Trust Estate

  	
   

  	
  5

  
	
  Section 2.6.

  	
   

  	
  Declaration of Trust

  	
   

  	
  5

  
	
  Section 2.7.

  	
   

  	
  Liability

  	
   

  	
  6

  
	
  Section 2.8.

  	
   

  	
  Title to Owner Trust Estate

  	
   

  	
  6

  
	
  Section 2.9.

  	
   

  	
  Situs of Owner Trust Estate

  	
   

  	
  6

  
	
  Section 2.10.

  	
   

  	
  Representations and Warranties of the Depositor

  	
   

  	
  6

  
	
  Section 2.11.

  	
   

  	
  Federal Income Tax Allocations

  	
   

  	
  8

  
	
  Section 2.12.

  	
   

  	
  Covenants of the Depositor

  	
   

  	
  8

  
	
  Section 2.13.

  	
   

  	
  Covenants of the Certificateholders

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III Certificates and Transfer of Interests

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Initial Ownership

  	
   

  	
  10

  
	
  Section 3.2.

  	
   

  	
  The Certificates

  	
   

  	
  10

  
	
  Section 3.3.

  	
   

  	
  Authentication of Certificates

  	
   

  	
  11

  
	
  Section 3.4.

  	
   

  	
  Registration of Transfer and Exchange of
  Certificates

  	
   

  	
  11

  
	
  Section 3.5.

  	
   

  	
  Mutilated, Destroyed, Lost or Stolen Certificates

  	
   

  	
  12

  
	
  Section 3.6.

  	
   

  	
  Persons Deemed Certificateholders

  	
   

  	
  13

  
	
  Section 3.7.

  	
   

  	
  Access to List of Certificateholders’ Names and
  Addresses

  	
   

  	
  13

  
	
  Section 3.8.

  	
   

  	
  Maintenance of Office or Agency

  	
   

  	
  13

  
	
  Section 3.9.

  	
   

  	
  ERISA Restrictions

  	
   

  	
  13

  
	
  Section 3.10.

  	
   

  	
  Securities Matters

  	
   

  	
  14

  
	
  Section 3.11.

  	
   

  	
  Distributions

  	
   

  	
  14

  
	
  Section 3.12.

  	
   

  	
  Certificate Paying Agent

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV Voting Rights and Other Actions

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Prior Notice to Holders with Respect to Certain
  Matters

  	
   

  	
  14

  
	
  Section 4.2.

  	
   

  	
  Action by Certificateholders with Respect to Certain
  Matters

  	
   

  	
  15

  
	
  Section 4.3.

  	
   

  	
  Action by Certificateholders with Respect to
  Bankruptcy

  	
   

  	
  15

  
	
  Section 4.4.

  	
   

  	
  Restrictions on Certificateholders’ Power

  	
   

  	
  15

  
	
  Section 4.5.

  	
   

  	
  Majority Control

  	
   

  	
  16

  










 



 


	
  Section 4.6.

  	
   

  	
  [Reserved]

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V Certain Duties

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Accounting and Records to the Noteholders,
  Certificateholders, the Internal Revenue Service and Others

  	
   

  	
  16

  
	
  Section 5.2.

  	
   

  	
  Signature on Returns; Tax Matters Partner

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI Authority and Duties of Owner Trustee

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  General Authority

  	
   

  	
  17

  
	
  Section 6.2.

  	
   

  	
  General Duties

  	
   

  	
  18

  
	
  Section 6.3.

  	
   

  	
  Action upon Instruction

  	
   

  	
  18

  
	
  Section 6.4.

  	
   

  	
  No Duties Except as Specified in this Agreement or
  in Instructions

  	
   

  	
  19

  
	
  Section 6.5.

  	
   

  	
  No Action Except under Specified Documents or
  Instructions

  	
   

  	
  19

  
	
  Section 6.6.

  	
   

  	
  Restrictions

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII Concerning the Owner Trustee

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Acceptance of Trust and Duties

  	
   

  	
  20

  
	
  Section 7.2.

  	
   

  	
  Furnishing of Documents

  	
   

  	
  21

  
	
  Section 7.3.

  	
   

  	
  Representations and Warranties

  	
   

  	
  21

  
	
  Section 7.4.

  	
   

  	
  Reliance; Advice of Counsel

  	
   

  	
  22

  
	
  Section 7.5.

  	
   

  	
  Not Acting in Individual Capacity

  	
   

  	
  22

  
	
  Section 7.6.

  	
   

  	
  Owner Trustee Not Liable for Certificates or
  Receivables

  	
   

  	
  23

  
	
  Section 7.7.

  	
   

  	
  Owner Trustee May Own Certificates and Notes

  	
   

  	
  23

  
	
  Section 7.8.

  	
   

  	
  Payments from Owner Trust Estate

  	
   

  	
  23

  
	
  Section 7.9.

  	
   

  	
  Doing Business in Other Jurisdictions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII Compensation of Owner Trustee

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Owner Trustee’s Fees and Expenses

  	
   

  	
  24

  
	
  Section 8.2.

  	
   

  	
  Indemnification

  	
   

  	
  24

  
	
  Section 8.3.

  	
   

  	
  Payments to the Owner Trustee

  	
   

  	
  24

  
	
  Section 8.4.

  	
   

  	
  Non-recourse Obligations

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX Termination of Agreement

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Termination of Agreement

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X Successor Owner Trustees and Additional
  Owner Trustees

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Eligibility Requirements for Owner Trustee

  	
   

  	
  26

  
	
  Section 10.2.

  	
   

  	
  Resignation or Removal of Owner Trustee

  	
   

  	
  27

  
	
  Section 10.3.

  	
   

  	
  Successor Owner Trustee

  	
   

  	
  28

  
	
  Section 10.4.

  	
   

  	
  Merger or Consolidation of Owner Trustee

  	
   

  	
  29

  
	
  Section 10.5.

  	
   

  	
  Appointment of Co-Trustee or Separate Trustee

  	
   

  	
  29

  



 



 ii
 






 



 


	
  ARTICLE XI Miscellaneous

  	
   

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Supplements and Amendments

  	
   

  	
  31

  
	
  Section 11.2.

  	
   

  	
  No Legal Title to Owner Trust Estate in
  Certificateholders

  	
   

  	
  32

  
	
  Section 11.3.

  	
   

  	
  Limitations on Rights of Others

  	
   

  	
  32

  
	
  Section 11.4.

  	
   

  	
  Notices

  	
   

  	
  32

  
	
  Section 11.5.

  	
   

  	
  Severability

  	
   

  	
  33

  
	
  Section 11.6.

  	
   

  	
  Separate Counterparts

  	
   

  	
  33

  
	
  Section 11.7.

  	
   

  	
  Assignments; Support Provider

  	
   

  	
  33

  
	
  Section 11.8.

  	
   

  	
  Covenants of the Depositor

  	
   

  	
  33

  
	
  Section 11.9.

  	
   

  	
  No Petition

  	
   

  	
  33

  
	
  Section 11.10.

  	
   

  	
  No Recourse

  	
   

  	
  33

  
	
  Section 11.11.

  	
   

  	
  Headings

  	
   

  	
  34

  
	
  Section 11.12.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  34

  
	
  Section 11.13.

  	
   

  	
  Servicer

  	
   

  	
  34

  
	
  Section 11.14.

  	
   

  	
  [Reserved]

  	
   

  	
  34

  
	
  Section 11.15.

  	
   

  	
  Regulation AB

  	
   

  	
  34

  
	
  Section 11.16.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  35

  



 


EXHIBITS


	
  Exhibit A

  	
   

  	
  Form of Certificate

  
	
  Exhibit B

  	
   

  	
  Form of Certificate of Trust

  



 



 iii














 


THIS
AMENDED AND RESTATED TRUST AGREEMENT, dated as of November 1, 2006, between
HSBC AUTO RECEIVABLES CORPORATION, a Nevada corporation (the “Depositor”), and U.S.
BANK TRUST NATIONAL ASSOCIATION, a national banking association, as Owner
Trustee (the “Owner Trustee”), amends and restates in its entirety that certain
Trust Agreement, dated as of October 11, 2006, between the Depositor and the
Owner Trustee.


ARTICLE I



Definitions


Section 1.1.            Capitalized
Terms.  For all purposes of this
Agreement, the following terms shall have the meanings set forth below:


“Administrator”
shall mean HSBC Bank USA, National Association, or its successors, not in its
individual capacity but solely as administrator under the Transaction Documents
to which it is a party, and any successor administrator thereunder.


“Agreement”
shall mean this Amended and Restated Trust Agreement, as the same may be
amended and supplemented from time to time.


“Benefit
Plan” shall have the meaning assigned to such term in Section 3.9.


“Certificates”
means, if the Depositor elects (i) to evidence its interest in certificated
form pursuant to Section 3.2, the certificate substantially in the form of
Exhibit A or (ii) to have its interest be uncertificated pursuant to Section
3.2, such uncertificated interest.


“Certificate
Majority” shall have the meaning assigned to such term in Section 4.1.


“Certificate
Paying Agent” means the Administrator.


“Certificate
Register” and “Certificate Registrar” shall mean the register mentioned and the
registrar appointed pursuant to Section 3.4.


“Certificate
of Trust” shall mean the Certificate of Trust in the form of Exhibit B which
was filed on October 11, 2006 pursuant to § 3810(a) of the Statutory Trust
Statute.


“Code”
shall mean the Internal Revenue Code of 1986, as amended.


“Corporate Trust Office”
shall mean, with respect to the Owner Trustee, the office of the Owner Trustee
located at 209 South LaSalle Street, Suite 300, Chicago, Illinois 60604,
Attention: Corporate Trust Services, or at such other address as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the









 



principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Certificateholders and the Depositor).


“Depositor”
shall mean HSBC Auto Receivables Corporation in its capacity as Depositor
hereunder.


“ERISA”
shall have the meaning assigned to such term in Section 3.9.


“Expenses”
shall have the meaning assigned to such term in Section 8.2.


