Document:

Exhibit 4.1

EXECUTION VERSION

 

 

 

 

INDENTURE

 

Dated as of June 8,
2006

 

among

HSBC AUTOMOTIVE
TRUST (USA) 2006-1

Issuer,

 

THE BANK OF NEW
YORK

Indenture Trustee

 

and

 

HSBC BANK USA,
NATIONAL ASSOCIATION

Administrator

 

 

 

 

________________________________________________________________________

 

   
 
  

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I. Definitions
  and Incorporation by Reference

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  SECTION 1.2

  	
   

  	
  Incorporation by
  Reference of the Trust Indenture Act

  	
   

  	
  6

  
	
  SECTION 1.3

  	
   

  	
  Rules of
  Construction

  	
   

  	
  7

  
	
  SECTION 1.4

  	
   

  	
  Action by or Consent of
  Noteholders and Certificateholders

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II. The Notes

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Form; Amount Limited;
  Issuable in Series

  	
   

  	
  8

  
	
  SECTION 2.2

  	
   

  	
  Execution,
  Authentication and Delivery

  	
   

  	
  8

  
	
  SECTION 2.3

  	
   

  	
  Temporary Notes

  	
   

  	
  9

  
	
  SECTION 2.4

  	
   

  	
  Registration;
  Registration of Transfer and Exchange

  	
   

  	
  9

  
	
  SECTION 2.5

  	
   

  	
  Mutilated, Destroyed,
  Lost or Stolen Notes

  	
   

  	
  12

  
	
  SECTION 2.6

  	
   

  	
  Persons Deemed Owner

  	
   

  	
  13

  
	
  SECTION 2.7

  	
   

  	
  Payment of Principal
  and Interest; Defaulted Interest

  	
   

  	
  13

  
	
  SECTION 2.8

  	
   

  	
  Cancellation

  	
   

  	
  14

  
	
  SECTION 2.9

  	
   

  	
  Reserved

  	
   

  	
  14

  
	
  SECTION 2.10

  	
   

  	
  Book-Entry Notes

  	
   

  	
  14

  
	
  SECTION 2.11

  	
   

  	
  Notices to Clearing
  Agency

  	
   

  	
  15

  
	
  SECTION 2.12

  	
   

  	
  Definitive Notes

  	
   

  	
  15

  
	
  SECTION 2.13

  	
   

  	
  Final Distribution

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III. Covenants

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
   

  	
  Payment of Principal
  and Interest

  	
   

  	
  17

  
	
  SECTION 3.2

  	
   

  	
  Maintenance of Office
  or Agency

  	
   

  	
  17

  
	
  SECTION 3.3

  	
   

  	
  Money for Payments to
  be Held in Trust

  	
   

  	
  17

  
	
  SECTION 3.4

  	
   

  	
  Existence

  	
   

  	
  19

  
	
  SECTION 3.5

  	
   

  	
  Protection of
  Series Trust Estate

  	
   

  	
  19

  
	
  SECTION 3.6

  	
   

  	
  Opinions as to Series Trust
  Estate

  	
   

  	
  20

  
	
  SECTION 3.7

  	
   

  	
  Performance of
  Obligations; Servicing of Receivables

  	
   

  	
  21

  
	
  SECTION 3.8

  	
   

  	
  Negative Covenants

  	
   

  	
  21

  
	
  SECTION 3.9

  	
   

  	
  Annual Statement as to
  Compliance

  	
   

  	
  22

  
	
  SECTION 3.10

  	
   

  	
  Issuer
  May Consolidate, Etc. Only on Certain Terms

  	
   

  	
  23

  
	
  SECTION 3.11

  	
   

  	
  Successor or Transferee

  	
   

  	
  24

  
	
  SECTION 3.12

  	
   

  	
  No Other Business

  	
   

  	
  25

  
	
  SECTION 3.13

  	
   

  	
  No Borrowing

  	
   

  	
  25

  
	
  SECTION 3.14

  	
   

  	
  Servicer’s Obligations

  	
   

  	
  25

  
	
  SECTION 3.15

  	
   

  	
  Guarantees, Loans,
  Advances and Other Liabilities

  	
   

  	
  25

  
	
  SECTION 3.16

  	
   

  	
  Capital Expenditures

  	
   

  	
  25

  
	
  SECTION 3.17

  	
   

  	
  Compliance with Laws

  	
   

  	
  25

  
	
  SECTION 3.18

  	
   

  	
  Restricted Payments

  	
   

  	
  26

  
	
  SECTION 3.19

  	
   

  	
  Notice of Events of
  Default

  	
   

  	
  26

  
	
  SECTION 3.20

  	
   

  	
  Further Instruments and
  Acts

  	
   

  	
  26

  
	
  SECTION 3.21

  	
   

  	
  Amendments of Sale and
  Servicing Agreement and Trust Agreement

  	
   

  	
  26

  
	
  SECTION 3.22

  	
   

  	
  Income Tax
  Characterization

  	
   

  	
  26

  

 

 i
 

 

 

	
  ARTICLE IV. Satisfaction and
  Discharge

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Satisfaction and
  Discharge of Indenture

  	
   

  	
  26

  
	
  SECTION 4.2

  	
   

  	
  Application of Trust
  Money

  	
   

  	
  28

  
	
  SECTION 4.3

  	
   

  	
  Repayment of Monies
  Held by Note Paying Agent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V. Remedies

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Events of Default

  	
   

  	
  28

  
	
  SECTION 5.2

  	
   

  	
  Collection of
  Indebtedness and Suits for Enforcement by Indenture Trustee

  	
   

  	
  28

  
	
  SECTION 5.3

  	
   

  	
  Limitation of Suits

  	
   

  	
  30

  
	
  SECTION 5.4

  	
   

  	
  Unconditional Rights of
  Noteholders To Receive Principal and Interest

  	
   

  	
  31

  
	
  SECTION 5.5

  	
   

  	
  Restoration of Rights
  and Remedies

  	
   

  	
  31

  
	
  SECTION 5.6

  	
   

  	
  Rights and Remedies
  Cumulative

  	
   

  	
  31

  
	
  SECTION 5.7

  	
   

  	
  Delay or Omission Not a
  Waiver

  	
   

  	
  31

  
	
  SECTION 5.8

  	
   

  	
  Limitation on Voting of
  Preferred Stock; Control by Noteholders

  	
   

  	
  32

  
	
  SECTION 5.9

  	
   

  	
  Waiver of Past Defaults

  	
   

  	
  32

  
	
  SECTION 5.10

  	
   

  	
  Undertaking for Costs

  	
   

  	
  32

  
	
  SECTION 5.11

  	
   

  	
  Waiver of Stay or
  Extension Laws

  	
   

  	
  33

  
	
  SECTION 5.12

  	
   

  	
  Action on Notes

  	
   

  	
  33

  
	
  SECTION 5.13

  	
   

  	
  Performance and
  Enforcement of Certain Obligations

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI. The
  Indenture Trustee and the Administrator

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Duties of Indenture
  Trustee

  	
   

  	
  34

  
	
  SECTION 6.2

  	
   

  	
  Rights of Indenture
  Trustee

  	
   

  	
  36

  
	
  SECTION 6.3

  	
   

  	
  Individual Rights of
  Indenture Trustee

  	
   

  	
  37

  
	
  SECTION 6.4

  	
   

  	
  Indenture Trustee’s
  Disclaimer

  	
   

  	
  37

  
	
  SECTION 6.5

  	
   

  	
  Notice of Defaults

  	
   

  	
  37

  
	
  SECTION 6.6

  	
   

  	
  Reports by Servicer to
  Holders

  	
   

  	
  38

  
	
  SECTION 6.7

  	
   

  	
  Indenture Trustee
  Compensation and Indemnification

  	
   

  	
  38

  
	
  SECTION 6.8

  	
   

  	
  Replacement of
  Indenture Trustee

  	
   

  	
  39

  
	
  SECTION 6.9

  	
   

  	
  Successor Indenture
  Trustee by Merger

  	
   

  	
  41

  
	
  SECTION 6.10

  	
   

  	
  Appointment of
  Co-Indenture Trustee or Separate Indenture Trustee

  	
   

  	
  41

  
	
  SECTION 6.11

  	
   

  	
  Eligibility:
  Disqualification

  	
   

  	
  42

  
	
  SECTION 6.12

  	
   

  	
  Preferential Collection
  of Claims Against Issuer

  	
   

  	
  43

  
	
  SECTION 6.13

  	
   

  	
  Representations and
  Warranties of the Indenture Trustee

  	
   

  	
  43

  
	
  SECTION 6.14

  	
   

  	
  Waiver of Setoffs

  	
   

  	
  43

  
	
  SECTION 6.15

  	
   

  	
  No Consent to Certain
  Acts of Seller

  	
   

  	
  43

  
	
  SECTION 6.16

  	
   

  	
  Duties, Liabilities and
  Limitations on Liability of Administrator.

  	
   

  	
  44

  
	
  SECTION 6.17

  	
   

  	
  Administrator
  Compensation and Indemnification.

  	
   

  	
  45

  
	
  SECTION 6.18

  	
   

  	
  Replacement of
  Administrator.

  	
   

  	
  46

  
	
  SECTION 6.19

  	
   

  	
  Successor Administrator
  by Merger

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII.
  Noteholders’ Lists and Reports

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
   

  	
  Issuer To Furnish To
  Indenture Trustee and Administrator Names and Addresses of Noteholders

  	
   

  	
  47

  

 

 ii
 

 

 

	
  SECTION 7.2

  	
   

  	
  Preservation of
  Information; Communications to Noteholders

  	
   

  	
  48

  
	
  SECTION 7.3

  	
   

  	
  Reports by Issuer

  	
   

  	
  48

  
	
  SECTION 7.4

  	
   

  	
  Reports by Indenture
  Trustee

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII. Accounts,
  Disbursements and Releases

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
   

  	
  Collection of Money

  	
   

  	
  49

  
	
  SECTION 8.2

  	
   

  	
  Release of
  Series Trust Estate

  	
   

  	
  49

  
	
  SECTION 8.3

  	
   

  	
  Opinion of Counsel

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX. Amendments;
  the Series Supplement

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
   

  	
  Amendments Without
  Consent of Noteholders

  	
   

  	
  50

  
	
  SECTION 9.2

  	
   

  	
  Amendments With Consent
  of Noteholders

  	
   

  	
  52

  
	
  SECTION 9.3

  	
   

  	
  Series Supplement
  Authorizing the Notes

  	
   

  	
  53

  
	
  SECTION 9.4

  	
   

  	
  Execution of the
  Series Supplement

  	
   

  	
  53

  
	
  SECTION 9.5

  	
   

  	
  Effect of Series Supplement

  	
   

  	
  54

  
	
  SECTION 9.6

  	
   

  	
  Conformity With Trust
  Indenture Act

  	
   

  	
  54

  
	
  SECTION 9.7

  	
   

  	
  Reference in Notes to
  the Series Supplement

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X. [Reserved]

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI.
  Miscellaneous

  	
   

  	
  54

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
   

  	
  Compliance Certificates
  and Opinions, etc.

  	
   

  	
  54

  
	
  SECTION 11.2

  	
   

  	
  Form of Documents
  Delivered to Indenture Trustee

  	
   

  	
  56

  
	
  SECTION 11.3

  	
   

  	
  Acts of Noteholders

  	
   

  	
  57

  
	
  SECTION 11.4

  	
   

  	
  Notices, etc., to
  Indenture Trustee, Issuer and Rating Agencies

  	
   

  	
  57

  
	
  SECTION 11.5

  	
   

  	
  Notices to Noteholders;
  Waiver

  	
   

  	
  58

  
	
  SECTION 11.6

  	
   

  	
  Alternate Payment and
  Notice Provisions

  	
   

  	
  59

  
	
  SECTION 11.7

  	
   

  	
  Conflict with TIA

  	
   

  	
  59

  
	
  SECTION 11.8

  	
   

  	
  Effect of Headings and
  Table of Contents

  	
   

  	
  59

  
	
  SECTION 11.9

  	
   

  	
  Successors and Assigns

  	
   

  	
  60

  
	
  SECTION 11.10

  	
   

  	
  Separability

  	
   

  	
  60

  
	
  SECTION 11.11

  	
   

  	
  Benefits of Indenture

  	
   

  	
  60

  
	
  SECTION 11.12

  	
   

  	
  Legal Holidays

  	
   

  	
  60

  
	
  SECTION 11.13

  	
   

  	
  GOVERNING LAW

  	
   

  	
  60

  
	
  SECTION 11.14

  	
   

  	
  Counterparts

  	
   

  	
  60

  
	
  SECTION 11.15

  	
   

  	
  Recording of Indenture

  	
   

  	
  60

  
	
  SECTION 11.16

  	
   

  	
  Trust Obligation

  	
   

  	
  61

  
	
  SECTION 11.17

  	
   

  	
  No Petition

  	
   

  	
  61

  
	
  SECTION 11.18

  	
   

  	
  Limited Recourse.

  	
   

  	
  61

  
	
  SECTION 11.19

  	
   

  	
  Inspection

  	
   

  	
  62

  
	
  SECTION 11.20

  	
   

  	
  Limitation of Liability

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A — Form of Transferee Certificate

  	
   

  	
   

  

 

 iii

 

INDENTURE dated as of June 8,
2006, among HSBC AUTOMOTIVE TRUST (USA) 2006-1, a Delaware statutory
trust (the “Issuer”), THE
BANK OF NEW YORK, a New York banking corporation, as indenture trustee
(the “Indenture Trustee”) and HSBC BANK
USA, NATIONAL ASSOCIATION, a national banking association, as
administrator (the “Administrator”).

In consideration of the mutual agreements contained
herein, and of other good and valuable consideration the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:

GRANTING CLAUSE

In order to secure the due and punctual payment of the
principal of and interest on the Notes when and as the same shall become due
and payable, whether as scheduled, by declaration of acceleration, prepayment
or otherwise, the Issuer, pursuant to the Series Supplement, shall pledge
the Series Trust Estate to the Indenture Trustee, all for the benefit of
the Indenture Trustee for the benefit of the Secured Parties.

ARTICLE I.

Definitions and
Incorporation by Reference

SECTION 1.1         Definitions.
Except as otherwise specified herein, the following terms have the respective
meanings set forth below for all purposes of this Indenture.

“Act” has the meaning specified in Section 11.3(a).

“Administrator” means HSBC Bank USA, National Association,
a national banking association, as administrator under this Indenture and the
other Basic Documents to which it is a party, or any successor administrator
hereunder and thereunder.

“Authorized Officer” means, with respect to the Issuer
and the Servicer, any officer or agent acting pursuant to a power of attorney
of the Owner Trustee or the Servicer, as applicable, who is authorized to act
for the Owner Trustee or the Servicer, as applicable, in matters relating to
the Issuer and who is identified on the list of Authorized Officers delivered
by each of the Owner Trustee and the Servicer to the Indenture Trustee and the
Administrator on the Closing Date (as such list may be modified or supplemented
from time to time thereafter).

“Book Entry Notes” means any beneficial interest in
the Notes, ownership and transfers of which shall be made through book entries
by a Clearing Agency as described in Section 2.10.

“Class” means all of the Notes having the same
specified payment terms and priority of payment.

 1
 

 

 

“Class SV Preferred Stock” means the preferred
stock of the Seller.

“Clearing Agency” means an organization registered as
a “clearing agency” pursuant to Section 17A of the Exchange Act.

“Clearing Agency Participant” means a broker, dealer,
bank, other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities
deposited with the Clearing Agency.

“Code” means the Internal Revenue Code of 1986, as
amended from time to time, and the Treasury Regulations promulgated thereunder.

