Document:

Exhibit 4.2

 

 

AMENDED AND RESTATED

 

TRUST AGREEMENT

 

 

between

 

 

HSBC AUTO RECEIVABLES CORPORATION,

 

 

and

 

 

U.S. BANK TRUST NATIONAL ASSOCIATION

Owner Trustee

 

 

Dated as of November 3, 2005

 

 

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

  

 

 

	
  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.

  	
   

  	
  23

  
	
  Section 7.7.

  	
  Owner
  Trustee May Own Certificates and Notes

  	
  23

  
	
  Section 7.8.

  	
  Payments
  from Owner Trust Estate

  	
  23

  
	
  Section 7.9.

  	
  Doing
  Business in Other Jurisdictions

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  Compensation of Owner Trustee

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Owner
  Trustee’s Fees and Expenses

  	
  24

  
	
  Section 8.2.

  	
  Indemnification

  	
  24

  
	
  Section 8.3.

  	
  Payments to
  the Owner Trustee

  	
  24

  
	
  Section 8.4.

  	
  Non-recourse
  Obligations

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  Termination of Agreement

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Termination
  of Agreement

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  Successor Owner Trustees and Additional Owner Trustees

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Eligibility
  Requirements for Owner Trustee

  	
  26

  
	
  Section 10.2.

  	
  Resignation
  or Removal of Owner Trustee

  	
  27

  
	
  Section 10.3.

  	
  Successor
  Owner Trustee

  	
  27

  
	
  Section 10.4.

  	
  Merger or
  Consolidation of Owner Trustee

  	
  28

  
	
  Section 10.5.

  	
  Appointment
  of Co-Trustee or Separate Trustee

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  Miscellaneous

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
  Supplements
  and Amendments

  	
  30

  
	
  Section 11.2.

  	
  No Legal
  Title to Owner Trust Estate in Certificateholders

  	
  31

  

 

ii

 

	
  Section 11.3.

  	
  Limitations
  on Rights of Others

  	
  31

  
	
  Section 11.4.

  	
  Notices

  	
  31

  
	
  Section 11.5.

  	
  Severability

  	
  31

  
	
  Section 11.6.

  	
  Separate
  Counterparts

  	
  32

  
	
  Section 11.7.

  	
  Assignments;
  Support Provider

  	
  32

  
	
  Section 11.8.

  	
  Covenants
  of the Depositor

  	
  32

  
	
  Section 11.9.

  	
  No Petition

  	
  32

  
	
  Section 11.10.

  	
  No Recourse

  	
  32

  
	
  Section 11.11.

  	
  Headings

  	
  33

  
	
  Section 11.12.

  	
  GOVERNING
  LAW

  	
  33

  
	
  Section 11.13.

  	
  Master
  Servicer

  	
  33

  

 

EXHIBITS

 

	
  Exhibit A

  	
  Form of Certificate

  	
  A-1

  
	
  Exhibit B

  	
  Form of Certificate
  of Trust

  	
  B-1

  

 

iii

 

THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as
of November 3, 2005, between HSBC AUTO RECEIVABLES CORPORATION, a Nevada
corporation (the “Depositor”), and U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association, as Owner Trustee (the “Owner Trustee”), amends
and restates in its entirety that certain Trust Agreement, dated as of October 26,
2005, between the Depositor and the Owner Trustee.

 

ARTICLE I

Definitions

 

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

 

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

 

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

 

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

 

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

 

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

 

“Certificate Paying Agent” means the Administrator.

 

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

 

“Certificate of Trust” shall mean the Certificate of
Trust in the form of Exhibit B which was filed on October 26, 2005
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.

 

“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 Master 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 Master 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.

 

“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.

 

“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

 

2

 

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 Master 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
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

 

3

 

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 2005-3”, in which name the Owner Trustee
may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.

 

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

 

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

 

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

 

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

 

(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;

 

4

 

(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 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

 

5

 

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 Master
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.

 

(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

 

6

 

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
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

 

7

 

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

 

8

 

(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.  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;

 

9

 

(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 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

 

10

 

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.

 

(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

 

11

 

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

 

12

 

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 Master 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 Master 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 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

 

13

 

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);

 

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

 

14

 

(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 Master Sale and Servicing Agreement, the amendment, change or modification
of the Master 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 Master Servicer under the Master 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 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

 

15

 

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.

 

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 Master
Sale and Servicing Agreement, the Master 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 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

 

16

 

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 Master 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 Master 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
Master 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 authorized from time to time to take such
action as the Certificate Majority recommends

 

17

 

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 Master Servicer has
agreed in the Master 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 Master Servicer to carry out its obligations under the Master
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 Master 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 Master 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 Master Servicer under the Master 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 Master
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 Master 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 Master 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 Master Servicer of the corpus of the Trust as described in
Section 11.1 of the Master 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 Master 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 & Poors; 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 Master Servicer. 
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.

 

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.

 

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 Master Servicer, any Support Provider and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon

 

27

 

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.

 

Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section, the Master 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 Master 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 Master 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 Master Servicer.

 

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 Master Servicer and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee and any Support Provider to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of
all or any part of the Owner Trust Estate, and to vest in such

 

28

 

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 Master Servicer and the Owner Trustee may
consider necessary or desirable.  If the
Master 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 and 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
Master 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 Master 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

 

29

 

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

 

30

 

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 Master 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

 

31

 

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 Master 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.

 

32

 

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.                       Master
Servicer.  The Master 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 Master Servicer a
limited power of attorney appointing the Master 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.

 

[Remainder of page
intentionally left blank]

 

33

 

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 Master Servicer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ William H.
  Kesler

  	
   

  	
   

  	
   

  
	
   

  	
  Name: William H. Kesler

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President
  and Assistance Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSBC BANK USA, NATIONAL
  ASSOCIATION,

  	
   

  	
   

  
	
  not in its individual
  capacity

  	
   

  	
   

  
	
  but solely as
  Certificate Paying Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Susie Moy

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Susie Moy

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  	
   

  
							

 

[Signature Page
for Amended and Restated Trust Agreement]

 

 

EXHIBIT A

 

[FORM OF
CERTIFICATE]

 

NUMBER

 

HSBC AUTOMOTIVE
TRUST 2005-3

CERTIFICATE

 

 

SEE REVERSE FOR
CERTAIN DEFINITIONS

 

THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE UPON EXEMPTIONS PROVIDED BY THE
SECURITIES ACT AND SUCH STATE SECURITIES LAWS. 
NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS SUCH
RESALE OR TRANSFER (A) IS MADE IN ACCORDANCE WITH SECTION 3.4 OF THE AMENDED
AND RESTATED TRUST AGREEMENT PERTAINING TO THE HSBC AUTOMOTIVE TRUST 2005-3
(THE “AGREEMENT”) AND (B) IS MADE (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (ii) IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS, (iii) TO THE SELLER OR (iv) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT THAT IS AWARE THAT THE RESALE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A AND (C) UPON THE SATISFACTION OF CERTAIN
OTHER REQUIREMENTS SPECIFIED IN THE AGREEMENT. 
NEITHER THE DEPOSITOR, THE MASTER 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 2005-3 (the “Trust”)
formed by HSBC Auto

 

A-1

 

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

 

OWNER TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

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

 

U.S. BANK TRUST NATIONAL
ASSOCIATION,

not in its individual

capacity but solely as

Owner Trustee

 

by                                                                                                                                                                               
Authenticating Agent

by                                                                                                                                                                                                                   

 

HSBC Automotive Trust 2005-3 (the “Trust”), was
created pursuant to a Trust Agreement, dated as of October 26, 2005 (the “Agreement”),
between the Depositor and U.S. Bank Trust National Association, as owner
trustee (the “Owner Trustee”), as amended and restated as of November 3, 2005
and as supplemented by a Series Supplement dated as of November 3, 2005 (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 2005-3 designated as
Certificates.

 

This Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Series Supplement, to
which Agreement the holder of this Certificate by virtue of the acceptance
hereof assents and by which such holder is bound.  The property of the Trust consists of the
Series Trust Estate which includes a pool of motor vehicle retail installment
sale contracts (the “Receivables”), all monies due thereunder on or after
specified Cut-off Dates, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, proceeds from claims on certain
insurance policies and certain other rights under the Agreement and the Master
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.
(formerly Household Automotive Finance Corporation) 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. (formerly Household Automotive Credit Corporation) and the
Depositor, as such agreement may be amended or supplemented from time to time.

 

A-2

 

The Notes have been issued pursuant to an Indenture
dated as of November 3, 2005 (the “Indenture”), among the Trust, HSBC Bank USA,
National Association, as Administrator and JPMorgan Chase Bank, N.A., as Indenture
Trustee and the Series Supplement.

 

Under the Series Supplement, there will be distributed
on the 17th day of each month or, if such 17th day is not a Business Day, the
next Business Day (the “Distribution Date”), commencing on December 19, 2005,
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 Master 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 Master 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
  2005-3

  
	
   

  	
   

  
	
   

  	
  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 Master 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 Master Sale and Servicing
Agreement.  A copy of each of the Master
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 Master 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 Master 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 INSERT SOCIAL
SECURITY

OR OTHER IDENTIFYING
NUMBER

OF ASSIGNEE

 

 

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

 

 

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

 

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

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  *

  
	
   

  	
  Signature Guaranteed:

  	
   

  
	
   

  	
   

  	
  *

  

 

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

 

A-7

 

EXHIBIT B

 

[FORM OF
CERTIFICATE OF TRUST]

 

CERTIFICATE
OF TRUST

OF

HSBC
AUTOMOTIVE TRUST 2005-3

 

THIS Certificate of Trust of HSBC Automotive Trust 2005-3
(the “Trust”) is being duly executed and filed on behalf of the Trust by the
undersigned, as trustee, to form a statutory trust under the Delaware Statutory
Trust Act (12 Del. C. § 3801 et seq.) (the “Act”).

 

1.                                       Name.  The name of the statutory trust formed by
this Certificate of Trust is HSBC Automotive Trust 2005-3.

 

2.                                       Delaware Trustee.  The
name and business address of the trustee of the Trust with a principal place of
business in the State of Delaware are U.S. Bank Trust National Association, 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-1Exhibit
4.3

 

 

 

MASTER SALE AND
SERVICING AGREEMENT

 

among

 

HSBC AUTOMOTIVE
TRUST 2005-3,

as Issuer,

 

HSBC AUTO
RECEIVABLES CORPORATION,

as Seller,

 

HSBC FINANCE
CORPORATION,

as Master Servicer

 

JPMORGAN CHASE
BANK, N.A.,

as Indenture
Trustee

 

and

 

HSBC BANK USA,
NATIONAL ASSOCIATION,

as Administrator

 

Dated as of November
3, 2005

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1.

  	
  Definitions

  	
  1

  
	
  SECTION 1.2.

  	
  Other Interpretive Provisions

  	
  17

  
	
  SECTION 1.3.

  	
  Usage of Terms

  	
  18

  
	
  SECTION 1.4.

  	
  Certain References

  	
  18

  
	
  SECTION 1.5.

  	
  No Recourse

  	
  18

  
	
  SECTION 1.6.

  	
  Action by or Consent of Noteholders

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  Conveyance
  of Receivables

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1.

  	
  Conveyance of Receivables

  	
  19

  
	
  SECTION 2.2.

  	
  Further Encumbrance of Owner Trust Estate

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Receivables

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1.

  	
  Representations and Warranties of Seller

  	
  24

  
	
  SECTION 3.2.

  	
  Repurchase upon Breach

  	
  24

  
	
  SECTION 3.3.

  	
  Custody of Receivables Files

  	
  25

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Administration
  and Servicing of Receivables

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1.

  	
  Duties of the Master Servicer

  	
  26

  
	
  SECTION 4.2.

  	
  Collection of Receivable Payments;
  Modifications of Receivables

  	
  27

  
	
  SECTION 4.3.

  	
  Realization Upon Receivables

  	
  30

  
	
  SECTION 4.4.

  	
  Insurance

  	
  31

  
	
  SECTION 4.5.

  	
  Maintenance of Security Interests in
  Vehicles

  	
  32

  
	
  SECTION 4.6.

  	
  Covenants, Representations, and Warranties
  of Master Servicer

  	
  32

  
	
  SECTION 4.7.

  	
  Repurchase of Receivables Upon Breach of
  Covenant

  	
  33

  
	
  SECTION 4.8.

  	
  Total Servicing Fee; Payment of Certain
  Expenses by Master Servicer

  	
  34

  
	
  SECTION 4.9.

  	
  Master Servicer’s Certificate

  	
  34

  
	
  SECTION 4.10.

  	
  Annual Statement as to Compliance, Notice
  of Master Servicer Termination Event

  	
  35

  
	
  SECTION 4.11.

  	
  Annual Independent Accountants’ Report

  	
  35

  

 

 

	
  SECTION 4.12.

  	
  Access to Certain Documentation and
  Information Regarding Receivables

  	
  36

  
	
  SECTION 4.13.

  	
  Fidelity Bond and Errors and Omissions
  Policy

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  Trust Accounts;
  Distributions;

  Statements to
  Certificateholders and Noteholders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1.

  	
  Establishment of Trust Accounts

  	
  37

  
	
  SECTION 5.2.

  	
  Certain Reimbursements to the Master
  Servicer

  	
  39

  
	
  SECTION 5.3.

  	
  Application of Collections

  	
  39

  
	
  SECTION 5.4.

  	
  Additional Deposits

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  	
   

  
	
  RESERVED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  	
   

  
	
  RESERVED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1.

  	
  Representations of Seller

  	
  40

  
	
  SECTION 8.2.

  	
  Corporate Existence

  	
  42

  
	
  SECTION 8.3.

  	
  Liability of Seller; Indemnities

  	
  43

  
	
  SECTION 8.4.

  	
  Merger or Consolidation of, or Assumption
  of the Obligations of, Seller

  	
  44

  
	
  SECTION 8.5.

  	
  Limitation on Liability of Seller and
  Others

  	
  44

  
	
  SECTION 8.6.

  	
  Seller May Own Certificates or Notes

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Master Servicer

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1.

  	
  Representations of Master Servicer

  	
  45

  
	
  SECTION 9.2.

  	
  Liability of Master Servicer; Indemnities

  	
  47

  
	
  SECTION 9.3.

  	
  Merger or Consolidation of, or Assumption
  of the Obligations of the Master Servicer

  	
  49

  
	
  SECTION 9.4.

  	
  Limitation on Liability of Master Servicer
  and Others

  	
  49

  
	
  SECTION 9.5.

  	
  Delegation of Duties

  	
  50

  
	
  SECTION 9.6.

  	
  Master Servicer Not to Resign

  	
  50

  
	
  SECTION 9.7.

  	
  Subservicing Agreements Between Master
  Servicer and Subservicers

  	
  51

  
	
  SECTION 9.8.

  	
  Successor Subservicers

  	
  51

  

 

ii

 

	
  ARTICLE
  X

  	
   

  
	
   

  	
   

  	
   

  
	
  Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1.

  	
  Master Servicer Termination Event

  	
  52

  
	
  SECTION 10.2.

  	
  Consequences of a Master Servicer
  Termination Event

  	
  53

  
	
  SECTION 10.3.

  	
  Appointment of Successor

  	
  55

  
	
  SECTION 10.4.

  	
  Notification to Noteholders and
  Certificateholders

  	
  56

  
	
  SECTION 10.5.

  	
  Waiver of Past Defaults

  	
  56

  
	
  SECTION 10.6.

  	
  Successor to Master Servicer

  	
  56

  
	
   

  	
   

  
	
  ARTICLE
  XI

  	
   

  
	
   

  	
   

  	
   

  
	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1.

  	
  Optional Purchase of All Receivables

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII

  	
   

  
	
   

  	
   

  	
   

  
	
  Administrative
  Duties of the Master Servicer

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1.

  	
  Administrative Duties

  	
  57

  
	
  SECTION 12.2.

  	
  Records

  	
  60

  
	
  SECTION 12.3.

  	
  Additional Information to be Furnished to
  the Issuer

  	
  60

  
	
   

  	
   

  
	
  ARTICLE
  XIII

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous
  Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.1.

  	
  Amendments

  	
  60

  
	
  SECTION 13.2.

  	
  Protection of Title to Series Trust Estate

  	
  61

  
	
  SECTION 13.3.

  	
  Notices

  	
  63

  
	
  SECTION 13.4.

  	
  Assignment

  	
  63

  
	
  SECTION 13.5.

  	
  Limitations on Rights of Others

  	
  63

  
	
  SECTION 13.6.

  	
  Severability

  	
  64

  
	
  SECTION 13.7.

  	
  Separate Counterparts

  	
  64

  
	
  SECTION 13.8.

  	
  Headings

  	
  64

  
	
  SECTION 13.9.

  	
  Governing Law

  	
  64

  
	
  SECTION 13.10.

  	
  Assignment to Indenture Trustee

  	
  64

  
	
  SECTION 13.11.

  	
  Nonpetition Covenants

  	
  64

  
	
  SECTION 13.12.

  	
  Limitation of Liability of the Owner
  Trustee and the Indenture Trustee

  	
  65

  
	
  SECTION 13.13.

  	
  Limitation of Liability of Issuer

  	
  65

  
	
  SECTION 13.14.

  	
  Independence of the Master Servicer

  	
  65

  
	
  SECTION 13.15.

  	
  No Joint Venture

  	
  66

  

 

iii

 

EXHIBITS

 

	
  Exhibit A

  	
  -

  	
  Form of Transfer
  Agreement

  

 

iv

 

MASTER SALE AND SERVICING AGREEMENT dated as of November
3, 2005, among HSBC AUTOMOTIVE TRUST 2005-3, a Delaware statutory trust (the “Issuer”
or the “Trust”), HSBC AUTO RECEIVABLES CORPORATION, a Nevada corporation (the “Seller”),
HSBC FINANCE CORPORATION, a Delaware corporation (the “Master Servicer”), JPMORGAN
CHASE BANK, N.A., a national banking association, in its capacity as Indenture
Trustee, and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking
association, in its capacity as Administrator.

 

WHEREAS the Issuer desires to purchase from time to
time Receivables arising in connection with motor vehicle retail installment
sale contracts originated or acquired by HSBC Auto Finance Inc. (“HAFI”) or any
of its predecessors or Affiliates, including, but not limited to, HSBC Auto
Credit Inc. (“HACI”);

 

WHEREAS the Seller will purchase from time to time
Receivables from HAFI or one or more of its Affiliates, including, but not
limited to, HACI, and is willing to sell Receivables to the Issuer;

 

WHEREAS the Master Servicer is willing to service all
such Receivables;

 

NOW, THEREFORE, in consideration of the promises and
the mutual covenants herein contained, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.1.        Definitions.  Whenever used in this Agreement, the
following words and phrases shall have the following meanings:

 

“Accountants’ Report” means the report of a firm of
nationally recognized independent accountants described in Section 4.11.

 

“Accounting Date” means, with respect to a
Distribution Date, the last day of the Collection Period immediately preceding
such Distribution Date.

 

“Actuarial Method” means the method of allocating a
fixed level monthly payment on an obligation between principal and interest,
pursuant to which the portion of such payment that is allocated to interest is
equal to the product of (a) 1/12, (b) the fixed annual rate of interest on such
obligation and (c) the outstanding principal balance of such obligation.

 

“Actuarial Receivable” means a Receivable under which
the portion of the payment allocated to interest and the portion allocable to
principal is determined in accordance with the Actuarial Method.

 

“Addition Notice” means, with respect to any transfer
of Receivables to the Trust pursuant to Section 2.1 of this Agreement, notice
of the Seller’s election to

 

 

transfer Receivables to the Trust, such notice to
designate the related Transfer Date, and the approximate principal amount of
Receivables to be transferred on such Transfer Date.

 

“Additional Principal Amount” has the meaning, if any,
assigned to such term in the Series Supplement.

 

“Administrative Agent” means the Person, if any,
specified in the Note Purchase Agreement.

 

“Administrator” means HSBC Bank USA, National
Association, a national banking association, as Administrator under the
Indenture and the other Basic Documents to which it is a party, or any
successor administrator under the Indenture appointed in accordance with such
agreement.

 

“Advanced Insurance Premiums” means any amounts due to
the Master Servicer for amounts advanced by the Master Servicer to acquire or
maintain an LPI Policy as to a Financed Vehicle.

 

“Affiliate” means, with respect to any specified
Person, any other Person controlling or controlled by or under common control
with such specified Person.  For the
purposes of this definition, “control” when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

 

“Aggregate Principal Balance” means, with respect to
any date of determination, the sum of the Principal Balances for all
Receivables (other than (i) any Receivable that has become a Liquidated Receivable
and (ii) any Receivable that has become a Repurchased Receivable as of the date
of determination).

 

“Agreement” means this Master Sale and Servicing
Agreement, as the same may be amended and supplemented from time to time.