“Form 8-K”  shall mean a current report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.


“Holder”
or “Certificateholder” shall mean a Person in whose name a Certificate is
registered on the Certificate Register.


“HSBC
Finance” shall mean HSBC Finance Corporation.


“Indemnified
Parties” shall have the meaning assigned to such term in Section 8.2.


“Owner
Trust Estate” shall mean all right, title and interest of the Trust in and to
the property and rights assigned to the Trust pursuant to Article II of the
Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts and all other property of the Trust from time to time, including
any rights of the Owner Trustee and the Trust pursuant to the Sale and
Servicing Agreement and each Related Document.


“Owner
Trustee” shall mean U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee under
this Agreement, and any successor Owner Trustee hereunder.


“Percentage
Interest” shall mean, with respect to a Certificate, the portion of the
interests in the Trust represented by a Certificate, as reflected in the
Certificate Register.


“Sale
and Servicing Agreement” means the Sale and Servicing Agreement dated as of
November 1, 2006, 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.


“Secretary
of State” shall mean the Secretary of State of the State of Delaware.


“Securities
Act” shall have the meaning assigned to such term in the Indenture.


“Series
Trust Estate” shall mean the property granted to the Indenture Trustee on
behalf of the Trust pursuant to Section 1.02 of the Series Supplement.



 2
 






 



 


“Statutory
Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code § 3801 et seq. as the same may be amended from time to time.


“Treasury
Regulations” shall mean regulations, including proposed or temporary
regulations, promulgated under the Code. 
References herein to specific provisions of proposed or temporary
regulations shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.


“Trust”
shall mean the trust established by this Agreement.


Section 1.2.            Other Definitional Provisions.  (a)  Capitalized terms used herein
and not otherwise defined have the meanings assigned to them in the Sale and
Servicing Agreement or, if not defined therein, in the Indenture; provided
that, as used herein, Series means only the Series of Notes and Series
of Certificates with respect to which the Trust is the Issuer and only such
Series Trust Estates included in the Owner Trust Estate.


(b)           All terms defined in this Agreement shall have the defined
meanings when used in any Certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.


(c)           As used in this Agreement and in any Certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on
the date of this Agreement or any such certificate or other document, as
applicable.  To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.


(d)           The words “hereof,” “herein,” “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and
Exhibit references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term “including”
shall mean “including without limitation.”


(e)           The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.


Section 1.3.            Action by or Consent of
Noteholders and Certificateholders. 
Whenever any provision of this Agreement refers to action to be taken,
or consented to, by Noteholders or Certificateholders, such provision shall be
deemed to refer to the Certificateholder or Noteholder, as the case may be, of
record as of the Record Date immediately preceding the date on which such
action is to be taken, or



 3
 






 



consent given, by Noteholders or
Certificateholders.  Solely for the
purposes of any action to be taken, or consented to, by Noteholders, any Note
registered in the name of the Depositor or any Affiliate thereof shall be
deemed not to be outstanding; provided, however, that, solely for
the purpose of determining whether the Indenture Trustee is entitled to rely
upon any such action or consent, only Notes that a Responsible Officer of the
Owner Trustee or the Indenture Trustee, as the case may be, either actually
knows to be so owned or has received written notice thereof shall be so
disregarded.


Section 1.4.            Material Adverse Effect.  Whenever a determination is to be made under
this Agreement as to whether a given event, action, course of conduct or set of
facts or circumstances could or would have a material adverse effect on the
Noteholders or Certificateholders (or any similar or analogous determination),
such determination shall be made without taking into account the funds
available from claims under any policy or other Series Support.


ARTICLE II



Organization


Section 2.1.            Name.  There is hereby formed a trust to be known as
“HSBC Automotive Trust (USA) 2006-3”, in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.


Section 2.2.            Office.  The principal place of business of the Trust
for purposes of Delaware law shall be in care of the Owner Trustee at the
Corporate Trust Office of the Owner Trustee or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and the
Depositor.  The Trust may establish
additional offices located at such place or places inside or outside the State
of Delaware as the Owner Trustee may designate from time to time by written
notice to the Certificateholders and the Depositor.


Section 2.3.            Purposes and Powers.  (a)  The purpose of the Trust is,
and the Trust shall have the power and authority, to engage in the following
activities:


(i)            to issue the Notes
pursuant to the Indenture and the Series Supplement and the Certificates
pursuant to this Agreement and the Series Supplement, and to sell the Notes;


(ii)           with the proceeds
of the sale of the Notes, to fund the expense of obtaining any Series Support
and to pay the organizational, start-up and transactional expenses of the
Trust and to pay the balance to the Depositor pursuant to the Sale and
Servicing Agreement;


(iii)          with respect to the
Series Trust Estate, to assign, grant, transfer, pledge, mortgage and convey
the Series Trust Estate to the Indenture Trustee pursuant to the Indenture and
the Series Supplement for the benefit of the Secured Parties;



 4
 






 



 


(iv)          to enter into and
perform its obligations under the Basic Documents and the Related Documents, in
each case, to which it is a party;


(v)           to acquire, hold and
manage the Owner Trust Estate;


(vi)          to make
distributions on the Certificates in accordance with their respective terms;


(vii)         to own Class SV
Preferred Stock of the Depositor;


(viii)        to engage in those
activities, including entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and


(ix)           subject to
compliance with the Basic Documents and the Related Documents, to engage in
such other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the Certificateholders
and the Noteholders.


(b)           The Trust is hereby authorized to engage in the foregoing
activities.  The Trust shall not engage
in any activity other than in connection with the foregoing or other than as
required or authorized by the terms of this Agreement, the Basic Documents or
any Related Documents.


Section 2.4.            Appointment of Owner Trustee.  The Depositor hereby appoints the Owner Trustee
as trustee of the Trust effective as of the date hereof, to have all the
respective rights, powers and duties set forth herein.


Section 2.5.            Initial Capital Contribution of
Owner Trust Estate.  The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee,
on behalf of the Trust, as of the date hereof, the sum of $1,000 and one share
of Class SV Preferred Stock of the Depositor. 
The Owner Trustee hereby acknowledges receipt in trust from the
Depositor, as of the date hereof, of the foregoing contribution, which shall
constitute the initial Owner Trust Estate. 
The Depositor shall pay organizational expenses of the Trust as they may
arise.


Section 2.6.            Declaration of Trust.  The Owner Trustee hereby declares that it
will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein, on behalf of the Trust, for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents.  It is the intention of the
parties hereto that the Trust constitute a statutory trust under the Statutory
Trust Statute and that this Agreement constitute the governing instrument of
such statutory trust.  It is the
intention of the parties hereto that, solely for federal income tax purposes,
the Trust shall be disregarded as an entity separate from the
Certificateholder; provided, however, that in the event
Certificates are owned by more than one Certificateholder, it is the intention
of the parties hereto that, solely for federal income tax purposes, the Trust
shall then be treated as a partnership and that, unless otherwise required by
appropriate tax authorities, only after such time the Trust will file or cause
to be filed annual or other



 5
 






 



necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes.  Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and to the extent not inconsistent herewith, in the Statutory Trust
Statute with respect to accomplishing the purposes of the Trust.  The Owner Trustee shall file the Certificate
of Trust with the Secretary of State.


Section 2.7.            Liability.  (a)  The Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.


(b)           No Holder, other than to the extent set forth in clause
(a), shall have any personal liability for any liability or obligation of the
Trust.


Section 2.8.            Title to Owner Trust Estate.  (a)  Legal title to all of the
Owner Trust Estate shall be vested at all times in the Trust as a separate
legal entity except where applicable law in any jurisdiction requires title to
any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a
co-trustee and/or a separate trustee, as the case may be.


(b)           The holders of the Certificates shall not have legal title
to any part of the Series Trust Estate. 
The Holders of the Certificates shall be entitled to receive
distributions with respect to their undivided ownership interest therein in
accordance with the terms hereof and the Series Supplement.  No transfer, by operation of law or
otherwise, of any right, title or interest by any Certificateholder of its
ownership interest in the Owner Trust Estate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Series Trust Estate.


Section 2.9.            Situs of Owner Trust Estate.  The Trust will be located in the State of
Delaware and administered in the State of Delaware and the State of Illinois.  All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located with the Certificate Paying
Agent in the State of New York.  Payments
will be received by the Certificate Paying Agent on behalf of the Trust in New
York and payments will be made by the Trust from New York.  The Trust shall not have any employees in any
state other than Delaware; provided, however, that nothing herein
shall restrict or prohibit the Owner Trustee, the Servicer or any agent of the
Trust from having employees within or without the State of Delaware.  The principal office of the Trust will be at
the Corporate Trust Office of the Owner Trustee.


Section 2.10.          Representations and Warranties of
the Depositor.  The Depositor makes
the following representations and warranties on which the Owner Trustee relies
in accepting the Owner Trust Estate in trust and executing the Certificates and
Notes and upon which any Support Provider relies in providing any Series
Support.  Each of the following
representations and warranties shall be deemed to be made on each date on which
a Series Trust Estate is pledged under the Indenture.



 6
 






 



 


(a)           Organization and Good Standing.  The Depositor is duly organized and validly
existing as a Nevada corporation with power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted and is proposed to be conducted pursuant to
this Agreement and the Basic Documents.


(b)           Due Qualification. 
It is duly qualified to do business as a foreign corporation in good
standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of its property, the conduct of
its business and the performance of its obligations under this Agreement and
the Basic Documents requires such qualification and in which the failure to so
qualify would have a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of the Depositor.


(c)           Power and Authority.  The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust; the Depositor has duly
authorized such sale, assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.


(d)           Binding Obligations.  This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Depositor enforceable against the Depositor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other 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.


(e)           No Consent Required.  To the best knowledge of the Depositor, no
consent, license, approval or authorization or registration or declaration
with, any Person or with any governmental authority, bureau or agency is
required in connection with the execution, delivery or performance of this
Agreement and the Related Documents, except for such as have been obtained,
effected or made or as to which a failure to obtain, effect or make would not
have a material adverse effect on the business, properties, assets or condition
(financial or other) of the Depositor.