“Corporate Trust Office” has the meaning assigned to
such term in the Series Supplement.

“Default” means any occurrence that is, or with notice
or the lapse of time or both would become, an Event of Default.

“Definitive Notes” has the meaning specified in Section 2.10.

“Event of Default” has the meaning specified in Section 5.1.

“Exchange Act” means the Securities Exchange Act of
1934, as amended.

“Executive Officer” means, with respect to any
corporation, the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, President, Executive Vice President, any Vice President, the
Secretary, the Treasurer, or any Assistant Treasurer of such corporation.

“Form 8-K” means
a current report pursuant to Section 13 or Section 15(d) of the
Exchange Act.

“Grant” means mortgage, pledge, bargain, sell,
warrant, alienate, remise, release, convey, assign, transfer, create, grant a
lien upon and a security interest in and right of set-off against, deposit, set
over and confirm pursuant to this Indenture. A Grant of the Series Trust
Estate or of any other agreement or instrument shall include all rights, powers
and options (but none of the obligations) of the granting party thereunder,
including the immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of the Series Trust
Estate and all other monies payable thereunder, to give and receive notices and
other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the granting party or
otherwise and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.

“Holder” or “Noteholder” means the Person in whose
name a Note is registered on the Note Register.

 2
 

 

 

“Indebtedness” means, with respect to any Person at
any time, (a) indebtedness or liability of such Person for borrowed money
whether or not evidenced by bonds, debentures, notes or other instruments, or
for the deferred purchase price of property or services (including trade
obligations); (b) obligations of such Person as lessee under leases which
should have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases; (c) current liabilities of such
Person in respect of unfunded vested benefits under plans covered by Title IV
of ERISA; (d) obligations issued for or liabilities incurred on the
account of such Person; (e) obligations or liabilities of such Person
arising under acceptance facilities; (f) obligations of such Person under
any guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations of such Person secured
by any lien on property or assets of such Person, whether or not the obligations
have been assumed by such Person; or (h) obligations of such Person under
any interest rate or currency exchange agreement.

“Indenture Trustee” means, initially, The Bank of New
York, a New York banking corporation, not in its individual capacity but as
trustee under this Indenture, or any successor trustee under this Indenture.

“Indenture Trustee Fee” means the fees due to the
Indenture Trustee, as may be set forth in that certain fee letter, dated as of
the date hereof between the Servicer and the Indenture Trustee.

“Independent” means, when used with respect to any
specified Person, that the person (a) is in fact independent of the
Issuer, any other obligor upon the Notes, the Seller and any Affiliate of any
of the foregoing persons, (b) does not have any direct financial interest
or any material indirect financial interest in the Issuer, any such other
obligor, the Seller or any Affiliate of any of the foregoing Persons and (c) is
not connected with the Issuer, any such other obligor, the Seller or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.

“Independent Certificate” means a certificate or
opinion to be delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable requirements of Section 11.1,
prepared by an Independent appraiser or other expert appointed pursuant to an
Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of “Independent” in this Indenture and that the signer
is Independent within the meaning thereof.

“Issuer Order” and “Issuer Request” means a written
order or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee and/or the Administrator, as
the case may be.

“Moody’s” means Moody’s Investors Service, Inc.,
or its successor.

 3
 

 

 

“Notes” means the Notes authenticated and delivered
under this Indenture.

“Note Owner” means, with respect to a Book-Entry Note,
the person who is the owner of such Book-Entry Note, as reflected on the books
of the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).

“Note Paying Agent” means the Administrator or any
other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and is authorized by the Issuer to make payments
to and distributions from the Collection Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.

“Note Register” and “Note Registrar” have the
respective meanings specified in Section 2.4.

“Officer’s Certificate” means a certificate signed by
any Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 and
TIA § 314, and delivered to the Indenture Trustee and/or the
Administrator, as the case may be. Unless otherwise specified, any reference in
this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate
of any Authorized Officer of the Issuer. Each certificate with respect to
compliance with a condition or covenant provided for in this Indenture shall
include (1) a statement that the Authorized Officer signing the
certificate has read such covenant or condition; (2) a brief statement as
to the nature and scope of the examination or investigation upon which the
statements contained in such certificate are based; (3) a statement that
in the opinion of such person, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (4) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.

“Outstanding” means, as of the date of determination,
all Notes theretofore authenticated and delivered under this Indenture except:

(i)            Notes theretofore canceled by the
Note Registrar or delivered to the Note Registrar for cancellation;

(ii)           Notes or portions thereof the payment
for which money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Note Paying Agent in trust for the Holders of such
Notes (provided, however, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the Series Supplement
or provision therefor, satisfactory to the Indenture Trustee and the
Administrator, has been made); and

(iii)          Notes in exchange for or in lieu of
other Notes which have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to 

 4
 

 

 

the Indenture Trustee and the Administrator is
presented that any such Notes are held by a bona fide purchaser;

provided,
however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Indenture Trustee
and/or the Administrator shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee or the Administrator, as the case
may be, either actually knows to be so owned or has received written notice
thereof shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Administrator, as the case may be,
the pledgee’s right so to act with respect to such Notes and that the pledgee
is not the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons.

“Outstanding Amount” means the aggregate principal
amount of all Notes, or Class of Notes, as applicable, Outstanding at the
date of determination.

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

“Predecessor Note” means, with respect to any
particular Note, every previous Note evidencing all or a portion of the same
debt as that evidenced by such particular Note; and, for the purpose of this
definition, any Note authenticated and delivered under Section 2.5 in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.

“Proceeding” means any suit in equity, action at law
or other judicial or administrative proceeding.

“Record Date” means, with respect to a Distribution
Date, the close of business on the Business Day immediately preceding such
Distribution Date. However, if Definitive Notes are issued, the Record Date
shall be the last Business Day of the month preceding a Distribution Date.

“Registration Statement” has the meaning specified
therefor in the Securities Act.

“Responsible Officer” means, with respect to the Indenture
Trustee, the Administrator or the Owner Trustee, any officer within the
Corporate Trust Office of the Indenture Trustee, the Administrator or the Owner
Trustee, as the case may be, including any Vice President, Assistant Vice
President, Assistant Treasurer, Assistant Secretary, Financial Services Officer
or any other officer of the Indenture Trustee, the Administrator or the Owner
Trustee, as the case may be, customarily performing functions similar to 

 5
 

 

 

those performed by any of the above designated
officers and in each case having direct responsibility for the administration
of this Indenture.

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

“Secured Parties” has the meaning assigned to such
term in the Series Supplement.

“Securities Act” means the Securities Act of 1933, as
amended.

“Series Supplement” means the Series Supplement,
dated as of June 8, 2006, among the Servicer, the Issuer, the Seller, the
Indenture Trustee, the Owner Trustee and the Administrator, as such agreement
may be amended or supplemented from time to time.

“Series Trust Estate” has the meaning assigned to
such term in the Series Supplement.

“S&P” means Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc., or its successor.

“State” means any one of the 50 states of the United
States of America or the District of Columbia.

“Tranche” means all of the Notes having the same date
of authentication.

“Trust Agreement” has the meaning assigned to such
term in the Series Supplement.

“Trust Indenture Act” or “TIA” means the Trust
Indenture Act of 1939, as amended and as in force on the date hereof, unless
otherwise specifically provided.

“UCC” means, unless the context otherwise requires,
the Uniform Commercial Code, as in effect in the relevant jurisdiction, as
amended from time to time.

“Unregistered Note” means a Note which is not being
offered for sale hereunder pursuant to a Registration Statement.

Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Sale and
Servicing Agreement, the Series Supplement or the Trust Agreement.

SECTION 1.2         Incorporation
by Reference of the Trust Indenture Act. Whenever this Indenture refers to
a provision of the TIA, the provision is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:

 6
 

 

 

“Commission” means the Securities and Exchange
Commission.

“indenture securities” means the Notes.

“indenture security holder” means a Noteholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means
the Indenture Trustee.

“obligor” on the indenture securities means the
Issuer.

All other TIA terms used in this Indenture that are
defined by the TIA, or defined by Commission rule have the meaning
assigned to them by such definitions.

SECTION 1.3         Rules of
Construction. Unless the context otherwise requires:

(i)                    a term has the meaning
assigned to it;

(ii)                   an accounting term not
otherwise defined has the meaning assigned to it in accordance with generally
accepted accounting principles as in effect from time to time;

(iii)                  “or” is not exclusive;

(iv)                  “including” means including
without limitation; and

(v)                   words in the singular include
the plural and words in the plural include the singular.

SECTION 1.4         Action
by or Consent of Noteholders and Certificateholders. Whenever any provision
of this Indenture 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
consent given, by Noteholders or Certificateholders. Solely for the purposes of
any action to be taken, or consented to, by Noteholders or Certificateholders,
any Note or Certificate registered in the name of Seller or any Affiliate
thereof shall be deemed not to be Outstanding (except in the event that the
Seller and/or an Affiliate thereof then owns all outstanding Certificates and
Outstanding Notes); 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 or Certificates 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.

 7

 

ARTICLE II.

The Notes

SECTION 2.1                Form;
Amount Limited; Issuable in Series.

(a)  The Notes
shall be in substantially the form set forth in the Series Supplement,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture or the Series Supplement
and which do not affect the rights, duties or obligations of the Indenture
Trustee or the Administrator without the consent of the Indenture Trustee or
the Administrator, respectively, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.

The Definitive Notes shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders), all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.

Each Note shall be dated the date of its
authentication. The terms of the Notes set forth in the Series Supplement
are part of the terms of this Indenture.

(b)  The
aggregate principal amount of Notes which may be authenticated and delivered
and Outstanding at any time under this Indenture is not limited; provided
that the Series Supplement may so limit the aggregate principal amount of
Notes. The Notes shall be issued in a series, and may be issued in Classes
and/or Tranches within such series (and Tranches within a Class).

No Notes shall be issued under this Indenture unless
such Notes 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 Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof and secured by the
Series Trust Estate without preference, priority or distinction on account
of the actual time or times of authentication and delivery, all in accordance
with the terms and provisions hereof and the Series Supplement.

SECTION 2.2                Execution,
Authentication and Delivery. The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of any such Authorized
Officer on the Notes may be original or facsimile.

Notes bearing the original or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the

 8
 

 

authentication and delivery of such Notes or did not
hold such offices at the issuance date of such Notes.

The Notes shall be issuable in the denominations
specified in the Series Supplement.

No Note shall be entitled to any benefit under this
Indenture or the Series Supplement or be valid or obligatory for any
purpose, unless there appears attached to such Note a certificate of
authentication, substantially in the form attached as Exhibit B to the Series Supplement,
executed by the Administrator by the manual signature of one of its authorized
signatories, and such certificate attached to any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

SECTION 2.3                Temporary
Notes. Pending the preparation of Definitive Notes of any Class or
Tranche, the Issuer may execute, and upon receipt of an Issuer Order prepared
and delivered by the Servicer, the Administrator shall authenticate and
deliver, temporary Notes which are printed, lithographed, typewritten,
mimeographed or otherwise produced, of the tenor of the Definitive Notes in
lieu of which they are issued and with such variations not inconsistent with
the terms of this Indenture as the officers executing such Notes may determine,
as evidenced by their execution of such Notes.

If temporary Notes of any Class or Tranche are
issued, the Issuer will cause Definitive Notes of such Class or Tranche to
be prepared without unreasonable delay. After the preparation of Definitive
Notes of such Class or Tranche, the temporary Notes shall be exchangeable
for Definitive Notes of such Class or Tranche upon surrender of the
temporary Notes at the office or agency of the Issuer to be maintained as
provided in Section 3.2, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute and,
upon receipt of an Issuer Order, the Administrator shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
such Class or Tranche of authorized denominations. Until so exchanged, the
temporary Notes of any Class or Tranche shall in all respects be entitled
to the same benefits under this Indenture and the Series Supplement as
Definitive Notes of such Class or Tranche.

SECTION 2.4                Registration;
Registration of Transfer and Exchange. The Issuer shall cause to be kept a
register (the “Note Register”) in which, subject to such reasonable regulations
as it may prescribe, the Issuer shall provide for the registration of Notes and
the registration of transfers of Notes. The Administrator shall be “Note Registrar”
for the purpose of registering Notes and transfers of Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.

If a Person other than the Administrator is appointed
by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee and
the Administrator prompt written notice of the appointment of such Note
Registrar and of the location, and any change in 

 9
 

 

the location, of the Note Register. The Indenture
Trustee and, if it is no longer serving as Note Registrar hereunder, the
Administrator, shall have the right to inspect the Note Register at all
reasonable times and to obtain copies thereof. The Indenture Trustee and the
Administrator shall have the right to rely upon a certificate executed on
behalf of the Note Registrar by an Authorized Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and number
of such Notes.

Upon surrender for registration or transfer of any
Note at the office or agency of the Issuer to be maintained as provided in Section 3.2,
and if the requirements of Section 8-401(1) of the UCC are met,
the Issuer shall execute and cause the Administrator to authenticate one or
more new Notes, in any authorized denominations, of the same class and a like
aggregate principal amount. A Noteholder may also obtain from the
Administrator, in the name of the designated transferee or transferees one or
more new Notes, in any authorized denominations, of the same Class and
Tranche, as applicable, and a like aggregate principal amount. Such
requirements shall not be deemed to create a duty in the Administrator, nor
shall the Administrator have any duty, to monitor the compliance by the Issuer
with Section 8-401 of the UCC.

At the option of the Holder, Notes of any Class or
Tranche may be exchanged for other Notes of such Class or Tranche in any
authorized denominations of the same Class (and Tranche, if applicable)
and a like aggregate principal amount, upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, and if the requirements of Section 8-401(1) of the
UCC are met, the Issuer shall execute and upon its written request the
Administrator shall authenticate the Notes which the Noteholder making the
exchange is entitled to receive. Such requirements shall not be deemed to
create a duty in the Administrator, nor shall the Administrator have any duty,
to monitor the compliance by the Issuer with Section 8-401 of the
UCC.

All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt, and entitled to the same benefits under this Indenture and the Series Supplement,
as the Notes surrendered upon such registration of transfer or exchange.

Unless specified in the Series Supplement, every
Note presented or surrendered for registration of transfer or exchange shall, unless
specified in the Series Supplement, be (i) duly endorsed by, or be
accompanied by a written instrument of transfer in the form attached as an
exhibit to the Note duly executed by the Holder thereof or such Holder’s
attorney duly authorized in writing, with such signature guaranteed by an “eligible
guarantor institution” meeting the requirements of the Note Registrar which
requirements include membership or participation in Securities Transfer Agents
Medallion Program (“Stamp”) or such other “signature guarantee program” as may
be determined by the Note Registrar in addition to, or in substitution for,
Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Note Registrar may require.

 10
 

 

No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange
of Notes.

Notwithstanding, the preceding provisions of this
section, the Issuer shall not be required to make, and the Note Registrar shall
not register, transfers or exchanges of Notes selected for redemption for a
period of 15 days preceding a Distribution Date.

The Note Registrar shall not register the transfer of
a Definitive Note unless the transferee has executed and delivered to the
Administrator a certification, in the form of Exhibit A hereto, to
the effect that either (i) the transferee is not (A) an employee
benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)) that is subject
to Title I of ERISA or (B) a plan (within the meaning of Section 4975(e)(1) of
the Code) that is subject to Section 4975 of the Code (each of the
foregoing, a “Plan”), and is not acting on behalf of or investing the assets of
a Plan or (ii) that the transferee’s acquisition and continued holding of
the Definitive Note will be covered by a prohibited transaction class exemption
issued by the U.S. Department of Labor. Each Note Owner that purchases a
Book-Entry Note, or to whom a Book-Entry Note is transferred, shall be deemed
to represent that either (i) it is not a Plan and is not acting on behalf
of or investing the assets of a Plan or (ii) its acquisition and continued
holding of the Book-Entry Note will be covered by a prohibited transaction
class exemption issued by the U.S. Department of Labor.