 

“Amount Financed” means, with respect to a Receivable,
the aggregate amount advanced under such Receivable toward the purchase price
of the Financed Vehicle and any related costs, including amounts advanced in
respect of accessories, insurance premiums (other than premiums with respect to
LPI Policies), service and warranty contracts, other items customarily financed
as part of retail motor vehicle installment sale contracts and related costs.

 

“Annual Percentage Rate” or “APR” of a Receivable
means the annual percentage rate of finance charges or service charges, as
stated in the related Contract.

 

“Basic Documents” has the meaning assigned to such
term in the Series Supplement.

 

“Business Day” has the meaning assigned to such term
in the Series Supplement.

 

2

 

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

 

“Certificateholder” means the holders of the
Certificates.

 

“Class” means a class of Notes or Certificates, as the
context requires.

 

“Closing Date” has the meaning assigned to such term
in the Series Supplement.

 

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

 

“Collections” means, with respect to any Collection
Period, all amounts paid on or with respect to the Receivables, including all
payments of principal and interest, cancellation fees, administrative fees,
expenses and charges, late fees, payment fees, liquidation fees, Net
Liquidation Proceeds, proceeds of Insurance Policies and any Substitution
Adjustment Amounts, and received by the Master Servicer on or with respect to
the Receivables during such Collection Period; provided, however,
Collections shall not include taxes, assessments, Advanced Insurance Premiums
repaid by an Obligor or similar items or Repurchase Amounts.

 

“Collection Account” means the collection account
designated in the Series Supplement.

 

“Collection Period” means, (i) with respect to the
first Distribution Date, the period beginning on the opening of business on the
day after the related Cut-off Date and ending on the close of business on the
last day of the calendar month preceding such Distribution Date and (ii) with
respect to each subsequent Distribution Date, the preceding calendar
month.  Any amount stated “as of the
close of business of the last day of a Collection Period” shall give effect to
all applications of Collections on such day.

 

“Collection Records” means all manually prepared or
computer generated records relating to collection efforts or payment histories
with respect to the Receivables.

 

“Contract” means a motor vehicle retail installment
sales contract.

 

“Controlling Party” has the meaning assigned to such
term in the Series Supplement.

 

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

 

“Cram Down Loss” means, with respect to a Receivable,
if a court of appropriate jurisdiction in an insolvency proceeding shall have
issued a final order reducing the amount owed on a Receivable or otherwise
modifying or restructuring the scheduled payments to be made on a Receivable,
an amount equal to the excess of the Principal Balance of such Receivable
immediately prior to such order over the Principal

 

3

 

Balance of such Receivable as so reduced.  A “Cram Down Loss” shall be deemed to have
occurred on the date of issuance of such order.

 

“Cut-off Date” means, except as otherwise provided in
the Series Supplement, with respect to a Receivable, the date designated in the
related Transfer Agreement as the Cut-off Date for such Receivable transferred
to the Trust on the related Transfer Date.

 

“Dealer” means a dealer who sold a Financed Vehicle
and who originated and assigned the respective Receivable, directly or
indirectly, to HAFI or one of its Affiliates under a Dealer Agreement or
pursuant to a Dealer Assignment.

 

“Dealer Agreement” means any agreement between HAFI or
one if its Affiliates and a Dealer relating to the acquisition of Receivables
from a Dealer by HAFI or one of its Affiliates.

 

“Dealer Assignment” means, with respect to a
Receivable, the assignment by a Dealer conveying such Receivable to HAFI or one
of its Affiliates.

 

“Delaware Trustee” has the meaning, if any, assigned
to such term in the Series Supplement.

 

“Delivery” means, with respect to Trust Account
Property:

 

(1)           (a)           with
respect to bankers’ acceptances, commercial paper, negotiable certificates of
deposit and other obligations that constitute “instruments” within the meaning
of Article 9 of the UCC, transfer thereof:

 

(i)            by
physical delivery to the Administrator, indorsed to, or registered in the name
of, the Administrator or its nominee or indorsed in blank;

 

(ii)           by the Administrator
continuously maintaining possession of such instrument; and

 

(iii)          by
the Administrator continuously indicating by book-entry that such instrument is
credited to the related Trust Account;

 

(b)           with
respect to a “certificated security” (as defined in Article 8 of the UCC),
transfer thereof:

 

(i)            by (x)
physical delivery of such certificated security to the Administrator, provided
that if the certificated security is in registered form, it shall be indorsed
to, or registered in the name of, the Administrator or indorsed in blank, and
(y) the Administrator continuously maintaining possession of such certificated security;
or

 

4

 

(ii)           by another
Person (not a securities intermediary) (1) acquiring possession of such
certificated security on behalf of the Administrator, provided that if the
certificated security is in registered form, it shall be indorsed to, or
registered in the name of, the Administrator or indorsed in blank, or (2)
having acquired possession of such certificated security, acknowledging that it
holds such certificated security for the Administrator, and, in either such
case, continuously maintaining possession of such certificated security; and

 

by the Administrator continuously indicating by
book-entry that such certificated security is credited to the related Trust
Account;

 

(c)           with
respect to any security issued by the U.S. Treasury, the Federal Home Loan
Mortgage Corporation or the Federal National Mortgage Association that is a
book-entry security held through the Federal Reserve System pursuant to federal
book entry regulations, transfer thereof pursuant to the following procedures,
all in accordance with applicable law, including applicable federal regulations
and Articles 8 and 9 of the UCC:

 

(i)            by (x)
book-entry registration of such property to an appropriate book-entry account
maintained with a Federal Reserve Bank by a securities intermediary that is
also a “depositary” pursuant to applicable federal regulations and issuance by
such securities intermediary of a deposit advice or other written confirmation
of such book-entry registration to the Administrator of the purchase by the
securities intermediary on behalf of the Administrator of such book-entry
security; the making by such securities intermediary of entries in its books
and records identifying such book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations as belonging to the Administrator
and continuously indicating that such securities intermediary holds such
book-entry security solely as agent for the Administrator or such additional or
alternative procedures as are appropriate under applicable law to effect a
complete transfer of ownership of such property to the Administrator or its
nominee or custodian; or (y) continuous book-entry registration of such
property to a book-entry account maintained by the Administrator with a Federal
Reserve Bank; and

 

(ii)           by the Administrator
continuously indicating by book-entry that such property is credited to the
related Trust Account;

 

(d)           with
respect to any asset in the Trust Accounts that is an “uncertificated security”
(as defined in Article 8 of the UCC) and that is not governed by clause (c)
above or clause (e) below:

 

(i)            transfer
thereof:

 

5

 

(A)          by
registration to the Administrator as the registered owner thereof, on the books
and records of the issuer thereof; or

 

(B)           by
another Person (not a securities intermediary) (1) becoming the registered
owner of the uncertificated security on behalf of the Administrator, or (2)
having become the registered owner of the uncertificated security,
acknowledging that it holds such uncertificated security for the Administrator;
or

 

(ii)           the
issuer of the uncertificated security has agreed that it will comply with
instructions originated by the Administrator with respect to such
uncertificated security without further consent of the registered owner
thereof; and

 

the Administrator continuously indicating by
book-entry that such uncertificated security is credited to the related Trust
Account;

 

(e)           in the
case of a security in the custody of or maintained on the books of a clearing
corporation (as defined in Article 8 of the UCC) or its nominee, transfer
thereof by causing:

 

(i)            the
relevant clearing corporation to credit such security to a securities account
of the Administrator at such clearing corporation; and

 

(ii)           the Administrator
to continuously indicate by book-entry that such security is credited to the
related Trust Account; or

 

(f)            with
respect to a “security entitlement” (as defined in Article 8 of the UCC) to be
transferred to or for the benefit of the Administrator and not governed by
clauses (c) or (e) above, transfer thereof by:

 

(i)                                     a
securities intermediary’s (A) indicating by book entry that the underlying “financial
asset” (as defined in Article 8 of the UCC) has been credited to the Administrator’s
“securities account” (as defined in Article 8 of the UCC), (B) receiving a
financial asset from the Administrator or acquiring the underlying financial
asset for the Administrator, and in either case, accepting it for credit to the
Administrator’s securities account, or (C) becoming obligated under other law,
regulation or rule to credit the underlying financial asset to the Administrator’s
securities account,

 

(ii)                                  the
making by the securities intermediary of entries on its books and records
continuously identifying such security entitlement as belonging to the Administrator;
and continuously indicating by book-entry that such securities entitlement is
credited to the Administrator’s securities account; and

 

6

 

(iii)                               the
Administrator’s continuously indicating by book-entry that such security
entitlement (or all rights and property of the Administrator representing such
securities entitlement) is credited to the related Trust Account; and/or

 

(2)           In the
case of any such asset, (i) compliance with such additional or alternative
procedures as are now or may hereafter become appropriate to effect the
complete transfer of ownership of, or control over, any such Trust Account
Property to the Administrator free and clear of any adverse claims, consistent
with changes in applicable law or regulations or the interpretation thereof,
and (ii) the Administrator’s continuously indicating by book entry that such
asset is credited to the related Trust Account.

 

In each case of delivery contemplated herein, the Administrator
shall make appropriate notations on its records, and shall cause the same to be
made on the records of its nominees, indicating that securities are held in
trust pursuant to and as provided in this Agreement.

 

“Depositor” means the Seller in its capacity as
Depositor under the Trust Agreement.

 

“Determination Date” means, unless otherwise provided
in the Series Supplement, the earlier of the fifth calendar day (or if such day
is not a Business Day, the immediately following Business Day) or the third
Business Day preceding each Distribution Date.

 

“Distribution Date” has the meaning assigned to such
term in the Series Supplement.

 

“Eligibility Criteria” means the criteria set forth in
the Schedule of Eligibility Criteria.

 

“Eligible Account” means, except as otherwise provided
in the Series Supplement, either (a) a segregated account with an Eligible Bank
or (b) a segregated trust account with the corporate trust department of a
depository institution with corporate trust powers organized under the laws of
the United States of America or any state thereof or the District of Columbia
(or any United States branch or agency of a foreign bank), provided that such institution
also must have a rating of Baa3 or higher from Moody’s, a rating of BBB- or
higher from Standard & Poor’s and a rating of BBB- or higher from Fitch, in
each case only if such Person is a Rating Agency, with respect to long-term
deposit obligations, or such other lower ratings acceptable to the Rating
Agency.

 

“Eligible Bank” means, except as otherwise provided in
the Series Supplement, any depository institution (which shall initially be the
Administrator), organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any United States
branch or agency of a foreign bank), which is subject to supervision and
examination by federal or state banking authorities

 

7

 

and which at all times (a) has a net worth in excess
of $50,000,000 and (b) (i) has a rating of P-1 from Moody’s, A-1 from Standard
& Poor’s and F1 from Fitch, in each case only if such Person is a Rating
Agency, with respect to short-term deposit obligations, or such other lower
ratings acceptable to the Rating Agency, or (ii) if such institution has issued
long-term unsecured debt obligations, a rating acceptable to the Rating Agency with
respect to long-term unsecured debt obligations.

 

“Eligible Investments” shall mean, except as otherwise
provided in a Series Supplement, (i) negotiable instruments or securities
represented by instruments in bearer or registered form (or, in the case of
Eligible Investments described in clause (a) of this definition, book-entry
securities representing such obligations), or (ii) securities entitlements (as
defined in Article 8 of the UCC) arising from Delivery of any such negotiable
instruments or securities in accordance with the provisions of clause (1)(f) of
the definition of such term, or (iii) in the case of deposits described below,
deposit accounts held in the name of the Administrator in trust for the benefit
of the Holders of the Securities, subject to the exclusive custody and control
of the Administrator and for which the Administrator has sole signature
authority, which evidence or arise out of, as the case may be:

 

(a)           direct
obligations of, or obligations fully guaranteed as to timely payment by, the
United States of America;

 

(b)           demand deposits,
time deposits or certificates of deposit (having original maturities of no more
than 365 days) of depositary institutions or trust companies incorporated under
the laws of the United States of America or any state thereof (or domestic
branches of foreign banks) and subject to supervision and examination by
federal or state banking or depositary institution authorities; provided,
that at the time of the Trust’s investment or contractual commitment to invest
therein, the short-term debt rating of such depository institution or trust
company shall be satisfactory to the Rating Agency, and provided  further
that the “jurisdiction” of such depositary institution or trust company, for
purposes of Article 9 of the UCC, shall be a state in which Revised Article 9
of the UCC has become effective and in which security interests in deposit
accounts are subject to Article 9, as in effect therein;

 

(c)           commercial
paper (having original or remaining maturities of not more than 30 days)
having, at the time of the Trust’s investment or contractual commitment to
invest therein, a rating satisfactory to the Rating Agency;

 

(d)           investments
in money market funds having, at the time of the Trust’s investment therein, a
rating satisfactory to the Rating Agency;

 

(e)           demand deposits,
time deposits and certificates of deposit which are fully insured by the FDIC
having, at the time of the Trust’s investment therein, a rating satisfactory to
the Rating Agency;

 

(f)            bankers’
acceptances (having original maturities of no more than 365 days) issued by a
depository institution or trust company referred to in (b) above;

 

8

 

(g)           (x) time
deposits (having maturities not later than the succeeding Distribution Date)
other than as referred to in clause (e) above, with a Person the commercial
paper of which has a credit rating satisfactory to the Rating Agency or (y)
notes which are payable on demand issued by HSBC Finance Corporation; provided
such notes will constitute Eligible Investments only if HSBC Finance
Corporation has, at the time of the Trust’s investment in such notes, a
commercial paper rating of not less than A-1 by Standard & Poor’s, P-1 by
Moody’s and F1 by Fitch (or such other rating as shall be satisfactory to such
Rating Agency); or

 

(h)           any other
investment of a type or rating that is acceptable to the Rating Agency.

 

Any of the foregoing Eligible Investments may be
purchased by or through the Administrator, the Indenture Trustee or through any
of their respective Affiliates.

 

“Eligible Servicer” means HSBC Finance Corporation which
at the time of its appointment as Master Servicer, (i) is servicing a portfolio
of motor vehicle retail installment sales contracts and/or motor vehicle
installment loans, (ii) is legally qualified and has the capacity to service
the Receivables, (iii) has demonstrated the ability professionally and
competently to service a portfolio of motor vehicle retail installment sales
contracts and/or motor vehicle installment loans similar to the Receivables with
reasonable skill and care, (iv) is qualified and entitled to use, pursuant to a
license or other written agreement, and agrees to maintain the confidentiality
of, the software which the Master Servicer uses in connection with performing
its duties and responsibilities under this Agreement or otherwise has available
software which is adequate to perform its duties and responsibilities under
this Agreement and (v) has a net worth of at least $50,000,000.

 

“Eligible Subservicer” means HSBC Auto Finance Inc. or
any wholly owned subsidiary of HSBC Finance Corporation which at the time of
its appointment as Subservicer, (i) is servicing a portfolio of motor vehicle
retail installment sales contracts and/or motor vehicle installment loans, (ii)
is legally qualified and has the capacity to service the Receivables, (iii) has
demonstrated the ability professionally and competently to service a portfolio
of motor vehicle retail installment sales contracts and/or motor vehicle
installment loans similar to the Receivables with reasonable skill and care,
and (iv) is qualified and entitled to use, pursuant to a license or other
written agreement, and agrees to maintain the confidentiality of, the software
which the Master Servicer uses in connection with performing its duties and
responsibilities under this Agreement or otherwise has available software which
is adequate to perform its duties and responsibilities under this Agreement.

 

“Financed Vehicle” means a new or used automobile,
light duty truck or van securing an Obligor’s indebtedness under the respective
Receivable.

 

“Fitch” means Fitch Inc., or its successor.

 

9

 

“Grant” has the meaning assigned to such term in the
Indenture.

 

“HACI” means HSBC Auto Credit Inc., a Delaware corporation.  For the avoidance of doubt, HACI is an
Affiliate of HAFI.

 

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

 

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

 

“Indenture Trustee” means the Person acting as
Indenture Trustee under the Indenture, its successors in interest and any
successor Indenture Trustee under the Indenture.

 

“Indenture Trustee Fee” means the fees and reasonable
out-of-pocket expenses due to the Indenture Trustee as may be set forth in that
certain fee agreement dated as of the date hereof between the Master Servicer
and the Indenture Trustee.

 

“Insolvency Event” means, with respect to a specified
Person, (a) the filing of a petition against such Person or the entry of a
decree or order for relief by a court having jurisdiction in respect of such
Person or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person’s affairs, and such petition, decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or (b) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or similar official for such Person or for any substantial part
of its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.

 

“Insurance Policy” means, with respect to a
Receivable, any insurance policy (including the insurance policies described in
Section 4.4 hereof) benefiting the holder of the Receivable providing loss or
physical damage, credit life, credit disability, theft, mechanical breakdown or
similar coverage with respect to the Financed Vehicle or the Obligor.

 

“Interest Period” has the meaning assigned to such
term in the Series Supplement.

 

“Issuer” means HSBC Automotive Trust 2005-3, a
Delaware statutory trust formed under the laws of the State of Delaware.

 

10

 

“Lien” means a security interest, lien, charge,
pledge, equity, or encumbrance of any kind, other than tax liens, mechanics’
liens and any liens that attach to the respective Receivable by operation of
law as a result of any act or omission by the related Obligor, provided that
the lien created by this Agreement or the Indenture shall not be deemed to constitute
a Lien.

 

“Lien Certificate” means, with respect to a Financed
Vehicle, an original certificate of title, certificate of lien or other
notification issued by the Registrar of Titles of the applicable state to a
secured party which indicates that the lien of the secured party on the
Financed Vehicle is recorded on the original certificate of title.  In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term “Lien
Certificate” shall mean only a certificate or notification issued to a secured
party.  For Financed Vehicles registered
in states which only issue confirmation of the lienholder’s interest
electronically, the “Lien Certificate” may consist of notification of an
electronic recordation, by either a third party service provider or the
relevant Registrar of Titles of the applicable state, which indicates that the
lien of the secured party on the Financed Vehicle is recorded on the original
certificate of title on the electronic lien and title system of the applicable
state.

 

“Liquidated Receivable” means, with respect to any
Collection Period, upon the earliest of any of the following to occur, a
Receivable as to which (i) such Receivable has been liquidated by the Master
Servicer through the sale of the Financed Vehicle, (ii) 90 days have
elapsed since the Master Servicer repossessed the Financed Vehicle, (iii)
proceeds have been received in respect of such Receivable which, in the Master
Servicer’s reasonable judgment, constitute the final amounts recoverable in
respect of such Receivable or (iv) 10% or more of a Scheduled Payment
shall have become 150 or more days delinquent (or, in the case where the
Obligor of such Receivable is subject to an Insolvency Event, 10% or more of a
Scheduled Payment shall have become 210 or more days delinquent); provided,
however, that the number of days specified in either clause (ii) or (iv)
may at the election of the Master Servicer be such shorter number of days as
may from time to time be consistent with the Master Servicer’s then-current
collection policy.  Any Receivable that
becomes a Repurchased Receivable on or before the related Accounting Date shall
not be a Liquidated Receivable.

 

“LPI Policy” has the meaning assigned to such term in
Section 4.4(b).

 

“Managing Agent” means, with respect to any Purchaser
Group, the Person specified as the Managing Agent for such Purchaser Group from
time to time pursuant to the Note Purchase Agreement (including, without
limitation, Schedule I thereto) or any Joinder Agreement thereto or any
Assignment and Acceptance Agreement thereto.

 

“Majority Purchaser” has the meaning assigned to such
term in the Note Purchase Agreement.

 

“Master Receivables Purchase Agreements” has the
meaning assigned to such term in the Series Supplement.

 

11

 

“Master Servicer” means HSBC Finance Corporation, as
the servicer of the Receivables, and each Successor Master Servicer pursuant to
Section 10.3.

 

“Master Servicer Credit Facility” means the credit
facility maintained by the Master Servicer with a Master Servicer Credit
Facility Issuer pursuant to Section 4.2(e).

 

“Master Servicer Credit Facility Issuer” means a
depository institution or insurance company that qualifies pursuant to Section
4.2(e).

 

“Master Servicer Termination Event” means an event
specified in Section 10.1.

 

“Master Servicer’s Certificate” has the meaning
assigned to such term in the Series Supplement.

 

“Monthly Records” means all records and data
maintained by the Master Servicer with respect to the Receivables, including
the following with respect to each Receivable: 
the account number; the originating Dealer, if any; Obligor name;
Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment
date; final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount of Scheduled
Payment; current Insurance Policy expiration date; and past due late charges.

 

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

 

“Net Liquidation Proceeds” means, with respect to a
Liquidated Receivable, all amounts realized with respect to such Receivable
(other than amounts withdrawn or received from any Series Support) net of (i)
reasonable expenses incurred by the Master Servicer in connection with the
collection of such Receivable and the repossession and disposition of the
Financed Vehicle and (ii) amounts that are required to be refunded to the
Obligor on such Receivable; provided, however, that the Net Liquidation Proceeds
with respect to any Receivable shall in no event be less than zero; provided,
further, that, so long as amounts are not traced to specific
Receivables the Master Servicer shall reasonably estimate, on or prior to each
Accounting Date, the amount of Net Liquidation Proceeds attributable to the
Series Trust Estate.