(f)            No Violation. 
The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof do not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the articles of incorporation or by-laws of the
Depositor, or any material indenture, agreement or other instrument to which
the Depositor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to the Basic
Documents or any applicable Related Documents); nor violate any law or, to the
best of the Depositor’s knowledge, any order, rule or regulation



 7
 






 



applicable to the Depositor of any court or
of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties, provided, however, that the Receivables will not
satisfy the Eligibility Criteria set forth in Schedule I to the Series
Supplement until the date on which such Receivables are transferred to the
Issuer.


(g)           No Proceedings. 
To the best of the Depositor’s knowledge, there are no proceedings or
investigations pending or, to its knowledge threatened against it before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting the
invalidity of this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of the Certificates or the Notes or the consummation of
any of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect its performance of its obligations under, or the validity or
enforceability of, this Agreement or any Related Documents, or (D) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of any of the Notes or Certificates.


Section 2.11.          Federal Income Tax Allocations.  (a)  For so long as the Trust has a
single owner for federal income tax purposes, it will, pursuant to Treasury
Regulations promulgated under section 7701 of the Code, be disregarded as an
entity separate from the Certificateholder for all federal income tax
purposes.  Accordingly, for federal
income tax purposes, the Certificateholder will be treated as (i) owning all
assets owned by the Trust, (ii) having incurred all liabilities incurred by the
Trust, and (iii) all transactions between the Trust and the Certificateholder
will be disregarded.


(b)           Neither the Owner Trustee nor any Certificateholder will,
under any circumstances, and at any time, make an election on IRS Form 8832 or
otherwise, to classify the Trust as an association taxable as a corporation for
federal, state or any other applicable tax purpose.


(c)           In the event that the Trust has two or more equity owners
for federal income tax purposes, the Trust will be treated as a
partnership.  At any such time that the
Trust has two or more equity owners, this Agreement will be amended, in
accordance with Section 11.1 herein, and appropriate provisions will be added
so as to provide for treatment of the Trust as a partnership.


Section 2.12.          Covenants of the Depositor.  The Depositor agrees and covenants for the
benefit of the Owner Trustee and the Indenture Trustee for the benefit of the
Secured Parties, during the term of this Agreement, and to the fullest extent
permitted by applicable law, that:


(a)           (i) it shall not create, incur or suffer to exist any
indebtedness or (ii) engage in any business, except (x) as permitted by its
articles of incorporation and the Related Documents and (y) in connection with
a securitization transaction (including warehousing transactions) and the
related documents in which the related indebtedness is issued pursuant to an
indenture having a provision substantially similar to Section 11.18



 8
 






 



of the Indenture; provided, however,
that no other Series shall be issued under the Basic Documents so long as the
Notes are outstanding;


(b)           it shall not, for any reason, institute proceedings for the
Trust to be adjudicated bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trust or a substantial part of the property of
the Trust or cause or permit the Trust to make any assignment for the benefit
of creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;


(c)           it shall obtain from each counterparty to each Basic
Document to which it or the Trust is a party and each other agreement entered
into on or after the date hereof to which it or the Trust is a party, an
agreement by each such counterparty that prior to the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against,
or join any other Person in instituting against, it or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state
of the United States; and


(d)           it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement, dissolve, institute proceedings for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state
law relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of it
or a substantial part of its property, or make any assignment for the benefit
of creditors, or admit in writing its inability to pay its debts generally as
they become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.


Section 2.13.          Covenants of the Certificateholders.  Each Certificateholder agrees:


(a)           to be bound by the terms and conditions of the related
Certificates, of this Agreement and, with respect to the holders of
Certificates, of the Series Supplement, including any supplements or amendments
hereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto.  This undertaking is made for the benefit of
the Trust, the Owner Trustee and the Secured Parties;


(b)           to hereby appoint the Owner Trustee as such
Certificateholder’s agent and attorney-in-fact to sign any federal
income tax information return filed on behalf of the Trust, if any, and agree
that, if requested by the Trust, it will sign such federal income tax
information return in its capacity as holder of an interest in the Trust.



 9
 






 



Each Certificateholder also hereby agrees that
in its tax returns it will not take any position inconsistent with those taken
in any tax returns that may be filed by the Trust;


(c)           if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it
of a Certificate in a taxable sale or exchange, within 30 days of the date of
the transfer;


(d)           until the completion of the events specified in
Section 9.1(e), not to, for any reason, institute proceedings for the
Trust or the Depositor to be adjudicated a bankrupt or insolvent, or consent to
the institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trust or a substantial part of its property, or
cause or permit the Trust to make any assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action; and


(e)           that there shall not be more than 98 other holders of
Certificates.


ARTICLE III



Certificates and Transfer of Interests


Section 3.1.            Initial Ownership.  Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5, the Trust shall
issue an uncertificated ownership interest in the Trust (the “Uncertificated
Certificate”) to the Depositor.  Unless
and until the Depositor transfers all or a portion of the Percentage Interest
represented by such Uncertificated Certificate, such Uncertificated Certificate
shall represent one hundred percent (100%) of the Percentage Interest.  Upon issuance, the Certificates shall be
fully paid and nonassessable.


Section 3.2.            The Certificates.  (a)   The Certificates shall be in
uncertificated form with records of interest ownership maintained by the
Certificate Registrar in the Certificate Register.  If, on or after the Closing Date, the holder
of any Uncertificated Certificate delivers to the Owner Trustee a written
request that the Uncertificated Certificate specified in such request be issued
in certificated form (a related “Certification Request”), the Owner Trustee
shall promptly issue such Certificate to the holder thereof in certificated
form.  If a Certification Request has
been delivered, the Certificate will be issued in registered form,
substantially in the form of Exhibit A, and shall upon issue, be executed and
delivered by the Depositor to the Owner Trustee for authentication and
redelivery as provided in Section 3.3.


(b)           If the Certificates are in certificated form, they shall
be executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. 
Certificates bearing the manual or facsimile signatures of individuals



 10
 






 



who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefit of this Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such offices at the date of authentication and delivery of such Certificates.


(c)             A transferee of a
Certificate (whether in certificated or uncertificated form) shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee’s name pursuant to Section 3.4.  Any transfer of a Certificate (whether in
certificated or uncertificated form) shall satisfy each of the transfer
restrictions set forth herein and other requirements set forth in the form of
Certificate attached hereto as Exhibit A.


(d)           No Certificates shall be issued under this Agreement
unless such Certificates have been authorized pursuant to the Series Supplement
and all conditions precedent to the issuance thereof, as specified in the
Series Supplement shall have been satisfied. 
All Certificates issued under this Agreement shall be in all respects
entitled to the benefits hereof and of the Owner Trust Estate.


Section 3.3.            Authentication of Certificates.  If the Certificates are in certificated form,
the Owner Trustee shall cause the related Certificates to be executed on behalf
of the Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president or any vice
president, its treasurer or any assistant treasurer without further corporate
action by the Depositor, in authorized denominations.  No Certificate shall entitle its holder to
any benefit under this Agreement or, with respect to a Series, the Series
Supplement, or shall be valid for any purpose, unless there shall appear on
such Certificate a certificate of authentication substantially in the form set
forth in Exhibit A, executed by the Owner Trustee or its authenticating agent,
by manual signature; such authentication shall constitute conclusive evidence
that such Certificate shall have been duly authenticated and delivered
hereunder.  All Certificates shall be
dated the date of their authentication.


Section 3.4.            Registration of Transfer and
Exchange of Certificates. 
(a)  The Certificate Registrar shall keep or cause to be kept,
at the office or agency maintained pursuant to Section 3.8, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Owner Trustee shall provide for the registration of Certificates (whether
in certificated or uncertificated form) and of transfers and exchanges of
Certificates (whether in certificated or uncertificated form) as herein
provided.  The Owner Trustee shall be the
initial Certificate Registrar.


(b)           The Certificate Registrar shall provide the Indenture
Trustee and the Administrator with a list of the names and addresses of the
Certificateholders on the Closing Date in the form which such information is
provided to the Certificate Registrar by the Depositor.  Upon any transfers of Certificates, the
Certificate Registrar shall notify the Indenture Trustee and the Administrator
of the name and address of the transferee in writing, by facsimile, on the day
of such transfer.



 11
 






 



 


(c)           If a Certificate is in certificated form, upon surrender
for registration of transfer of any Certificate to the Certificate Registrar at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Series in
the aggregate Percentage Interest to be transferred, dated the date of
authentication by the Owner Trustee or any authenticating agent.  If a Certificate is in uncertificated form,
upon representation of such Certificate in accordance with Section 3.2, the
Certificate Registrar shall reflect in the Certificate Register the transfer of
the relevant Percentage Interest.  If a
Certificate is in certificated form, at the option of the Holder thereof, such
Certificate may be exchanged for one or more other Certificates of the same Series
in authorized denominations of a like Percentage Interest upon surrender of the
Certificates of the same Series, to be exchanged at the office or agency
maintained pursuant to Section 3.8. 
Certificates may be issued in any Percentage Interest not to exceed
100%.


(d)           Every Certificate presented or, in the case of
certificated Certificates, surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the Owner Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.  Each
certificated Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.


(e)           No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.


Section 3.5.            Mutilated, Destroyed, Lost or
Stolen Certificates.  If (a) any
mutilated Certificate shall be surrendered to the Certificate Registrar, or if
the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee, such security or indemnity
as may be required by them to hold each of them harmless, then in the absence
of notice that such Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee or its authenticating agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like Series principal balance.  In connection with the issuance of any new
Certificate under this Section, the Owner Trustee or the Certificate Registrar
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.  Any duplicate Certificate issued pursuant to
this section shall constitute conclusive evidence of an ownership interest in
the Trust, as if



 12
 






 



originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.