No Holder of an Unregistered Note shall transfer its
Note, unless (i) such transfer is made in accordance with Rule 144A
under the Securities Act or (ii) pursuant to an exemption from
registration provided by Rule 144 under the Securities Act (if available)
and the registration and qualification requirements under applicable state
securities laws.

Each Unregistered Note issued hereunder will contain
the following legend limiting sales to “Qualified Institutional Buyers” within
the meaning of Rule 144A under the Securities Act:

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR REGULATORY AUTHORITY OF ANY STATE. THIS NOTE HAS BEEN OFFERED AND
SOLD PRIVATELY. THE HOLDER HEREOF ACKNOWLEDGES THAT THESE SECURITIES ARE “RESTRICTED
SECURITIES” THAT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES
FOR THE BENEFIT OF THE OBLIGORS AND ITS AFFILIATES THAT THESE SECURITIES MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON
WHOM 

 11
 

 

THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (B) PURSUANT TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION.

SECTION 2.5                Mutilated,
Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is
surrendered to the Administrator or the Note Registrar, or the Administrator or
the Note Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (ii) there is delivered to each of the
Issuer, the Administrator and the Note Registrar such security or indemnity as
may be required by it to hold the Issuer, the Administrator and the Note
Registrar harmless, then, in the absence of notice to the Issuer, the Administrator
or the Note Registrar that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its written request the
Administrator shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class or
Tranche (such requirement shall not be deemed to create a duty in the
Administrator to monitor the compliance by the Issuer with Section 8-405);
provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become, or within seven days shall
be due and payable, or shall have been called for redemption pursuant to the
terms of the Series Supplement, the Issuer may, instead of issuing a
replacement Note, direct the Administrator, in writing, to pay such destroyed,
lost or stolen Note when so due or payable or upon the redemption date without
surrender thereof. If, after the delivery of such replacement Note or payment
of a destroyed, lost or stolen Note pursuant to the proviso in the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer,
the Administrator and the Note Registrar shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred
by the Issuer or the Administrator in connection therewith.

Upon the issuance of any replacement Note under this
Section, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Administrator) connected therewith.

Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional 

 12
 

 

contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture and the Series Supplement
equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.

SECTION 2.6                Persons
Deemed Owner. Prior to due presentment for registration of transfer of any
Note, the Issuer, the Indenture Trustee, the Administrator, the Note Registrar
and any agent of any of them may treat the Person in whose name any Note is
registered (as of the Record Date) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none of
the Issuer, the Indenture Trustee, the Administrator, the Note Registrar or any
agent of any of them shall be affected by notice to the contrary.

SECTION 2.7                Payment
of Principal and Interest; Defaulted Interest.

(a)  The Notes
shall accrue interest as provided in the form of Note set forth in the Series Supplement
and such interest shall be due and payable on each Distribution Date as
specified therein. Any installment of interest or principal, if any, payable on
any Note which is punctually or duly provided for by the Issuer on the
applicable Distribution Date shall be paid, as provided in the Series Supplement,
or if not so provided to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person’s address as it appears on the
Note Register on such Record Date, except that, if the Notes are Book-Entry
Notes, unless Definitive Notes have been issued pursuant to Section 2.12,
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment will be made by wire transfer in immediately available funds to the
account designated by such nominee and except for the final installment of
principal payable with respect to such Note on a Distribution Date or on the
Final Scheduled Distribution Date as set forth in the Series Supplement
which shall be payable as provided below. The funds represented by any such
checks returned undelivered shall be held in accordance with Section 3.3.

(b)  The
principal of each Note shall be payable in installments on each Distribution
Date as provided in the form of Note set forth in the Series Supplement. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable, if not previously paid, on the date on which an Event of Default shall
have occurred and be continuing, if the Notes are declared to be immediately
due and payable in the manner provided in the Series Supplement. Upon
written notice from the Servicer on behalf of the Issuer, the Administrator
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on 

 13
 

 

such Note will be paid. Such notice may be mailed or
transmitted by facsimile prior to such final Distribution Date and may specify
that such final installment will be payable only upon presentation and surrender
of such Note and shall specify the place where such Note may be presented and
surrendered for payment of such installment.

(c)  If the
Issuer defaults in a payment of interest on the Notes, the Issuer shall pay
defaulted interest (plus interest on such defaulted interest to the extent
lawful) at the applicable Note Rate to the extent lawful. Unless otherwise
provided in the Series Supplement, the Issuer may pay such defaulted
interest to the Persons who are Noteholders on a subsequent special record date,
which date shall be at least five Business Days prior to the payment date. The
Issuer shall fix or cause to be fixed any such special record date and payment
date, and, at least 15 days before any such special record date, the Issuer
shall mail to each Noteholder, the Indenture Trustee and the Administrator a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

SECTION 2.8                Cancellation.
All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Administrator, be
delivered to the Note Registrar and shall be promptly canceled by the Note
Registrar in accordance with its customary procedures. The Issuer may at any
time deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Note Registrar in accordance with its customary procedures. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Note Registrar in accordance with its
standard retention or disposal policy as in effect at the time.

SECTION 2.9                Reserved.

SECTION 2.10              Book-Entry
Notes. The Notes, upon original issuance, may be issued in the form of
typewritten Notes representing the Book-Entry Notes, to be delivered to The
Depository Trust Company or its agent, the initial Clearing Agency, by, or on
behalf of, the Issuer. Such Notes may initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Note Owner will receive a Definitive Note representing
such Note Owner’s interest in such Note, except as provided in Section 2.12.
Unless and until definitive, fully registered Notes (the “Definitive Notes”)
have been issued to Note Owners pursuant to Section 2.12:

(i)           the
provisions of this Section shall be in full force and effect;

(ii)          the
Note Registrar, the Indenture Trustee and the Administrator shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of the Notes, and
shall have no obligation to the Note Owners;

 14
 

 

(iii)         to
the extent that the provisions of this Section conflict with any other
provisions of this Indenture, the provisions of this Section shall
control;

(iv)        the
rights of Note Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between such Note
Owners and the Clearing Agency and/or the Clearing Agency Participants. Unless
and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants;

(v)         whenever
this Indenture requires or permits actions to be taken based upon instructions
or directions of Holders of Notes evidencing a specified percentage of the
Outstanding Amount of the Notes, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received instructions
to such effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial interest
in the Notes or in the Notes of a Class, as the case maybe, and has delivered
such instructions to the Indenture Trustee and/or the Administrator, as the
case may be; and

(vi)        Note
Owners may receive copies of any reports sent to Noteholders pursuant to this
Indenture, upon written request, together with a certification that they are
Note Owners and payment of reproduction and postage expenses associated with
the distribution of such reports, from the Administrator at the Corporate Trust
Office or, if applicable, on the Administrator’s web-site specified in the Series Supplement.

SECTION 2.11              Notices
to Clearing Agency. With respect to any Notes which are Book Entry Notes,
whenever a notice or other communication to the Noteholders is required under
this Indenture, unless and until Definitive Notes shall have been issued to
Note Owners pursuant to Section 2.12, the Indenture Trustee or the
Administrator, as the case may be, shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to the Note Owners.

SECTION 2.12              Definitive
Notes. If any Notes are Book-Entry Notes and if (i) the Servicer
advises the Indenture Trustee and the Administrator in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to such Notes, and the Servicer is unable to
locate a qualified successor, (ii) the Servicer at its option advises the
Indenture Trustee and the Administrator in writing that it elects to terminate
the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Note Owners representing beneficial
interests aggregating at least a majority of the Outstanding Amount of the
Notes advise the Indenture Trustee through the Clearing Agency in writing that
the continuation of a book entry system through the Clearing Agency is no
longer in the best interests of the Note Owners, then the Administrator, in the
case of (i) and (ii), and the Indenture Trustee, in 

 15
 

 

the case of (iii), shall notify all Note Owners, the
Servicer, the Indenture Trustee and the Administrator of the occurrence of any
such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Administrator of the typewritten
Note or Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute, and upon the
written direction of the Issuer the Administrator shall authenticate, the
Definitive Notes in accordance with the instructions of the Clearing Agency. None
of the Issuer, the Note Registrar, the Indenture Trustee or the Administrator
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions. Upon
the issuance of Definitive Notes, the Indenture Trustee, the Administrator and
the Note Registrar shall recognize the Holders of the Definitive Notes as
Noteholders.

SECTION 2.13              Final
Distribution.

(a)  Upon
receiving notice from the Servicer of the Distribution Date (or other date) on
which the Noteholders of any Class may surrender their Notes for payment
of the final distribution on and cancellation of such Notes, the Administrator
shall provide notice to the Noteholders of such Class specifying (i) the
date upon which final payment of such Class will be made upon presentation
and surrender of Notes (if required) of such Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii) that
the Record Date otherwise applicable to such payment date is not applicable,
payments being made only upon presentation and surrender of such Notes at the
office or offices therein specified. The Administrator will notify the
Noteholders of the date for payment of the final distribution on and
cancellation of such Notes not later than two days before such date. Unless it
is serving in the related functions, the Administrator shall give a copy of
such notice to the Indenture Trustee, the Note Registrar and the Note Paying
Agent at the time such notice is given to Noteholders.

(b)  Notwithstanding
a final distribution to the Noteholders of any Class, except as otherwise
provided in this paragraph, all funds then on deposit in the Collection Account
and the Trust Accounts shall continue to be held in trust for the benefit of
such Noteholders, and the Note Paying Agent or the Administrator shall pay such
funds to such Noteholders upon surrender of their Notes. In the event that all
such Noteholders shall not surrender their Notes for cancellation within six
months after the date specified in the notice from the Administrator described
in paragraph (a), the Administrator shall give a second notice to the remaining
such Noteholders to surrender their Notes for cancellation and receive the
final distribution with respect thereto. If within one year after the second
notice all such Notes shall not have been surrendered for cancellation, the
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining such Noteholders concerning
surrender of their Notes, and the cost thereof shall be paid out of the funds
in the account held for the benefit of such Noteholders. The Administrator and
the Note Paying Agent shall upon written request pay to the Issuer any moneys
held by them for the payment of principal or interest that remains unclaimed
for two years. After payment to the Issuer, Noteholders entitled to such monies
must look to the Issuer for payment as general unsecured creditors, unless an
applicable abandoned property law designates another Person and all 

 16
 

 

liability of the Indenture Trustee, the Administrator
or such Note Paying Agent with respect to such trust monies shall thereupon
cease.

(c)  Any notice
required or permitted to be given to a Holder of Registered Notes shall be
given by first-class mail, postage prepaid, at the address of such Holder as
shown in the Note Register.

ARTICLE III.

Covenants

SECTION 3.1                Payment
of Principal and Interest. The Issuer will duly and punctually pay or cause
to be paid the principal of and interest on the Notes in accordance with the
terms of the Notes, this Indenture and the Series Supplement. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.

SECTION 3.2                Maintenance
of Office or Agency. The Issuer will maintain an office or agency where
Notes may be surrendered for registration, transfer or exchange of the Notes,
and where notices and demands to or upon the Issuer in respect of the Notes and
this Indenture may be served. The Issuer hereby initially appoints the
Administrator to serve as its agent for the foregoing purposes. The Issuer will
give prompt written notice to the Indenture Trustee and the Administrator of
the location, and of any change in the location, of any such office or agency. If
at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee or the Administrator with the
address thereof, such surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Administrator, and the Issuer hereby appoints
the Administrator as its agent to receive all such surrenders, notices and
demands.

SECTION 3.3                Money
for Payments to be Held in Trust. One Business Day prior to each
Distribution Date, the Issuer shall deposit or cause to be deposited to the
Collection Account Available Funds (which shall be immediately available) with
respect to the related Collection Period. Such sum shall be held in trust for
the benefit of the Persons entitled thereto and (unless the Note Paying Agent
is the Administrator), the Issuer shall promptly notify the Administrator of
its action or failure so to act.

The Issuer hereby appoints the Person serving as
Administrator as Note Paying Agent to make payments to Noteholders on behalf of
the Issuer in accordance with the provisions of the Notes, this Indenture and
the Series Supplement, and such Person hereby accepts such appointment
(subject to removal in the event it no longer serves as Administrator pursuant
to Section 6.18).

The Issuer will cause each Note Paying Agent other
than the Indenture Trustee or the Administrator to execute and deliver to the
Indenture Trustee an instrument in which such Note Paying Agent shall agree
with the Indenture Trustee (and 

 17
 

 

if the Indenture Trustee or the Administrator acts as
Note Paying Agent with respect to clauses (i) and (v), it hereby so
agrees), subject to the provisions of this Section, that such Note Paying Agent
will:

(i)           hold
all sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;

(ii)          give
the Indenture Trustee written notice of any default by the Issuer of which a
Responsible Officer of the Note Paying Agent has actual knowledge (or any other
obligor upon the Notes) in the making of any payment required to be made with
respect to the Notes;

(iii)         at
any time during the continuance of any such default, upon the written request
of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so
held in trust by such Note Paying Agent;

(iv)        immediately
resign as a Note Paying Agent and forthwith pay to the Indenture Trustee all
sums held by it in trust for the payment of Notes if at any time it ceases to
meet the standards required to be met by a Note Paying Agent at the time of its
appointment; and

(v)         comply
with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.

The Issuer may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture and the Series Supplement
or for any other purpose, by Issuer Order direct any Note Paying Agent to pay
to the Indenture Trustee all sums held in trust by such Note Paying Agent, such
sums to be held by the Indenture Trustee upon the same trusts as those upon
which the sums were held by such Note Paying Agent; and upon such a payment by
any Note Paying Agent to the Indenture Trustee, such Note Paying Agent shall be
released from all further liability with respect to such money.

The Issuer hereby appoints the Person serving as
Administrator, as Certificate Paying Agent to make payments to
Certificateholders on behalf of the Issuer in accordance with the provisions of
the Certificates, this Indenture and the Trust Agreement, and such Person
hereby accepts such appointment (subject to removal in the event it no longer
serves as Administrator pursuant to Section 6.18) and further agrees that
it will be bound by the provisions of the Trust Agreement relating to the
Certificate Paying Agent and will:

(i)           hold
all sums held by it for the payment of amounts due with respect to the
Certificates in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein 

 18
 

 

provided and as provided in the Trust Agreement and
pay such sums to such Persons as herein and therein provided;

(ii) give the
Owner Trustee notice of any default by the Issuer of which a Responsible
Officer of the Certificate Paying Agent has actual knowledge in the making of
any payment required to be made with respect to the Certificates;

(iii)                at
any time during the continuance of any such default, upon the written request
of the Owner Trustee forthwith pay to the Owner Trustee on behalf of the Issuer
all sums so held in Trust by such Certificate Paying Agent;

(iv)               immediately
resign as a Certificate Paying Agent and forthwith pay to the Owner Trustee on
behalf of the Issuer all sums held by it in trust for the payment of
Certificates if at any time it ceases to meet the standards required to be met
by a Note Paying Agent at the time of its appointment; and

(v)                comply
with all requirements of the Code with respect to the withholding from any
payments made by it on any Certificates of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in
connection therewith.