 

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

 

“Note Purchase Agreement” has the meaning, if any,
assigned to such term in the Series Supplement.

 

“Notes” has the meaning assigned to such term in the
Indenture.

 

12

 

“Obligor” on a Receivable means the purchaser or
co-purchasers of the Financed Vehicle and any other Person who owes payments
under the Receivable.

 

“Officers’ Certificate” means a certificate signed by
the chairman of the board, the president, any executive vice president or any
vice president, any treasurer, assistant treasurer, secretary or assistant
secretary of the Seller or the Master Servicer, as appropriate.

 

“Opinion of Counsel” means an opinion of counsel who
may be counsel to the Master Servicer or the Seller, acceptable to the
Indenture Trustee and/or the Administrator, as the case may be.

 

“Other Conveyed Property” means all property conveyed by
the Seller to the Trust pursuant to Section 2.1(a)(ii) through (xii) of this
Agreement.

 

“Outstanding” has the meaning assigned to such term in
the Indenture.

 

“Outstanding Amount” has the meaning assigned to such
term in the Indenture.

 

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

 

“Owner Trustee” means the Person acting as Owner
Trustee under the Trust Agreement, its successors-in-interest or any successor
Owner Trustee under the Trust Agreement.

 

“Payment Record” means the record maintained by the
Master Servicer for the Trust as provided in Section 4.2(e) hereof.

 

“Person” means any individual, corporation, limited
liability company, estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated organization
or government or any agency or political subdivision thereof.

 

“Principal Balance” means, with respect to any
Receivable, as of any date, the Amount Financed minus (i) that portion of all
amounts received on or prior to such date and allocable to principal in
accordance with the Actuarial Method, or the Simple Interest Method, as
appropriate and (ii) any Cram Down Loss in respect of such Receivable.  The “Principal Balance” of a Repurchased
Receivable or Liquidated Receivable shall be deemed to be zero.

 

“Rating Agency” has the meaning assigned to such term
in the Series Supplement.

 

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

 

13

 

“Receivable Files” means the documents specified in
Section 3.3.

 

“Receivables Purchase Agreement Supplement” means any
Receivables Purchase Agreement Supplement to any Master Receivables Purchase
Agreement.

 

“Record Date” with respect to each Distribution Date
means the Business Day immediately preceding such Distribution Date, unless
otherwise specified in the Series Supplement.

 

“Registrar of Titles” means, with respect to any
state, the governmental agency or body responsible for the registration of, and
the issuance of certificates of title relating to, motor vehicles and liens
thereon.

 

“Related Documents” has the meaning assigned to such
term in the Series Supplement.

 

“Repurchase Amount” means, with respect to a
Receivable, the Principal Balance and all accrued and unpaid interest on the
Receivable, after giving effect to the receipt of any moneys collected (from
whatever source) on such Receivable, if any, as of the date of repurchase,
provided that, reductions in the Principal Balance resulting from such
Receivable becoming a Liquidated Receivable shall be disregarded.

 

“Repurchased Receivable” means a Receivable purchased
by the Master Servicer pursuant to Section 4.7 or repurchased by the Seller
pursuant to Section 3.2 or the Master Servicer pursuant to Section 11.1(a).

 

“Schedule of Eligibility Criteria” means the Schedule
of Eligibility Criteria attached as Schedule I to the Series Supplement.

 

“Schedule of Receivables” has the meaning assigned to
such term in the Series Supplement.

 

“Scheduled Payment” means, with respect to any
Collection Period for any Receivable, the sum of (i) the amount set forth in
such Receivable as required to be paid by the Obligor in such Collection Period
and (ii) any outstanding Advanced Insurance Premiums.  If after the Closing Date, the Obligor’s
obligation under a Receivable with respect to a Collection Period has been
modified so as to differ from the amount specified in such Receivable as a
result of (i) the order of a court in an insolvency proceeding involving the
Obligor, (ii) pursuant to the Servicemembers Civil Relief Act, as amended, or
(iii) modifications or extensions of the Receivable permitted by Sections
4.2(b) and (c), the Scheduled Payment with respect to such Collection Period
shall refer to the Obligor’s payment obligation under the Receivable with
respect to such Collection Period as so modified.

 

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

 

“Securities” means the Notes and the Certificates.

 

14

 

“Securityholders” means the Noteholders and the
Certificateholders.

 

“Seller” means HSBC Auto Receivables Corporation, a
Nevada corporation, and its successors in interest to the extent permitted
hereunder.

 

“Series” means the Notes and Certificates issued
pursuant to the Series Supplement.

 

“Series 2005-3 Notes” shall have the meaning assigned
to such term in the Series Supplement.

 

“Series Supplement” means, the Series Supplement,
dated as of the Closing Date, to this Agreement, the Indenture and the Trust
Agreement, among the Master Servicer, the Issuer, the Seller, the Indenture
Trustee, the Owner Trustee, the Delaware Trustee (if any) and the Administrator,
as such agreement may be amended or supplemented from time to time.

 

“Series Support” means any such rights and benefits as
specified in the Series Supplement provided to the Indenture Trustee or the
Noteholders of any Class pursuant to any letter of credit, surety bond, cash
collateral account, spread account, reserve account, guaranteed rate agreement,
maturity liquidity facility, interest rate swap agreement, tax protection
agreement or other similar arrangement. 
The subordination of any Class to another Class shall be deemed to be
Series Support.  Notwithstanding that
such Series Support may be held by or in favor of the Indenture Trustee for the
benefit of any Class, only those Class(es) to which such Series Support relates
shall have any rights with respect thereto and all payments thereunder received
by the Indenture Trustee (or the Administrator on its behalf) shall be
distributed exclusively as prescribed in the Series Supplement.

 

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

 

“Service Contract” means, with respect to a Financed
Vehicle, the agreement, if any, financed under the related Receivable that
provides for the repair of such Financed Vehicle.

 

“Servicing Fee” has the meaning assigned to such term
in the Series Supplement.

 

“Servicing Fee Rate” means the rate per annum
specified in the Series Supplement.

 

“Simple Interest Method” means the method of
allocating a fixed level monthly payment on an obligation between principal and
interest, pursuant to which the portion of such payment that is allocated to interest
is equal to the product of (a) the fixed rate of interest on such obligation,
(b) the period of time (expressed as a fraction of a year, based on the actual
number of days in the calendar month and 365 or 360 days (as applicable in the
underlying document) in the calendar year) elapsed since the preceding

 

15

 

payment under the obligation was made and (c) the
outstanding principal balance of such obligation.

 

“Simple Interest Receivable” means a Receivable under
which the portion of the payment allocable to interest and the portion
allocable to principal is determined in accordance with the Simple Interest
Method.

 

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

 

“Subservicer” means, initially, HSBC Auto Finance Inc.,
or any Eligible Subservicer with whom the Master Servicer has entered into an
agreement relating to subservicing the Receivables.

 

“Successor Master Servicer” has the meaning assigned
to such term in Section 10.3(a).

 

“Support Default” means a default relating to an
Insolvency Event with respect to, or the performance of, a Support Provider.

 

“Support Provider” means the Person, if any,
designated in the Series Supplement, as providing any Series Support, other
than HSBC Finance Corporation or any of its Affiliates or the Noteholders of
any Class which is subordinated to any other Class.

 

“Transfer Agreement” means the agreement among the
Issuer, the Seller, the Master Servicer, the Indenture Trustee and the
Administrator, substantially in the form of Exhibit A.

 

“Transfer Date” means, with respect to Receivables,
any date on which Receivables are to be transferred to the Trust pursuant to
this Agreement and a related Transfer Agreement.

 

“Treasury Regulations” 
has the meaning assigned to such term in the Trust Agreement.

 

“Trust” means the Issuer.

 

“Trust Account Property” means the Trust Accounts, all
amounts and investments held from time to time in any Trust Account (whether in
the form of deposit accounts, book-entry securities, uncertificated securities
or otherwise), and all proceeds of the foregoing.

 

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

 

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

 

16

 

“Trust Officer” means, (i) in the case of the
Indenture Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee, including any President, Vice President, Assistant Vice
President, Assistant Treasurer, Assistant Secretary, Financial Services Officer
or any other officer of the Indenture Trustee, customarily performing functions
similar to those performed by any of the above designated officers and in each
case having direct responsibility for the administration of the Indenture, (ii)
in the case of the Administrator, any officer within the Corporate Trust Office
of the Administrator, and (iii) in the case of the Owner Trustee, any officer
in the corporate trust office of the Owner Trustee or any agent of the Owner
Trustee under a power of attorney with direct responsibility for the
administration of this Agreement or any of the Basic Documents or Related
Documents on behalf of the Owner Trustee.

 

“UCC” means the Uniform Commercial Code as in effect
in the relevant jurisdiction on the date of this Agreement.

 

SECTION 1.2.        Other
Interpretive Provisions.  (a)  Capitalized terms used herein and not
otherwise defined herein have the meanings assigned to them in the Indenture,
the Series Supplement or the Trust Agreement.

 

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

 

(c)           As
used in this Agreement, in any instrument governed hereby 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 instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, 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 instrument, certificate or other document, as applicable.  To the extent that the definitions of
accounting terms in this Agreement or in any such instrument, 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 instrument, certificate or other document shall control.

 

(d)           Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein.

 

(e)           Any
term defined herein, which is otherwise defined in the Series Supplement, shall
have the meaning specified therefor in the Series Supplement, whether or not
the definition in this Agreement includes a phrase to the effect that such term
may be otherwise defined in the Series Supplement.

 

17

 

(f)            In
the event that with respect to the Series there is no Support Provider, any
references herein or in any other of the Basic Documents to the consent of, or
acceptability to, the Support Provider shall be deemed to be deleted.

 

(g)           In
the event that with respect to the Series, the Indenture and Series Supplement
do not provide for the purchase by the Noteholders of Additional Principal
Amounts, any references herein or in any other Basic Document to Additional
Principal Amounts shall be deemed to be deleted.

 

(h)           In
the event that with respect to the Series, the Indenture and Series Supplement
do not provide for an Administrative Agent or any Managing Agent, any
references herein or in any other Basic Document to an Administrative Agent
shall be deemed to be deleted.

 

SECTION 1.3.        Usage
of Terms.  With respect to all terms
used in this Agreement, the singular includes the plural and the plural
includes the singular; words importing any gender include the other gender;
references to “writing” include printing, typing, lithography, and other means
of reproducing words in a visible form; references to agreements and other
contractual instruments include all subsequent amendments thereto or changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; the terms “include” or “including” mean “include
without limitation” or “including without limitation;” the words “herein”, “hereof”
and “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Article, Section, Schedule and Exhibit references, unless otherwise specified,
refer to Articles and Sections of Schedules and Exhibits to this Agreement.

 

SECTION 1.4.        Certain
References.  All references to the
Principal Balance of a Receivable as of any date of determination shall refer
to the close of business on such day, or as of the first day of an Interest
Period shall refer to the opening of business on such day.  All references to the last day of an Interest
Period shall refer to the close of business on such day.

 

SECTION 1.5.        No
Recourse.  Without limiting the
obligations of the Master Servicer or Seller hereunder, no recourse may be
taken, directly or indirectly, under this Agreement or any certificate or other
writing delivered in connection herewith or therewith, against any stockholder,
officer or director, as such, of the Master Servicer or Seller, or of any of
their respective Affiliates, predecessors or successors.

 

SECTION 1.6.        Action
by or Consent of Noteholders. 
Whenever any provision of this Agreement refers to action to be taken,
or consented to, by Noteholders, such provision shall be deemed to refer to the
Noteholders of record as of the Record Date immediately preceding the date on
which such action is to be taken, or consent given, by Noteholders.  Solely for the purposes of any action to be
taken, or consented to, by Noteholders, any Note registered in the name of HAFI
or any Affiliate thereof shall be deemed not to be outstanding; provided, however,
that, solely for the purpose of

 

18

 

determining whether the Indenture Trustee is entitled to rely upon any
such action or consent, only Notes which a Trust Officer of the Indenture
Trustee actually knows to be so owned shall be so disregarded.

 

ARTICLE II

 

Conveyance of Receivables

 

SECTION 2.1.        Conveyance
of Receivables.  (a)  Subject to the conditions set forth in
paragraph (b) below, in consideration of the Issuer’s delivery to or upon the
order of the Seller on a Transfer Date (which may include the Closing Date) of
the net proceeds of the issuance of Notes or from any Additional Principal
Amount thereunder and the other amounts to be distributed from time to time to
the Seller in accordance with the terms of this Agreement and the Series
Supplement, the Seller shall, from time to time, sell, transfer, assign, set
over and otherwise convey to the Issuer, without recourse (subject to the
obligations set forth herein), all right, title and interest of the Seller in
and to:

 

(i)            each and
every Receivable listed on the Schedule of Receivables and all monies paid or
payable thereon or in respect thereof after the related Cut-off Date (including
amounts due on or before such Cut-off Date but received by HSBC Finance, the
Master Servicer, HAFI or any Affiliate of HAFI that is a seller under a Master
Receivables Purchase Agreement or the Seller after such Cut-off Date);

 

(ii)           the
security interests in the related Financed Vehicles granted by Obligors
pursuant to the related Receivables and any other interest of the Seller in
such Financed Vehicles;

 

(iii)          all
rights of HAFI or any Affiliate of HAFI that is the seller under a Master
Receivables Purchase Agreement against the Dealers pursuant to Dealer
Agreements or Dealer Assignments related to such Receivables;

 

(iv)          any
proceeds and the right to receive proceeds with respect to such Receivables
repurchased by a Dealer pursuant to a Dealer Agreement;

 

(v)           all rights
under any Service Contracts on the related Financed Vehicles;

 

(vi)          any
proceeds and the right to receive proceeds with respect to such Receivables
from claims on any Insurance Policy covering the related Financed Vehicles or
Obligors;

 

(vii)         all
items contained in the related Receivables Files with respect to the
Receivables; and any and all other documents

 

19

 

that HAFI or any Affiliate of HAFI that is a seller under a Master
Receivables Purchase Agreement, the Seller or the Master Servicer, as
applicable, keeps on file in accordance with its customary procedures relating
to the related Receivables, the Obligors or the Financed Vehicles;

 

(viii)        all
funds on deposit from time to time in the Trust Accounts (including all
investments and proceeds thereof);

 

(ix)           all
property (including the right to receive future Net Liquidation Proceeds) that
secures a Receivable and that has been acquired by or on behalf of the Seller
pursuant to liquidation of such Receivable;

 

(x)            all of
the Seller’s right, title and interest in its rights and benefits, but none of
its obligations or burdens, under each of the Master Receivables Purchase
Agreements and the Receivables Purchase Agreement Supplements, including the
delivery requirements, representations and warranties and the cure and
repurchase obligations of HAFI or any Affiliate of HAFI that is a seller under
a Master Receivables Purchase Agreement or HSBC Finance Corporation, as
applicable, under each of the Master Receivables Purchase Agreements and the
related Receivables Purchase Agreement Supplements, after the related Cut-off
Date;

 

(xi)           on the
Closing Date, one share of Class SV Preferred Stock of the Seller together with
the exclusive right to vote such share; and

 

(xii)          all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, investment property, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing.

 

(b)           The
Seller shall transfer to the Issuer the Receivables and the other property and
rights related thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to the related
Transfer Date (if the Transfer Date is not also the Closing Date):

 

20

 

(i)            the
Seller shall have provided the Indenture Trustee, the Administrator and the
Owner Trustee with an Addition Notice not later than five days prior to such
Transfer Date and shall have provided any information reasonably requested by
any of the foregoing with respect to the related Receivables;

 

(ii)           the Seller
shall have delivered to the Owner Trustee a duly executed Transfer Agreement
which shall include supplements to Schedule A (which may be in electronic
format), listing the Receivables to be transferred to the Issuer;

 

(iii)          the
Master Servicer, on behalf of the Issuer, shall have delivered to the Indenture
Trustee and the Administrator a supplemental schedule to the Series Supplement
(which may be in electronic format), listing the Receivables to be pledged to
the Indenture Trustee under the Indenture;

 

(iv)          the Seller
shall, to the extent required by Section 4.2, have deposited in the Collection
Account all Collections received after the related Cut-off Date in respect of
the Receivables to be transferred;

 

(v)           as of each
Transfer Date, (A) the Seller shall not be insolvent and shall not become
insolvent as a result of the transfer of Receivables on such Transfer Date, (B)
the Seller shall not intend to incur or believe that it shall incur debts that
would be beyond its ability to pay as such debts mature, (C) such transfer
shall not have been made with actual intent to hinder, delay or defraud any
Person and (D) the assets of the Seller shall not constitute unreasonably small
capital to carry out its business as conducted;

 

(vi)          each of the
representations and warranties made by the Seller pursuant to Section 3.1 with
respect to the Receivables to be transferred on such Transfer Date shall be
true and correct as of the related Transfer Date, and the Seller shall have
performed all obligations to be performed by it hereunder on or prior to such
Transfer Date;

 

(vii)         the
Seller shall, at its own expense, on or prior to the Transfer Date indicate in
its computer files that the Receivables identified in the Transfer Agreement
have been sold to the Trust pursuant to this Agreement;

 

(viii)        the
Seller shall have taken any action necessary or, if required by the Indenture
Trustee, advisable to obtain and

 

21

 

maintain the first priority perfected ownership interest of the Trust
in the Owner Trust Estate;

 

(ix)           the Issuer
shall have taken any action necessary or, if required by the Indenture Trustee,
advisable to obtain and maintain the first priority perfected security interest
of the Indenture Trustee, for the benefit of the Noteholders, in the Series
Trust Estate;

 

(x)            no
selection procedures adverse to the interests of the Noteholders or any Support
Provider shall have been utilized in selecting the related Receivables;

 

(xi)           the
addition of any such Receivables shall 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;

 

(xii)          if
required by any of the Related Documents, the Issuer shall simultaneously
transfer to the Administrator any amounts required to be deposited in the
related Trust Accounts with respect to the Receivables transferred on such
Transfer Date; and

 

(xiii)         the
Seller shall have delivered to the Indenture Trustee and the Administrator an
Officers’ Certificate confirming the satisfaction of each condition precedent
specified in this paragraph (b).

 

The Seller covenants that in the event any of the
foregoing conditions precedent are not satisfied with respect to any Receivable
on the date required as specified above, the Seller will immediately repurchase
such Receivable from the Trust, at a price equal to the Repurchase Amount thereof,
in the manner specified in Section 5.4.

 

It is the intention of the Seller that the transfer
and assignment contemplated by this Agreement and each related Transfer
Agreement shall constitute a sale of the related Receivables, other than for
federal income tax purposes, and the related Other Conveyed Property from the
Seller to the Issuer and the beneficial interest in and title to such property
shall not be part of the Seller’s estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law.  In the event that, notwithstanding the intent
of the Seller, the transfer and assignment contemplated hereby and thereby is
held not to be a sale, this Agreement and the related Transfer Agreement and financing
statements described in this Agreement, shall constitute a Grant by the Seller of
a valid and continuing first priority perfected security interest in the
property referred to in this Section 2.1 to the Issuer.  The Seller hereby authorizes the Issuer to
file

 

22

 

such financing statements as it deems necessary in
connection with the security interest granted pursuant to the preceding
sentence.

 

(c)           Notwithstanding
the provisions of this Section 2.1 and any other provisions of any Transaction
Document that purport to allow multiple conveyances of Receivables from the
Seller to the Issuer, the parties hereto agree that, other than the conveyance
of (i) the Receivables on the Closing Date and (ii) any Eligible Substitute
Receivables on any date hereafter, the Seller shall not convey any Receivables
to the Trust pursuant to this Agreement or any Transfer Agreement.

 

SECTION 2.2.        Further
Encumbrance of Owner Trust Estate.  (a)  Immediately upon the conveyance to the Trust
by the Seller of Receivables and the related Other Conveyed Property pursuant
to Section 2.1, all right, title and interest of the Seller in and to such
Receivables and such Other Conveyed Property shall terminate, and all such
right, title and interest shall vest in the Issuer, in accordance with the
Trust Agreement and Sections 3802 and 3805 of the Statutory Trust Statute (as
defined in the Trust Agreement).

 

(b)           Immediately
upon the vesting of any Receivables and the related Other Conveyed Property, the
Trust shall have the sole right to pledge or otherwise encumber such property
subject to the terms of the Basic Documents. 
Pursuant to the Indenture and the Series Supplement, the Trust will
grant a security interest in the Series Trust Estate to secure the repayment of
the Notes.  The Certificates shall
represent the beneficial ownership interest in the Receivables and the Other
Conveyed Property, and the Certificateholders shall be entitled to receive
distributions with respect thereto as set forth in the Series Supplement.