Section 3.6.            Persons Deemed Certificateholders.  Every Person by virtue of becoming a
Certificateholder in accordance with this Agreement and the rules and
regulations of the Certificate Registrar shall be deemed to be bound by the
terms of this Agreement.  Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee
and the Certificate Registrar and any agent of the Owner Trustee and the
Certificate Registrar may treat the Person in whose name any Certificate shall
be registered in the Certificate Register as the owner of such Certificate for
the purpose of receiving distributions pursuant hereto, the Indenture or the
Series Supplement (in the case of a Certificate) and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar nor any
agent of the Owner Trustee or the Certificate Registrar shall be bound by any
notice to the contrary.


Section 3.7.            Access to List of
Certificateholders’ Names and Addresses. 
The Owner Trustee or the Certificate Registrar shall furnish or cause to
be furnished to the Servicer, the Depositor, the Indenture Trustee or the
Administrator within 15 days after receipt by the Owner Trustee or the
Certificate Registrar of a request therefor from such Person in writing, a
list, of the names and addresses of the Certificateholders as of the most
recent Record Date.  If three or more
Holders of Certificates or one or more Holders of Certificates evidencing not
less than 25% of the Percentage Interest apply in writing to the Owner Trustee
or the Certificate Registrar, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their
rights under this Agreement, under the Certificates of such Series or under the
Series Supplement and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
or the Certificate Registrar shall, within five Business Days after the receipt
of such application, afford such applicants access during normal business hours
to the current list of Certificateholders of such Series.  Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Servicer, the Owner Trustee or any agent thereof accountable by reason of
the disclosure of its name and address, regardless of the source from which
such information was derived.


Section 3.8.            Maintenance of Office or Agency.  The Owner Trustee or the Certificate
Registrar shall maintain in Chicago, Illinois, an office or offices or agency
or agencies where Certificates may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Owner Trustee in
respect of the Certificates and the Basic Documents may be served.  The Owner Trustee initially designates its
Corporate Trust Office for such purposes. 
The Owner Trustee shall give prompt written notice to the Depositor, the
Certificateholders and any Support Provider of any change in the location of
the Certificate Register or any such office or agency.


Section 3.9.            ERISA Restrictions.  The Certificates may not be acquired by or
for the account of (i) an employee benefit plan (as defined in § 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that
is subject to the provisions of Title I of ERISA, (ii) a plan (as defined in
§ 4975(e)(1) of the



 13
 






 



Code) that is subject to Section 4975 of the
Code or (iii) any entity whose underlying assets include assets of a plan
described in (i) or (ii) by reason of such plan’s investment in the entity
(each, a “Benefit Plan”).  The
Certificate Registrar shall not register the transfer of a Certificate unless
the transferee has delivered to the Owner Trustee a representation letter in
form and substance satisfactory to the Owner Trustee to the effect that the
transferee is not, and is not acquiring the Certificate for the account of, a
Benefit Plan.


Section 3.10.          Securities Matters.  Notwithstanding anything contained herein to
the contrary, the Owner Trustee shall not be responsible for ascertaining
whether any transfer complies with the registration provisions or exemptions
from the Securities Act, the Exchange Act, applicable state securities law or
the Investment Company Act; provided, however, that if a
certificate is specifically required to be delivered to the Owner Trustee by a
purchaser or transferee of a Certificate, the Owner Trustee shall be under a
duty to examine the same to determine whether it conforms to the requirements
of this Agreement and shall promptly notify the party delivering the same if
such certificate does not so conform.


Section 3.11.          Distributions.  Distributions shall be made from time to time
by the Owner Trustee or the Certificate Paying Agent in accordance with the
Percentage Interests of the Certificateholders.


Section 3.12.          Certificate Paying Agent.  Distributions to be made in respect of the
Certificates pursuant to this Agreement, or the Series Supplement shall be made
by the Certificate Paying Agent, by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of the Certificate or the making of any notation
thereon, except as provided in Section 9.1(c) with respect to the final
distribution on a Certificates.


ARTICLE IV



Voting Rights and Other Actions


Section 4.1.            Prior Notice to Holders with
Respect to Certain Matters.  With
respect to the following matters, the Owner Trustee shall not take action
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action
and Certificateholders holding, in the aggregate, greater than 50% of the
Percentage Interests (a “Certificate Majority”) shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders have withheld consent or provided alternative
direction:


(a)           the election by the Trust to file an amendment to the
Certificate of Trust, which amendment shall have satisfied the Rating Agency
Condition (unless such amendment is required to be filed under the Statutory
Trust Statute or unless such amendment would not materially and adversely
affect the interests of the Holders);



 14
 






 



 


(b)           the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;


(c)           the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;


(d)           except pursuant to Section 13.1(b) of the Sale and
Servicing Agreement, the amendment, change or modification of the Sale and
Servicing Agreement, except to cure any ambiguity or defect or to amend or
supplement any provision in a manner that would not materially adversely affect
the interests of the Certificateholders; or


(e)           the Depositor shall not, without the unanimous consent of
the holders of the Class SV Preferred Stock of the Depositor, institute
proceedings to be adjudicated insolvent, or consent to the institution of any
bankruptcy or insolvency case or proceedings against it, or file or consent to
a petition under any applicable federal or state law relating to bankruptcy,
seeking the Depositor’s liquidation or reorganization or any other relief for
the Corporation as debtor, or consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other similar
official) of the Corporation or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts generally as they become due, or take any corporate action in
furtherance of such action.


The
Owner Trustee shall notify the Certificateholders in writing of any appointment
of a successor Note Registrar or Certificate Registrar within five Business
Days thereof.


Section 4.2.            Action by Certificateholders with
Respect to Certain Matters.  The
Owner Trustee shall not have the power (a) to remove the Servicer under the
Sale and Servicing Agreement or (b) except as expressly provided in the
Indenture and the Series Supplement and at the written direction of the Certificateholders,
sell the Receivables after the termination of the Indenture.  The Owner Trustee shall take the actions
referred to in the preceding sentence only upon written instructions signed by
the Certificateholders and the furnishing of indemnification satisfactory to
the Owner Trustee by the Certificateholders.


Section 4.3.            Action by Certificateholders with
Respect to Bankruptcy.  Until one
year and one day following the date of payment in full of the Notes, the Owner
Trustee shall not have the power to, and shall not, commence any proceeding or
other actions contemplated by Section 2.13(d) hereof relating to the Trust
without the prior written consent of all the Certificateholders and the
delivery to the Owner Trustee by each such Certificateholder of a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.


Section 4.4.            Restrictions on
Certificateholders’ Power. 
(a)  The Certificateholders shall not direct the Owner Trustee
to take or refrain from taking any



 15
 






 



action if such action or inaction would be
contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Basic Documents or would be contrary to
Section 2.3 or otherwise contrary to law nor shall the Owner Trustee be
obligated to follow any such direction, if given.


(b)           No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless there are no outstanding Notes and
unless the Certificate Majority previously shall have given to the Owner
Trustee a written notice of default and of the continuance thereof, as provided
in this Agreement, and also unless the Certificate Majority shall have made
written request upon the Owner Trustee to institute such action, suit or
proceeding in its own name as Owner Trustee under this Agreement and shall have
offered to the Owner Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby,
and the Owner Trustee, for 30 days after its receipt of such notice, request,
and offer of indemnity, shall have neglected or refused to institute any such
action, suit, or proceeding, and during such 30-day period no request or
waiver inconsistent with such written request has been given to the Owner
Trustee pursuant to and in compliance with this section or Section 6.3; it
being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Owner Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb, or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this Agreement,
except in the manner provided in this Agreement and for the equal, ratable, and
common benefit of all Certificateholders. 
For the protection and enforcement of the provisions of this
Section 4.4, each and every Certificateholder and the Owner Trustee shall
be entitled to such relief as can be given either at law or in equity.


Section 4.5.            Majority Control.  No Certificateholder shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust except as expressly provided in this Agreement.  Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Agreement may be
taken by the Certificate Majority. 
Except as expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by the
Certificate Majority at the time of the delivery of such notice.


Section 4.6.            [Reserved]


ARTICLE V



Certain Duties


Section 5.1.            Accounting and Records to the
Noteholders, Certificateholders, the Internal Revenue Service and Others.  Subject to Sections 12.1(b)(iii) and 12.1(c)
of the Sale and Servicing Agreement, the Servicer, on behalf of the Trust and
Depositor, shall (a) maintain or cause to be maintained the books of the Trust
on a calendar year basis on the accrual method of accounting, including,
without



 16
 






 



limitation, the allocations of net income
under Section 2.11, (b) deliver (or cause to be delivered) to each
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be required (including Schedule K-1,
if applicable) to enable each Certificateholder to prepare its federal and
state income tax returns, (c) file or cause to be filed, if necessary, such tax
returns relating to the Trust (including a partnership information return, Form
1065, if applicable), and direct the Owner Trustee to or may itself, as the
case may be, make such elections as may from time to time be required or
appropriate under any applicable state or federal statute or rule or regulation
thereunder so as to maintain the Trust’s characterization as a disregarded
entity, or if applicable, as a partnership, for federal income tax purposes and
(d) collect or cause to be collected any withholding tax as described in and in
accordance with the Sale and Serving Agreement or the Series Supplement with
respect to income or distributions to Certificateholders and the appropriate
forms relating thereto.  The Owner Trustee
or the Servicer, as the case may be, shall make all elections pursuant to this
Section 5.1 as directed in writing by the Depositor.  The Owner Trustee shall sign all tax
information returns, if any, filed pursuant to this Section 5.1 and any other
returns as may be required by law, and in doing so shall rely entirely upon,
and shall have no liability for information provided by, or calculations
provided by, the Depositor or the Servicer. 
The Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to
the Receivables.  The Owner Trustee shall
not make the election provided under Section 754 of the Code unless
required by law.


Section 5.2.            Signature on Returns; Tax Matters
Partner. 
(a)  Notwithstanding the provisions of Section 5.1 and in
the event that the Trust is characterized as a partnership for federal income
tax purposes, the Owner Trustee shall sign on behalf of the Trust the tax
returns of the Trust, unless applicable law requires a Certificateholder to sign
such documents, in which case such documents shall be signed by the Depositor.