SECTION 3.4                Existence.
Except as otherwise permitted by the provisions of Section 3.10, the
Issuer will keep in full effect its existence, rights and franchises as a
statutory trust under the laws of the State of Delaware (unless it becomes, or
any successor Issuer hereunder is or becomes, organized under the laws of any
other state or of the United States of America, in which case the Issuer will
keep in full effect its existence, rights and franchises under the laws of such
other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the Series Supplement,
the Notes and each other instrument or agreement included in the Series Trust
Estate.

SECTION 3.5                Protection
of Series Trust Estate. The Issuer intends the security interest
Granted pursuant to this Indenture and the Series Supplement in favor of
the Secured Parties to be prior to all other liens in respect of the Series Trust
Estate, and the Issuer shall take all actions necessary to obtain and maintain,
in favor of the Indenture Trustee for the benefit of the Secured Parties a
first lien on and a first priority, perfected security interest in the Series Trust
Estate. The Issuer will: (a) from time to time prepare (or shall cause to
be prepared), execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, (b) authenticate such records,
and (c) take such other action necessary or advisable to:

(i)   Grant more
effectively all or any portion of the Series Trust Estate;

 19
 

 

(ii)  maintain or
preserve the lien and security interest (and the priority thereof) in favor of
the Indenture Trustee for the benefit of the Secured Parties created by this Indenture
and the Series Supplement or carry out more effectively the purposes
hereof;

(iii) perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture and the Series Supplement;

(iv) enforce any
of the Series Trust Estate;

(v)  preserve and
defend title to the Series Trust Estate and the rights of the Indenture
Trustee in such Series Trust Estate against the claims of all persons and
parties; and

(vi) pay all
taxes or assessments levied or assessed upon the Series Trust Estate when
due.

SECTION 3.6                Opinions
as to Series Trust Estate.

(a)  On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, the Series Supplement,
and any other requisite documents, and with respect to the execution and filing
of any financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest in
favor of the Indenture Trustee for the benefit of the Secured Parties, created
by this Indenture and the Series Supplement and reciting the details of
such action, or stating that, in the opinion of such counsel, no such action is
necessary to make such perfected lien and security interest effective.

(b)  On or before
March 30 of each year, beginning with March 30, 2007, the Servicer on
behalf of the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling of
this Indenture, the Series Supplement and any other requisite documents,
with respect to the execution and filing of any financing statements and
continuation statements, and with respect to the authentication of such records
as are necessary to maintain the lien and security interest created by this
Indenture and the Series Supplement and reciting the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite
documents, the execution and filing of any financing statements and
continuation statements and the authentication of such records that will, in
the opinion of such counsel, be required to maintain the lien and security
interest of this Indenture and the Series Supplement until March 30
of the following year.

 20

 

SECTION 3.7         Performance of Obligations;
Servicing of Receivables.

(a)           The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person’s material covenants or obligations under any
instrument or agreement included in the Series Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or agreement,
except as ordered by any bankruptcy or other court or as expressly provided in
this Indenture and the Basic Documents or such other instrument or agreement.

(b)           The Issuer has contracted with the Servicer to assist the
Issuer in performing its duties under this Indenture and the Series Supplement.
The Issuer may contract with Persons other than the Servicer to assist it in
performing its duties under this Indenture and the Series Supplement, and
any performance of such duties by a Person identified to the Indenture Trustee
in an Officer’s Certificate of the Issuer shall be deemed to be action taken by
the Issuer.

(c)           The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture and the Basic Documents
and in the instruments and agreements included in the Series Trust Estate,
including, but not limited, to preparing (or causing to be prepared) and filing
(or causing to be filed) all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture, the Series Supplement
and the Sale and Servicing Agreement in accordance with and within the time
periods provided for herein and therein. Except as otherwise expressly provided
therein, the Issuer shall not waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof without the consent of the Indenture
Trustee.

(d)           If a Responsible Officer of the Owner Trustee shall have
actual knowledge of the occurrence of a Servicer Termination Event under the
Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee, the Administrator and the Rating Agencies thereof in accordance with Section 11.4,
and shall specify in such notice the action, if any, the Issuer is taking in
respect of such default. If a Servicer Termination Event shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Receivables, the Issuer shall
take all reasonable steps available to it to remedy such failure.

SECTION 3.8         Negative Covenants.   So long as any Notes are Outstanding, the
Issuer shall not:

(i)                    except as expressly permitted
by this Indenture or the Basic Documents, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including those
included in the Series Trust Estate;

 21
 

 

(ii)                   claim any credit on, or make
any deduction from the principal or interest payable in respect of, the Notes
of a Series (other than amounts properly withheld from such payments under
the Code) or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon any part of the Series Trust
Estate; or

(iii)                  (A) permit the validity or
effectiveness of this Indenture or the Series Supplement to be impaired,
or permit the lien in favor of the Indenture Trustee created by this Indenture
to be amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect to the
Notes under this Indenture or the Series Supplement except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture and the Series Supplement) to be created on or extend to or
otherwise arise upon or burden the Series Trust Estate or any part thereof
or any interest therein or the proceeds thereof (other than tax liens,
mechanics’ liens and other liens that arise by operation of law, in each case
on a Financed Vehicle and arising solely as a result of an action or omission
of the related Obligor), (C) permit the lien of this Indenture and the Series Supplement
not to constitute a valid first priority (other than with respect to any such
tax, mechanics’ or other lien) security interest in the Series Trust
Estate, (D) except as expressly permitted therein, amend, modify or fail
to comply with the provisions of the Basic Documents or (E) except as expressly
permitted therein, amend, modify or fail to comply with the provisions of the
Related Documents.

SECTION 3.9         Annual
Statement as to Compliance. The Servicer on behalf of the Issuer will
deliver to the Indenture Trustee, an Officer’s Certificate stating, as to the
Authorized Officer signing such Officer’s Certificate, that

(i)                    a review of the activities of
the Issuer during the preceding calendar year (or such shorter or longer, as
applicable, period since the Closing Date) and of performance under this
Indenture has been made under such Authorized Officer’s supervision; and

(ii)                   to the best of such Authorized
Officer’s knowledge, based on such review, the Issuer has complied with all
conditions and covenants under this Indenture and the Series Supplement
throughout such period, or, if there has been a default in the compliance of
any such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.

The
Officer’s Certificate referred to in this Section 3.9 will be delivered on
or before March 15 of each calendar year, beginning March 15, 2007
and otherwise in compliance with the requirements of TIA Section 314(a)(4),
unless the Issuer is not required to file periodic reports under the Exchange
Act, in which case the certificate may be delivered within 90 days after the
end of each calendar year and otherwise in compliance with the requirements of
TIA Section 314(a)(4).

 22
 

 

SECTION 3.10       Issuer May Consolidate, Etc. Only
on Certain Terms.

(a)           The Issuer shall not consolidate or merge with or into any
other Person, unless

(i)                    the Person (if other than the
Issuer) formed by or surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Indenture Trustee and the Administrator, in form
satisfactory to the Indenture Trustee and the Administrator, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture and
the Series Supplement on the part of the Issuer to be performed or
observed, all as provided herein;

(ii)                   immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing under the Series Supplement;

(iii)                  the Rating Agency Condition
shall have been satisfied with respect to such transaction;

(iv)                  the Issuer shall have received
an Opinion of Counsel (and shall have delivered copies thereof to the Indenture
Trustee and the Owner Trustee) to the effect that such transaction will not
cause the Trust to be treated as an association or publicly traded partnership
taxable as a corporation for federal income tax purposes, or cause the Notes to
fail to qualify as debt for federal income tax purposes;

(v)                   any action as is necessary to
maintain the lien and security interest created by this Indenture and the Series Supplement
shall have been taken; and

(vi)                  the Issuer shall have delivered
to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel
each stating that such consolidation or merger comply with this Article III
and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act.

(b)           The Issuer shall not convey or transfer all or substantially
all of its properties or assets, including those included in the Series Trust
Estate, to any Person, unless

(i)                    the Person that acquires by
conveyance or transfer the properties and assets of the Issuer the conveyance
or transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United States
of America or any state, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture 

 23
 

 

Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture, the Series Supplement,
each of the Basic Documents and each of the Related Documents on the part of
the Issuer to be performed or observed, all as provided herein, (C) expressly
agree by means of such Indenture Supplement that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the rights of
Holders of the Notes, (D) unless otherwise provided in such Series Supplement,
expressly agree to indemnify, defend and hold harmless the Issuer against and
from any loss, liability or expense arising under or related to this Indenture,
the Series Supplement and the Notes and (E) expressly agree by means
of such Series Supplement that such Person (or if a group of persons, then
one specified Person) shall prepare (or cause to be prepared) and make all
filings with the Commission (and any other appropriate Person) required by the
Exchange Act in connection with the Notes;

(ii)                   immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing under the Series Supplement;

(iii)                  the Rating Agency Condition
shall have been satisfied with respect to such transaction;

(iv)                  the Issuer shall have received
an Opinion of Counsel (and shall have delivered copies thereof to the Indenture
Trustee) to the effect that such transaction will not cause the Trust to be
treated as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes, or cause the Notes to fail to
qualify as debt for federal income tax purposes;

(v)                   any action as is necessary to
maintain the lien and security interest created by this Indenture and the Series Supplement
shall have been taken; and

(vi)                  the Issuer shall have delivered
to the Indenture Trustee an Officers’ Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such Indenture Supplement
complies with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with (including
any filing required by the Exchange Act).

SECTION 3.11       Successor or Transferee.

(a)           Upon any consolidation or merger of the Issuer in accordance
with Section 3.10(a), the Person formed by or surviving such consolidation
or merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture and
the Series Supplement with the same effect as if such Person had been
named as Issuer herein.

 24
 

 

(b)           Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), HSBC Automotive
Trust (USA) 2006-1 will be released from every covenant and agreement of
this Indenture and the Series Supplement to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
of written notice to the Indenture Trustee stating that HSBC Automotive Trust
(USA) 2006-1 is to be so released.

SECTION 3.12       No
Other Business. The Issuer shall not engage in any business other than
financing, purchasing, owning, selling and managing the Receivables, entering
and maintaining any ancillary agreement related to issuance of the Notes and
owning the Class SV Preferred Stock of the Seller in the manner
contemplated by this Indenture, the Basic Documents and the Series Supplement
and all Related Documents and activities incidental thereto.

SECTION 3.13       No
Borrowing. The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any Indebtedness except
for (i) the Notes, (ii) obligations owing from time to time to a Series Support
Provider under the related agreement regarding Series Support, if any and (iii) any
other Indebtedness permitted by or arising under the Basic Documents and the Series Supplement.
The proceeds of the Notes and the Certificates of a Series shall be used
exclusively to fund the Issuer’s purchase of the Receivables of such Series, or
to obtain release of the lien relating to the pledge of the Receivables for a
prior series of notes issued by the Issuer, the purchase of related property of
the Series Trust Estate, to fund any trust account and to pay the Issuer’s
organizational, transactional and start-up expenses.

SECTION 3.14       Servicer’s
Obligations. The Issuer shall enforce the provisions of Sections 4.9, 4.10,
4.11 and Article XIV of the Sale and Servicing Agreement with respect to
the duties of Servicer thereunder.

SECTION 3.15       Guarantees,
Loans, Advances and Other Liabilities. Except as contemplated by the Sale
and Servicing Agreement or this Indenture or the Series Supplement, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another’s
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree continently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.

SECTION 3.16       Capital
Expenditures. The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty).

SECTION 3.17       Compliance
with Laws. The Issuer shall comply with the requirements of all applicable
laws, the non-compliance with which would, individually or in the aggregate,
materially and adversely affect the ability of the Issuer to 

 25
 

 

perform its obligations under the Notes, this
Indenture, or any Basic Document, the Series Supplement or any Related
Document.

SECTION 3.18       Restricted
Payments. The Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Seller, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside
or otherwise segregate any amounts for any such purpose; provided, however,
that the Issuer may make, or cause to be made, distributions to the Seller, the
Servicer, the Owner Trustee, the Indenture Trustee, the Administrator and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement or Trust Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture, the Basic
Documents, the Series Supplement or any Related Document.

SECTION 3.19       Notice
of Events of Default. Upon a Responsible Officer of the Owner Trustee
having actual knowledge thereof, the Issuer agrees to give the Indenture
Trustee, the Administrator and the Rating Agencies prompt written notice of
each Event of Default under the Series Supplement and each default on the
part of the Servicer or the Seller of its obligations under the Sale and
Servicing Agreement.

SECTION 3.20       Further
Instruments and Acts. Upon request of the Indenture Trustee or the
Administrator, as the case may be, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.

SECTION 3.21       Amendments
of Sale and Servicing Agreement and Trust Agreement. The Issuer shall not
agree to any amendment to Section 13.1 of the Sale and Servicing Agreement
or Section 11.1 of the Trust Agreement to eliminate the requirements
thereunder that the Indenture Trustee, the Administrator or the Holders of the
Notes consent to amendments thereto as provided therein.

SECTION 3.22       Income
Tax Characterization. For purposes of federal income, state and local
income and franchise and any other income taxes, the Issuer, the Noteholders
and the Certificateholders will treat the Notes as indebtedness and hereby
instruct the Indenture Trustee to treat the Notes as indebtedness for federal
and state tax reporting purposes.

ARTICLE IV.

Satisfaction and
Discharge

SECTION 4.1         Satisfaction
and Discharge of Indenture. This Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of 

 26
 

 

registration of transfer and exchange, (ii) substitution
of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders
to receive payments of principal thereof and interest thereon, (iv) Sections
3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20, 3.21 and 3.22, (v) the rights
and immunities of the Indenture Trustee and the Administrator hereunder
(including the rights of the Indenture Trustee and the Administrator under Section 6.7
and Section 6.17 and the obligations of the Indenture Trustee and the
Administrator under Section 4.2) and (vi) the rights of the Secured
Parties as beneficiaries hereof with respect to the Series Trust Estate so
deposited with the Indenture Trustee or the Administrator payable to all or any
of them, and the Indenture Trustee, on written demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when either

(1)           all Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 2.5 and (ii) Notes
for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.3) have been
delivered to the Note Registrar for cancellation and the Series Support,
if any, has been returned to the Series Support Provider; or

(2)           all Notes not theretofore delivered to
the Note Registrar for cancellation

(i)            have become due and payable,

(ii)           will become due and payable at their
respective Final Scheduled Distribution Dates within one year, or

(iii)          are to be called for redemption within
one year under arrangements satisfactory to the Indenture Trustee and the
Administrator for the giving of notice of redemption by the Administrator, upon
the instructions of the Servicer or the Indenture Trustee, as the case may be,
in the name, and at the expense, of the Issuer,

and the Issuer, in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Administrator cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to
the Administrator for cancellation when due on the Final Scheduled Distribution
Date or tender date (if Notes shall have been called for redemption or tender
pursuant to the Series Supplement), as the case may be.

 27
 

 

SECTION 4.2         Application
of Trust Money. All monies deposited with the Indenture Trustee and/or the
Administrator pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes, this Indenture
and the Series Supplement, to the payment, either directly or through any
Note Paying Agent, as the Indenture Trustee and/or the Administrator, as the
case may be, may determine, to the Secured Parties for the payment or
redemption of which such monies have been deposited with the Indenture Trustee
and/or the Administrator, as the case may be, of all sums due and to become due
thereon for principal and interest; but such monies need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.

SECTION 4.3         Repayment
of Monies Held by Note Paying Agent. In connection with the satisfaction
and discharge of this Indenture with respect to the Notes, all monies then held
by any Note Paying Agent under the provisions of this Indenture with respect to
such Notes shall, upon demand of the Issuer, be paid to the Administrator on
behalf of the Indenture Trustee to be held and applied according to Section 3.3
and thereupon such Note Paying Agent shall be released from all further
liability with respect to such monies.