 

(c)           The
Indenture Trustee shall hold the Series Trust Estate for the benefit of the
Secured Parties.  Following the payment
in full of the Notes and the release and discharge of the Indenture and the
Series Supplement, all covenants of the Issuer under Article III of the
Indenture and the Series Supplement shall, until payment in full of the
Certificates, remain as covenants of the Issuer for the benefit of the
Certificateholders, enforceable by the Certificateholders to the same extent as
such covenants were enforceable by the Secured Parties prior to the discharge
of the Indenture.  Any rights of the
Indenture Trustee under Article III of the Indenture and the Series Supplement,
following the discharge of the Indenture and the Series Supplement, shall vest
in the Certificateholders.

 

(d)           The
Indenture Trustee shall, at such time as there are no Securities outstanding
and all sums due to the Indenture Trustee or any agent or counsel thereof
pursuant to the Indenture as supplemented by the Series Supplement, have been
paid, pursuant to Section 4.1 of the Indenture, and subject to satisfaction of
the conditions set forth therein, release the Lien of the Series Supplement and
the Indenture with respect to the Series Trust Estate.

 

23

 

ARTICLE III

 

The Receivables

 

SECTION 3.1.        Representations
and Warranties of Seller.  The Seller
represents and warrants as to the related Receivables that the representations
and warranties set forth on the Schedule of Eligibility Criteria are, or will
be, true and correct as of the respective dates specified in such
Schedule.  The Issuer is deemed to have
relied on such representations and warranties in acquiring the related
Receivables and the related Securityholders shall be deemed to rely on such
representations and warranties in purchasing the Notes and Certificates or any
Additional Principal Amounts thereunder. 
Such representations and warranties shall survive the sale, transfer and
assignment of the Owner Trust Estate to the Issuer and any pledge of the Series
Trust Estate to the Indenture Trustee pursuant to the Indenture and the Series
Supplement.

 

SECTION 3.2.        Repurchase
upon Breach.  (a)  The Seller, the Master Servicer, any Trust
Officer of the Indenture Trustee, the Administrator or the Owner Trustee, as
the case may be, shall inform each of the other parties to this Agreement
promptly, in writing, upon the discovery of any breach of the Seller’s
representations and warranties made pursuant to Section 3.1; provided, however,
that the failure to give any such notice shall not derogate from any
obligations of the Seller under this Section 3.2.  As of the last day of the second (or, if the
Seller so elects, the first, or with respect to any exceptions appearing on any
exception report delivered by the Indenture Trustee, the first) month following
the discovery by the Seller or receipt by the Seller of notice of such breach
(or such longer period not in excess of 120 days, as may be agreed upon by the
Indenture Trustee and the Master Servicer), unless such breach is cured by such
date, the Seller shall have an obligation to repurchase or cause HAFI or an
Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement or HSBC Finance Corporation, as applicable, to repurchase any
Receivable in which the interests of the Securityholders are materially and
adversely affected by any such breach. 
In consideration of and simultaneously with the repurchase of the
Receivables, the Seller shall remit, or cause HAFI or an Affiliate of HAFI that
is the seller under a Master Receivables Purchase Agreement or HSBC Finance
Corporation, as applicable, to remit, to the Collection Account the Repurchase
Amount in the manner specified in Section 5.4 and the Issuer shall execute such
assignments and other documents reasonably requested by such person in order to
effect such repurchase.  The sole remedy
of the Issuer, the Owner Trustee, the Indenture Trustee, the Administrator and
the related holders with respect to a breach of representations and warranties
pursuant to Section 3.1 and the agreement contained in this Section shall be
the repurchase by the Seller of the Receivables pursuant to this Section,
subject to the conditions contained herein or to enforce the obligation of HAFI
or an Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement or HSBC Finance Corporation, as applicable, to the Seller to
repurchase such Receivables pursuant to the related Master Receivables Purchase
Agreement.  None of the Owner Trustee,
the Indenture Trustee or the Administrator shall have a duty to conduct any
affirmative investigation as to the occurrence of any conditions requiring the
repurchase of any Receivable pursuant to this Section.

 

24

 

(b)           Pursuant
to Section 2.1 of this Agreement and pursuant to the related Transfer
Agreement, the Seller conveyed to the Trust all of the Seller’s right, title
and interest in its rights and benefits, but none of its obligations or
burdens, under the Master Receivables Purchase Agreements and the related
Receivables Purchase Agreement Supplements, including the Seller’s rights under
the Master Receivables Purchase Agreements and the delivery requirements,
representations and warranties and the cure or repurchase obligations of HAFI
or an Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement or HSBC Finance Corporation, as applicable, thereunder.  The Seller hereby represents and warrants to
the Trust that such assignment is valid, enforceable and effective to permit
the Trust to enforce such obligations of HAFI or an Affiliate of HAFI that is
the seller under a Master Receivables Purchase Agreement and HSBC Finance
Corporation under the Master Receivables Purchase Agreements.

 

SECTION 3.3.        Custody
of Receivables Files.  In connection
with the sale, transfer and assignment of the Receivables to the Trust pursuant
to this Agreement and pursuant to the related Transfer Agreement, the Master
Servicer shall act, until such time as the Master Servicer resigns as Master
Servicer or is replaced as Master Servicer pursuant to the terms of this
Agreement, as custodian for the benefit of the Indenture Trustee of the
following documents or instruments with respect to each Receivable:

 

(i)            The fully
executed original of the Contract (together with any agreements modifying the Contract,
including, without limitation, any extension agreements);

 

(ii)           The
original credit application, or a physical or electronic copy thereof, of each
Obligor, fully executed by each such Obligor on the customary form used by HAFI,
an Affiliate of HAFI, or the related Dealer, as applicable, or on a form
approved by HAFI or an Affiliate of HAFI, as applicable, for such application;
and

 

(iii)          The
Lien Certificate (when received) and otherwise such documents, if any, that HAFI
or any Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement, as applicable, keeps on file in accordance with its customary procedures
indicating that the Financed Vehicle is owned by the Obligor and subject to the
interest of HAFI or any Affiliate of HAFI that is the seller under a Master
Receivables Purchase Agreement as first lienholder or secured party (including
any Lien Certificate received by HAFI or any Affiliate of HAFI that is the
seller under a Master Receivables Purchase Agreement, as applicable), or, if
such Lien Certificate has not yet been received, a copy of the application
therefor, showing any of HAFI, any Affiliate of HAFI that is a seller under a
Master Receivables Purchase Agreement or a Dealer as secured party (in the case
of a Dealer, the application shall be to obtain title in the name of HAFI

 

25

 

or any Affiliate of HAFI that is a seller under a Master Receivables
Purchase Agreement); and

 

(iv)          Documents
evidencing or relating to any Insurance Policy, to the extent such documents
are maintained by or on behalf of the Seller, HAFI or any Affiliate of HAFI
that is a seller under a Master Receivables Purchase Agreement.

 

At such time as the
Master Servicer resigns as Master Servicer or is replaced as Master Servicer
pursuant to the terms of this Agreement, the Successor Master Servicer shall act
as custodian of the Receivables Files.

 

Notwithstanding the
foregoing, the Master Servicer may appoint a subcustodian, which subcustodian
may hold physical possession of some or all of the Receivable Files.  The Indenture Trustee shall have no liability
for the acts or omissions of any custodian or subcustodian.

 

ARTICLE IV

 

Administration and
Servicing of Receivables

 

SECTION 4.1.        Duties
of the Master Servicer.  The Master
Servicer is hereby authorized to act as agent for the Trust (and also on behalf
of the Indenture Trustee and the Noteholders) and in such capacity shall
manage, service, administer and make collections on the Receivables, and
perform the other actions required by the Master Servicer under this Agreement,
the Indenture and the Series Supplement. 
The Master Servicer agrees that its servicing of the Receivables shall
be carried out in accordance with customary and usual procedures of
institutions which service motor vehicle retail installment sales contracts
and, to the extent more exacting, the degree of skill and attention that the
Master Servicer exercises with respect to all comparable motor vehicle
receivables that it services for itself or others.  In performing such duties, so long as HSBC
Finance Corporation is the Master Servicer, it shall comply with the standard
and customary procedures for servicing all of its comparable motor vehicle
receivables.  The Master Servicer’s
duties shall include, without limitation, collection and posting of all
payments, responding to inquiries of Obligors on the Receivables, investigating
delinquencies, sending monthly billing statements to Obligors, reporting any
required tax information to Obligors, monitoring the collateral, accounting for
collections and furnishing monthly and annual statements to the Indenture Trustee,
the Administrator and the Noteholders with respect to distributions, monitoring
the status of Insurance Policies with respect to the Financed Vehicles and
performing the other duties specified herein. 
The Master Servicer shall also administer and enforce all rights and
responsibilities of the holder of the Receivables provided for in the Dealer
Agreements (and HSBC Finance Corporation shall make commercially reasonable
efforts to obtain possession of the Dealer Agreements, to the extent it is
necessary to do so), the Dealer Assignments, the Master Receivables Purchase
Agreements, and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments, the Master Receivables Purchase Agreements, and
Insurance Policies relate to the Receivables, the Financed Vehicles or

 

26

 

the Obligors.  To the extent
consistent with the standards, policies and procedures otherwise required
hereby, the Master Servicer shall follow its customary standards, policies, and
procedures and shall have full power and authority, acting alone, to do any and
all things in connection with such managing, servicing, administration and
collection that it may deem necessary or desirable.  In performing such duties, the Master
Servicer or any Subservicer may delegate their duties in accordance with
Section 9.5 hereof.  Without limiting the
generality of the foregoing, the Master Servicer is hereby authorized and
empowered by the Trust to execute and deliver, on behalf of the Trust, any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the
Receivables and with respect to the Financed Vehicles.  The Master Servicer is hereby authorized to
commence, in its own name or in the name of the Trust, a legal proceeding to
enforce a Receivable pursuant to Section 4.3 or to commence or participate in
any other legal proceeding (including, without limitation, a bankruptcy
proceeding) relating to or involving a Receivable, an Obligor or a Financed
Vehicle.  If the Master Servicer
commences or participates in such a legal proceeding in its own name, the Trust
shall thereupon be deemed to have automatically assigned such Receivable to the
Master Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Master Servicer is authorized and
empowered by the Trust to execute and deliver in the Master Servicer’s name any
notices, demands, claims, complaints, responses, affidavits or other documents
or instruments in connection with any such proceeding.  The Indenture Trustee and the Owner Trustee
shall furnish the Master Servicer with any powers of attorney and other
documents which the Master Servicer may reasonably request and which the Master
Servicer deems necessary or appropriate and take any other steps which the
Master Servicer may deem reasonably necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this
Agreement.

 

SECTION 4.2.        Collection
of Receivable Payments; Modifications of Receivables.  (a) 
Consistent with the standards, policies and procedures required by this
Agreement, the Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Receivables as and
when the same shall become due, and shall follow such collection procedures as
it follows with respect to all comparable motor vehicle receivables that it
services for itself or others and otherwise act with respect to the
Receivables, the Dealer Agreements, the Dealer Assignments, the Master
Receivables Purchase Agreements, the Insurance Policies and the Other Conveyed
Property in such manner as will, in the reasonable judgment of the Master
Servicer, maximize the amount to be received by the Trust with respect
thereto.  Consistent with the foregoing,
the Master Servicer may, if it determines in its reasonable judgment that such
action would maximize the amount to be received by the Trust, arrange for the
sale by the Trust of Liquidated Receivables with respect to which the related
Financed Vehicle has been sold, and the net proceeds of such sale shall be
included in Net Liquidation Proceeds. 
The Master Servicer is authorized in its discretion to waive any
prepayment charge, late payment charge or any other similar fees that may be
collected in the ordinary course of servicing any Receivable.

 

(b)           The
Master Servicer may at any time agree to a modification or amendment of a
Receivable in order to (i) change the
Obligor’s regular

 

27

 

due date to a date within 30 days of when such
due date occurs or (ii) re-amortize the Obligor’s obligation under the
Receivable following a partial prepayment of principal; provided, however,
that no re-amortization permitted by this clause (ii) shall extend the maturity
date of any Receivable.  The
Master Servicer may elect, at any time and from time to time in accordance with
its customary procedures, to defer a Scheduled Payment for one month; provided,
however, that (i) the Obligor has paid all amounts due on the Receivable
as of the date such deferral is granted, (ii) the Master Servicer believes in
good faith that such deferral will maximize the amount to be received with
respect to such Receivable and is otherwise in the best interests of the Trust
and (iii) a deferral permitted by this
sentence shall not extend the maturity date of such Receivable.

 

(c)           The
Master Servicer may grant payment extensions on, or other modifications or
amendments to, a Receivable in accordance with its customary procedures if the
Master Servicer believes in good faith that such extension, modification or
amendment is necessary to avoid a default on such Receivable, will maximize the
amount to be received with respect to such Receivable, and is otherwise in the
best interests of the Trust; provided, however, that if the Master Servicer extends the date for
final payment by the Obligor of any Receivable beyond the last day of the
Collection Period immediately preceding the Final Scheduled Distribution
Date of the Notes, the Master Servicer will
(or will cause HAFI as subservicer to) promptly purchase such Receivable by
depositing the related Repurchase Amount into the Collection Account.

 

(d)           Except
as otherwise provided below in Section 4.2(e) hereof, the Master Servicer shall
deposit Collections in immediately available funds on or with respect to
Receivables into the Collection Account as promptly as possible after the date
of processing of such Collections, but in no event later than the second
Business Day following the date of processing.

 

(e)           Subject
to the express terms of the Series Supplement, but notwithstanding anything
else in this Agreement to the contrary, for so long as (i) HSBC Finance
Corporation remains the Master Servicer and maintains a commercial paper rating
of not less than A-1 by Standard & Poor’s, P-1 by Moody’s and F1 by Fitch
(or such other rating as shall be satisfactory to such Rating Agency), in each
case only if such Person is a Rating Agency, and for five Business Days
following any reduction of any such rating or (ii) a Master Servicer Credit
Facility is maintained in effect by the Master Servicer in form and substance
acceptable to the Rating Agency (such acceptability to be evidenced in writing
by the Rating Agency to the effect that failure to make the aforementioned
deposit on the basis of the maintenance of the Master Servicer Credit Facility
will not adversely affect the then current rating of the Notes) issued by a Master
Servicer Credit Facility Issuer having a rating on its (A) short-term
obligations of at least P-1 by Moody’s, A-1 by Standard & Poor’s and F1 by
Fitch (or such other rating as shall be satisfactory to such Rating Agency), in
each case only if such Person is a Rating Agency, and (B) long term obligations
of at least A2 by Moody’s, A by Standard & Poor’s, and A by Fitch, in each
case only if such Person is a Rating Agency, the Master Servicer shall not be
required to make deposits of Collections on or with respect to Receivables as
provided in Section 4.2(d), but may make one or more deposits of Collections
(excluding any portion of such funds which the Master Servicer may retain in

 

28

 

accordance with Section 4.8 or pay directly to the Seller in its
capacity as Certificateholder in accordance with Section 5.1(f)) with respect
to the Series Trust Estate with respect to a Collection Period into the
Collection Account in immediately available funds not later than 1:00 P.M.,
Central time, on the Business Day immediately preceding the related
Distribution Date.  The Master Servicer
shall give written notice to the Indenture Trustee and the Administrator if it
is required to deposit funds in accordance with Section 4.2(d).  If, during any Collection Period that the
Master Servicer is required to deposit funds in accordance with Section 4.2(d),
the Master Servicer satisfies either condition of the first sentence of this
Section 4.2(e) such that the Master Servicer is no longer required to deposit
funds in accordance with Section 4.2(d), the Master Servicer may, as of the
date of such satisfaction but subject to the provisions of this Section 4.2(e),
withdraw from the Collection Account all of the Collections which it has
deposited thereto in accordance with Section 4.2(d) during such Collection
Period, and retain such funds in the manner provided in the first sentence of
this Section 4.2(e).

 

(f)            Notwithstanding
anything else in the Basic Documents to the contrary, with respect to any
Collection Period and whether the Master Servicer is required to make deposits
of Collections pursuant to Section 4.2(d) or Section 4.2(e), (i) the Master
Servicer shall only be required to deposit Collections into the Collection
Account up to an aggregate amount of Available Funds required to be distributed
on or prior to the related Distribution Date pursuant to the terms of the Basic
Documents and (ii) if at any time prior to such Distribution Date the amount of
Collections deposited into the Collection Account exceeds the amount required
to be deposited pursuant to clause (i) above, the Master Servicer shall be
permitted to direct the Administrator to withdraw the excess from the
Collection Account and pay such amount pursuant to the Basic Documents.  Subject to the immediately preceding
sentence, the Master Servicer may retain its Servicing Fee pursuant to Section
4.8 and shall not be required to deposit it in the Collection Account.

 

(g)           In
the event that a Master Servicer Credit Facility is maintained, the Master
Servicer shall within two Business Days of the date of processing of Collections
on or with respect to Receivables notify the Indenture Trustee, the
Administrator and the Master Servicer Credit Facility Issuer in writing of the
amount of Collections that would otherwise be deposited in the Collection
Account and the Master Servicer shall establish and maintain for the Trust a
Payment Record in which the payments on or with respect to the Receivables
shall be credited and the Master Servicer shall notify the Indenture Trustee,
the Administrator and the Master Servicer Credit Facility Issuer in writing as
promptly as practicable (but in any event prior to the Determination Date for
the following Distribution Date) of the amounts so credited on or with respect
to the Receivables that are to be included in Collections (as determined for
this purpose after giving effect to the exclusions described above) for the
related Distribution Date and of the amounts so credited which will constitute
a part of Collections (as determined for this purpose after giving effect to
the exclusions described above) for the second following Distribution
Date.  The Payment Record shall be made
available for inspection during normal business hours of the Master Servicer
upon request of the Indenture Trustee, the Administrator or any Master Servicer
Credit Facility Issuer.

 

29

 

SECTION 4.3.        Realization
Upon Receivables.  (a)  Consistent with the standards, policies and
procedures required by this Agreement, the Master Servicer shall use its best
efforts to repossess (or otherwise comparably convert the ownership of) and
liquidate any Financed Vehicle securing a Receivable with respect to which the
Master Servicer has determined that payments thereunder are not likely to be
resumed, as soon as is practicable after default on such Receivable but in no
event later than the date on which 10% or more of a Scheduled Payment has become
150 days delinquent (other than in the case of Financed Vehicles where neither
the Financed Vehicle nor the Obligor can be physically located by the Master
Servicer (using procedures consistent with the standards, policies and
procedures of the Master Servicer required by this Agreement) and other than in
the case of an Obligor who is subject to a bankruptcy proceeding); provided, however,
that the Master Servicer may elect not to repossess a Financed Vehicle within
such time period if in its good faith judgment it determines that the proceeds
ultimately recoverable with respect to such Receivable would be increased by
forbearance.  The Master Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by
Section 4.1, which practices and procedures may include reasonable efforts to
realize upon any recourse to Dealers, the sale of the related Financed Vehicle
at public or private sale, the submission of claims under an Insurance Policy
and other actions, including, without limitation, entering into settlements
with Obligors, by the Master Servicer in order to realize upon such a
Receivable.  The foregoing is subject to
the provision that, in any case in which the Financed Vehicle shall have
suffered damage, the Master Servicer shall not expend funds in connection with
any repair or towards the repossession of such Financed Vehicle unless it shall
determine in its discretion that such repair and/or repossession shall increase
the proceeds of liquidation of the related Receivable by an amount greater than
the amount of such expenses.  The Master
Servicer shall be entitled to recover all reasonable expenses incurred by it in
the course of repossessing and liquidating a Financed Vehicle but only from the
liquidation proceeds of the vehicle or under the related Dealer Agreement.  The Master Servicer shall pay on behalf of
the Trust any personal property taxes assessed on repossessed Financed
Vehicles.  The Master Servicer shall be
entitled to reimbursement of any such tax from Net Liquidation Proceeds with
respect to such Receivable.

 

(b)           If
the Master Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement or Dealer Assignment, the act of commencement shall be deemed to be
an automatic assignment from the Trust to the Master Servicer of the rights
under such Dealer Agreement and Dealer Assignment for purposes of collection
only.  If, however,
in any enforcement suit or legal proceeding it is held that the Master Servicer
may not enforce a Dealer Agreement or Dealer Assignment on the grounds that it
is not a real party in interest or a Person entitled to enforce the Dealer
Agreement or Dealer Assignment, the Indenture Trustee, at the Master Servicer’s
written direction and expense, or the Seller, at the Seller’s expense, shall
take such steps as the Master Servicer deems reasonably necessary to enforce
the Dealer Agreement or Dealer Assignment, including bringing suit in its name
or the name of the Seller, the Trust or the Owner Trustee.  All amounts recovered shall be remitted
directly by the Master Servicer as provided in Section 4.2(d) or 4.2(e), as
applicable.