(b)           In the event that the Trust is characterized as a
partnership for federal income tax purposes, the Depositor shall be the “tax
matters partner” of the Trust pursuant to the Code.


ARTICLE VI



Authority and Duties of Owner Trustee


Section 6.1.            General Authority.  The Owner Trustee is authorized and directed
to execute and deliver on behalf of the Trust the Basic Documents to which the
Trust is named as a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is named
as a party and any amendment thereto, in each case, in such form as the
Depositor shall approve as evidenced conclusively by the Owner Trustee’s
execution thereof, and on behalf of the Trust, to direct the Administrator to
authenticate and deliver the Notes.  In
addition to the foregoing, the Owner Trustee is authorized, but shall not be
obligated, to take all actions required of the Trust pursuant to the Basic
Documents.  The Owner Trustee is also



 17
 






 



authorized to execute and deliver on behalf
of the Trust, at the Depositor’s or the Servicer’s direction, any documents
that may be required to be executed by the Trust in connection with any state
business licenses (and any renewal thereof) required to be obtained or
maintained by the Trust.  The Owner
Trustee is further authorized from time to time to take such action as the
Certificate Majority recommends with respect to the Basic Documents so long as
such activities are consistent with the terms of the Basic Documents.


Section 6.2.            General Duties.  It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and to administer the Trust in accordance with the
provisions of this Agreement and in the interest of the Holders, subject to the
Basic Documents.  Notwithstanding the
foregoing, the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement to perform any act or
to discharge any duty of the Trust or the Owner Trustee hereunder or under any
Basic Document and the Owner Trustee shall not be liable for the default or
failure of the Servicer to carry out its obligations under the Sale and
Servicing Agreement.


Section 6.3.            Action upon Instruction.  (a) 
Subject to Article IV, the Certificate Majority shall have the exclusive
right to direct the actions of the Owner Trustee in the management of the
Trust, so long as such instructions are not inconsistent with the express terms
set forth herein or in any Basic Document. 
The Certificate Majority shall not instruct the Owner Trustee in a
manner inconsistent with this Agreement or the Basic Documents.


(b)           The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.


(c)           Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Certificate Majority requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificate Majority, the Owner Trustee
shall not be liable on account of such action to any Person.  If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
Basic Documents or as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action
or inaction.



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(d)           In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give notice
(in such form as shall be appropriate under the circumstances) to the
Certificate Majority requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person.  If
the Owner Trustee shall not have received appropriate instruction within 10
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Certificateholders, and shall have no liability to
any Person for such action or inaction.


Section 6.4.            No Duties Except as Specified in
this Agreement or in Instructions. 
The Owner Trustee shall not have any duty or obligation to manage, make
any payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Owner Trust Estate, or to otherwise take or refrain from taking
any action under, or in connection with, any document contemplated hereby to
which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against the
Owner Trustee.  The Owner Trustee shall
have no responsibility for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file any Commission filing for the Trust or to record this Agreement
or any Basic Document.  The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take
all action as may be necessary to discharge any Liens on any part of the Owner
Trust Estate that result from actions by, or claims against, the Owner Trustee
(solely in its individual capacity) and that are not related to the ownership
or the administration of the Owner Trust Estate.


Section 6.5.            No Action Except under Specified
Documents or Instructions.  The Owner
Trustee shall not manage, control, use, sell, dispose of or otherwise deal with
any part of the Owner Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Basic Documents or any Related Document
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.


Section 6.6.            Restrictions.  The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee,
would result in the Trust being treated as an association or publicly traded
partnership taxable as a corporation for federal income tax



 19
 






 



purposes. 
The Certificateholders shall not direct the Owner Trustee to take action
that would violate the provisions of this Section.


ARTICLE VII



Concerning the Owner Trustee


Section 7.1.            Acceptance of Trust and Duties.  The Owner Trustee accepts the trust hereby
created and agrees to perform its duties hereunder with respect to such trust
but only upon the terms of this Agreement. 
The Owner Trustee and the Certificate Paying Agent also agree to
disburse all monies actually received by it constituting part of the Owner
Trust Estate upon the terms of this Agreement or the Basic Documents.  The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct, bad faith or negligence, (ii) in the
case of the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by the Owner Trustee in its individual capacity,
(iii) for liabilities arising from the failure of the Owner Trustee to perform
obligations expressly undertaken by it in the last sentence of Section 6.4
hereof, (iv) for any investments issued by the Owner Trustee or any branch or
affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee.  In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):


(a)           the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;


(b)           the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions
of the Certificate Majority, the Depositor, the Servicer or any
Certificateholder;


(c)           no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;


(d)           under no circumstances shall the Owner Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents or
any Related Document, including the principal of and interest on the Notes;


(e)           the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or in
respect of the validity or sufficiency of the Basic Documents or any Related
Document, other than the certificate of authentication on the Certificates, and



 20
 






 



the Owner Trustee shall in no event assume or
incur any liability, duty or obligation to the Depositor, any Support Provider,
the Indenture Trustee, the Administrator, the Certificate Paying Agent, any
Noteholder or to any Certificateholder, other than as expressly provided for
herein or in the Basic Documents;


(f)            the Owner Trustee shall not be liable for the default or
misconduct of the Depositor, any Support Provider, the Indenture Trustee, the
Administrator or the Servicer under any of the Basic Documents or otherwise and
the Owner Trustee shall have no obligation or liability to perform the
obligations under this Agreement or the Basic Documents that are required to be
performed by the Depositor or the Certificate Paying Agent under this
Agreement, by the Indenture Trustee or the Administrator under the Indenture,
the Series Supplement or any Related Document or the Servicer under the Sale
and Servicing Agreement or the Series Supplement; and


(g)           the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document at the request, order or
direction of the Certificate Majority or any of the Certificateholders, unless
such Certificate Majority or Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or
thereby.  The right of the Owner Trustee
to perform any discretionary act enumerated in this Agreement or in any Basic
Document shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its negligence, bad faith or willful misconduct in
the performance of any such act.


Section 7.2.            Furnishing of Documents.  The Owner Trustee shall furnish to the
Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.


Section 7.3.            Representations and Warranties.  The Owner Trustee hereby represents and
warrants, in its individual capacity, to the Depositor, the Holders and any
Support Provider (which shall have relied on such representations and
warranties in issuing any policy relating to Series Support), that:


(a)           It is a national banking association, duly organized,
validly existing and in good standing under the laws of the United States.  It has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement.


(b)           It has taken all actions necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.


(c)           Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it



 21
 






 



with any of the terms or provisions hereof
will contravene any federal or Delaware state law, governmental rule or
regulation governing the banking or trust powers of it or any judgment or order
binding on it, or constitute any default under its charter documents or by-laws
or any indenture, mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.


(d)           This Agreement constitutes the legal, valid and binding
obligation of the Owner Trustee, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity.


(e)           It is authorized to exercise trust powers in the State of
Delaware as and to the extent contemplated herein and it has a principal place
of business in the State of Delaware.


Section 7.4.            Reliance; Advice of Counsel.  (a)  The Owner Trustee shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties.  The Owner Trustee may accept a certified copy
of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner Trustee
may for all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer, secretary or other authorized officers
of the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Owner Trustee for any action taken or omitted
to be taken by it in good faith in reliance thereon.


(b)           In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or
the Basic Documents, the Owner Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants
and other skilled persons to be selected with reasonable care and employed by
it.  The Owner Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the written opinion or advice of any such counsel, accountants or other
such persons and according to such opinion not contrary to this Agreement or
any Basic Document.


Section 7.5.            Not Acting in Individual Capacity.  Except as provided in this Article VII, in
accepting the trusts hereby created the Owner Trustee acts solely as Owner
Trustee hereunder and not in its individual capacity and all Persons having any
claim against the Owner Trustee by reason of the transactions contemplated by
this



 22
 






 



Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.


Section 7.6.            Owner Trustee Not Liable for
Certificates or Receivables.  The
recitals contained herein and in certificated Certificates (other than the
signature and countersignature of the Owner Trustee on such Certificates) shall
be taken as the statements of the Depositor and the Owner Trustee assumes no
responsibility for the correctness thereof. 
The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement, of any Basic Document or of the Certificates
(other than the signature and countersignature of the Owner Trustee on
certificated Certificates) or the Notes, or of any Receivable or related
documents.  The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Receivable, or the perfection and priority
of any security interest created by any Receivable in any Financed Vehicle or
the maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation:  the existence, condition and ownership of any
Financed Vehicle; the existence and enforceability of any insurance thereon;
the existence and contents of any Receivable on any computer or other record
thereof; the validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Depositor, the Servicer or
any other Person with any warranty or representation made under any Basic
Document or in any related document or the accuracy of any such warranty or
representation or any action of the Indenture Trustee, the Administrator or the
Servicer or any subservicer taken in the name of the Owner Trustee.


Section 7.7.            Owner Trustee May Own
Certificates and Notes.  The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositor, the Indenture
Trustee, the Administrator and the Servicer in banking transactions with the
same rights as it would have if it were not Owner Trustee.


Section 7.8.            Payments from Owner Trust Estate.  All payments to be made by the Owner Trustee
or any Certificate Paying Agent under this Agreement or any of the Basic
Documents shall be made only from the income and proceeds of the Owner Trust
Estate and only to the extent that the Owner Trustee shall have received income
or proceeds from the Owner Trust Estate to make such payments in accordance
with the terms hereof.  The Owner
Trustee, or any successor thereto, in its individual capacity, shall not be
liable for any amounts payable under this Agreement or any of the Basic
Documents.