ARTICLE V.

Remedies

SECTION 5.1         Events
of Default. The definition of “Event of Default” with respect to a Series,
together with certain rights and remedies consequent thereto, shall be set
forth in the Series Supplement.

SECTION 5.2         Collection of Indebtedness and Suits
for Enforcement by Indenture Trustee.

(a)           Subject to the terms of the Series Supplement, the
Issuer covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, and such default continues for a period
of five days, the Issuer will, upon demand of the Indenture Trustee, pay to it
or the Administrator, for the benefit of the Secured Parties, the whole amount
then due and payable on such Notes for principal and interest, with interest
upon the overdue principal, and, to the extent payment at such rate of interest
shall be legally enforceable, upon overdue installments of interest, at the
applicable Note Rate and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and outside counsel.

(b)           If an Event of Default occurs and is continuing with respect
to a Series, the Indenture Trustee may in its discretion proceed to protect and
enforce the rights of the Secured Parties by such appropriate Proceedings as
the Indenture Trustee 

 28
 

 

shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or the Series Supplement or in aid of the exercise of
any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture, the Series Supplement
or by law.

(c)           In case there shall be pending, relative to the Issuer or
any other obligor upon the Notes or any Person having or claiming an ownership
interest in the Series Trust Estate, proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its property
or such other obligor or Person, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Notes of such
Series, or to the creditors or property of the Issuer or such other obligor,
the Indenture Trustee, irrespective of whether the principal of any Notes of
such Series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee
shall have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:

(i)                    to file and prove a claim or
claims for the whole amount of principal and interest owing and unpaid to the
Secured Parties and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee against the Series Trust
Estate (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective agents,
attorneys and outside counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence, bad faith or
willful misconduct) and of the Noteholders allowed in such Proceedings;

(ii)                   unless prohibited by applicable
law and regulations, to vote on behalf of the Secured Parties of such Series in
any election of a trustee, a standby trustee or person performing similar
functions in any such proceedings;

(iii)                  to collect and receive any
monies or other property payable or deliverable on any such claims and received
with respect to the Series Trust Estate and to distribute all amounts
received with respect to the claims of the Secured Parties and of the Indenture
Trustee on their behalf; and

(iv)                  to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Secured Parties, in each case against
the Series Trust Estate allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;

 29
 

 

and any trustee, receiver, liquidator, custodian or
other similar official in any such proceeding is hereby authorized by the
Secured Parties to make payments to the Indenture Trustee, and, in the event
that the Indenture Trustee shall consent to the making of payments directly to
the Secured Parties, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee except as
a result of negligence or bad faith.

(d)           Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Secured Party any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any Secured
Party in any such proceeding except, as aforesaid, to vote for the election of
a trustee in bankruptcy or similar person.

(e)           All rights of action and of asserting claims under this
Indenture, the Series Supplement or under any of the Notes, may be
enforced by the Indenture Trustee without the possession of any of the Notes or
the production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of the
Secured Parties.

(f)            In any proceedings brought by the Indenture Trustee (and
also any proceedings involving the interpretation of any provision of this
Indenture or the Series Supplement), the Indenture Trustee shall be held
to represent all the Secured Parties, and it shall not be necessary to make any
Secured Party a party to any such proceedings.

SECTION 5.3         Limitation
of Suits. No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Series Supplement,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

(i)                    such Holder has previously
given written notice to the Indenture Trustee of a continuing Event of Default
with respect to the Notes;

(ii)                   the Holders of not less than
25% of the Outstanding Amount of the Notes have made written request to the
Indenture Trustee to institute such proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;

(iii)                  such Holder or Holders have
offered to the Indenture Trustee indemnity reasonably satisfactory to it
against the costs, expenses and liabilities to be incurred in complying with
such request;

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(iv)                  the Indenture Trustee for 60
days after its receipt of such notice, request and offer of indemnity has
failed to institute such Proceedings; and

(v)                   no direction inconsistent with
such written request has been given to the Indenture Trustee during such 60-day
period by the Holders of a majority of the Outstanding Amount of the Notes of
such Series;

it being understood and intended that no Holders of
Notes shall have any right in any manner whatsoever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Notes or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under
this Indenture, except in the manner herein provided.

SECTION 5.4         Unconditional
Rights of Noteholders To Receive Principal and Interest. Notwithstanding
any other provisions in this Indenture, the Holder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal
of and interest, if any, on such Note on or after the respective due dates
thereof expressed in such Note or in this Indenture or the Series Supplement
(or, in the case of redemption or tender pursuant to the Series Supplement,
on or after the related redemption or tender date) and to institute a suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.

SECTION 5.5         Restoration
of Rights and Remedies. If the Indenture Trustee or any Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture
or the Series Supplement and such Proceeding has been discontinued or
abandoned for any reason, then and in every such case the Issuer, the Indenture
Trustee and the related Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the related Noteholders shall continue as though no such proceeding had been
instituted.

SECTION 5.6         Rights
and Remedies Cumulative. No right or remedy herein conferred upon or
reserved to any Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

SECTION 5.7         Delay
or Omission Not a Waiver. No delay or omission of the Indenture Trustee,
any Controlling Party or any Holder of any related Note to exercise any right
or remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of Default
or an acquiescence therein. Every right and remedy given by this Article V
or by law to the Indenture Trustee or to any Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee
or by the related Noteholders, as the case may be.

 31

 

SECTION 5.8         Limitation on Voting of Preferred Stock; Control by
Noteholders.

(a)           Notwithstanding any provision of any Related Document to the
contrary, the Indenture Trustee shall hold the Class SV Preferred Stock in
trust for the benefit of the Secured Parties and shall vote such stock only
pursuant to the written instructions of the Holders of a majority of the
Outstanding Amount of the Notes.

(b)           The Controlling Party shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee with respect to the Notes of such Series or
exercising any trust or power conferred on the Indenture Trustee; provided
that

(i)                    such direction shall not be in
conflict with any rule of law or with this Indenture or with the Series Supplement;
and

(ii)                   the Indenture Trustee may take
any other action deemed proper by the Indenture Trustee that is not
inconsistent with such direction;

provided, however, that,
subject to Section 6.1, the Indenture Trustee need not take any action
that it determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.

SECTION 5.9         Waiver of Past Defaults. The Controlling Party may
waive any Default or Event of Default relating to the Notes and its
consequences except a Default (a) in payment of principal of or interest
on any of the Notes or (b) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Note. In the case of any such waiver, the Issuer, the Indenture Trustee and the
Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.

Upon any such waiver, such Default shall cease to
exist and be deemed to have been cured and not to have occurred, and any Event
of Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture and the Series Supplement;
but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereto.

SECTION 5.10       Undertaking for Costs. All parties to this Indenture and
the Series Supplement agree, and each Holder of any Note by such Holder’s
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture and the Series Supplement, or in any suit against the
Indenture Trustee for any action taken, suffered or omitted by it as Indenture
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this Section shall
not apply to (a) any suit 

 32
 

 

instituted by the Indenture Trustee, (b) any suit
instituted by any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any
suit instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates
expressed in such Note and in this Indenture and the Series Supplement.

SECTION 5.11       Waiver
of Stay or Extension Laws. The Issuer covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead or in any
manner whatsoever, claim or take the benefit of, any stay or extension law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture and the Series Supplement;
and the Issuer (to the extent that it may lawfully do so) hereby expressly
waives all benefit of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

SECTION 5.12       Action
on Notes. The Indenture Trustee’s right to seek and recover judgment on the
Notes or under this Indenture or the Series Supplement shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture or the Series Supplement. Neither the lien
of this Indenture or the Series Supplement nor any rights or remedies of
the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Series Trust Estate
or upon any of the assets of the Issuer.

SECTION 5.13       Performance and Enforcement of Certain
Obligations.

(a)           Promptly following a request from the
Indenture Trustee to do so and at the Servicer’s expense, the Issuer agrees to
take all such lawful action as the Indenture Trustee may request to compel or
secure the performance and observance by the Seller and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the Servicer of
each of their obligations under the Sale and Servicing Agreement.

(b)           If an Event of Default has occurred and
is continuing, the Indenture Trustee may, and at the written direction of the
Holders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the
Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure performance
or observance by the Seller or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, 

 33
 

 

approval, extension or waiver under the Sale and
Servicing Agreement, and any right of the Issuer to take such action shall be
suspended.

ARTICLE
VI.

The
Indenture Trustee and the Administrator

SECTION 6.1         Duties of Indenture Trustee.

(a)           If an Event of Default has occurred and
is continuing of which a Responsible Officer of the Indenture Trustee has
actual knowledge, the Indenture Trustee shall exercise the rights and powers
vested in it by this Indenture and the other Basic Documents and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own affairs.

(b)           Except during the continuance of an
Event of Default with respect to a Series of which a Responsible Officer
of the Indenture Trustee has actual knowledge:

(i)                    the Indenture Trustee undertakes to perform with
respect to such Series such duties and only such duties as are
specifically set forth in this Indenture and the other Basic Documents to which
it is a party and no implied covenants or obligations shall be read into this
Indenture or the other Basic Documents against the Indenture Trustee; and

(ii)                   in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee as the case may be and conforming
to the requirements of this Indenture and the other Basic Documents; however,
with respect to certificates and opinions required by any provision hereof or
under the Basic Documents to be furnished to it, the Indenture Trustee shall
examine such certificates and opinions to determine whether or not they conform
on their face to the requirements of this Indenture and the other Basic
Documents provided, further, that the Indenture Trustee shall not be
responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished to
it, including, without limitation, any statistical, numerical or financial data
contained therein.

(c)           The Indenture Trustee may not be
relieved from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

(i)                    this paragraph does not limit the effect of
paragraph (b) of this Section;

 34
 

 

(ii)                   the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless it is
proven that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and

(iii)                  the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.8.

(d)           The Indenture Trustee shall not be
liable for interest on any money received by it except as such Person may agree
in writing with the Issuer.

(e)           Money held in trust by the Indenture
Trustee, if any, need not be segregated from other funds except to the extent
required by law or the terms of this Indenture, the Series Supplement or
the Sale and Servicing Agreement.

(f)            No provision of this Indenture or the
other Basic Documents shall require the Indenture Trustee to expend or risk its
own funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayment of such funds or
indemnity reasonably satisfactory to it against such risk or liability is not
reasonably assured to it.

(g)           Every provision of this Indenture and
the other Basic Documents relating to the conduct or affecting the liability of
or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.

(h)           The Indenture Trustee shall, and hereby
agrees that it will, perform all of the obligations and duties required of it
under each Related Document to which it is a party.

(i)            Without limiting the generality of
this Section 6.1, neither the Indenture Trustee nor the Administrator
shall have any duty (i) to see to any recording, filing or depositing of
this Indenture, the Series Supplement or any agreement referred to herein
or any financing statement evidencing a security interest in the Financed
Vehicles, or to see to the maintenance of any such recording or filing or
depositing or to any recording, refiling or redepositing of any thereof, (ii) to
see to any insurance of the Financed Vehicles or Obligors or to effect or
maintain any such insurance, (iii) to see to the payment or discharge of
any tax, assessment or other governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed or levied against any part of the
Trust, (iv) to confirm or verify the contents of any reports or
certificates delivered to the Indenture Trustee pursuant to this Indenture, the
Series Supplement or the Sale and Servicing Agreement believed by the
Indenture Trustee to be genuine and to have been signed or presented by the
proper party or parties, or (v) to inspect the Financed Vehicles at any
time or ascertain or inquire as to the performance or observance of any of the
Issuer’s, the Seller’s or the Servicer’s representations, warranties or
covenants or the Servicer’s duties and obligations as Servicer and as custodian
of the Receivable Files under the Sale and Servicing Agreement.

 35
 

 

(j)            In no event shall the Indenture Trustee, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Statutory Trust Statute, common law, or the Trust Agreement.

SECTION 6.2         Rights of Indenture Trustee.

(a)           The Indenture Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Indenture Trustee need not investigate any fact or
matter stated in the document.

(b)           Before the Indenture Trustee acts or
refrains from acting, it may require an Officer’s Certificate and/or an Opinion
of Counsel. The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on the Officer’s Certificate and/or
Opinion of Counsel.

(c)           The Indenture Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a custodian or nominee, and
the Indenture Trustee shall not be responsible for any misconduct or negligence
on the part of, or for the supervision of the Servicer or any other agent,
attorney, custodian or nominee appointed with due care by it hereunder.

(d)           The Indenture Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers; provided, however,
that the Indenture Trustee’s conduct does not constitute willful misconduct,
negligence or bad faith.

(e)           The Indenture Trustee may consult with
counsel, and the advice or opinion of counsel with respect to legal matters
relating to any Related Documents and the Notes and such advice or opinion of
counsel shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

(f)            The Indenture Trustee shall be under
no obligation to institute, conduct or defend any litigation under this
Indenture or the Series Supplement or in relation to this Indenture or the
Series Supplement, at the request, order or direction of any of the
Holders of Notes, pursuant to the provisions of this Indenture or the Series Supplement,
unless such Holders of Notes shall have offered to the Indenture Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that may be incurred therein or thereby; provided, however,
that the Indenture Trustee shall, upon the occurrence of an Event of Default
(that has not been cured), exercise the rights and powers vested in it by this
Indenture and the Series Supplement with reasonable care and skill
customary for the care and skill exercised by Indenture Trustees under similar
circumstances.

(g)           The Indenture Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document unless required in
writing to do so by any Holder of a Note; provided, 

 36
 

 

however, that if the payment within
a reasonable time to the Indenture Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Indenture Trustee not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the Series Supplement
or the Sale and Servicing Agreement, the Indenture Trustee may require
indemnity reasonably satisfactory to it against such cost, expense or liability
as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such request.

(h)           The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed as a
duty, and the Indenture Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of such act. For purposes
of clarification, the Indenture Trustee shall be under no obligation hereunder
to monitor the perfection of any security interest or the filing of any
financing statement or continuation statement in connection therewith.

(i)            The Indenture Trustee shall not be required to give any
bond or surety in respect of the execution of the Trust Estate created hereby
or the powers granted hereunder.

(j)            Anything in this Indenture or any supplement hereto to the
contrary notwithstanding, in no event shall the Indenture Trustee be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Indenture Trustee has
been advised of the likelihood of such loss or damage and regardless of the
form of action.

(k)           The Indenture Trustee shall not be required to take notice
or be deemed to have notice or knowledge of any default, Event of Default or
Servicer Termination Event unless a Responsible Officer of the Indenture
Trustee shall have actual notice thereof.

SECTION 6.3         Individual
Rights of Indenture Trustee. The Indenture Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were
not Indenture Trustee. Any Note Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Indenture
Trustee must comply with Sections 6.11 and 6.12.

SECTION 6.4         Indenture
Trustee’s Disclaimer. The Indenture Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture,
the Series Supplement, the Series Trust Estate or the Notes, it shall
not be accountable for the Issuer’s use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in the Indenture, in
the Series Supplement or in any document issued in connection with the
sale of the Notes or in the Notes.

SECTION 6.5         Notice
of Defaults. If an Event of Default occurs and is continuing and if it is
either actually known by, or written notice of the existence thereof 

 37
 

 

has been delivered to, a Responsible Officer of the
Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice
of the Event of Default within 90 days after such knowledge or notice occurs. Except
in the case of an Event of Default in payment of principal of or interest on
any Note, the Indenture Trustee may withhold the notice to Noteholders if and
so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of Noteholders.