 

30

 

SECTION 4.4.        Insurance.  (a) 
The Master Servicer shall require, in accordance with its customary
servicing policies and procedures, that each Financed Vehicle be insured by the
related Obligor under an insurance policy covering physical loss and damage to
the related Financed Vehicle and shall monitor the status of such physical loss
and damage insurance coverage thereafter, in accordance with its customary
servicing procedures.  Each Receivable
requires the Obligor to obtain such physical loss and damage insurance, naming HAFI
or any Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement, as applicable, and its successors and assigns as loss payee, and
with respect to liability coverage, additional insureds, and permits the holder
of such Receivable to obtain physical loss and damage insurance at the expense
of the Obligor if the Obligor fails to maintain such insurance.  If the Master Servicer shall determine that
an Obligor has failed to obtain or maintain a physical loss and damage
Insurance Policy covering the related Financed Vehicle which satisfies the
conditions set forth in the related Eligibility Criteria (including, without
limitation, during the repossession of such Financed Vehicle) the Master
Servicer shall, in accordance with its customary servicing procedures, enforce
the rights of the holder of the Receivable under the Receivable to require the
Obligor to obtain such physical loss and damage insurance in accordance with
its customary servicing policies and procedures.

 

(b)           The
Master Servicer may, if an Obligor fails to obtain or maintain a physical loss
and damage Insurance Policy, obtain insurance with respect to the related
Financed Vehicle and advance on behalf of such Obligor, as required under the
terms of the Insurance Policy, the premiums for such insurance (such insurance
policy being referred to herein as an “LPI Policy”).  All LPI Policies shall be endorsed with
clauses providing for loss payable to the Master Servicer or a Seller.  Any cost incurred by the Master Servicer in
maintaining such LPI Policy shall be recoverable only out of premiums paid by
the Obligors or Net Liquidation Proceeds with respect to the Receivable, as
provided in Section 4.4(c).

 

(c)           In
connection with any LPI Policy obtained hereunder, the Master Servicer may, in the
manner and to the extent permitted by applicable law, require the Obligors to
repay any Advanced Insurance Premiums to the Master Servicer.  In no event shall the Master Servicer include
the amount of the premium in the Amount Financed under the Receivable.  The Master Servicer will not add any Advanced
Insurance Premium to the Principal Balance of the related Receivable, and
amounts allocable thereto will not be available for distribution on the Notes.  The Master Servicer shall retain and
separately administer the right to receive payments from or pay rebates to
Obligors with respect to LPI Policies. 
If an Obligor makes a payment with respect to a Receivable having an LPI
Policy in place that is less than the Scheduled Payment, then, unless otherwise
required by applicable law or the terms of the related Receivable, the Master
Servicer shall apply the payment first to any accrued and unpaid interest on
the Receivable, then to any outstanding Advanced Insurance Premium, and then to
principal and other amounts due on the Receivable in accordance with the Master
Servicer’s standard and customary servicing procedures.  Unless otherwise required by applicable law
or the terms of the related Receivable, Net Liquidation Proceeds on any
Receivable will be applied first to the Principal Balance until paid in full,
then to other amounts due from the Obligor, including any outstanding Advanced
Insurance Premiums, in

 

31

 

accordance with the terms of the related Receivable and the Master
Servicer’s standard and customary servicing procedures.

 

(d)           The
Master Servicer may sue to enforce or collect upon the Insurance Policies, in
its own name, if possible, or as agent of the Trust.  If the Master Servicer elects to commence a
legal proceeding to enforce an Insurance Policy, the act of commencement shall
be deemed to be an automatic assignment of the rights of the Trust under such
Insurance Policy to the Master Servicer for purposes of collection only.  If, however,
in any enforcement suit or legal proceeding it is held that the Master Servicer
may not enforce an Insurance Policy on the grounds that it is not a real party
in interest or a holder entitled to enforce the Insurance Policy, the Indenture
Trustee, at the Master Servicer’s written direction and expense, or the Seller,
at the Seller’s expense, shall take such steps as the Master Servicer deems
reasonably necessary to enforce such Insurance Policy, including bringing suit
in its name or the name of the Trust or the Owner Trustee.

 

SECTION 4.5.        Maintenance
of Security Interests in Vehicles. 
Consistent with the policies and procedures required by this Agreement,
the Master Servicer shall take such steps on behalf of the Trust as are
necessary to maintain perfection of the security interest created by each
Receivable in the related Financed Vehicle on behalf of the Trust or as the
Indenture Trustee shall reasonably request, including, but not limited to,
obtaining the execution by the Obligors and the recording, registering, filing,
re-recording, re-filing, and re-registering of all security agreements,
financing statements and continuation statements as are necessary to maintain
the security interest granted by the Obligors under the respective Receivables.  The Owner Trustee, on behalf of the Trust,
hereby authorizes the Master Servicer, and the Master Servicer agrees, to take
any and all steps necessary to re-perfect such security interest on behalf of
the Trust as necessary because of the relocation of a Financed Vehicle or for
any other reason.  In the event that the
assignment of a Receivable to the Trust is insufficient, without a notation on
the related Financed Vehicle’s certificate of title, or without fulfilling any
additional administrative requirements under the laws of the state in which the
Financed Vehicle is located, to perfect a security interest in the related
Financed Vehicle in favor of the Trust, the Seller hereby agrees to cause HAFI
or any Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement, as applicable, to treat the designation of HAFI or any Affiliate of HAFI
that is the seller under a Master Receivables Purchase Agreement, as
applicable, as the secured party on the certificate of title as a designation
in its capacity as agent of the Trust for such limited purpose.

 

SECTION 4.6.        Covenants,
Representations, and Warranties of Master Servicer.  By its execution and delivery of this
Agreement, the Master Servicer makes the following representations, warranties
and covenants on which the Issuer relies in accepting the Receivables, on which
the Administrator relies in authenticating the Notes, on which the Noteholders
rely in purchasing the Notes and any Additional Principal Amount thereunder, on
which the Owner Trustee relies in executing the Certificates.

 

The Master Servicer covenants as follows:

 

32

 

(i)            Liens
in Force.  The Financed Vehicle
securing each Receivable shall not be released in whole or in part from the
security interest granted by the Receivable, except upon payment in full of the
Receivable or as otherwise contemplated herein;

 

(ii)           No
Impairment.  The Master Servicer
shall do nothing to impair the rights of the Trust or the Noteholders in the
Receivables, the Dealer Agreements, the Dealer Assignments, the Master
Receivables Purchase Agreements, the Insurance Policies or the Other Conveyed
Property;

 

(iii)          No
Amendments.  The Master Servicer
shall not extend or otherwise amend the terms of any Receivable, except in
accordance with Section 4.2;

 

(iv)          Restrictions
on Liens.  The Master Servicer shall
not (i) create, incur or suffer to exist, or agree to create, incur or suffer
to exist, or consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any Lien or
restriction on transferability of the Receivables except for the Lien in favor
of the Indenture Trustee for the benefit of the Secured Parties, and the
restrictions on transferability imposed by this Agreement or (ii) sign or file
under the Uniform Commercial Code of any jurisdiction any financing statement
which names HAFI, the Master Servicer or any Affiliate thereof as a debtor, or
sign any security agreement authorizing any secured party thereunder to file
such financing statement, with respect to the Receivables, except in each case
any such instrument solely securing the rights and preserving the Lien in favor
of the Indenture Trustee for the benefit of the Secured Parties;

 

(v)           Servicing
of Receivables.  The Master Servicer
shall service the Receivables as required by the terms of this Agreement and in
material compliance with its standard and customary procedures for servicing
all its other comparable motor vehicle receivables and in compliance with
applicable law; and

 

(vi)          Relocations
of Principal Office.  The Master
Servicer shall notify in writing the Indenture Trustee of any relocation of the
Master Servicer’s principal office set forth in Section 13.3 hereof and all
Receivables Files shall be maintained by the Master Servicer in the United
States.

 

SECTION 4.7.        Repurchase
of Receivables Upon Breach of Covenant. 
Upon discovery by any of the Master Servicer, the Seller, or a Trust
Officer of any of the Owner Trustee, the Indenture Trustee or the Administrator
of a breach of any of the covenants set forth in Sections 4.5 or 4.6, the party
discovering such breach shall give

 

33

 

prompt written notice to the others; provided,
however, that the failure to give any such
notice shall not affect any obligation of the Master Servicer under this
Section 4.7.  As of the second Accounting
Date following its discovery or receipt of notice of any breach of any covenant
set forth in Sections 4.5 or 4.6 which materially and adversely affects the
interests of the Securityholders in any Receivable (including any Liquidated
Receivable) or the related Financed Vehicle (or, if such second Accounting Date
is more than 45 days after discovery or receipt by the Master Servicer of
notice of such breach, then the first Accounting Date so following), the Master
Servicer shall, unless such breach shall have been cured in all material
respects, repurchase from the Trust the Receivable affected by such breach and,
on the date specified in Section 5.4, the Master Servicer shall pay the related
Repurchase Amount and deposit such Repurchase Amounts into the Collection
Account.  It is understood and agreed
that the obligation of the Master Servicer to repurchase any Receivable
(including any Liquidated Receivable) with respect to which such a breach has
occurred and is continuing shall, if such obligation is fulfilled, constitute
the sole remedy against the Master Servicer for such breach.

 

SECTION 4.8.        Total
Servicing Fee; Payment of Certain Expenses by Master Servicer.  So as long as:  (i) HSBC Finance Corporation is the Master
Servicer, (ii) the Master Servicer is permitted to make deposits of Collections
in accordance with Section 4.2(e) hereof and (iii) the Master Servicer’s
Certificate delivered with respect to such Distribution Date indicates that
Available Funds with respect to such Distribution Date are sufficient to make
the distributions required to be made on such Distribution Date in respect of
the Servicing Fee payable to HSBC Finance Corporation as Master Servicer (and
all other distributions required to be made on such Distribution Date having a
higher priority than the distribution of the Servicing Fee payable to HSBC
Finance Corporation as Master Servicer), the Master Servicer shall be entitled
to retain out of amounts otherwise to be deposited in the Collection Account
with respect to a Collection Period, the Servicing Fee payable to HSBC Finance
Corporation as Master Servicer for such Collection Period.  The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities under this
Agreement (including taxes imposed on the Master Servicer, expenses incurred in
connection with distributions and reports made by the Master Servicer to
Securityholders, all fees and expenses of the Owner Trustee, the Indenture
Trustee and the Administrator), except taxes levied or assessed against the
Trust, and claims against the Trust in respect of indemnification, which taxes
and claims in respect of indemnification against the Trust are expressly stated
to be for the account of HSBC Finance Corporation.  The Master Servicer shall not be entitled to
reimbursement of Advanced Insurance Premiums except as set forth in Section
4.4(c).  The Master Servicer shall be
liable for the fees, charges and expenses of the Owner Trustee, the Indenture
Trustee, the Administrator, any Subservicer and their respective agents.

 

SECTION 4.9.        Master
Servicer’s Certificate.  No later
than 10:00 a.m. Central time on each Determination Date, the Master Servicer
shall deliver, and cause to be delivered via access to its or its Affiliate’s
web-site address, to the Rating Agencies, the Indenture Trustee, the
Administrator and the Owner Trustee, a Master Servicer’s Certificate executed
by a responsible officer or agent of the Master Servicer containing among other
things, all information necessary to enable the Administrator to make the

 

34

 

distributions with respect to the related Distribution Date pursuant to
the Series Supplement.  In addition to
the information set forth in the preceding sentence, the Master Servicer’s
Certificate shall also contain the information required by the Series
Supplement.

 

SECTION 4.10.      Annual
Statement as to Compliance, Notice of Master Servicer Termination Event.  (a) 
The Master Servicer shall deliver or cause to be delivered to the
Indenture Trustee, the Administrator and the Owner Trustee on or before April
30 (or 120 days after the end of the Master Servicer’s fiscal year, if other
than December 31) of each year, beginning on April 30 in calendar year 2006, an
Officer’s Certificate signed by any responsible officer of the Master Servicer,
or such Eligible Subservicer who is performing the servicing duties of the
Master Servicer, dated as of December 31 (or other applicable date) of the
immediately preceding year, stating that (i) a review of the activities of the
Master Servicer, or such Eligible Subservicer who is performing the servicing
duties of the Master Servicer, during the preceding 12-month period (or such shorter
or longer, as applicable, period since the Closing Date) and of its performance
under this Agreement has been made under such officer’s supervision, and (ii)
to such officer’s knowledge, based on such review, the Master Servicer, or such
Eligible Subservicer who is performing the servicing duties of the Master
Servicer, has in all material respects fulfilled all its obligations under this
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.

 

(b)           The
Master Servicer, or such Eligible Subservicer who is performing the servicing
duties of the Master Servicer, shall deliver to the Indenture Trustee, the
Administrator and the Owner Trustee, and, in the event that such notice is
delivered by the Subservicer, to the Master Servicer, promptly after having
obtained knowledge thereof, but in no event later than two (2) Business Days
thereafter, written notice in an Officer’s Certificate of any event which with
the giving of notice or lapse of time, or both, would become a Master Servicer
Termination Event under Section 10.1(a). 
The Seller or the Master Servicer shall deliver to the Indenture
Trustee, the Administrator, the Owner Trustee, the Master Servicer or the
Seller (as applicable) promptly after having obtained knowledge thereof, but in
no event later than two (2) Business Days thereafter, written notice in an
Officer’s Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Master Servicer Termination Event under any other
clause of Section 10.1.

 

SECTION 4.11.      Annual
Independent Accountants’ Report. 
(a)  The Master Servicer shall
cause a firm of nationally recognized independent certified public accountants
(the “Independent Accountants”), who may also render other services to the
Master Servicer or to the Seller, to deliver to the Indenture Trustee, the
Administrator and the Owner Trustee on or before April 30 (or 120 days after
the end of the Master Servicer’s fiscal year, if other than December 31) of
each year, beginning on April 30 in calendar year 2006 with respect to the
twelve months (or shorter applicable period) ended the immediately preceding
December 31 (or other applicable date), a report showing that, for the prior
calendar year the accounting firm has
performed procedures in order to provide a report on management’s assertion
that the servicing of receivables has been

 

35

 

conducted in compliance with the terms and
conditions set forth in Articles IV and V of this Agreement and applicable
provisions of the Series Supplement related to the servicing of receivables and
the reporting thereof and that assertion is fairly presented.

 

(b)           On
or before April 30 of each calendar year, beginning with April 30 in calendar
year 2006, the Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master Servicer
or the Seller) to furnish an agreed-upon procedures report to the Indenture
Trustee, the Administrator and the Master Servicer to the effect that they have
applied certain agreed-upon procedures comparing the mathematical calculations
of each amount set forth in the Master Servicer’s Certificates delivered
pursuant to Section 4.9 during the period covered by such report with the
Master Servicer’s computer reports which were the source of such amounts and
that on the basis of such comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement.

 

(c)           In
the event such Independent Accountants require the Indenture Trustee and/or the
Administrator to agree to the procedures to be performed by such firm in any of
the reports required to be prepared pursuant to this Section 4.11, the Master
Servicer shall direct the Indenture Trustee and/or the Administrator in writing
to so agree; it being understood and agreed that the Indenture Trustee and/or
the Administrator will deliver such letter of agreement in conclusive reliance
upon the direction of the Master Servicer, and the Indenture Trustee and/or the
Administrator has not made any independent investigation as to, and shall have
no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.

 

SECTION 4.12.      Access
to Certain Documentation and Information Regarding Receivables.  The Master Servicer shall provide to
representatives of the Indenture Trustee and the Owner Trustee reasonable
access to the documentation regarding the Receivables.  In each case, such access shall be afforded
without charge but only upon reasonable request and during normal business
hours.  Nothing in this Section shall
derogate from the obligation of the Master Servicer to observe any applicable
law prohibiting disclosure of information regarding the Obligors, and the
failure of the Master Servicer to provide access as provided in this Section as
a result of such obligation shall not constitute a breach of this Section.

 

SECTION 4.13.      Fidelity
Bond and Errors and Omissions Policy. 
The Master Servicer or such Eligible Subservicer that is performing the
servicing duties of the Master Servicer, has obtained, and shall continue to
maintain in full force and effect, a Fidelity Bond and Errors and Omissions
Policy of a type and in such amount as is customary for servicers engaged in
the business of servicing motor vehicle receivables.

 

36

 

ARTICLE V

 

Trust Accounts;
Distributions;

Statements to Certificateholders and Noteholders

 

SECTION 5.1.        Establishment
of Trust Accounts.  (a)  (i) 
The Administrator shall establish and maintain the Trust Accounts
required to be established and maintained pursuant to the Series Supplement,
and such Trust Accounts shall be subject to the sole dominion and control of
the Administrator on behalf of the Indenture Trustee for the benefit of the
Noteholders.

 

(ii)                   No
Trust Account shall be maintained with an institution other than the Administrator
unless such institution agrees in writing to the provisions of this Section 5.1
as if such institution were the Administrator, except that the Administrator shall
continue to be the “entitlement holder” of the related Trust Account.

 

(iii)                  With
respect to any Trust Account Property held from time to time in any Trust
Account, the Administrator agrees that (A) such Trust Account Property shall at
all times be credited in the Administrator’s books and records to the relevant
Trust Account, (B) any Eligible Investment constituting a deposit account shall
be, except as otherwise provided herein, subject to the exclusive custody and
control of the Administrator, and, if the Administrator is not the depositary
bank with which such deposit account is maintained, the Administrator shall be
the depositary bank’s customer with respect thereto, and (C) any Eligible
Investment other than a deposit account shall be held, pending maturity or
disposition by the Administrator, in accordance with the relevant terms of the
definition of “Delivery.”  The Administrator
acknowledges and agrees that (i) each item of property (whether investment
property, financial asset, security, instrument, cash or any other type of
property) credited to a Trust Account that is a “securities account,” (as
defined in Article 8 of the UCC) shall be treated as a “financial asset” within
the meaning of Article 8 of the UCC, (ii) it shall act as a “securities
intermediary” (as defined in Article 8 of the UCC) with respect to each Trust
Account which is a “securities account” and a “bank” (as defined in Article 9
of the UCC) with respect to each Trust Account that is a “deposit account” (as
defined in Article 9 of the UCC), and (iii) each Trust Account is either a “securities
account” or a “deposit account.”

 

(b)           Except
as otherwise provided in the Series Supplement, funds on deposit in the Trust
Accounts shall be invested by the Administrator (or any custodian with respect
to funds on deposit in any such account) in Eligible Investments selected in
writing by the Master Servicer (pursuant to standing instructions or otherwise)
which absent any instruction shall be the investments specified in clause (d)
of the definition of Eligible Investments set forth herein.  Unless otherwise agreed in writing by the
Rating Agencies, funds on deposit in any Trust Account shall be invested in
Eligible Investments that will mature so that such funds will be available at
the close of business on the Business Day immediately preceding the following
Distribution Date.  Funds deposited in a
Trust Account on the day immediately preceding a Distribution Date and
representing the proceeds of Eligible Investments are required to be held
overnight in an

 

37

 

Eligible Account and shall be included in Available Funds (as defined
in the Series Supplement) for the succeeding Distribution Date.  All Eligible Investments will be held to
maturity.

 

(c)           All
investment earnings of monies deposited in the Trust Accounts shall be
deposited (or caused to be deposited) by the Administrator in the Collection
Account no later than the close of business on the Business Day immediately
preceding the related Distribution Date, and any loss resulting from such
investments shall be charged to the Collection Account.  The Master Servicer will not direct the Administrator
to make any investment of any funds held in any of the Trust Accounts unless
the security interest granted and perfected in such account will continue to be
perfected in such investment, in either case without any further action by any
Person, and, in connection with any direction to the Administrator, to make any
such investment, if necessary, the Master Servicer shall deliver to the Administrator
and the Indenture Trustee an Opinion of Counsel to such effect.

 

(d)           The
Administrator shall not in any way be held liable by reason of any
insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the Administrator’s
negligence or bad faith.

 

(e)           If
(i) the Master Servicer shall have failed to give investment directions for any
funds on deposit in the Trust Accounts to the Administrator by 2:00 p.m.
Eastern Time (or such other time as may be agreed by the Issuer and the Administrator)
on any Business Day; or (ii) an Event of Default shall have occurred and be
continuing, the Administrator shall, to the fullest extent practicable, invest
and reinvest funds in the Trust Accounts in one or more Eligible Investments in
accordance with paragraph (b) above; provided that, if following an
Event of Default amounts are to be distributed to Securityholders other than on
a Distribution Date, investments shall mature on the Business Day preceding any
such proposed date of distribution.

 

(f)            The
Administrator shall possess all right, title and interest in all funds on
deposit from time to time in the Trust Accounts and in all proceeds thereof and
all such funds, investments, proceeds and income shall be part of the Series
Trust Estate.  Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and
control of the Administrator for the benefit of the Secured Parties.  If, at any time, any Trust Account ceases to
be an Eligible Account, the Administrator (or the Master Servicer on its
behalf) shall within five Business Days (or such longer period as to which each
Rating Agency may consent) establish a new Trust Account as an Eligible Account
and shall transfer any cash and/or any investments to such new Trust
Account.  In connection with the
foregoing, the Master Servicer agrees that, in the event that any of the Trust
Accounts are not accounts with the Administrator, the Master Servicer shall
notify the Administrator in writing promptly upon any of such Trust Accounts
ceasing to be an Eligible Account. The Master Servicer may net against any
deposits required to be made to the Collection Account on the Business Day
before any Determination Date amounts that the Seller, as Certificateholder or
otherwise, is entitled to receive as distributions from the Collection Account
on the related Distribution Date.