Section 7.9.            Doing Business in Other
Jurisdictions.  Notwithstanding
anything contained herein to the contrary, the Owner Trustee (in its individual
and trustee capacities) shall not be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent



 23
 






 



or approval or authorization or order of or
the giving of notice to, or the registration with or the taking of any other
action in respect of, any state or other governmental authority or agency of
any jurisdiction other than the State of Delaware; (ii) result in any fee, tax
or other governmental charge under the laws of the State of Delaware becoming
payable by the Owner Trustee (in its individual capacity); or (iii) subject the
Owner Trustee (in its individual capacity) to personal jurisdiction in any
jurisdiction other than the State of Delaware for causes of action arising from
acts unrelated to the consummation of the transactions by the Owner Trustee (in
its individual and trustee capacities) contemplated hereby.


ARTICLE VIII



Compensation of Owner Trustee


Section 8.1.            Owner Trustee’s Fees and Expenses.  The Owner Trustee shall receive as
compensation for its services hereunder such fees as have been separately
agreed upon before the date hereof between HSBC Finance and the Owner Trustee,
and the Owner Trustee shall be entitled to be reimbursed by the Depositor for
its other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its respective rights and duties hereunder or under the Basic Documents.


Section 8.2.            Indemnification.  To the fullest extent permitted by applicable
law, the Depositor shall be liable as primary obligor for, and shall indemnify
the Owner Trustee (in its individual and trustee capacities) and its officers,
directors, successors, assigns, agents and servants (collectively, the “Indemnified
Parties”) from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever (collectively, “Expenses”) which may at any time
be imposed on, incurred by, or asserted against the Owner Trustee (in its trust
or individual capacities) or any Indemnified Party in any way relating to or
arising out of this Agreement or the Basic Documents, the Owner Trust Estate,
the administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee hereunder, except only that the Depositor shall not be liable for
or required to indemnify the Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of
Section 7.1 with respect to the Owner Trustee.  The indemnities contained in this
Section 8.2 and the rights under Section 8.1 shall survive the
resignation or termination of the Owner Trustee or the termination of this
Agreement.  In any event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee’s choice of legal counsel shall be subject to the
approval of the Depositor which approval shall not be unreasonably withheld.


Section 8.3.            Payments to the Owner Trustee.  Any amounts paid to the Owner Trustee in its
trustee capacity pursuant to this Article VIII shall be deemed not to be a part
of the Owner Trust Estate immediately after such payment and any amounts so



 24
 






 



paid to the Owner Trustee in its individual
capacity shall not be so paid out of the Owner Trust Estate but shall be the
property of the Owner Trustee in its individual capacity.


Section 8.4.            Non-recourse Obligations.  Notwithstanding anything in this Agreement or
any Basic Document, the Owner Trustee agrees in its individual capacity and in
its capacity as Owner Trustee for the Trust that all obligations of the Trust
to the Owner Trustee individually or as Owner Trustee for the Trust shall be
recourse to the Owner Trust Estate only and specifically shall not be recourse
to the assets of any Certificateholder.


ARTICLE IX



Termination of Agreement


Section 9.1.            Termination of Agreement.  (a)  This Agreement shall terminate
and the Trust shall dissolve, wind up, terminate and be of no further force or
effect upon the latest to occur of (i) the maturity or other liquidation of the
last Receivable (including the optional purchase by the Depositor or the
Servicer of the corpus of the Trust as described in Section 11.1 of the
Sale and Servicing Agreement) and the subsequent distribution of amounts in
respect of such Receivables as provided in the Basic Documents and, with
respect to amounts released from the Lien of the Indenture, distribution
thereof to the Certificateholders, or (ii) the payment to Noteholders and
Certificateholders of all amounts required to be paid to them pursuant to the
Indenture and this Agreement, including, with respect to amounts released from
the Lien of the Indenture, distribution thereof to the Certificateholders and
the payment to any Support Provider of all amounts payable or reimbursable to
it pursuant to the Series Supplement; provided, however, that the
rights to indemnification under Section 8.2 and the rights under
Section 8.1 shall survive the termination of the Trust.  The Servicer shall promptly notify the Owner
Trustee of any prospective termination pursuant to this Section 9.1.  The bankruptcy, liquidation, dissolution,
death or incapacity of any Certificateholder shall not (x) operate to terminate
this Agreement or the Trust, nor (y) entitle such Certificateholder’s legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations
and liabilities of the parties hereto.


(b)           Except as provided in clause (a), neither the Depositor
nor any other Certificateholder shall be entitled to revoke or terminate the
Trust.


(c)           If any Certificates are in certificated form, notice of
any termination of a Series Trust Estate, specifying the Distribution Date upon
which the Certificateholders of such Series shall surrender their Certificates
to the Certificate Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders of such Series mailed within five Business Days of receipt
of notice of such termination given pursuant to Section 9.1(a) hereof, stating
(i) the Distribution Date upon or with respect to which final payment of the
Certificates of such Series shall be made upon presentation and surrender of
the



 25
 






 



Certificates of such Series at the office of
the Certificate Paying Agent therein designated, (ii) the amount of any such
final payment, (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates of such Series at the office of the
Certificate Paying Agent therein specified and (iv) interest will cease to
accrue on the Certificates of such Series. 
The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. 
Upon presentation and surrender of the Certificates of such Series, the
Certificate Paying Agent shall cause to be distributed to Certificateholders of
such Series amounts distributable pursuant to the Series Supplement.


(d)           If any Certificates are in certificated form, in the event
that all of the Certificateholders holding certificated Certificates of such
Series shall not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the
Certificate Paying Agent shall give a second written notice to the remaining
Certificateholders holding certificated Certificates of such Series to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto.  If
within one year after the second notice all the certificated Certificates of
such Series shall not have been surrendered for cancellation, the Certificate
Paying Agent may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders holding
certificated Certificates concerning surrender of their Certificates, and the
cost thereof shall be paid out of the funds and other Series Trust Estate
assets that shall remain subject to this Agreement.  Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to applicable escheat
laws, by the Certificate Paying Agent to the Depositor and Holders shall look
solely to the Depositor for payment.


(e)           Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution in accordance
with Section 3808 of the Statutory Trust Statute shall be distributed by the Certificate
Paying Agent to the Depositor.


(f)            Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Statutory Trust Statute.


ARTICLE X



Successor Owner Trustees and Additional Owner Trustees


Section 10.1.          Eligibility Requirements for Owner
Trustee.  The Owner Trustee shall at
all times be a corporation or national banking association (i) satisfying the
provisions of Section 3807(a) of the Statutory Trust Statute, (ii) authorized
to exercise corporate trust powers; (iii) having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authorities; (iv) having (or having a parent which has) a rating of at
least Baa3 by Moody’s or A-1 by Standard &



 26
 






 



Poor’s; and (v) acceptable to the
Certificateholders.  If such corporation
shall publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
In case at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2.


Section 10.2.          Resignation or Removal of Owner
Trustee.  The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor (or in the event that the Depositor is
not the sole Certificateholder, the Certificate Majority), any Support Provider
and the Servicer.  As a condition
precedent to the effectiveness of any such resignation, the Owner Trustee
shall, at least 30 calendar days prior to the effective date of such
resignation, provide to the Depositor and the Servicer written notice of any
successor owner trustee pursuant to this Section, in form and substance
reasonably satisfactory to the Depositor and the Servicer, containing all
information reasonably requested by the Depositor and Servicer in order for the
Depositor to comply with its reporting obligations under Item 6.02 of Form 8-K
with respect to the resignation of the Owner Trustee.  Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor Owner Trustee meeting the
qualifications set forth in Section 10.1 herein, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Owner Trustee and one copy to the successor Owner Trustee; provided  that
the Depositor shall have received written confirmation from each of the Rating
Agencies that the proposed appointment will not result in an increased capital
charge to any Support Provider by either of the Rating Agencies.  If no successor Owner Trustee shall have been
so appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee or any Support Provider
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.


If
at any time the Owner Trustee shall cease to be eligible in accordance with the
provisions of Section 10.1 and shall fail to resign after written request
therefor by the Depositor, or if at any time the Owner Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Owner Trustee or of its respective property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its respective
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Owner Trustee.  If the Depositor shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Owner Trustee meeting the
qualifications set forth in Section 10.1 herein, by written instrument, in
triplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed, one copy to any Support Provider and one copy to the
successor Owner Trustee.  As a condition
precedent to such removal and appointment described in the two preceding
sentences, the Owner Trustee shall provide to the Depositor and the Servicer,
at least 30 calendar days prior to the effective date of such removal and
appointment, written notice to the Depositor and the Servicer, in form and
substance



 27
 






 



reasonably
satisfactory to the Depositor and the Servicer, containing all information
reasonably requested by the Depositor and the Servicer in order for the
Depositor to comply with its reporting obligation under Item 6.02 of Form 8-K
with respect to the removal of the outgoing Owner Trustee and the appointment
of a successor Owner Trustee.


In
addition, if the Owner Trustee shall fail to fulfill its obligations under
Section 10.2 (with respect to notice to the Depositor or the Servicer), and
such failure continues for the lesser of 10 calendar days or such period in
which the applicable report under the Exchange Act can be filed timely (without
taking into account any extensions), then the Depositor may remove the Owner
Trustee.  If the Depositor removes the
Owner Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Owner Trustee by written
instrument in duplicate, one copy of which shall be delivered to the Owner
Trustee so removed and one copy to the successor Owner Trustee.


Any
resignation or removal of the Owner Trustee and appointment of a successor
Owner Trustee pursuant to any of the provisions of this Section 10.2 shall not
become effective until acceptance of appointment by the successor Owner Trustee
pursuant to Section 10.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee.  The Depositor
shall provide notice of such resignation or removal of the Owner Trustee to
each of the Rating Agencies.


In
connection with its resignation or removal, the Owner Trustee agrees to
cooperate with any successor Owner Trustee in effecting the termination of the
Owner Trustee’s responsibilities and rights hereunder and shall promptly
provide such successor Owner Trustee all documents and records reasonably
requested by it to enable it to assume the Owner Trustee’s functions hereunder;
provided however, the Owner Trustee
shall not be required to incur any expenses for which it will not be promptly
reimbursed.