SECTION 6.6         Reports
by Servicer to Holders. Upon the written request of any Noteholder to the
Servicer, the Servicer shall on behalf of the Issuer deliver to the
Administrator for distribution to any Noteholder such information as may be
reasonably required by such Noteholder to enable such Noteholder to prepare its
federal and state income tax returns required by law. Neither the Indenture
Trustee nor the Administrator shall have any duty or obligation to verify or
confirm the contents of the information contained therein.

SECTION 6.7         Indenture Trustee Compensation and
Indemnification.

(a)           As payable in the Series Supplement, the Issuer shall,
or shall cause the Servicer pursuant to the Sale and Servicing Agreement to,
pay to the Indenture Trustee from time to time the Indenture Trustee Fee as
compensation for its services. The Indenture Trustee’s compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Issuer shall or shall cause the Servicer pursuant to the Sale and Servicing
Agreement to reimburse the Indenture Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee’s
agents, outside counsel, accountants and experts. The Issuer shall or shall
cause the Servicer pursuant to the Sale and Servicing Agreement to indemnify
the Indenture Trustee, and its respective officers, directors, employees and
agents against any and all loss, liability or expense (including attorneys’
fees and expenses) incurred by each of them in connection with the acceptance
or the administration of this trust and the performance of its duties hereunder.
The Indenture Trustee shall notify the Issuer and the Servicer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so
notify the Issuer and the Servicer shall not relieve the Issuer of its
obligations hereunder or the Servicer of its obligations under Article XII
of the Sale and Servicing Agreement. The Issuer shall defend or shall cause the
Servicer to defend any claim for indemnity that may arise against the Indenture
Trustee, or the Indenture Trustee may have separate counsel and the Issuer
shall or shall cause the Servicer to pay the fees and expenses of such counsel.
Neither the Issuer nor the Servicer need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Indenture Trustee
through such Person’s own willful misconduct, negligence or bad faith.

(b)           The Issuer’s payment obligations to the Indenture Trustee
pursuant to this Section shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Insolvency Event with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any 

 38
 

 

other applicable federal or state bankruptcy,
insolvency or similar law. Notwithstanding anything else set forth in any
Related Documents, the Indenture Trustee agrees that the obligations of the
Issuer (but not the Servicer) to the Indenture Trustee hereunder or under any
other Related Documents, shall be recourse to the Series Trust Estate only
and specifically shall not be recourse to the assets of any Securityholder. In
addition, the Indenture Trustee agrees that its recourse to the Issuer, the Series Trust
Estate, the Seller and amounts held pursuant to the Series Support shall
be limited to the right to receive the distributions as provided for in the
payment priority provisions of the Series Supplement.

SECTION 6.8         Replacement
of Indenture Trustee. The Indenture Trustee may, and in the circumstances
specified in subparagraph (i) shall, resign at any time upon 60 days’
prior written notice by so notifying the Issuer, the Administrator, Holders of
a majority of Outstanding Amount of the Notes, the Seller and the Servicer. In
addition, the Servicer may remove the Indenture Trustee by so notifying the
Indenture Trustee upon 60 days’ written notice. The Issuer may, and shall at
the direction of the Noteholders, remove the Indenture Trustee, if:

(i)                    the Indenture Trustee fails to
comply with Section 6.11;

(ii)                   a court having jurisdiction in
the premises in respect of the Indenture Trustee in an involuntary case or
proceeding under federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order granting
relief or appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the Indenture Trustee or
for any substantial part of the Indenture Trustee’s property, or ordering the
winding-up or liquidation of the Indenture Trustee’s affairs;

(iii)                  an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law is commenced with
respect to the Indenture Trustee and such case is not dismissed within 60 days;

(iv)                  the Indenture Trustee commences
a voluntary case under any federal or state banking or bankruptcy laws, as now
or hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture Trustee
or for any substantial part of the Indenture Trustee’s property, or makes any
assignment for the benefit of creditors or fails generally to pay its debts as
such debts become due or takes any corporate action in furtherance of any of
the foregoing;

(v)                   the Indenture Trustee otherwise
becomes incapable of acting; or

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(vi)                  the rating assigned to the
long-term unsecured debt obligations of the Indenture Trustee by the Rating
Agencies shall be lowered below the rating of “BBB”, “Baa2” or equivalent rating
or be withdrawn by either of the Rating Agencies.

As a condition precedent to
the effectiveness of any such resignation or removal, the Indenture Trustee
shall provide to the Servicer, at least 30 calendar days prior to the effective
date of any such resignation or removal, written notice, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the Servicer in order for the Servicer to comply with its
reporting obligations under Item 6.02 of Form 8-K with respect to
the replacement of the Indenture Trustee. If the Indenture Trustee fails to
fulfill its obligations under this Section 6.8 with respect to notice to
the Servicer or under Article XIII of the Sale and Servicing Agreement,
and such failure continues for the lesser of 10 calendar days or such period in
which the applicable Exchange Act report can be filed timely (without taking
into account any extensions), the Servicer may terminate the Indenture Trustee.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly deliver a written notice of such removal, resignation or vacancy
to the Servicer, and the Servicer may appoint a successor Indenture Trustee
that satisfies the eligibility requirements of Section 6.11. If the
Servicer fails to appoint such a successor Indenture Trustee, the Issuer or a
resigning Indenture Trustee may petition any court of competent jurisdiction to
appoint a successor Indenture Trustee. If the Indenture Trustee resigns or is
removed, the Indenture Trustee shall also resign or be removed, as the case may
be, as Note Paying Agent, Note Registrar and Certificate Paying Agent.

In connection with its
resignation or removal, the Indenture Trustee agrees to cooperate with any
successor Indenture Trustee in effecting the termination of the Indenture
Trustee’s responsibilities and rights hereunder and shall promptly provide such
successor Indenture Trustee all documents and records reasonably requested by
it to enable it to assume the Indenture Trustee’s functions hereunder.

A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, the Issuer and
the Administrator and
shall, at least 30 calendar days prior to the effective date of its acceptance,
provide to the Servicer written notice thereof, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the Servicer in order for the Servicer to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a
replacement of the Indenture Trustee. Thereupon the resignation or removal of
the retiring Indenture Trustee shall become effective, and the successor
Indenture Trustee shall have all the rights, powers and duties of the retiring
Indenture Trustee under the Basic Documents. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

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If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee.

Notwithstanding the replacement of the Indenture
Trustee pursuant to this Section, the Issuer’s and the Servicer’s obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee.

SECTION 6.9         Successor
Indenture Trustee by Merger. If the Indenture Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee entity without any further act shall be the
successor Indenture Trustee; provided that such corporation or banking
association shall otherwise be eligible under Section 6.11 hereof. The
Indenture Trustee shall provide the Rating Agencies with written notice of any
such transaction as soon as practical
thereafter. As a condition precedent to the effectiveness of any merger or
consolidation of the Indenture Trustee, the Indenture Trustee shall provide to
the Servicer, at least 30 calendar days prior to the effective date of any such
merger or consolidation, written notice thereof, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the  Servicer in order for
the  Servicer to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a
successor Indenture Trustee. If the Indenture Trustee fails to fulfill its
obligations under this Section 6.9 with respect to notice to the Servicer
or under Article XIII of the Sale and Servicing Agreement, and such
failure continues for the lesser of 10 calendar days or such period in which
the applicable Exchange Act report can be filed timely (without taking into
account any extensions), the Servicer may terminate the Indenture Trustee.

SECTION 6.10       Appointment of Co-Indenture Trustee or
Separate Indenture Trustee.

(a)            Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Series Trust
Estate, and to vest in such Person or Persons, in such capacity and for the
benefit of the Secured Parties, such title to the Series Trust Estate, or
any part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under Section 6.11
and no notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8 hereof. The cost and expense
of such co-trustee or co-trustees, and/or separate trustee or separate
trustees, shall be a cost and expense of the Indenture Trustee pursuant to Section 3.03(a)(ii) of
the Series Supplement.

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(b)           Every 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 Indenture Trustee shall be conferred
or imposed upon and exercised or performed by the Indenture 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 Indenture
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 Indenture 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 Indenture Trustee;

(ii)                   no trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder, including acts or omissions of predecessor or successor trustees;
and

(iii)                  the Indenture Trustee may at any
time accept the resignation of or remove any separate trustee or co-trustee.

(c)           Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each separate trustee and
co-trustee, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

(d)           Any separate trustee or co-trustee may at any time
constitute the Indenture 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 Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, dissolve, become insolvent, 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 Indenture Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.

SECTION 6.11       Eligibility:
Disqualification. The Indenture Trustee shall at all times:  satisfy TIA § 310(a), have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition, and have a long-term debt rating of at
least “BBB”, “Baa2” or equivalent rating from each of the Rating Agencies. The
Indenture Trustee shall comply with TIA § 310(b), including the optional
provision permitted by the second sentence of TIA § 310(b)(9); provided,

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however, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA § 310(b)(1) are met.

SECTION 6.12       Preferential
Collection of Claims Against Issuer. The Indenture Trustee shall comply
with TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b). An Indenture Trustee who has resigned or been removed shall be
subject to TIA § 311(a) to the extent indicated.

SECTION 6.13       Representations
and Warranties of the Indenture Trustee. The Indenture Trustee represents
and warrants to the Issuer as follows:

(a)           Due Organization. The Indenture Trustee is a New York
banking corporation, duly organized, validly existing and in good standing
under the laws of the United States and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.

(b)           Corporate Power. The Indenture Trustee has all
requisite right, power and authority to execute and deliver this Indenture, the
Series Supplement and any other Related Document to which it is a party
and to perform all of its duties as the Indenture Trustee hereunder.

(c)           Due Authorization. The execution and delivery by the
Indenture Trustee of this Indenture, the Series Supplement and any other
Related Documents to which it is a party, and the performance by the Indenture
Trustee of its duties hereunder and thereunder, have been duly authorized by
all necessary corporate proceedings which are required for the valid execution
and delivery by the Indenture Trustee, or the performance by the Indenture
Trustee, of this Indenture, the Series Supplement and such other Related
Documents.

(d)           Valid and Binding Indenture. The Indenture Trustee
has duly executed and delivered this Indenture, the Series Supplement and
each other Related Document to which it is a party, and each of this Indenture,
the Series Supplement and each other Related Document constitutes the
legal, valid and binding obligation of the Indenture Trustee enforceable
against the Indenture Trustee in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, insolvency, reorganization and
similar laws relating to or affecting the enforcement of creditors’ rights
generally and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability.

SECTION 6.14       Waiver
of Setoffs. The Indenture Trustee hereby expressly waives any and all
rights of setoff that the Indenture Trustee may otherwise at any time have
under applicable law with respect to any Trust Account and agrees that amounts
in the Trust Accounts shall at all times be held and applied solely in
accordance with the provisions hereof.

SECTION 6.15       No
Consent to Certain Acts of Seller. The Seller shall not request that the
Indenture Trustee consent to, nor shall the Indenture Trustee consent 

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to any action proposed to be taken by the Seller
pursuant to Article FIFTEENTH of the Seller’s Articles of Incorporation.

SECTION 6.16               Duties, Liabilities and
Limitations on Liability of Administrator.

(a)           The Administrator shall undertake to perform such duties and
only such duties as are specifically set forth in this Indenture and the other
Basic Documents to which it is a party. The duties and obligations of the
Administrator with respect to the Notes and the Certificates and the Basic
Documents to which it is a party shall be determined solely by the express
provisions of such Basic Documents, the Administrator shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in the Basic Documents to which it is a party, and no implied
covenants or obligations shall be read into the Basic Documents against the
Administrator.

(b)           The Administrator shall have all of the rights of, benefits
of, and limitations on liability afforded to, the Indenture Trustee under this Article VI
to the same extent as though the Administrator had been named in the various
provisions of Article VI, except (i) to the extent otherwise provided
in Sections 6.17, 6.18 and 6.19 (for example, Section 6.17 shall apply
instead of Section 6.7), (ii) with respect to Section 6.4, the
Administrator shall be responsible for the Administrator’s certificate of
authentication, and (iii) to the extent a conflict arises between this Section 6.16
and another provision of this Article VI, this Section 6.16 shall
govern. Such rights, benefits and limitations will be accorded the
Administrator, in its capacity as such, under all of the Basic Documents.

(c)           Except with respect to the holding or control of any portion
of the Series Trust Estate, in acting under this Indenture and the other
Basic Documents to which it is a party and in connection with the Notes and the
Ownership Interest, the Administrator is acting solely as an agent of the Issuer
and does not assume any obligation or relationship of agency for or with, or
any fiduciary obligation towards, any of the Holders of the Notes; provided
that, the Administrator, when holding or controlling any portion of the Series Trust
Estate, shall be acting as a “collateral agent” solely on behalf of the
Indenture Trustee for the benefit of the Secured Parties.

(d)           The Administrator shall be obligated to make payments
pursuant to the terms of the Basic Documents only if, and only to the extent
that, sufficient funds are available therefor in the Collection Account. In no
event shall the Administrator, in its capacity as Administrator, Note Paying
Agent or Certificate Paying Agent or in its individual capacity, be liable for
any such payments.

(e)           In each case that the Administrator (including in its
capacity as Note Paying Agent or Certificate Paying Agent hereunder) may or is
required hereunder or under any other Basic Document to which it is a party to
take any action (an “Action”), including without limitation to make any
determination or judgment (including without limitation the proper reporting
and/or withholding for federal income tax purposes 

 44
 

 

required with respect to any payment made under any
Basic Document for which the Administrator has a reporting and/or withholding
obligation for federal income tax purposes), to exercise rights or powers or
otherwise act hereunder or thereunder, the Administrator may seek direction
from the Servicer. The Administrator shall not be liable with respect to any
Action taken or omitted to be taken by it in good faith in accordance with the
direction from the Servicer. If the Administrator shall request direction from
the Servicer with respect to any Action, the Administrator shall be entitled to
refrain from such Action unless and until such Administrator shall have
received direction from the Servicer, and the Administrator shall not incur
liability to any Person by reason of so refraining.

(f)            The Administrator may rely, and shall be fully protected in
relying, on any direction or instruction received from the Servicer, the
Indenture Trustee or any other party hereto or to the other Basic Documents.

(g)           The Administrator shall not be responsible for filing any
financing or continuation statement or otherwise taking any action in
connection with any security interest or lien granted pursuant to the Basic
Documents.

SECTION 6.17               Administrator Compensation and
Indemnification.

(a)           The Administrator shall be entitled to such compensation as
shall be mutually agreed upon between it and the Servicer for its services
hereunder and under the other Basic Documents to which it is a party, including
its roles as Note Paying Agent and Certificate Paying Agent and Certificate
Registrar under the Trust Agreement. The Administrator agrees and acknowledges
that it shall look solely to the Servicer for payment of such compensation and
it shall not be entitled to payment of such compensation from the Issuer, the
Indenture Trustee or out of the Series Trust Estate. The Issuer shall or
shall cause the Servicer to reimburse the Administrator for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services. Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Administrator’s agents, outside counsel, accountants and experts.

(b)           The Administrator and any director, officer, employee or
agent of the Administrator shall be indemnified by the initial Servicer and
held harmless by the Servicer against any loss, liability or expense (including
reasonable attorney’s fees and expenses) arising out of, relating to or in
connection with (i) this Indenture, the Notes and the other Basic
Documents or in connection with their respective duties hereunder or any legal
action relating thereto, other than any loss, liability or expense incurred by
reason of willful misconduct, negligence or bad faith in the performance of the
Administrator’s duties hereunder or thereunder and (ii) any audit,
controversy or judicial proceeding relating to a governmental taxing authority.