 

38

 

SECTION 5.2.        Certain
Reimbursements to the Master Servicer. 
The Master Servicer shall be entitled to withhold from amounts otherwise
required to be remitted to the Collection Account with respect to a Collection
Period an amount in respect of funds deposited with respect to prior Collection
Periods in the Collection Account but later determined by the Master Servicer
to have resulted from mistaken deposits or postings or checks returned for
insufficient funds; provided, that, such withholding may be made
only following certification by the Master Servicer of such amounts and the
provision of such information to the Indenture Trustee and the Administrator as
may be necessary in the opinion of the Indenture Trustee and the Administrator to
verify the accuracy of such certification.

 

SECTION 5.3.        Application
of Collections.  All Collections for
the Collection Period shall be applied by the Master Servicer as follows:  with respect to each Simple Interest
Receivable (other than a Repurchased Receivable), payments by or on behalf of
the Obligor, (other than amounts, if any, collected with respect to
administrative fees, including late fees, prepayment fees and liquidation fees
collected on the Receivable) shall be applied to interest and principal in
accordance with the Simple Interest Method. 
With respect to each Actuarial Receivable, (other than a Repurchased
Receivable), payments by or on behalf of the Obligor, (other than amounts, if
any, collected with respect to administrative fees, including late fees,
prepayment fees and liquidation fees collected on the Receivable) shall be
applied to interest and principal in accordance with the Actuarial Method.

 

SECTION 5.4.        Additional
Deposits.

 

(a)           HAFI,
any Affiliate of HAFI that is the seller under a Master Receivables Purchase
Agreement, HSBC Finance Corporation and the Seller, as applicable, shall
deposit or cause to be deposited in the Collection Account on the Business Day
preceding the Distribution Date following the date on which such obligations
are due the aggregate Repurchase Amount with respect to Repurchased
Receivables.

 

(b)           The
Master Servicer agrees for the benefit of the Indenture Trustee that any
amounts payable by the Master Servicer to the Seller under the Master
Receivables Purchase Agreement to which the Master Servicer is a party which
are to be paid by the Seller to the Indenture Trustee for the benefit of the
Secured Parties shall be paid by the Master Servicer, on behalf of the Seller,
directly to the Administrator (on behalf of the Indenture Trustee).

 

ARTICLE VI

 

RESERVED

 

ARTICLE VII

 

RESERVED

 

39

 

ARTICLE VIII

 

The Seller

 

SECTION 8.1.        Representations
of Seller.  The Seller makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables and on which the Noteholders are deemed to have
relied on in the purchasing of Notes and any Additional Principal Amount and on
which each Support Provider shall be deemed to have relied on providing the
Series Support.  Except as otherwise
specifically provided, the representations speak as of the Closing Date and as
of each Transfer Date and shall survive each sale of the Receivables to the
Issuer and each pledge thereof to the Indenture Trustee pursuant to the
Indenture and the Series Supplement.

 

(a)           Representations
in Transfer Agreement.  The
representations and warranties set forth on the Schedule of Eligibility
Criteria attached as Schedule I to the Series Supplement are true and correct
with respect to the Receivables included in the Series Trust Estate.

 

(b)           Organization
and Good Standing.  The Seller has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Nevada, with power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted, and had at all relevant times, and
now has, power, authority and legal right to acquire, own and sell the Owner
Trust Estate transferred to the Trust.

 

(c)           Due
Qualification.  The Seller is duly
qualified to do business as a foreign corporation in good standing and has
obtained all necessary licenses and approvals in all jurisdictions where the
failure to do so would materially and adversely affect the Seller’s ability to
transfer the Receivables and the Other Conveyed Property to the Trust pursuant
to this Agreement, or the validity or enforceability of the Receivables and the
Other Conveyed Property or to perform the Seller’s obligations hereunder and
under the Related Documents to which the Seller is a party.

 

(d)           Power
and Authority.  The Seller has the
power and authority to execute and deliver this Agreement and the Related
Documents to which it is a party and to carry out its terms and their terms,
respectively; the Seller has full power and authority to sell and assign the
Owner Trust Estate to be sold and assigned to and deposited with the Trust by
it and has duly authorized such sale and assignment to the Trust by all
necessary corporate action; and the execution, delivery and performance of this
Agreement and the Related Documents to which the Seller is a party have been
duly authorized by the Seller by all necessary corporate action.

 

(e)           Valid
Sale, Binding Obligations. This Agreement and each related Transfer
Agreement effects a valid sale, transfer and assignment of the Owner Trust
Estate, enforceable against the Seller and creditors of and purchasers from the
Seller; and this Agreement and the Related Documents to which the Seller is a
party, when duly executed and delivered, shall constitute legal, valid and
binding obligations of

 

40

 

the Seller enforceable in accordance with their respective 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.

 

(f)            No
Violation.  The consummation of the
transactions contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents shall not
(A) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice, lapse of time or both) a default under,
the articles of incorporation or by-laws of the Seller, or any indenture,
agreement, mortgage, deed of trust or other instrument to which the Seller is a
party or by which it is bound, (B) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, or (C) violate any law, order, rule or regulation applicable to the
Seller of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Seller or any of its properties, except in the case of (A), (B) or (C) where
any such default, Lien or violation shall not materially and adversely affect
the interest of the Noteholders or the Trust in the Series Trust Estate.

 

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

 

(h)           Approvals.  All approvals, authorizations, consents,
orders or other actions of any person, corporation or other organization, or of
any court, governmental agency or body or official, required in connection with
the execution and delivery by the Seller of this Agreement and the other
Related Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby have been or will be taken or
obtained on or prior to the Closing Date and each Transfer Date.

 

(i)            No
Consents.  The Seller is not required
to obtain the consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement which has not already been obtained.

 

41

 

(j)            No
Lien Filings.  The Seller is not
aware of any judgment lien filings or tax lien filings against itself.

 

(k)           Chief
Executive Office.  The chief
executive office of the Seller is at 1111 Town Center Drive, Las Vegas, Nevada
89144.

 

SECTION 8.2.        Corporate
Existence.  (a)  During the term of this Agreement, the Seller
will keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its incorporation 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 Agreement, the Related Documents and each other instrument
or agreement necessary or appropriate to the proper administration of this
Agreement and the transactions contemplated hereby.

 

(b)           During
the term of this Agreement, the Seller shall observe the applicable legal
requirements for the recognition of the Seller as a legal entity separate and
apart from its Affiliates, including as follows:

 

(i)            the
Seller shall not engage in any other business other than as provided in Article
THIRD of Seller’s Articles of Incorporation.

 

(ii)           the Seller
shall maintain corporate records and books of account separate from those of
its Affiliates;

 

(iii)          except
as otherwise provided in this Agreement, the Seller shall not commingle its
assets and funds with those of its Affiliates;

 

(iv)          the Seller
shall hold such appropriate meetings of its Board of Directors as are necessary
to authorize all the Seller’s corporate actions required by law to be
authorized by the Board of Directors, shall keep minutes of such meetings and
of meetings of its stockholder(s) and observe all other customary corporate
formalities or shall obtain written consents in lieu of formal meetings of its
Board of Directors or stockholder(s) (and any successor Seller that is not a
corporation shall observe similar procedures in accordance with its governing
documents and applicable law);

 

(v)           the Seller
shall at all times hold itself out to the public under the Seller’s own name as
a legal entity separate and distinct from its Affiliates;

 

(vi)          the Seller
shall not become involved in the day-to-day management of any other Person;

 

42

 

(vii)         the
Seller shall not guarantee any other Person’s obligations or advance funds to
any other Person for the payment of expenses or otherwise;

 

(viii)        the
Seller shall not act as an agent of any other Person in any capacity;

 

(ix)           the Seller
shall not dissolve or liquidate, in whole or in part; and

 

(x)            all
transactions and dealings between the Seller and its Affiliates will be
conducted on an arm’s-length basis.

 

(c)           During
the term of this Agreement, the Seller will comply with the limitations on its
business and activities, as set forth in its Articles of Incorporation, and
will not incur indebtedness other than pursuant to or as expressly permitted by
the Related Documents.

 

(d)           During
the term of this Agreement, the Seller will ensure that its corporate records
indicate that the Indenture Trustee has the exclusive right to vote the Class
SV Preferred Stock.

 

SECTION 8.3.        Liability
of Seller; Indemnities.  The Seller
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken under this Agreement by the Seller and the
representations made by the Seller under this Agreement.

 

(a)           The
Seller shall indemnify, defend and hold harmless the Issuer, the Owner Trustee,
the Delaware Trustee, the Indenture Trustee and the Administrator from and
against any taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated in this Agreement and any of the Basic
Documents (except any income taxes arising out of fees paid to the Owner
Trustee, the Delaware Trustee, the Indenture Trustee or the Administrator, and
except any taxes to which the Owner Trustee, the Delaware Trustee, the
Indenture Trustee or the Administrator may otherwise be subject to), including
any sales, gross receipts, general corporation, tangible personal property,
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to federal or other income taxes arising out of
distributions on the Certificates and the Notes) and costs and expenses in
defending against the same.

 

(b)           The
Seller shall indemnify, defend and hold harmless the Issuer, the Owner Trustee,
the Delaware Trustee, the Indenture Trustee and the Administrator against any
loss, liability or expense incurred by reason of (i) the Seller’s willful
misfeasance, bad faith or negligence in the performance of its duties under
this Agreement, or by reason of reckless disregard of its obligations and
duties under this Agreement and (ii) the Seller’s or the Issuer’s violation of federal
or state securities laws in connection with the offering and sale of the Notes.

 

43

 

(c)           The
Seller shall indemnify, defend and hold harmless the Owner Trustee, the
Delaware Trustee, the Indenture Trustee and the Administrator and their
respective officers, directors, employees and agents from and against any and
all costs, expenses, losses, claims, damages and liabilities arising out of, or
incurred in connection with, the acceptance or performance of the trusts and
duties set forth herein and in the Basic Documents, except to the extent that
such cost, expense, loss, claim, damage or liability shall be due to the willful
misfeasance, bad faith or negligence (except for errors in judgment) of the
Person seeking indemnification.

 

Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee, the Delaware Trustee, the
Indenture Trustee or the Administrator and the termination of this Agreement or
the Indenture or the Trust Agreement, as applicable, and shall include
reasonable fees and expenses of counsel and other expenses of litigation.  If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Seller, without interest.

 

SECTION 8.4.        Merger
or Consolidation of, or Assumption of the Obligations of, Seller.  Any Person (a) into which the Seller may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Seller shall be a party or (c) which may succeed to the properties
and assets of the Seller substantially as a whole, which Person in any of the
foregoing cases (x) has articles of incorporation containing provisions
relating to limitations on business and other matters substantially identical
to those contained in the Seller’s articles of incorporation and (y) executes
an agreement of assumption to perform every obligation of the Seller under this
Agreement and the other Related Documents shall be the successor to the Seller
hereunder without the execution or filing of any document or any further act by
any of the parties to this Agreement.

 

SECTION 8.5.        Limitation
on Liability of Seller and Others.  (a)  The Seller and any director or officer or
employee or agent of the Seller may rely in good faith on the written advice of
counsel or on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising under any Basic
Document.  The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.  Except as provided in Section 8.3 hereof,
neither the Seller nor any of the directors, officers, employees or agents of
the Seller acting in such capacities shall be under any liability to the Trust,
the Securityholders, any Support Provider or any other Person for any action
taken or for refraining from the taking of any action in good faith in such
capacities pursuant to this Agreement; provided, however, that
this provision shall not protect the Seller or any such person against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.

 

44

 

(b)           All
obligations of the Seller under this Agreement (including, but not limited to,
repurchase and indemnification obligations) and under any of the Related
Documents shall be limited in recourse to property, if any, which the Seller
may hold from time to time, not subject to any Lien.

 

SECTION 8.6.        Seller
May Own Certificates or Notes.  The
Seller and any Affiliate thereof may in its individual or any other capacity
become the owner or pledgee of Certificates or Notes with the same rights as it
would have if it were not the Seller or an Affiliate thereof, except as
expressly provided herein or in any Basic Document.  Notes or Certificates so owned by the Seller
or such Affiliate shall have an equal and proportionate benefit under the
provisions of the Basic Documents, without preference, priority, or distinction
as among all of the Notes or Certificates; provided,
however, except in the event that all
outstanding Notes and Certificates are owned by the Seller and/or any
Affiliates thereof, that any Notes or Certificates owned by the Seller or any
Affiliate thereof, during the time such Notes or Certificates are owned by
them, shall be without voting rights for any purpose set forth in the Basic
Documents.  The Seller shall notify the
Owner Trustee, the Indenture Trustee and the Administrator promptly after it or
any of its Affiliates become the owner or pledgee of a Certificate or a Note.

 

ARTICLE IX

 

The Master Servicer

 

SECTION 9.1.        Representations
of Master Servicer.  The Master
Servicer makes the following representations on which the Issuer is deemed to
have relied in acquiring the Owner Trust Estate, on which the Noteholders are deemed
to have relied in the purchasing of Notes and any Additional Principal Amount,
and on which Support Provider shall be deemed to have relied in providing the
Series Support.  The representations
speak as of the execution and delivery of this Agreement, the Closing Date and
as of each Transfer Date and shall survive the sale of the Owner Trust Estate
to the Issuer and the pledge of the Series Trust Estate to the Indenture
Trustee pursuant to the Indenture.

 

(i)            Organization
and Good Standing.  The Master
Servicer has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization, with power, authority and
legal right to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted, and
had at all relevant times, and now has, power, authority and legal right to
enter into and perform its obligations under this Agreement and the other
Related Documents to which it is a party.

 

(ii)           Due
Qualification.  The Master Servicer
is duly qualified to do business as a foreign corporation in good standing and
has obtained all necessary licenses and approvals, in all jurisdictions in
which the ownership or lease of property or the

 

45

 

conduct of its business (including the servicing of the Receivables as
required by this Agreement) requires or shall require such qualification;
except where the failure to qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations as
Master Servicer under this Agreement and the other Related Documents to which
it is a party.

 

(iii)          Power
and Authority.  The Master Servicer
has the power and authority to execute and deliver this Agreement and the
Related Documents to which it is a party and to carry out its terms and their
terms, respectively, and the execution, delivery and performance of this
Agreement and the Related Documents to which the Master Servicer is a party
have been duly authorized by the Master Servicer by all necessary corporate
action.

 

(iv)          Binding
Obligation.  This Agreement and the
Related Documents to which the Master Servicer is a party shall constitute
legal, valid and binding obligations of the Master Servicer enforceable in
accordance with their respective 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.

 

(v)           No
Violation.  The consummation of the
transactions contemplated by this Agreement and the Related Documents to which
the Master Servicer is a party, and the fulfillment of the terms of this
Agreement and the Related Documents to which the Master Servicer is a party,
shall not (A) 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 bylaws of the Master Servicer,
or any indenture, agreement, mortgage, deed of trust or other instrument to
which the Master Servicer is a party or by which it is bound, or (B) result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or (C) violate any law, order, rule or regulation applicable to the
Master Servicer of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Master Servicer or any of its properties, except in the case of (A),
(B) or (C) where any such default, Lien or violation shall not materially and
adversely affect the interest of the Noteholders or the Trust in the Series
Trust Estate or affect the Master Servicer’s ability to perform its obligations
under this Agreement.

 

46

 

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

 

(vii)         Approvals.  All approvals, authorizations, consents,
orders or other actions of any person, corporation or other organization, or of
any court, governmental agency or body or official, required in connection with
the execution and delivery by the Master Servicer of this Agreement and the
consummation of the transactions contemplated hereby have been or will be taken
or obtained on or prior to the Closing Date.

 

(viii)        No
Consents.  The Master Servicer is not
required to obtain the consent of any other party or any consent, license,
approval or authorization, or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement which has
not already been obtained.

 

(ix)           Chief
Executive Office.  The chief
executive office of the Master Servicer is located at 2700 Sanders Road,
Prospect Heights, Illinois  60070.

 

SECTION 9.2.        Liability
of Master Servicer; Indemnities. 
(a)  The Master Servicer (in its
capacity as such) shall be liable hereunder only to the extent of the
obligations in this Agreement specifically undertaken by the Master Servicer
and the representations made by the Master Servicer.

 

(b)           The
Master Servicer shall defend, indemnify and hold harmless the Trust, the
Administrator, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, each
Support Provider and their respective officers, directors, agents and
employees, from and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation arising out of or resulting from the use, ownership or
operation of, or lien on, any Financed Vehicle.

 

47

 

(c)           The
Master Servicer (when the Master Servicer is HSBC Finance Corporation or an
Affiliate of HSBC Finance Corporation) shall indemnify, defend and hold
harmless the Trust, the Administrator, the Indenture Trustee, the Owner
Trustee, the Delaware Trustee, each Support Provider and their respective
officers, directors, agents and employees and from and against any taxes that
may at any time be asserted against any of such parties with respect to the
transactions contemplated in this Agreement, including, without limitation, any
sales, gross receipts, tangible or intangible personal property, privilege or
license taxes (but not including any federal or other income taxes) and costs
and expenses in defending against the same, except to the extent that such costs,
expenses, losses, damages, claims and liabilities arise out of the negligence
or willful misconduct of such parties. 
The Master Servicer hereby agrees to indemnify the Indenture Trustee as
set forth in Section 6.7(b) of the Indenture and the Administrator as set forth
in Section 6.17(b) of the Indenture.

 

(d)           The
Master Servicer (when the Master Servicer is not HSBC Finance Corporation)
shall indemnify, defend and hold harmless the Trust, the Administrator, the
Indenture Trustee, the Owner Trustee, the Delaware Trustee, each Support
Provider and their respective officers, directors, agents and employees from
and against any taxes with respect to the sale of Receivables in connection
with servicing hereunder that may at any time be asserted against any of such
parties with respect to the transactions contemplated in this Agreement,
including, without limitation, any sales, gross receipts, tangible or
intangible personal property, privilege or license taxes (but not including any
federal or other income taxes) and costs and expenses in defending against the
same, except to the extent that such costs, expenses, losses, damages, claims
and liabilities arise out of the negligence or willful misconduct of such
parties.

 

(e)           The
Master Servicer shall indemnify, defend and hold harmless the Trust, the
Administrator, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, each
Support Provider and their respective officers, directors, agents and employees
from and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Trust, the Administrator, the Indenture
Trustee or the Owner Trustee, by reason of the breach of this Agreement by the
Master Servicer, the negligence, misfeasance, or bad faith of the Master
Servicer in the performance of its duties under this Agreement or the Series
Supplement or by reason of reckless disregard of its obligations and duties
under this Agreement or the Series Supplement, except to the extent that such
costs, expenses, losses, damages, claims, and liabilities arise out of the
negligence or willful misconduct of the Person seeking indemnification.

 

(f)            The
Master Servicer (when the Master Servicer is HSBC Finance Corporation or an
Affiliate of HSBC Finance Corporation) shall indemnify, defend and hold
harmless the Trust, the Administrator, the Indenture Trustee, the Owner Trustee,
the Delaware Trustee and their respective officers, directors, agents and
employees from and against any loss, liability or expense incurred by reason of
the violation by Master Servicer of federal or state securities laws in
connection with the registration or the sale of the Securities, except to the
extent that such costs, expenses,

 

48

 

losses, damages, claims, and liabilities arise out of
the negligence or willful misconduct of such parties.

 

(g)           Indemnification
under this Article shall survive the termination of this Agreement and will
survive the early resignation or removal of any of the parties hereto and shall
include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation.  If the Master
Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Master Servicer, without
interest.  Notwithstanding any other
provision of this Agreement, the obligations of the Master Servicer shall not
terminate or be deemed released upon the resignation or termination of HSBC
Finance Corporation as the Master Servicer and shall survive any termination of
this Agreement.

 

SECTION 9.3.        Merger
or Consolidation of, or Assumption of the Obligations of the Master Servicer.  Any Person (i) into which the Master Servicer
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which the Master Servicer shall be a party, (iii) which acquires by conveyance,
transfer, or lease substantially all of the assets of the Master Servicer, or
(iv) succeeding to the business of the Master Servicer, in any of the foregoing
cases shall execute an agreement of assumption to perform every obligation of
the Master Servicer under this Agreement and each Related Document and, whether
or not such assumption agreement is executed, shall be the successor to the
Master Servicer under this Agreement and each Related Document without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement or the Series Supplement, anything in this Agreement
or the Series Supplement to the contrary notwithstanding.  Notwithstanding the foregoing, the Master
Servicer shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Master Servicer’s business, unless
the Master Servicer shall have delivered to the Owner Trustee and the Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption
comply with this Section 9.3 and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with.