Section 10.3.          Successor Owner Trustee.  Any successor Owner Trustee appointed
pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Servicer, any Support Provider and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of its predecessor shall become effective
and the successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations
of its predecessor under this Agreement, with like effect as if originally
named as Owner Trustee.  The predecessor
Owner Trustee shall upon payment of its fees and expenses deliver to the
successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and the Depositor and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties and obligations.



 28
 






 



 


No
successor Owner Trustee shall accept appointment as provided in this Section
10.3 unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.


Upon
acceptance of appointment by a successor Owner Trustee pursuant to this
Section, the Servicer shall mail notice of the successor of such Owner Trustee
to all Certificateholders, the Indenture Trustee, the Administrator, the
Noteholders and the Rating Agencies.  If
the Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer.


Any
successor Owner Trustee appointed pursuant to this Section 10.3 shall promptly
file an amendment to the Certificate of Trust with the Secretary of State
identifying the name and principal place of business of such successor Owner
Trustee in the State of Delaware.


Section 10.4.          Merger or Consolidation of Owner
Trustee.  Any corporation into which
the Owner Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Owner Trustee shall be a party, or any corporation succeeding to all
or substantially all of the corporate trust business of the Owner Trustee,
shall be the successor of the Owner Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 10.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies, the Depositor and the Servicer.


In
addition, as a condition precedent to the effectiveness of any merger or
consolidation of the Owner Trustee, the Owner Trustee shall deliver to the
Depositor and the Servicer, at least 30 calendar days prior to the effective
date of any merger or consolidation of the Owner Trustee, written notice
thereof, in form and substance reasonably satisfactory to the Depositor and the
Servicer, containing all information reasonably requested by the Depositor and
the Servicer in order for the Depositor to comply with its reporting
obligations under Item 6.02 of Form 8-K with respect to a successor Owner Trustee.
If the Owner Trustee shall fail to fulfill its obligations under Section 10.4
(with respect to notice to the Depositor or the Servicer), and such failure
continues for the lesser of 10 calendar days or such period in which the
applicable report under the Exchange Act can be filed timely (without taking
into account any extensions), then the Depositor may remove the Owner
Trustee.  If the Depositor removes the
Owner Trustee under the authority of the immediately preceding sentence, the
Depositor shall promptly appoint a successor Owner Trustee by written
instrument in duplicate, one copy of which shall be delivered to the Owner
Trustee so removed and one copy to the successor Owner Trustee.


Section 10.5.          Appointment of Co-Trustee or
Separate Trustee.  Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any part of the Owner Trust



 29
 






 



Estate or any Financed Vehicle may at the
time be located, the Servicer and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee and any Support Provider to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable.  If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee, subject to the approval
of the Certificate Majority (which approval shall not be unreasonably
withheld), shall have the power to make such appointment.  No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.


Each
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:


(i)            all rights, powers,
duties and obligations conferred or imposed upon the Owner Trustee shall be
conferred upon and exercised or performed by the Owner Trustee and such
separate trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the Owner
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;


(ii)           no trustee under
this Agreement shall be personally liable by reason of any act or omission of
any other trustee under this Agreement; and


(iii)          the Servicer and
the Owner Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee.


Any
notice, request or other writing given to the Owner Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. 
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article.  Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee.  Each
such instrument shall be filed with the Owner Trustee and a copy thereof given
to the Servicer.



 30
 






 



 


Any
separate trustee or co-trustee may at any time appoint the Owner Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on its behalf and in its name.  If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Owner Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.


ARTICLE XI



Miscellaneous


Section 11.1.          Supplements and Amendments.  (a) 
This Agreement may be amended from time to time by the parties hereto by
a written instrument signed by each of them, without the consent of any of the
Securityholders; provided that an Opinion of Counsel for the Depositor
(which Opinion of Counsel may, as to factual matters, rely upon Officer’s
Certificates of the Depositor) is addressed and delivered to the Owner Trustee,
dated the date of any such amendment, to the effect that the conditions
precedent to any such amendment have been satisfied and the Depositor shall
have delivered to the Owner Trustee an Officer’s Certificate dated the date of
any such Amendment, stating that the Depositor reasonably believes that such
Amendment will not have a material adverse effect on the Securityholders.


(b)           This Agreement may also be amended from time to time with
the consent of the Noteholders evidencing not less than a majority of the Outstanding
Amount of the Notes, and the consent of the Certificateholders representing at
least a 50% Percentage Interest, for which the Seller has not delivered an
Officer’s Certificate stating that there is no material adverse effect, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Securityholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received that are required to be distributed on any
Security without the consent of the related Securityholder, or (ii) reduce
the aforesaid percentage of Securities the Holder of which are required to
consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding or (iii) for federal income tax purposes, cause
the Trust to be treated as an association or publicly traded partnership
taxable as a corporation, or the Notes to fail to be treated as indebtedness.


Prior
to the execution of any such amendment or consent, the Owner Trustee shall
furnish written notification of the substance of such amendment or consent to
each Certificateholder, the Indenture Trustee, the Administrator and each of
the Rating Agencies.


It
shall not be necessary for the consent of Certificateholders, the Noteholders
or the Indenture Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. 
The manner of obtaining such consents (and any



 31
 






 



other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee may prescribe.  Promptly
after the execution of any amendment to the Certificate of Trust, including,
without limitation, amendments pursuant this Section, the Owner Trustee shall
cause the filing of such amendment with the Secretary of State.


(c)           The Owner Trustee shall not be required to enter into any
amendment to this Agreement which adversely affects their respective rights,
duties or immunities under this Agreement.


Section 11.2.          No Legal Title to Owner Trust
Estate in Certificateholders.  The
Certificateholders shall not have legal title to any part of the Series Trust
Estate.  The Certificateholders shall be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Articles III, V and IX.  No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Series Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Series
Trust Estate.


Section 11.3.          Limitations on Rights of Others.  The provisions of this Agreement are solely
for the benefit of the Owner Trustee, the Depositor, the Certificateholders,
the Servicer and any Support Provider, the Indenture Trustee, the Administrator
and the Noteholders, and nothing in this Agreement, whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.


Section 11.4.          Notices.  (a)  Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt personally delivered, delivered by overnight
courier or mailed first class mail or certified mail, in each case return
receipt requested, and shall be deemed to have been duly given upon receipt, if
to the Owner Trustee, addressed to its Corporate Trust Office; if to the
Depositor, addressed 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, Attn: Treasurer; if to the
Servicer, addressed to HSBC Finance Corporation, 2700 Sanders Road, Prospect
Heights, Illinois 60070, Attn: Treasurer; if to any Support Provider, at the
address of such Support Provider as set forth in the Series Supplement; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party.


(b)           Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register.  Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been duly given,
whether or not the Certificateholder receives such notice.



 32
 






 



 


Section 11.5.          Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


Section 11.6.          Separate Counterparts.  This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but one
and the same instrument.


Section 11.7.          Assignments; Support Provider.  This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.  This Agreement shall
also inure to the benefit of any Support Provider.  Without limiting the generality of the
foregoing, all covenants and agreements in this Agreement which confer rights
upon any Support Provider shall be for the benefit of and run directly to any
Support Provider, and any Support Provider shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents.  The Support Provider, if any, may disclaim
any of its rights and powers under this Agreement (but not its duties and
obligations under any Series Support) upon delivery of a written notice to the
Owner Trustee.


Section 11.8.          Covenants of the Depositor.  The Depositor will not at any time institute
against the Trust any bankruptcy proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, this Agreement or any of the Basic Documents.


Section 11.9.          No Petition.  To the fullest extent permitted by applicable
law, the Owner Trustee (not in its individual capacity but solely as Owner
Trustee), by entering into this Agreement, each Certificateholder, by accepting
a Certificate, and the Indenture Trustee, the Administrator and each Noteholder
by accepting the benefits of this Agreement, hereby covenants and agrees that
they will not at any time institute against the Depositor, or join in any
institution against the Depositor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, this Agreement, any of
the Basic Documents, the Series Supplement or any Related Documents.


Section 11.10.        No Recourse.  Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder’s Certificates represent
beneficial interests in the Owner Trust Estate only and do not represent
interests in or obligations of the Servicer, the Depositor, the Owner Trustee,
the Indenture Trustee, the Administrator, any Support Provider or any Affiliate
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the
Certificates, the Basic Documents, the Series Supplement or any Related
Documents.



 33
 






 



 


Section 11.11.        Headings.  The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or limit
any of the terms or provisions hereof.


Section 11.12.        GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


Section 11.13.        Servicer.  The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or the Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents, the Series Supplement or any Related
Documents.  Upon written request, the
Owner Trustee shall execute and deliver to the Servicer a limited power of
attorney appointing the Servicer the Trust’s agent and attorney-in-fact
to prepare, or cause to be prepared, execute and deliver all such documents,
reports, filings, instruments, certificates and opinions.


Section 11.14.        [Reserved].


Section 11.15.        Regulation AB.  The Seller, the Servicer and the Owner
Trustee acknowledge and agree that the purpose of this Section 11.15 is to
facilitate compliance by the Seller with the provisions of Regulation AB and
related rules and regulations of the Commission. The Seller shall not exercise
its right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. The Owner Trustee
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Seller or the Servicer in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. The Owner Trustee shall cooperate fully with the Seller and the
Issuer to deliver to the Seller and the Issuer (including the Servicer and any
other assignees or designees) any and all information regarding the Owner
Trustee that is necessary in the good faith determination of the Seller or the
Issuer to permit the Seller to comply with the provisions of Items 1109(a),
1109(b), 1117 and 1119 of Regulation AB. 
Without limiting the generality of the foregoing, for so long as the
Issuer is required to report under the Exchange Act, the Owner Trustee shall
(i) on or before the fifth Business Day of each month, provide to the Servicer,
in writing, such information regarding the Owner Trustee as is requested by the
Servicer for the purpose of compliance with Items 1117 and 1119 of Regulation
AB; provided, however, that the Owner Trustee shall not
be required to provide such information in the event that there has been no
change to the information previously provided by the Owner Trustee to the
Servicer, and (ii) as promptly as practicable following notice to or discovery
by a Responsible Officer of the Owner Trustee of any



 34
 






 



changes to such information, provide to the Servicer,
in writing, such updated information.