(c)           Notwithstanding anything contained in this Indenture or any
of the other Basic Documents to the contrary, the indemnification provided for
in this Section 

 45
 

 

6.17 shall survive the payment of the Notes, the
resignation or removal of the Administrator and/or the satisfaction and
discharge of this Indenture.

SECTION 6.18               Replacement of Administrator.

Except as otherwise set forth in this Section 6.18,
no resignation or removal of the Administrator and no appointment of a
successor Administrator shall become effective until the acceptance of
appointment by the successor Administrator pursuant to this Section. The
Administrator may resign at any time by so notifying the Issuer. The Issuer
shall remove the Administrator if:

(a)           the Administrator fails to comply with Section 6.11
above;

(b)           the Administrator is adjudged a bankrupt or insolvent;

(c)           a receiver or other public officer takes charge of the
Administrator or its property; or

(d)           the Administrator otherwise becomes incapable of acting.

As a condition precedent to
the effectiveness of any such resignation or removal, the Administrator shall
provide to the Servicer, at least 30 calendar days prior to the effective date
of any such resignation or removal, written notice, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the Servicer in order for the Servicer to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to the
replacement of the Administrator. If the Administrator fails to fulfill its
obligations under this Section 6.8 with respect to notice to the Servicer
or under Article XIII of the Sale and Servicing Agreement, and such
failure continues for the lesser of 10 calendar days or such period in which
the applicable Exchange Act report can be filed timely (without taking into
account any extensions), the Servicer may terminate the Administrator. If
the Administrator resigns or is removed or if a vacancy exists in the office of
Administrator for any reason (the Administrator in such event being referred to
herein as the retiring Administrator), the Issuer shall promptly, but in no
event later than 30 days after such removal or resignation, appoint a successor
Administrator.

A successor Administrator shall deliver a written
acceptance of its appointment to the retiring Administrator, the Issuer and the
Indenture Trustee and shall,
at least 30 calendar days prior to the effective date of its acceptance,
provide to the Servicer written notice thereof, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the Servicer in order for the Servicer to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a
replacement of the Administrator. Thereupon the resignation or removal
of the retiring Administrator shall become effective, and the successor
Administrator shall have all the rights, powers and duties of the Administrator
under this Indenture and the other Basic Documents to which it is a party. The
successor Administrator shall mail a notice of its succession to Noteholders. The
retiring Administrator shall promptly transfer all property held by it as
Administrator to the successor Administrator.

 

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If a successor Administrator does not take office
within 30 days after the retiring Administrator resigns or is removed, the
Indenture Trustee shall perform the obligations of the Administrator hereunder
until a successor Administrator shall be appointed, and for so long as the
Indenture Trustee serves as Administrator hereunder, the Indenture Trustee
shall be entitled to such compensation in addition to its compensation pursuant
to Section 6.7 hereunder as the Servicer and the Indenture Trustee shall
agree.

Notwithstanding the replacement of the Administrator
pursuant to this Section 6.18, the Servicer’s obligations under Section 6.17
above shall continue for the benefit of the retiring Administrator.

SECTION 6.19              Successor
Administrator by Merger.

If the Administrator consolidates with, merges or
converts into, or transfers all or substantially all its corporate trust
business or assets to, another Person or banking association, the resulting,
surviving or transferee corporation without any further act shall be the
successor Administrator; provided, that such corporation or banking association
shall be otherwise qualified and eligible under Section 6.11 above. The Administrator shall provide to the
Servicer, at least 30 calendar days prior to the effective date of any such
merger or consolidation, written notice thereof, in form and substance
reasonably satisfactory to the Servicer, containing all information reasonably
requested by the  Servicer in order for
the  Servicer to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to a
successor Administrator. If the Administrator fails to fulfill its obligations
under this Section 6.19 with respect to notice to the Servicer or under Article XIII
of the Sale and Servicing Agreement, and such failure continues for the lesser
of 10 calendar days or such period in which the applicable Exchange Act report
can be filed timely (without taking into account any extensions), the Servicer
may terminate the Administrator.

In case, at the time such successor or successors by
merger, conversion or consolidation to the Administrator shall succeed to the
rights, duties and responsibilities created by this Indenture, any of the Notes
shall have been authenticated but not delivered, any such successor to the
Administrator may adopt the certificate of authentication, if any, of any
predecessor administrator, and deliver such Notes so authenticated; and in case
at that time any of the Notes shall not have been authenticated, any successor
to the Administrator may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Administrator; and
in all such cases such certificates shall have the full force which it is
anywhere in the Notes or in this Indenture provided that the certificate of the
Administrator shall have.

ARTICLE VII.

Noteholders’ Lists and Reports

SECTION 7.1                Issuer
To Furnish To Indenture Trustee and Administrator Names and Addresses of
Noteholders. The Issuer will furnish or cause to

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be furnished to the Indenture Trustee and the
Administrator with respect to each Series of Notes (a) not more than
five days after the earlier of (i) each Record Date with respect to such Series and
(ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee and the Administrator may reasonably require, of the names
and addresses of the Holders with respect to such Series as of such Record
Date, (b) at such other times as the Indenture Trustee and/or the
Administrator may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Administrator is the Note Registrar, no such list shall be
required to be furnished to the Administrator.

SECTION 7.2.               Preservation
of Information; Communications to Noteholders. The Indenture Trustee
shall preserve, in as current a form as is reasonably practicable, the names
and addresses of the Holders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.1. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon
receipt of a new list so furnished.

(a)  Noteholders
may communicate pursuant to TIA § 312(b) with other Noteholders with
respect to their rights under this Indenture or under the Notes.

(b)  The Issuer,
the Indenture Trustee, the Administrator and the Note Registrar shall have the
protection of TIA § 312(c).

SECTION 7.3                Reports
by Issuer.

(a)  If this
Indenture is qualified under the TIA, the Issuer shall:

(i)           file
with the Indenture Trustee, within 15 days after the Issuer is required to file
the same with the Commission, copies of the annual reports and copies of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)          file
with the Indenture Trustee and the Commission in accordance with rules and
regulations prescribed from time to time by the Commission such additional
information, documents and reports with respect to compliance by the Issuer
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and

(iii)         supply
to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to
all Noteholders described in TIA § 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer pursuant
to clauses (i) and (ii) of this Section 7.3(a) as may be
required by rules and regulations prescribed from time to time by the Commission.

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(b)  The
Indenture Trustee will mail as described in TIA Section 313(c) to all
Noteholders the information, documents and reports, or summaries thereof,
supplied to the Indenture Trustee pursuant to Section 7.3(a).

(c)  Unless the
Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31
of each year.

(d)  Except as
set forth in clause (b) above, the Indenture Trustee shall not have any
duty or obligation with respect to any reports or other information delivered
to it pursuant to this Section 7.3.

SECTION 7.4                Reports
by Indenture Trustee. If required by TIA § 313(a), within 60 days
after each March 30 beginning with March 30, 2007 the Indenture
Trustee shall mail to each Noteholder as required by TIA § 313(c) a
brief report dated as of such date that complies with TIA § 313(a). The
Indenture Trustee also shall comply with TIA § 313(b).

The Indenture Trustee will file with the Commission
and each stock exchange, if any, on which the Notes are listed a copy of each
report delivered pursuant to Section 7.4(a) at the time of its
mailing to Noteholders. The Issuer shall notify the Indenture Trustee if and
when the Notes are listed on any stock exchange.

ARTICLE VIII.

Accounts, Disbursements and Releases

SECTION 8.1                Collection
of Money. Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture and the Sale and Servicing
Agreement. The Indenture Trustee or the Note Paying Agent on its behalf shall
apply all such money received by it as provided in this Indenture and the Series Supplement.
Except as otherwise expressly provided in this Indenture or in the Sale and
Servicing Agreement, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Series Trust
Estate, the Indenture Trustee may, and at the direction of the Holders of the
Outstanding Amount of the Notes shall, take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

SECTION 8.2                Release
of Series Trust Estate.

(a)  Subject to
the payment of its fees and expenses pursuant to Section 6.7, and to the
extent not covered by Section 8.2(b), the Indenture Trustee may, and when
required by the Issuer and the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, in a manner
and under circumstances that

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are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee’s authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.

(b)  The
Indenture Trustee shall, at such time as there are no Notes Outstanding and all
sums due the Indenture Trustee pursuant to Section 6.7 have been paid,
release any remaining portion of the Series Trust Estate that secured the
Notes from the lien of this Indenture and release (or direct the Administrator
to release) to the Issuer or any other Person entitled thereto any funds then
on deposit in the Trust Accounts. The Indenture Trustee shall release property
from the lien of this Indenture pursuant to this Section 8.2(b) only
upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA §§ 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.1.

SECTION 8.3 Opinion of Counsel. The
Indenture Trustee shall receive at least seven days’ notice when requested by
the Issuer to take any action pursuant to Section 8.2(a), accompanied by
copies of any instruments involved, and the Indenture Trustee shall also
require as a condition to such action, an Opinion of Counsel, stating the legal
effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action have
been complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Secured Parties in contravention of
the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Series Trust Estate. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in
connection with any such action.

ARTICLE IX.

Amendments; the Series Supplement

SECTION 9.1                Amendments
Without Consent of Noteholders.

(a)  Except as
otherwise provided in the Series Supplement, without the consent of the
Holders of any Notes and with the prior written notice to the Rating Agencies,
as evidenced to the Indenture Trustee, the Administrator and the Issuer, when
authorized by an Issuer Order, at any time and from time to time, the parties
hereto may enter into one or more amendments hereto, in form satisfactory to
the Indenture Trustee, the Administrator and the Owner Trustee, for any of the
following purposes:

(i)           to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the

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lien of this Indenture, or to subject to the lien of
this Indenture additional property;

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

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

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

(v)         to
cure any ambiguity, to correct or supplement any provision herein or in the Series Supplement
which may be inconsistent with any other provision herein or in the Series Supplement
or to make any other provisions with respect to matters or questions arising
under this Indenture or in the Series Supplement; provided that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
the interests of the Holders of the Notes; provided, further,
that with respect to tax matters, such action shall not be deemed to adversely
affect the interests of the Holders of the Notes if, for federal income tax
purposes, the action does not cause the issuing entity to be treated as an
association or publicly traded partnership taxable as a corporation, or the
Notes that were characterized as debt at the time of issuance to fail to
qualify as debt;

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

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

The Indenture Trustee and the Administrator are hereby
authorized to join in the execution of any such amendment and to make any
further appropriate agreements and stipulations that may be therein contained.

(b)  Except as otherwise
provided in the Series Supplement, the Issuer, the Administrator and the
Indenture Trustee, when authorized by an Issuer Order, may, also without the
consent of any of the Holders of the Notes and with prior written notice to the
Rating Agencies by the Issuer, as evidenced to the Administrator and the
Indenture Trustee, enter into an amendment hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture;

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provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in
any material respect the interests of any Noteholder; provided, further,
that with respect to tax matters, such action shall not be deemed to adversely
affect in any material respect the interests of any Noteholder if, for federal
income tax purposes, the action does not cause the issuing entity to be treated
as an association or publicly traded partnership taxable as a corporation, or
the Notes that were characterized as debt at the time of issuance to fail to
qualify as debt.

SECTION 9.2                Amendments With Consent of
Noteholders. Except as otherwise provided in the Series Supplement,
the Issuer, the Administrator and the Indenture Trustee, when authorized by an
Issuer Order provided by the Servicer, also may, with prior written notice to
the Rating Agencies and with the consent of the Holders of not less than a
majority of the Outstanding Amount of each Class of Notes affected
thereby, by Act of such Holders delivered to the Issuer, the Administrator and
the Indenture Trustee, enter into an amendment hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however,
that no such amendment shall, without the consent of the Holder of each
Outstanding Note affected thereby:

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

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

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

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

(v)           reduce
the percentage of the Outstanding Amount of the Notes required to direct the
Indenture Trustee to direct the Issuer to sell or liquidate the Series Trust
Estate pursuant to Section 4.03 of the Series Supplement;

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

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

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

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

Promptly after the execution by the Issuer, the
Administrator and the Indenture Trustee of any amendment pursuant to this
Section, the Indenture Trustee shall mail to the Holders of the Notes to which
such amendment relates a notice setting forth in general terms the substance of
such amendment. Any failure of the Indenture Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such amendment.

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

SECTION 9.3                Series Supplement
Authorizing the Notes.

(a)  The Notes
issued hereunder shall be issued pursuant to the Series Supplement, which
shall set forth the terms and provisions of the Notes.

(b)  Amendments
to the Series Supplement shall be governed by the provisions of the Series Supplement.

SECTION 9.4                Execution
of the Series Supplement. The Indenture Trustee and the
Administrator shall be entitled to receive, and subject to Sections 6.1 and

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6.2, shall be fully protected in relying upon, an
Opinion of Counsel (and, if requested, an Officer’s Certificate) stating that
the execution of the Series Supplement is authorized or permitted by this
Indenture.

SECTION 9.5                Effect
of Series Supplement. Upon the execution of the Series Supplement
or any amendment pursuant to the provisions of the Series Supplement or
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of the Series Supplement or any amendment shall
be and be deemed to be part of the terms and conditions of this Indenture for
any and all purposes.

SECTION 9.6                Conformity
With Trust Indenture Act. Every amendment of this Indenture and the Series Supplement
executed pursuant to this Article IX shall conform to the requirements of
the Trust Indenture Act as then in effect so long as this Indenture shall then
be qualified under the Trust Indenture Act.

SECTION 9.7                Reference
in Notes to the Series Supplement. Notes authenticated and
delivered after the execution of the Series Supplement pursuant to this Article IX
may, and if required by the Issuer shall, bear a notation as to any matter
provided for in the Series Supplement. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Issuer, to the Series Supplement
may be prepared and executed by the Issuer and authenticated and delivered by
the Administrator in exchange for Outstanding Notes.

ARTICLE X.

[Reserved]

ARTICLE XI.

Miscellaneous

SECTION 11.1              Compliance
Certificates and Opinions, etc.

(a)  Upon any
application or request by the Issuer to the Indenture Trustee or the
Administrator, as the case may be, to take any action under any provision of
this Indenture or the Series Supplement, the Issuer shall furnish to the
Indenture Trustee or the Administrator, as the case may be, (i) an Officer’s
Certificate stating that all conditions precedent, if any, provided for in this
Indenture or the Series Supplement relating to the proposed action have
been complied with, (ii) an Opinion of Counsel stating that in the opinion
of such counsel all such conditions precedent, if any, have been complied with
and (iii) (if required by the TIA) an Independent Certificate from a firm
of certified public accountants meeting the applicable requirements of this
Section, except

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that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture or the Series Supplement, no additional
certificate or opinion need be furnished.

Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture or the Series Supplement shall include:

(i)           a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein
relating thereto;

(ii)          a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

(iii)         a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

(iv)        a
statement as to whether, in the opinion of each such signatory such condition
or covenant has been complied with.

(b)         (i) 
Prior to the deposit of any property or securities with the Indenture Trustee
(or the Administrator on behalf of the Indenture Trustee) that is to be made
the basis for the release of any property or securities subject to the lien of
this Indenture and the Series Supplement, the Issuer shall, in addition to
any obligation imposed in Section 11.1(a) or elsewhere in this
Indenture or the Series Supplement, furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the property or securities to be so deposited.