 

SECTION 9.4.        Limitation
on Liability of Master Servicer and Others. 
(a)  None of the Master Servicer, the
Administrator, the Indenture Trustee, or any of the directors or officers or
employees or agents of any such Persons shall be under any liability to the
Trust, except as provided in this Agreement and each Related Document, for any
action taken or for refraining from the taking of any action pursuant to this
Agreement or a Related Document; provided, however, that this provision shall not protect
the Master Servicer, the Administrator, the Indenture Trustee or any such
Persons against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence (excluding errors in judgment) in
the performance of duties (including negligence with respect to the Master
Servicer’s indemnification obligations hereunder), by reason of reckless
disregard of obligations and duties under this Agreement and each Related
Document or any violation of law by the Master Servicer, the Administrator, the
Indenture Trustee or such person, as the case may be; provided,

 

49

 

further, that this provision shall not affect any
liability to indemnify the Indenture Trustee, the Administrator, the Delaware Trustee
or the Owner Trustee for costs, taxes, expenses, claims, liabilities, losses or
damages paid by the Indenture Trustee, the Administrator, the Delaware Trustee or
the Owner Trustee, in their individual capacities.  The Master Servicer, the Administrator, the
Indenture Trustee and any director, officer, employee or agent of such Persons
may rely in good faith on the written advice of counsel or on any document of
any kind prima facie properly executed and submitted by any Person pertaining
to any matters arising under this Agreement. 
The Indenture Trustee shall not be required 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 the
repayment of such funds or adequate written indemnity against such risk or
liability is not reasonably assured to it in writing prior to the expenditure
of risk of such funds or incurrence of financial liability.

 

(b)           Unless
serving as Successor Master Servicer pursuant to Sections 10.2 and 10.3 hereof,
and notwithstanding any other provision to the contrary herein, the Indenture
Trustee and the Administrator shall not be liable for any obligation of the
Master Servicer contained in this Agreement or any Related Document, and the
Owner Trustee, , the Delaware Trustee, the Seller and the Noteholders shall
look only to the Master Servicer to perform such obligations.

 

(c)           The
parties expressly acknowledge and consent to the initial Indenture Trustee
acting in the potential dual capacity of Successor Master Servicer and in the
capacity as Indenture Trustee.  Such
Indenture Trustee may, in such dual or other capacity, discharge its separate
functions fully, without hindrance or regard to conflict of interest principles,
duty of loyalty principles or other breach of fiduciary duties to the extent
that any such conflict or breach arises from the performance by such Indenture
Trustee of express duties set forth in this Agreement in any of such
capacities, all of which defenses, claims or assertions are hereby expressly
waived by the other parties hereto and the Noteholders except in the case of
negligence or willful misconduct by such Indenture Trustee.

 

SECTION 9.5.        Delegation
of Duties.  Subject to Section 9.7, in
the ordinary course of business, the Master Servicer and the Subservicer,
provided it is HAFI, at any time may delegate any of their duties hereunder to
any Person, including any of their Affiliates, who agrees to conduct such
duties in accordance with standards employed by the Master Servicer or such
Subservicer in compliance with Section 4.1. 
Such delegation shall not relieve the Master Servicer of its liabilities
and responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 9.6.

 

SECTION 9.6.        Master
Servicer Not to Resign.  Subject to
the provisions of Section 9.3, the Master Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon determination that
the performance of its obligations or duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it or its subsidiaries
or Affiliates, or (ii) upon satisfaction of the following conditions:  (a) the

 

50

 

Master Servicer has proposed a successor servicer to the Indenture
Trustee in writing and such proposed successor servicer is reasonably acceptable
to the Indenture Trustee and the Administrative Agent, where one exists, or
otherwise, the Managing Agents; (b) such proposed successor servicer has agreed
in writing to assume the obligations of Master Servicer hereunder and under
each Basic Document to which it is a party and (c) the Master Servicer has
delivered to the Indenture Trustee an Opinion of Counsel to the effect that all
conditions precedent to the resignation of the Master Servicer and the
appointment of and acceptance by the proposed successor servicer have been
satisfied; provided, however, that, in the case of clause (i) above, no such resignation
by the Master Servicer shall become effective until the Indenture Trustee shall
have assumed the Master Servicer’s responsibilities and obligations hereunder
or the Indenture Trustee shall have designated a successor servicer in
accordance with Section 10.3 which shall have assumed such responsibilities and
obligations.  Any such resignation shall
not relieve the Master Servicer of responsibility for any of its obligations
hereunder arising prior to the effective date of such resignation.  Any such determination permitting the
resignation of the Master Servicer pursuant to clause (i) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee.

 

SECTION 9.7.        Subservicing
Agreements Between Master Servicer and Subservicers. The Master Servicer
initially appoints HAFI to subservice the Receivables.  From time to time after the Closing Date, the
Master Servicer may enter into a subservicing agreement with any Person other
than HAFI which is an Eligible Subservicer and is in compliance with the laws
of each state necessary to enable it to perform the obligations of the Master
Servicer pursuant to this Agreement.  Any
such subservicing agreement shall be consistent with and not violate the
provisions of this Agreement.  The Master
Servicer shall not be relieved of its obligations under this Agreement and each
Basic Document to which it is a party notwithstanding any agreement relating to
subservicing and the Master Servicer shall be obligated to the same extent and
under the same terms and conditions as if it alone were servicing and
administering the Receivables.  For
purposes of this Agreement and each Related Document, the Master Servicer shall
be deemed to have received payments on Receivables when any Subservicer has
received such payments.  The parties
hereto acknowledge that with respect to statements or certificates required to
be delivered by the Master Servicer in accordance with this Agreement and the
Series Supplement, including, but not limited to, Sections 4.9, 4.10 and 4.11
hereof, that a statement or certificate delivered by a subservicer shall be
sufficient to discharge the Master Servicer’s obligation to deliver such
certificate or statement.

 

SECTION 9.8.        Successor
Subservicers.  The Master Servicer
may terminate any Subservicer and either directly service the related
Receivables itself or enter into an agreement with a successor Subservicer that
is an Eligible Subservicer.  None of the
Owner Trustee, the Administrator or the Indenture Trustee shall have a duty or
obligation to monitor or supervise the performance of any Subservicer.

 

51

 

ARTICLE X

 

Default

 

SECTION 10.1.      Master
Servicer Termination Event.  For
purposes of this Agreement, each of the following shall constitute a “Master
Servicer Termination Event”:

 

(a)           Any
failure by the Master Servicer to deliver, or cause to be delivered, to the Administrator
for distribution pursuant to the terms of this Agreement or any Basic Document,
any proceeds or payment required to be so delivered by the Master Servicer
under the terms of this Agreement or any Basic Document (including deposits of
the Repurchase Amount pursuant to Section 4.7) that continues unremedied for a
period of three Business Days after written notice is received by the Master
Servicer from the Administrator or the Indenture Trustee or after discovery of
such failure by a responsible officer of the Master Servicer (but in no event
later than three Business Days after the Master Servicer is required to make
such delivery or deposit);

 

(b)           Failure
on the part of the Master Servicer duly to observe or perform any other
covenants or agreements of the Master Servicer set forth in this Agreement or
the Basic Documents, which failure (i) materially and adversely affects the
rights of Noteholders (determined without regard to the availability of funds
under any Series Support) and (ii) continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by the Administrator
or the Indenture Trustee or after discovery thereof by the Master Servicer;

 

(c)           The
entry of a decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Master Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another present or
future, federal bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Master Servicer or of any substantial part of its
property or ordering the winding up or liquidation of the affairs of the Master
Servicer or the commencement of an involuntary case under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law and such case is not
dismissed within 60 days; or

 

(d)           The
commencement by the Master Servicer of a voluntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future,
federal or state, bankruptcy, insolvency or similar law, or the consent by the
Master Servicer to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Master Servicer or of any substantial part of its property or
the making by the Master Servicer of an assignment for the benefit of creditors
or the failure by the Master Servicer generally to pay its debts as such debts
become due or the taking of corporate action by the Master Servicer in
furtherance of any of the foregoing; or

 

52

 

(e)           Any
representation, warranty or certification of the Master Servicer made in this
Agreement or any Basic Document or any certificate, report or other writing
delivered pursuant hereto or thereto shall prove to be incorrect in any
material respect as of the time when the same shall have been made, and the
incorrectness of such representation, warranty or statement has a material
adverse effect on the interests of the Indenture Trustee in the Series Trust
Estate and, within 60 days after written notice thereof shall have been given
to the Master Servicer by the Indenture Trustee or the Administrator after
discovery thereof by the Master Servicer, the circumstances or condition in
respect of which such representation, warranty or statement was incorrect shall
not have been eliminated or otherwise cured.

 

Notwithstanding the foregoing, a delay in or failure
of performance under Section 10.1(a) for a period of three Business Days or
under Section 10.1(b) for a period of 60 days, shall not constitute a Master
Servicer Termination Event if such delay or failure could not be prevented by
the exercise of reasonable diligence by the Master Servicer and such delay or
failure was caused by an act of God, acts of declared or undeclared war,
terrorism, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes.  The preceding sentence shall not relieve the
Master Servicer from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement, and the Master
Servicer shall provide the Administrator, the Indenture Trustee and the Seller
with an Officers’ Certificate giving prompt notice of such failure or delay by
it, together with a description of its efforts to so perform its obligations.

 

SECTION 10.2.      Consequences
of a Master Servicer Termination Event. 
If a Master Servicer Termination Event shall occur and be continuing,
the Indenture Trustee (to the extent a Trust Officer of the Indenture Trustee
has actual knowledge or has received written notice thereof), by notice given
in writing to the Rating Agencies and the Master Servicer may and shall, at the
written direction of the Controlling Party, terminate all of the rights and
obligations of the Master Servicer, including in its capacity as custodian,
under this Agreement and the other Basic Documents to which it is a party.  On or after the receipt by the Master
Servicer of such written notice, all authority, power, obligations and
responsibilities of the Master Servicer, including in its capacity as
custodian, under this Agreement, whether with respect to the Notes, the
Receivables or the Other Conveyed Property or otherwise, automatically shall
pass to, be vested in, and become obligations and responsibilities, of the
Indenture Trustee (or such other Successor Master Servicer appointed by the
Controlling Party pursuant to Section 10.3); provided,
however, that the Successor Master Servicer
shall have (i) no liability with respect to any obligation which was required
to be performed by the terminated Master Servicer prior to the date that the Successor
Master Servicer becomes the Master Servicer or any claim of a third party based
on any alleged action or inaction of the terminated Master Servicer, (ii) no
obligation to perform any repurchase or advancing obligations, if any, of the
terminated Master Servicer, (iii) no obligation to pay any of the fees and
expenses of any other party involved in this transaction not expressly assumed
by the Master Servicer and (iv) no liability or obligation with respect to any
Master Servicer indemnification obligations of any prior master servicer
including the original master servicer.

 

53

 

Notwithstanding anything contained in this Agreement
to the contrary, the Indenture Trustee as Successor Master Servicer and any other
Successor Master Servicer, are authorized to accept and rely on all of the
accounting, records (including computer records) and work of the prior Master
Servicer relating to the Receivables (collectively, the “Predecessor Servicer
Work Product”) without any audit or other examination thereof, and the
Indenture Trustee or other Successor Master Servicer shall have no duty,
responsibility, obligation or liability for the acts and omissions of the prior
Master Servicer.  If any error,
inaccuracy, omission or incorrect or non-standard practice or procedure
(collectively, “Errors”) exist in any Predecessor Servicer Work Product and
such Errors make it materially more difficult to service or should cause or
materially contribute to the Indenture Trustee or other Successor Master
Servicer making or continuing any Errors (collectively, “Continued Errors”),
the Indenture Trustee or other Successor Master Servicer, as the case may be,
shall have no duty, responsibility, obligation or liability for such Continued
Errors; provided, however, that the
Indenture Trustee or other Successor Master Servicer agrees to use its best
efforts to prevent further Continued Errors. 
In the event that the Indenture Trustee or other Successor Master
Servicer becomes aware of Errors or Continued Errors, such Indenture Trustee or
other Successor Master Servicer shall, with the prior consent of Noteholders
representing 66-2/3% of the outstanding Notes, use its best efforts to
reconstruct and reconcile such data as is commercially reasonable to correct
such Errors and Continued Errors and to prevent future Continued Errors.

 

The Successor Master Servicer is authorized and
empowered by this Agreement to execute and deliver, on behalf of the terminated
Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Owner Trust Estate and related
documents to show the Trust as lienholder or secured party on the related Lien
Certificates, or otherwise.  The
terminated Master Servicer agrees to cooperate with the Successor Master
Servicer in effecting the termination of the responsibilities and rights of the
terminated Master Servicer, including in its capacity as custodian, under this
Agreement, including, without limitation, the transfer to the Successor Master
Servicer for administration by it of all cash amounts that shall at the time be
held by the terminated Master Servicer for deposit, or have been deposited by
the terminated Master Servicer, in a Trust Account and the delivery to the Successor
Master Servicer of all Receivable Files being held by the terminated Master
Servicer in its capacity as custodian, Monthly Records and Collection Records
and a computer tape in readable form as of the most recent Business Day
containing all information necessary to enable the Successor Master Servicer to
service the Owner Trust Estate.  If
requested by the Controlling Party, the Successor Master Servicer shall direct
the Obligors to make all payments under the Receivables directly to the Successor
Master Servicer (in which event the Successor Master Servicer shall process
such payments in accordance with Section 4.2(d) or 4.2(e), as applicable).  The terminated Master Servicer shall grant
the Indenture Trustee and the Successor Master Servicer reasonable access to
the terminated Master Servicer’s premises at the terminated Master Servicer’s
expense.

 

54

 

SECTION 10.3.      Appointment
of Successor.  (a)  On and after the time the Master Servicer
receives a notice of termination pursuant to Section 10.2 or upon the
resignation of the Master Servicer pursuant to Section 9.6, the Master Servicer
shall continue to perform all servicing functions under this Agreement until the
date specified in such termination notice or until such resignation becomes
effective or until a date mutually agreed upon by the Master Servicer and the
Indenture Trustee.  The Indenture Trustee
shall as promptly as possible after such termination or resignation appoint an
Eligible Servicer as a successor servicer (the “Successor Master Servicer”),
and such Successor Master Servicer shall accept its appointment by a written
assumption in a form reasonably acceptable to the Indenture Trustee.  In the event that a Successor Master Servicer
has not been appointed or has not accepted its appointment at the time when the
Master Servicer ceases to act as Master Servicer, the Indenture Trustee without
further action shall automatically be appointed the Successor Master Servicer.  The Indenture Trustee may delegate any of its
servicing obligations to an Affiliate or agent in accordance with Section
9.5.  Notwithstanding the foregoing, the
Indenture Trustee shall, if it is legally unable so to act, petition a court of
competent jurisdiction to appoint any established institution qualifying as an
Eligible Servicer as the Successor Master Servicer hereunder.  The Indenture Trustee or the Successor Master
Servicer, as the case may be, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement, and shall be subject
to all the rights, responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Master Servicer by the
terms and provisions of this Agreement, except as otherwise stated herein.  The Indenture Trustee or
the Successor Master Servicer, as the case may be, shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.  The Successor Master
Servicer shall be subject to termination under Section 10.2 upon the occurrence
of any Master Servicer Termination Event applicable to it as Master Servicer.

 

(b)           Subject
to Section 9.6, no provision of this Agreement shall be construed as relieving
the Indenture Trustee of its
obligation to succeed as Successor Master Servicer upon the termination of the
Master Servicer pursuant to Section 10.2 or the resignation of the Master
Servicer pursuant to Section 9.6.

 

(c)           Any
Successor Master Servicer shall be entitled to such compensation (whether
payable out of the Collection Account or otherwise) equal to the compensation
the Master Servicer would have been entitled to under this Agreement if the
Master Servicer had not resigned or been terminated hereunder or such other
amount as may be agreed to by the Successor Master Servicer and the Indenture
Trustee and consented to by the Holders of a majority of the Outstanding Amount
of Notes.  In addition, any Successor
Master Servicer shall be entitled to reasonable transition expenses incurred in
acting as Successor Master Servicer payable by the outgoing Master Servicer,
and to the extent such transition expenses have not been paid by the outgoing
Master Servicer, such Successor Master Servicer shall be entitled to
reimbursement for such reasonable expenses pursuant to the Series Supplement.

 

55

 

SECTION 10.4.      Notification
to Noteholders.  Upon any termination
of, or appointment of a successor to, the Master Servicer the Indenture Trustee
shall give prompt written notice thereof to each Noteholder.

 

SECTION 10.5.      Waiver
of Past Defaults.  The Controlling
Party or, with the consent of the Controlling Party, a majority of the
Noteholders may, on behalf of all Securityholders, waive any default by the
Seller or the Master Servicer in the performance of their obligations hereunder
and its consequences, except the failure to make any distributions required to
be made to Noteholders or to make any required deposits of any amounts to be so
distributed.  Upon any such waiver of a
past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement.  No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.

 

SECTION 10.6.      Successor
to Master Servicer.  (a)  The Indenture Trustee, in its capacity as
successor to the Master Servicer, shall perform such duties and only such
duties as are specifically set forth in this Agreement and each Related
Document with respect to the assumption of any servicing duties and no implied
covenants or obligations shall be read into this Agreement against the
Indenture Trustee.

 

(b)           In
the absence of bad faith or negligence on its part, each of the Indenture
Trustee and the Administrator may conclusively
rely as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to them and
conforming to the requirements of this Agreement and the Series Supplement; but
in the case of any such certificates or opinions, which by any provision hereof
are specifically required to be furnished to the Indenture Trustee and/or the
Administrator, the Indenture Trustee and/or the
Administrator, as the case may be, shall be under a duty to examine the same
and to determine whether or not they conform to the requirements of this
Agreement and the Series Supplement.

 

(c)           The
Indenture Trustee shall have no liability for any
actions taken or omitted by the terminated Master Servicer.

 

ARTICLE XI

 

Termination

 

SECTION 11.1.      Optional
Purchase of All Receivables. 
(a)  To the extent and under the
circumstances provided in the Series Supplement, the Master Servicer and HAFI
each shall have the option to effect a “clean-up” redemption or purchase of the
Series Trust Estate.

 

(b)           Upon
any sale of the assets included in the Series Trust Estate permitted by the
Series Supplement, the Master Servicer shall instruct the Indenture Trustee (or
the Administrator on behalf of the Indenture Trustee) to deposit the

 

56

 

proceeds from such sale, after all payments and reserves therefrom
(including the expenses of such sale) have been made, in the Collection
Account.

 

(c)           Notice
of any termination of the Trust shall be given by the Master Servicer to the Owner
Trustee, the Indenture Trustee and the Administrator as soon as practicable
after the Master Servicer has received notice thereof.

 

(d)           Following
the satisfaction and discharge of the Indenture, the payment in full of the
principal of and interest on the Notes, the satisfaction of all payment
obligations under the Basic Documents and termination of any Series Support (as
provided therein), the Certificateholders will succeed to the rights of the
Noteholders hereunder and the Owner Trustee will succeed to the rights of, and
assume the obligations of, the Indenture Trustee and the Administrator pursuant
to this Agreement.

 

ARTICLE XII

 

Administrative Duties of
the Master Servicer

 

SECTION 12.1.      Administrative
Duties.

 

(a)           Duties
with Respect to the Indenture.  The
Master Servicer shall perform all its duties and the duties of the Issuer under
the Indenture.  In addition, the Master
Servicer shall consult with the Owner Trustee as the Master Servicer deems
appropriate regarding the duties of the Issuer under the Indenture.  The Master Servicer shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer’s duties under the Indenture.  The Master Servicer shall prepare for
execution by the Issuer or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Issuer to prepare, file or deliver
pursuant to the Indenture.  In
furtherance of the foregoing, the Master Servicer shall take all necessary
action that is the duty of the Issuer to take pursuant to the Indenture,
including, without limitation, pursuant to Sections 2.7, 3.3, 3.4, 3.5, 3.6,
3.7, 3.9, 3.10, 3.17, 7.3, 8.3, 9.2, 9.3, 11.1 and 11.15 of the Indenture.

 

(b)           Duties
with Respect to the Issuer.

 

(i)            In
addition to the duties of the Master Servicer set forth in this Agreement or
any of the Related Documents, the Master Servicer shall perform such
calculations and shall prepare for execution by the Issuer or the Owner
Trustee, or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner Trustee, to prepare, file or
deliver pursuant to this Agreement or any of the Related Documents or under
state and federal tax and securities laws, and at the request of the Owner
Trustee shall take all appropriate action that it is the duty of the Issuer to
take pursuant to this Agreement

 

57

 

or any of the Basic Documents, including, without limitation, pursuant
to Sections 2.6 and 2.11 of the Trust Agreement.  In accordance with the directions of the
Issuer or the Owner Trustee, the Master Servicer shall administer, perform or
supervise the performance of such other activities in connection with the Owner
Trust Estate (including the Related Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuer or the Owner
Trustee and are reasonably within the capability of the Master Servicer.