Section 11.16.        Waiver of Jury Trial.  Each party to this Agreement hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement, the Notes or the transactions contemplated hereby.



 35
 






 



 


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


	
   

  	
  U.S. BANK TRUST NATIONAL

  ASSOCIATION,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC AUTO RECEIVABLES 

  CORPORATION,

  
	
   

  	
  as Depositor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven H. Smith

  
	
   

  	
   

  	
  Name: Steven H. Smith

  
	
   

  	
   

  	
  Title: Vice
  President and Assistant

  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and
  Agreed:

  	
   

  	
   

  
	
  HSBC FINANCE
  CORPORATION,

  	
   

  	
   

  
	
  as Servicer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William H.
  Kesler

  	
   

  	
   

  	
   

  
	
   

  	
  Name: William H.
  Kesler

  	
   

  	
   

  
	
   

  	
  Title: Senior
  Vice President-Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSBC BANK USA,
  NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
  not in its
  individual capacity

  	
   

  	
   

  
	
  but solely as
  Certificate Paying Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Fernando
  Acebedo

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Fernando
  Acebedo

  	
   

  	
   

  
	
   

  	
  Title: Vice
  President

  	
   

  	
   

  



 


[Signature Page for
Amended and Restated Trust Agreement]



 36














 


EXHIBIT A


[FORM OF
CERTIFICATE]


NUMBER


HSBC AUTOMOTIVE
TRUST (USA) 2006-3

CERTIFICATE


SEE REVERSE FOR
CERTAIN DEFINITIONS


THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS PROVIDED BY THE SECURITIES ACT
AND SUCH STATE SECURITIES LAWS.  NO
RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS SUCH RESALE OR
TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE AMENDED AND RESTATED
TRUST AGREEMENT PERTAINING TO THE HSBC AUTOMOTIVE TRUST (USA) 2006-3 (THE “AGREEMENT”)
AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, (iii)
TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN OTHER
REQUIREMENTS SPECIFIED IN THE AGREEMENT. 
NEITHER THE DEPOSITOR, THE SERVICER, THE TRUST NOR THE OWNER TRUSTEE IS
OBLIGATED TO REGISTER THE CERTIFICATES UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS.






CERTIFICATE


evidencing a beneficial ownership interest in the
assets of the Trust relating to the Series Trust Estate, which includes a pool
of motor vehicle retail installment sale contracts sold to the Trust by HSBC
Auto Receivables Corporation.


(This Certificate does not represent an interest in or
obligation of HSBC Auto Receivables Corporation or any of its Affiliates,
except to the extent described below.)


THIS CERTIFIES THAT HSBC Auto Receivables Corporation
is the registered owner of a fully-paid and, to the fullest extent permitted by
applicable law, nonassessable beneficial ownership interest representing a 100%
Percentage Interest in the assets of HSBC Automotive Trust (USA) 2006-3 (the “Trust”)
formed by HSBC Auto



 A-1
 






 



Receivables Corporation,
a Nevada corporation (the “Depositor”) and the Series Trust Estate.


OWNER TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


This is one of the
Certificates referred to in the within-mentioned Agreement.


U.S.
BANK TRUST NATIONAL ASSOCIATION,

not in its individual

capacity but solely as

Owner Trustee


by                                                                                                                                                             
Authenticating Agent


by                                                                                                                                                                                                


HSBC Automotive Trust (USA) 2006-3 (the “Trust”), was
created pursuant to a Trust Agreement, dated as of October 11, 2006, between
the Depositor and U.S. Bank Trust National Association, as owner trustee (the “Owner
Trustee”), as amended and restated as of November 1, 2006 (the “Agreement”) and
as supplemented by a Series Supplement dated as of November 1, 2006 (the “Series
Supplement”).  A summary of certain of
the pertinent provisions of the Agreement and Series Supplement is set forth
below.  To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Agreement and the Series Supplement.


This certificate is one of the duly authorized
certificates of Trust of HSBC Automotive Trust (USA) 2006-3 designated as
Certificates.


This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Series Supplement, to
which Agreement the holder of this Certificate by virtue of the acceptance
hereof assents and by which such holder is bound.  The property of the Trust consists of the
Series Trust Estate which includes a pool of motor vehicle retail installment
sale contracts (the “Receivables”), all monies due thereunder on or after
specified Cut-off Dates, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, proceeds from claims on certain
insurance policies and certain other rights under the Agreement and the Sale
and Servicing Agreement and each related Transfer Agreement, all right, to and
interest of, the Depositor in and to (i) the Master Receivables Purchase
Agreement dated as of November 18, 2002 between HSBC Auto Finance Inc. (“HAFI”)
and the Depositor, as such agreement may be amended or supplemented from time
to time, and (ii) the Master Receivables Purchase Agreement dated as of August
8, 2002, between HACI and the Depositor, as such agreement may be amended or
supplemented from time to time.


The Notes have been issued pursuant to an Indenture
dated as of November 1, 2006 (the “Indenture”), among the Trust, HSBC Bank USA,
National



 A-2
 






 



Association, as
Administrator and The Bank of New York Trust Company, N.A., as Indenture
Trustee and the Series Supplement.


Under the Series Supplement, there will be distributed
on the 17th day of each month or, if such 17th day is not a Business Day, the
next Business Day (the “Distribution Date”), commencing on December 18, 2006,
to the Person in whose name this Certificate is registered at the close of
business on the Business Day preceding such Distribution Date (the “Record Date”)
such Certificateholder’s fractional undivided interest in any amount to be
distributed to Certificateholders on such Distribution Date.


The holder of this Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture, the Agreement and the Series Supplement, as
applicable.


Distributions on this Certificate will be made as
provided in the Agreement by the Owner Trustee by wire transfer or check mailed
to the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon.  Except as otherwise provided in
the Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in the Corporate Trust Office.


Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.


Unless the certificate of authentication hereon shall
have been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Agreement or the Sale and Servicing Agreement or be valid for any
purpose.


THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.



 A-3
 






 



 


IN WITNESS WHEREOF, the Owner Trustee, on behalf of
the Trust and not in its individual capacity, has caused this Certificate to be
duly executed.


	
   

  	
   

  	
  HSBC AUTOMOTIVE TRUST (USA) 2006-3

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  U.S. Bank Trust National Association,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
						




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(Reverse of
Certificate)


The Certificates do not represent an obligation of, or
an interest in, the Depositor, the Servicer, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Agreement, the Indenture, the Basic Documents or any Related
Documents.  In addition, this Certificate
is not guaranteed by any governmental agency or instrumentality and is limited
in right of payment to certain collections with respect to the Receivables, as
more specifically set forth herein and in the Sale and Servicing
Agreement.  A copy of each of the Sale
and Servicing Agreement, the Agreement and the Series Supplement may be
examined during normal business hours at the principal office of the Depositor,
and at such other places, if any, designated by the Depositor, by any
Certificateholder upon written request.


As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder’s
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. 
The initial Certificate Registrar appointed under the Agreement is the
Owner Trustee.


The Certificates are issuable as registered
Certificates in any Percentage Interest not to exceed 100%.  As provided in the Agreement and subject to
certain limitations therein set forth, Certificates are exchangeable for new
Certificates in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the holder surrendering the same.  No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or governmental
charge payable in connection therewith.


The Owner Trustee and the Certificate Registrar and
any agent of the Owner Trustee or the Certificate Registrar may treat the
person in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.


The Certificates may not be acquired by or for the
account of (a) an employee benefit plan (as defined in § 3(3) of ERISA)
that is subject to the provisions of Title I of ERISA, (b) a plan (as defined
in § 4975(e) (1) of the Code) that is subject to § 4975 of the Code
or (c) any entity whose underlying assets include plan assets by reason of such
plan’s investment in the entity (each, a “Benefit Plan”).  The Certificate Registrar shall not register
the transfer of a Certificate unless the transferee has delivered to the Owner
Trustee a representation letter in form and substance satisfactory to the



 A-5
 






 



Owner Trustee to the
effect that the transferee is not, and is not acquiring the Certificate for the
account of, a Benefit Plan.


The recitals contained herein shall be taken as the
statements of the Depositor or the Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as
to the validity or sufficiency of this Certificate or of any Receivable or
related document.


Unless the certificate of authentication hereon shall
have been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to
any benefit under the Agreement or the Sale and Servicing Agreement or be valid
for any purpose.



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ASSIGNMENT


FOR VALUE RECEIVED the
undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE




 





(Please print or
type name and address, including postal zip code, of assignee)




 





the within Certificate,
and all rights thereunder, hereby irrevocably constituting and appointing


____________________
Attorney to transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.


Dated:


	
  

  	
   

  	
  *

  
	
   

  	
  Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  	
  *

  



 






*              NOTICE:  The
signature to this assignment must correspond with the name of the registered
owner as it appears on the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an “eligible
guarantor institution” meeting the requirements of the Certificate Registrar,
which requirements include membership or participation in STAMP or such other “signature
guarantee program” as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.



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EXHIBIT B


[FORM OF
CERTIFICATE OF TRUST]


CERTIFICATE
OF TRUST

OF

HSBC AUTOMOTIVE TRUST (USA) 2006-3


THIS Certificate of Trust of HSBC Automotive Trust
(USA) 2006-3 (the “Trust”) is being duly executed and filed on behalf of the
Trust by the undersigned, as trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.)
(the “Act”).


1.             Name.  The name of the statutory trust formed by
this Certificate of Trust is HSBC Automotive Trust (USA) 2006-3.


2.             Delaware Trustee.  The
name and business address of the trustee of the Trust with a principal place of
business in the State of Delaware are U.S. Bank Trust National Association, 209
South LaSalle Street, Chicago, Illinois 60604.


3.             Effective
Date.  This Certificate of Trust shall
be effective upon filing.


IN
WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.


	
  

  	
   

  	
  U.S. BANK TRUST NATIONAL

  ASSOCIATION,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  



 



 B-1