(ii)          Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also deliver to
the Indenture Trustee an Independent Certificate as to the same matters, if the
fair value to the Issuer of the securities to be so deposited and of all other
such securities made the basis of any such withdrawal or release since the
commencement of then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii),
is 10% or more of the Outstanding Amount of the Notes; provided, that
such a certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the related
Officer’s Certificate is less than $25,000 or less than 1% percent of the
Outstanding Amount of the Notes.

(iii)         Other
than with respect to the release of any Repurchased Receivables or Liquidated
Receivables (as such terms are defined in the Sale and

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Servicing
Agreement) or Receivables for which a substitution has been completed pursuant
to Section 5.02 of the Series Supplement, whenever any property or
securities are to be released from the lien of this Indenture and the Series Supplement,
the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture and the Series Supplement
in contravention of the provisions hereof.

(iv)        Whenever
the Issuer is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also furnish to
the Indenture Trustee an Independent Certificate as to the same matters if the
fair value of the property or securities and of all other property other than
Repurchased Receivables and Defaulted Receivables (as such terms are defined in
the Sale and Servicing Agreement), or securities released from the lien of this
Indenture since the commencement of then current calendar year, as set forth in
the certificates required by clause (ii) above and this clause (iv),
equals 10% or more of the Outstanding Amount of the Notes; provided,
that such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than 1 percent of then
Outstanding Amount of the Notes.

(v)         Notwithstanding
any other provision of this Section, the Issuer may (A) collect,
liquidate, sell or otherwise dispose of Receivables as and to the extent
permitted or required by the Basic Documents and (B) make cash payments
out of the Trust Accounts as and to the extent permitted or required by the
Basic Documents.

SECTION 11.2              Form of
Documents Delivered to Indenture Trustee. In any case where several matters
are required to be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be certified by, or covered
by the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.

Any certificate or opinion of an Authorized Officer of
the Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller or the Issuer,

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unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

Whenever in this Indenture or the Series Supplement,
in connection with any application or certificate or report to the Indenture
Trustee, it is provided that the Issuer shall deliver any document as a
condition of the granting of such application, or as evidence of the Issuer’s
compliance with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee’s right to conclusively rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in Article VI.

SECTION 11.3              Acts
of Noteholders.

(a)  Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Noteholders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 6.1) conclusive in
favor of the Indenture Trustee, the Administrator and the Issuer, if made in
the manner provided in this Section.

(b)  The fact and
date of the execution by any person of any such instrument or writing may be
proved in any customary manner of the Indenture Trustee.

(c)  The
ownership of Notes shall be proved by the Note Register.

(d)  Any request,
demand, authorization, direction, notice, consent, waiver or other action by
the Holder of any Notes shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.

SECTION 11.4              Notices,
etc., to Indenture Trustee, Issuer and Rating Agencies. Any request,
demand, authorization, direction, notice, consent, waiver or Act

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of Noteholders or other documents provided or
permitted by this Indenture or the Series Supplement to be made upon,
given or furnished to or filed with:

(a)  The
Indenture Trustee by any Noteholder, the Issuer or the Administrator shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed first-class and shall be deemed to have been duly
given upon receipt to the Indenture Trustee at its Corporate Trust Office,

(b)  The
Administrator by any Noteholder, the Issuer or the Indenture Trustee shall be
sufficient for every purpose hereunder if personally delivered, delivered by
overnight courier or mailed first-class and shall be deemed to have been duly
given upon receipt to the Administrator at its Corporate Trust Office,

(c)  The Issuer
by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if personally delivered, delivered by facsimile or overnight
courier or mailed first class, and shall be deemed to have been duly given upon
receipt to the Issuer addressed to:  HSBC
Automotive Trust (USA) 2006-1, in care of the Owner Trustee at its
Corporate Trust Office, or at any other address previously furnished in writing
to the Indenture Trustee by the Issuer. Each of the Issuer and the
Administrator shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee.

Notices required to be given to the Rating Agencies by
the Issuer, the Indenture Trustee, the Administrator or the Owner Trustee shall
be in writing, personally delivered, delivered by overnight courier or first
class or via facsimile to (i) in the case of Moody’s, at the following address:
Moody’s Investors Service, Inc., 99 Church Street, New York, New York
10004, Fax No:  (212) 553-0355, (ii) in
the case of S&P, at the following address: Standard & Poor’s
Ratings Group, 55 Water Street, New York, New York 10041, Attention: Asset Backed
Surveillance Department, Fax No:  (212)
438-2649 and (iii) in the case of Fitch, Inc., at the following
address: One State Street Plaza, New York, New York 10004, Fax No. (212)
480-4438; or as to each of the foregoing, at such other address as shall
be designated by written notice to the other parties.

SECTION 11.5              Notices
to Noteholders; Waiver. Where this Indenture or the Series Supplement
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.

Where this Indenture or the Series Supplement
provides for notice in any manner, such notice may be waived in writing by any
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such

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notice. Waivers of notice by Noteholders shall be
filed with the Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a waiver.

In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Noteholders when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture or the Series Supplement
provides for notice to the Rating Agencies, failure to give such notice shall
not affect any other rights or obligations created hereunder, and shall not
under any circumstance constitute a Default or Event of Default.

SECTION 11.6              Alternate
Payment and Notice Provisions. Notwithstanding any provision of this
Indenture, the Series Supplement  or
any of the Notes to the contrary, the Issuer may enter into any agreement with
any Holder of a Note providing for a method of payment, or notice by the
Indenture Trustee or any Note Paying Agent to such Holder, that is different
from the methods provided for in this Indenture or the Series Supplement
for such payments or notices, provided that such methods are reasonable and
consented to by the Indenture Trustee and the Note Paying Agent (which consent,
in each case, shall not be unreasonably withheld). The Issuer will furnish to
the Indenture Trustee and the Note Paying Agent a copy of each such agreement
and the Indenture Trustee and the Note Paying Agent, as the case may be, will
cause payments to be made and notices to be given in accordance with such
agreements. Any additional costs and expenses incurred by the Indenture Trustee
or the Note Paying Agent, as the case may be, pursuant to this Section shall
be a cost and expense of the Indenture Trustee or the Administrator,
respectively, pursuant to Section 3.03(a)(ii) of the Series Supplement.

SECTION 11.7              Conflict
with TIA. If this Indenture is qualified under the TIA and if any provision
hereof limits, qualifies or conflicts with a provision of the TIA that is
required or deemed under the TIA to be a part of and govern this Indenture,
such required or deemed provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provisions shall be deemed to apply to this Indenture
as so modified or to be excluded, as the case may be.

The provisions of TIA §§ 310 through 317 that
impose duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of and
govern this Indenture, whether or not physically contained herein.

SECTION 11.8              Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

 59
 

 

 

SECTION 11.9              Successors
and Assigns. All covenants and agreements in this Indenture and the
Notes by the Issuer shall bind its successors and assigns, whether so expressed
or not. All agreements of the Indenture Trustee in this Indenture, the Series Supplement
shall bind its successors. All agreements of the Servicer in this Indenture or
the Series Supplement shall bind its successors and assigns. All
agreements of the Administrator in this Indenture or the Series Supplement
shall bind its successors and assigns.

SECTION 11.10            Separability. In
case any provision in this Indenture or in the Notes shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

SECTION 11.11            Benefits
of Indenture. Nothing in this Indenture or the Series Supplement
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other person with an ownership interest
in any part of the Series Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

SECTION 11.12            Legal
Holidays. In any case where the date on which any payment is due shall
not be a Business Day, then (notwithstanding any other provision of the Notes,
this Indenture or the Series Supplement) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date an which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

SECTION 11.13            GOVERNING
LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS
WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 11.14            Counterparts. This
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

SECTION 11.15            Recording
of Indenture. If this Indenture or the Series Supplement is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trust or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture or the Series Supplement.

 60
 

 

 

SECTION 11.16            Trust
Obligation. No recourse may be taken, directly or indirectly, with respect
to the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee,
the Administrator or the Indenture Trustee on the Notes or under this Indenture
or the Series Supplement or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Seller, the Servicer,
the Indenture Trustee, the Administrator or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Seller, the Servicer, the Indenture Trustee, the Administrator or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Seller, the Servicer, the Indenture Trustee, the Administrator or
the Owner Trustee or of any successor or assign of the Seller, the Servicer,
the Indenture Trustee, the Administrator or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee, the Administrator and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes
of this Indenture, in the performance of any duties or obligations of the
Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII, and VIII of the
Trust Agreement.

SECTION 11.17            No
Petition. The Indenture Trustee and the Administrator, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby covenant
and agree that they will not at any time institute against the Seller, or the
Issuer, or join in, cooperate with or encourage others in connection with the
institution against the Seller, or the Issuer 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 Notes, this Indenture or any
of the Basic Documents or any of the Related Documents.

SECTION 11.18            Limited
Recourse.

(a)  Notwithstanding
anything in the Related Documents to the contrary, the Notes constitute limited
recourse obligations of the Issuer and are limited in recourse to the Series Trust
Estate. The Indenture Trustee, by entering into this Indenture and the Series Supplement,
and each Noteholder agree that recourse for the Notes is limited to the Series Trust
Estate and, if the Series Trust Estate shall prove to be insufficient to
pay amounts due under the Notes, the Noteholders shall have no claim against
the assets of the Issuer or the Seller other than the Series Trust Estate.

(b)  If,
notwithstanding paragraph (a) above, the Noteholders are deemed to have
any interest in any asset of the Seller other than the Seller’s interest in the
Series Trust Estate, including any interest in assets of the Seller
pledged to secure debt obligations of the Seller other than the Notes, the
Indenture Trustee, by entering into this Indenture and the Series Supplement,
and each Noteholder agree that any such interest is subordinate to the claims
of the holders of any such debt obligations, and the Noteholders

 61
 

 

 

shall have no rights in such assets until such other
debt obligations are indefeasibly paid in full. The agreement of the Indenture
Trustee and the Noteholders pursuant to this Section 11.18(b) is
intended to constitute a subordination agreement for the purposes of Section 510(a) of
the Bankruptcy Code.

SECTION 11.19            Inspection. The
Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, during the Issuer’s normal business
hours, to examine all the books of account, records, reports, and other papers
of the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants, and to discuss the Issuer’s
affairs, finances and accounts with the Issuer’s officers, employees, and
independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its Obligations hereunder.

SECTION 11.20            Limitation
of Liability. It is expressly understood and agreed by the parties
hereto that (a) this Indenture is executed and delivered by the Owner
Trustee, not individually or personally but solely as Owner Trustee of the
Issuer under the Trust Agreement, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuer is made and intended not
as personal representations, undertakings and agreements by the Owner Trustee
but is made and intended for the purpose of binding only the Issuer, (c) nothing
herein contained shall be construed as creating any liability on the Owner
Trustee individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties to this Indenture and by any person claiming by, through or under
them and (d) under no circumstances shall the Owner Trustee be personally
liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaking by the Issuer under this Indenture or any related
documents.

[Signature Page Follows]

 62

 

IN WITNESS WHEREOF, the
Issuer and the Indenture Trustee have caused this Indenture to be duly executed
by their respective officers, hereunto duly authorized, all as of the day and
year first above written.

	
  

  	
  HSBC AUTOMOTIVE TRUST (USA) 2006-1

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. Bank Trust National Association, not in its
  individual capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, not in its individual capacity
  but solely as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan Li

  
	
   

  	
   

  	
  Name: Alan Li

  
	
   

  	
   

  	
  Title: Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Elena Zheng

  
	
   

  	
   

  	
  Name: Elena Zheng

  
	
   

  	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  	
           HSBC
  Bank USA, N.A.

  

 

 

Exhibit A

FORM OF
TRANSFEREE CERTIFICATE

Pursuant to Section 2.4 of the Indenture dated as
of June 8, 2006 between HSBC Automotive Trust (USA) 2006-1, The Bank
of New York, a New York banking corporation, and HSBC Bank USA, National
Association, a national banking association, ______________ (the “Transferee”)
hereby certifies on the date hereof that either (check appropriate
certification):

_____  (i) the
Transferee is not (A) an employee benefit plan (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that
is subject to Title I of ERISA or (B) a plan (within the meaning of Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”)) that is subject to Section 4975
of the Code (each of the foregoing, a “Plan”), and is not acting on behalf of
or investing the assets of a Plan; or

_____  (ii) that
the Transferee’s acquisition and continued holding of the Definitive Note will
be covered by a prohibited transaction class exemption issued by the U.S.
Department of Labor.

	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Transferee]Exhibit 4.2

EXECUTION VERSION

 

 

 

 

AMENDED AND
RESTATED

TRUST AGREEMENT

 

between

 

HSBC AUTO
RECEIVABLES CORPORATION,

and

U.S. BANK TRUST
NATIONAL ASSOCIATION

Owner Trustee

 

 

 

Dated as of June 8,
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

  	
   

  	
  28

  
	
  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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI Miscellaneous

  	
   

  	
  31

  

 

 ii
 

 

 

	
  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

  	
   

  	
  32

  
	
  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

  

 

EXHIBITS

Exhibit A                Form of
Certificate

Exhibit B                Form of
Certificate of Trust

 

 iii

THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of
June 8, 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 May 26, 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 May 26, 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 June 8, 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) 2006-1”, 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 further 

 17
 

 

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.

(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 

 18
 

 

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

 19

 

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 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 

 20
 

 

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 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 

 21
 

 

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

 22
 

 

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 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 

 23
 

 

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 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.

 24
 

 

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 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 

 25
 

 

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 & 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 

 26
 

 

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 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 

 27
 

 

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.

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.

 28

 

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 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 

 29
 

 

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.

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 

 30
 

 

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 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 

 31
 

 

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 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.

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 

 32
 

 

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.

 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/ DENNIS J.
  MICKEY

  	
   

  
	
   

  	
  Name: Dennis J. Mickey

  Title:   Vice President and Assistant Treasurer

  	
   

  
	
  HSBC BANK USA, NATIONAL
  ASSOCIATION,

  not in its individual capacity 

  but solely as Certificate Paying Agent

  	
   

  
	
  By: 

  	
  /s/ ELENA ZHENG

  	
   

  
	
   

  	
  Name:   Elena Zheng

  Title:    Assistant Vice President 

              HSBC Bank USA, N.A.

  	
   

  

 

[Signature Page for
Amended and Restated Trust Agreement]

 

EXHIBIT A

[FORM OF
CERTIFICATE]

NUMBER

HSBC AUTOMOTIVE
TRUST (USA) 2006-1

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) 2006-1 (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) 2006-1
(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) 2006-1 (the “Trust”),
was created pursuant to a Trust Agreement, dated as of May 26, 2006 (the “Agreement”),
between the Depositor and U.S. Bank Trust National Association, as owner
trustee (the “Owner Trustee”), as amended and restated as of June 8, 2006
and as supplemented by a Series Supplement dated as of June 8, 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) 2006-1 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. 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 HSBC Auto Credit
Inc. 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 June 8, 2006 (the “Indenture”), among the Trust, HSBC Bank
USA, National Association, as 

 A-2
 

 

Administrator and The Bank of New York, 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 July 17,
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) 2006-1

  
	
   

  	
  By:

  	
  U.S. Bank Trust
  National Association,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
  Dated:

  	
  By:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 A-4
 

 

(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.

 A-6
 

 

ASSIGNMENT

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

	
   

  
	
  (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.

 A-7

 

EXHIBIT B

[FORM OF
CERTIFICATE OF TRUST]

CERTIFICATE
OF TRUST

OF

HSBC AUTOMOTIVE TRUST (USA) 2006-1

THIS Certificate of Trust of HSBC Automotive Trust
(USA) 2006-1 (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) 2006-1.

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, 300 Delaware Avenue,
8th Floor, Wilmington, Delaware 19801.

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

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