 

(ii)           Notwithstanding
anything in this Agreement or any of the Basic Documents to the contrary, the
Master Servicer shall be responsible for promptly notifying the Owner Trustee,
the Indenture Trustee and the Administrator in the event that any withholding
tax is imposed on the Issuer’s payments (or allocations of income) to a
Certificateholder as contemplated by this Agreement.  Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee, the Indenture Trustee or the Administrator pursuant to such provision.

 

(iii)          Notwithstanding
anything in this Agreement or the Basic Documents to the contrary, the Master
Servicer shall be responsible for performance of the duties of the Issuer and
the Seller set forth in Section 5.1(a), (b), (c) and (d) of the Trust Agreement
with respect to, among other things, accounting and reports to Owners (as
defined in the Trust Agreement); provided, however, that once prepared by the Master
Servicer, the Depositor shall retain responsibility for the distribution of such
information as may be required under the Code and applicable Treasury
Regulations (including Schedule K-1, if applicable) under Section 5.1(b) of the
Trust Agreement to enable each Certificateholder to prepare its federal and
state income tax returns.

 

(iv)          The Master
Servicer shall perform the duties of the Depositor specified in Section 10.2 of
the Trust Agreement required to be performed in connection with the resignation
or removal of the Owner Trustee, and any other duties expressly required to be
performed by the Master Servicer under this Agreement or any of the Related
Documents.

 

(v)           The Master
Servicer, on behalf of the Seller, shall direct the Issuer to request the
tender of all or a portion of the Notes in accordance with the Indenture or the
Series Supplement.

 

(vi)          In carrying
out the foregoing duties or any of its other obligations under this Agreement,
the Master Servicer may

 

58

 

enter into transactions with or otherwise deal with any of its
Affiliates; provided, however, that the terms of any such transactions or dealings shall
be in accordance with any directions received from the Issuer and shall be, in
the Master Servicer’s opinion, no less favorable to the Issuer in any material
respect.

 

(c)           Tax
Matters. The Master Servicer shall prepare and file, or cause to be
prepared and filed, on behalf of the Seller, all tax returns, tax elections,
financial statements and such annual or other reports of the Issuer as are
necessary for preparation of tax reports as provided in Article V of the Trust
Agreement, including Form 1099.  All tax
returns of the Issuer shall will be signed in accordance with Article V of the
Trust Agreement.

 

(d)           Non-Ministerial
Matters.  With respect to matters
that in the reasonable judgment of the Master Servicer are non-ministerial, the
Master Servicer shall not take any action pursuant to this Article XII unless
within a reasonable time before the taking of such action, the Master Servicer
shall have notified the Owner Trustee, the Indenture Trustee and the
Administrator of the proposed action and the Owner Trustee, the Indenture
Trustee or the Administrator shall not have withheld consent or provided an
alternative direction.  For the purpose
of the preceding sentence, “non-ministerial matters” shall include:

 

(A)                              the
initiation of any claim or lawsuit by the Issuer and the compromise of any
action, claim or lawsuit brought by or against the Issuer (other than in
connection with the collection of the Receivables);

 

(B)                                the
appointment of successor Note Registrars, successor Note Paying Agents,
successor Indenture Trustees or successor Administrators pursuant to the
Indenture or the consent to the assignment by the Note Registrar, Note Paying
Agent, the Administrator or Indenture Trustee of its obligations under the
Indenture; and

 

(C)                                the
removal of the Indenture Trustee or the Administrator.

 

(e)           Exceptions.  Notwithstanding anything to the contrary in
this Agreement, except as expressly provided herein or in the other Basic
Documents, the Master Servicer, in its capacity hereunder, shall not be
obligated to, and shall not, (1) make any payments to the Noteholders or
Certificateholders under the Basic Documents, (2) sell any portion of the
Series Trust Estate pursuant to the Basic Documents, (3) take any other action
that the Issuer directs the Master Servicer not to take on its behalf or (4) in
connection with its duties hereunder assume any indemnification obligation of
any other Person.

 

(f)            Neither
the Indenture Trustee nor any Successor Master Servicer shall be responsible
for any obligations or duties of a predecessor Master Servicer under Section
12.1.

 

59

 

SECTION 12.2.      Records.  The Master Servicer shall maintain
appropriate books of account and records relating to services performed under
this Agreement, which books of account and records shall be accessible for
inspection by the Issuer and the Indenture Trustee at any time during normal
business hours.

 

SECTION 12.3.      Additional
Information to be Furnished to the Issuer. 
The Master Servicer shall furnish to the Issuer and the Indenture
Trustee, from time to time such additional information regarding the Owner
Trust Estate as the Issuer and the Indenture Trustee shall reasonably request.

 

ARTICLE XIII

 

Miscellaneous Provisions

 

SECTION 13.1.      Amendments.  (a) 
This Agreement may be amended by the parties hereto at any time when no
Securities are outstanding without the requirement of any consents or the
satisfaction of any conditions set forth below.

 

(b)           Except
as otherwise provided in the Series Supplement, this Agreement may be amended
from time to time by the parties hereto, by a written instrument signed by each
of the parties hereto without the consent of any of the Securityholders,
provided that (i) an Opinion of Counsel for the Seller (which Opinion of
Counsel may, as to factual matters, rely upon Officers’ Certificates of the
Seller or the Master Servicer) is addressed and delivered to the Indenture
Trustee and the Administrator, dated the date of any such amendment, to the
effect that the conditions precedent to any such amendment, including those of
Section 13.2(h) hereof, have been satisfied and (ii) the Seller shall have
delivered to the Indenture Trustee and the Administrator, an Officer’s
Certificate dated the date of any such amendment, stating that the Seller
reasonably believes that such amendment will not have a material adverse effect
on the rights of the Noteholders.

 

(c)           Except
as otherwise provided in the Series Supplement, subject to Section 13.2(h)
hereof, this Agreement may also be amended from time to time by the Master
Servicer, the Seller, the Indenture Trustee and the Administrator, with the
prior written consent of the Administrative Agent, where one exists, or
otherwise the Managing Agents, 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 any distributions to be made to
Securityholders or deposits of amounts to be so distributed or the amount
available under any Series Support without the consent of each affected
Securityholder, (ii) change the definition of or the manner of calculating the
interest of any Securityholder without the consent of each affected
Securityholder, or (iii) reduce the aforesaid percentage of Noteholders
required to consent to any such amendment.

 

60

 

Promptly after the execution of any such amendment or
supplement, the Indenture Trustee shall furnish
written notification of the substance of such amendment or supplement to each
Securityholder.

 

It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any amendment, but it shall be sufficient if such consent
shall approve the substance thereof.  The
manner of obtaining such consents (and any other consents of Noteholders or Certificateholders
provided for in this Agreement) and of evidencing the authorization of any
action by Noteholders or Certificateholders shall be subject to such reasonable
requirements as the Indenture Trustee or the Owner Trustee, as the case may be,
may prescribe, including the establishment of record dates.

 

The Owner Trustee, the Indenture Trustee and the
Administrator may, but shall not be obligated to, enter into any amendment
which affects the Issuer’s, the Owner Trustee’s, the Indenture Trustee’s or the
Administrator’s, as the case may be, own rights, duties or immunities under
this Agreement or otherwise.

 

Prior to the execution of any amendment to this
Agreement, the Indenture Trustee and the Administrator shall be entitled to
receive and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized and permitted by this Agreement and that all conditions
precedent to the execution and delivery of such amendment have been satisfied.

 

SECTION 13.2.      Protection
of Title to Series Trust Estate. 
(a)  The Seller shall execute and
file such financing statements and cause to be executed and filed such
continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer in the Owner Trust Estate and the Indenture Trustee in the Series Trust
Estate.

 

(b)           Neither
the Seller nor the Master Servicer shall change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Sections 9-503(a), 9-506 and 9-507
of the UCC, unless it shall have given the Owner Trustee and the Indenture
Trustee at least thirty days’ prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.

 

(c)           Each
of the Seller and the Master Servicer shall have an obligation to give the
Owner Trustee and the Indenture Trustee prompt notice of any change in its
state of incorporation if, as a result of such change, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file any such amendment.  The Master Servicer shall at all times
maintain each office from which it shall service Receivables within the United
States of America.

 

61

 

(d)           The
Master Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.

 

(e)           The
Master Servicer shall maintain or cause to be maintained, a computer system so
that, from and after the time of sale under this Agreement and each Transfer
Agreement of the Receivables to the Issuer, such master computer records
(including any backup archives) that refer to a Receivable shall indicate
clearly the interest of the Trust in such Receivable and that such Receivable
is owned by the Trust and such Receivable has been pledged pursuant to the
Indenture.  Indication of the Trust’s and
the Indenture Trustee’s interest in a Receivable shall be deleted from or
modified on such computer systems when, and only when, the related Receivable
shall have been paid in full, repurchased by HAFI, any Affiliate of HAFI that
is the seller under a Master Receivables Purchase Agreement, HSBC Finance
Corporation or the Seller or otherwise disposed of by the Issuer in accordance
with the terms of this Agreement.

 

(f)            If
at any time the Seller, HAFI or any Affiliate of HAFI that is the seller under
a Master Receivables Purchase Agreement shall propose to sell, grant a security
interest in or otherwise transfer any interest in motor vehicle receivables to
any prospective purchaser, lender or other transferee, the Master Servicer
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or printouts (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by the Trust unless
such Receivable has been paid in full, been repurchased by HAFI, any Affiliate
of HAFI that is the seller under a Master Receivables Purchase Agreement, HSBC
Finance Corporation or the Seller or has otherwise been disposed of by the
Issuer in accordance with the terms of this Agreement.

 

(g)           Upon
request, the Master Servicer shall furnish or cause to be furnished to the
Owner Trustee or the Indenture Trustee, within five Business Days, a list of
all Receivables (by contract number) then held as part of the Series Trust Estate,
together with a reconciliation of such list to the related Schedule of
Receivables and to any Master Servicer’s Certificates furnished before such
request indicating removal of Receivables from the Series Trust Estate.  The Indenture Trustee shall hold any such
list and Schedule of Receivables for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination.

 

(h)           The
Master Servicer shall deliver to the Owner Trustee, the Indenture Trustee and
the Administrator:

 

(1)           simultaneously
with the execution and delivery of the Agreement and, if required pursuant to
Section 13.1, of each amendment, an Opinion of

 

62

 

Counsel stating that, in the opinion of such Counsel,
in form and substance reasonably satisfactory to the addressees of such
Opinion, either (A) all financing statements and continuation statements have
been executed and filed that are necessary fully to preserve and protect the
interest of the Trust and the Indenture Trustee in the Receivables then held as
part of the Series Trust Estate, or (B) no such action shall be necessary to
preserve and protect such interest or (C) any action which is necessary to
preserve and protect such interest during the following 12-month period; and

 

(2)           on or
before March 31 of each year beginning with March 31, 2006, dated as of a date
during such period, stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Trust and the Indenture Trustee in the Series Trust Estate or (B) no such
action shall be necessary to preserve and protect such interest.

 

Each Opinion of Counsel referred to in clause (1) or
(2) above shall specify any action necessary (as of the date of such opinion)
to be taken in the following year to preserve and protect such interest.

 

SECTION 13.3.      Notices.  All demands, notices and communications upon
or to the Seller, the Master Servicer, the Owner Trustee, the Administrator, the
Indenture Trustee or any other Person entitled to receive a notice, shall be in
writing, personally delivered, or mailed by certified mail, sent by confirmed
telecopier transmission, or at the consent of the receiving party by electronic
mail, and shall be deemed to have been duly given upon receipt at the address
specified in the Series Supplement.  Any
notice required or permitted to be mailed to a Noteholder or Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register or Note Register, as
applicable.  Any notice so mailed within
the time prescribed in the Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder or Noteholder shall
receive such notice.

 

SECTION 13.4.      Assignment.  This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.  Notwithstanding
anything to the contrary contained herein, except as provided in Sections 8.4
and 9.3 and as provided in the provisions of this Agreement concerning the
resignation of the Master Servicer, this Agreement may not be assigned by the
Seller or the Master Servicer, the Owner Trustee, the Administrator, the
Indenture Trustee and the Administrative Agent, where one exists, or otherwise,
the Managing Agents.  In the event that a
successor Issuer is formed as permitted by the Series Supplement, such Issuer
shall succeed to all of the rights and obligations of the predecessor Issuer
hereunder; and all references to the Issuer hereunder shall thereafter be
deemed to be references to such successor Issuer.

 

SECTION 13.5.      Limitations
on Rights of Others.  The provisions
of this Agreement are solely for the benefit of the parties hereto and for the
benefit of the

 

63

 

Certificateholders (including the Seller), the Indenture Trustee, the
Administrator, the Owner Trustee, the Delaware Trustee, any Support Provider
and the Secured Parties, as third-party beneficiaries.  Each Support Provider shall be entitled to
rely upon and directly enforce such provisions of this Agreement, the Series
Supplement and the Indenture so long as no default with respect to such Support
Provider shall have occurred and be continuing; provided that nothing herein
shall affect or limit the Support Provider’s rights as subrogee to the
Noteholders.  Nothing in this Agreement
or in the Series Supplement, 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 13.6.      Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

SECTION 13.7.      Separate
Counterparts.  This Agreement and
each Transfer 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 13.8.      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 13.9.      Governing
Law.  THIS AGREEMENT AND EACH
TRANSFER AGREEMENT 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 13.10.    Assignment
to Indenture Trustee.  The Seller
hereby acknowledges and consents to any mortgage, pledge, assignment and grant
of a security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture, as supplemented by the Series Supplement for the benefit of the
Secured Parties of all right, title and interest of the Issuer in, to and under
the Series Trust Estate.

 

SECTION 13.11.    Nonpetition
Covenants.  (a)  Notwithstanding any prior termination of this
Agreement or the Series Supplement, none of the Master Servicer, the Seller,
the Administrative Agent, any Managing Agent or any Secured Party shall, prior
to the date which is one year and one day after the termination of this
Agreement and the payment in full of all obligations of the Issuer under the
Basic Documents, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or

 

64

 

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

 

(b)           Notwithstanding
any prior termination of this Agreement or the Series Supplement, none of the
Master Servicer, any Managing Agent, the Administrative Agent or any Secured
Party shall, prior to the date that is one year and one day after the
termination of this Agreement, acquiesce to, petition or otherwise invoke or
cause the Seller to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Seller under any
federal or state bankruptcy, insolvency or similar law, appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator, or other similar
official of the Seller or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Seller.

 

SECTION 13.12.    Limitation
of Liability of the Owner Trustee, the Administrator and the Indenture Trustee.  (a) 
Notwithstanding anything contained herein to the contrary, this
Agreement and the Series Supplement have been countersigned by the Owner
Trustee not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer and in no event shall the Owner Trustee in its individual
capacity or, except as expressly provided in the Trust Agreement, as Owner
Trustee have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.  For all purposes of this Agreement and the
Series Supplement, in the performance of its duties or obligations hereunder or
in the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.

 

(b)           Notwithstanding
anything contained herein to the contrary, this Agreement has been executed and
delivered by the Persons acting as the Indenture Trustee and the Administrator not
in their individual capacity but solely as Indenture Trustee or Administrator,
as applicable, and in no event shall such Persons have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.

 

SECTION 13.13.    Limitation
of Liability of Issuer.  The Issuer
shall have no liability to the Master Servicer except for payment of the
Servicing Fee and reimbursement of repossession and liquidation expenses.  The Issuer shall have no obligation to
indemnify the Master Servicer for costs or expenses, except with respect to the
preceding sentence.

 

SECTION 13.14.    Independence
of the Master Servicer.  For all
purposes of this Agreement, the Master Servicer shall be an independent
contractor and shall not be subject to the supervision of the Issuer, the
Indenture Trustee, the Administrator or the

 

65

 

Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. 
Unless expressly authorized by this Agreement or the Series Supplement,
the Master Servicer shall have no authority to act for or represent the Issuer
or the Owner Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Owner Trustee.

 

SECTION 13.15.    No
Joint Venture.  Nothing contained in
this Agreement or the Series Supplement (i) shall constitute the Master
Servicer and either of the Issuer or the Owner Trustee as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity, (ii) shall be construed to impose any liability as such
on any of them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.

 

66

 

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

 

	
   

  	
  HSBC AUTOMOTIVE TRUST 2005-3

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. Bank Trust National Association,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee on behalf of the Trust

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC AUTO RECEIVABLES CORPORATION,

  
	
   

  	
   as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Steven H. Smith

  
	
   

  	
   

  	
  Name: Steven H. Smith

  
	
   

  	
   

  	
  Title: Vice President and Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC FINANCE CORPORATION,

  
	
   

  	
   as Master Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ William H. Kesler

  
	
   

  	
   

  	
  Name: William H. Kesler

  
	
   

  	
   

  	
  Title: Vice President and Assistant Treasurer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, N.A., not in its

  individual capacity but solely as Indenture

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Keith R. Richardson

  
	
   

  	
   

  	
  Name: Keith R. Richardson

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
   as Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Susie Moy

  
	
   

  	
   

  	
  Name: Susie Moy

  
	
   

  	
   

  	
  Title: Vice President

  
				

 

 

EXHIBIT A

 

FORM OF TRANSFER AGREEMENT

 

TRANSFER No.                           of
Receivables dated as of                           pursuant
to the Master Sale and Servicing Agreement dated as of November 3, 2005 (the “Sale
and Servicing Agreement”), among HSBC AUTOMOTIVE TRUST 2005-3, a Delaware
statutory trust (the “Issuer” or the “Trust”), HSBC AUTO RECEIVABLES
CORPORATION, a Nevada corporation (the “Seller”), HSBC FINANCE CORPORATION, a
Delaware corporation (the “Master Servicer”), JPMORGAN CHASE BANK, N.A., a national
banking association, in its capacity as Indenture Trustee (the “Indenture
Trustee”) and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking
association, in its capacity as Administrator (the “Administrator”).

 

W I T N E S S E T H:

 

WHEREAS pursuant to the Sale and Servicing Agreement,
the Seller wishes to convey the Receivable to the Issuer; and

 

WHEREAS, the Issuer is willing to accept such
conveyance subject to the terms and conditions hereof.

 

NOW, THEREFORE, the Issuer, the Seller, the Master
Servicer, the Indenture Trustee and the Administrator hereby agree as follows:

 

1.             Defined
Terms.  Capitalized terms used herein
shall have the meanings ascribed to them in the Sale and Servicing Agreement
unless otherwise defined herein.

 

“Cut-off Date” shall mean, with respect to the
Receivables conveyed hereby, the close of business on                    ,
20    .

 

“Transfer Date” shall mean, with respect to the
Receivables conveyed hereby,                     ,
      .

 

2.             List
of Receivables.  Annexed hereto is
Schedule A listing the Receivables that constitute the Receivables to be
conveyed pursuant to the Sale and Servicing Agreement and this Agreement on the
Transfer Date.

 

3.             Conveyance
of Receivables.  The Seller does
hereby sell, transfer, assign, set over and otherwise convey to the Issuer,
without recourse (except as expressly provided
in the Sale and Servicing Agreement), all right, title and interest of the
Seller in and to:

 

(a)           each
and every Receivable listed on Schedule A and all monies paid or payable
thereon or in respect thereof after the related Cut-off Date (including amounts
due on or before the related Cut-off Date but received by

 

 

HAFI (or any
predecessor or Affiliate of HAFI, as applicable) or Seller on or after such
date);

 

(b)           the
security interests in the related Financed Vehicles granted by Obligors
pursuant to such Receivables and any other interest of the Seller in such
Financed Vehicles;

 

(c)           all
rights of the Seller against Dealers pursuant to Dealer Agreements or Dealer
Assignments related to such Receivables;

 

(d)           any
proceeds and the right to receive proceeds with respect to such Receivables
repurchased by a Dealer pursuant to a Dealer Agreement;

 

(e)           all
rights of the Seller under any Service Contracts on the related Financed
Vehicles;

 

(f)            any
proceeds and the right to receive proceeds with respect to such Receivables
from claims on any Insurance Policy covering the related Financed Vehicles or
Obligors;

 

(g)           all
items contained in the Receivables Files with respect to such Receivables and
any and all other documents that HAFI, any Affiliate of HAFI that is the seller
under a Master Receivables Purchase Agreement, the Seller or the Master
Servicer, as applicable, keeps on file in accordance with its customary
procedures relating to the related Receivables, the related Financed Vehicles
or Obligors;

 

(h)           all
funds on deposit from time to time in the Trust Accounts (including all
investments and proceeds thereof);

 

(i)            all
property (including the right to receive future Net Liquidation Proceeds) that
secures each related Receivable and that has been acquired by or on behalf of
the Seller or the Trust pursuant to liquidation of such Receivable;

 

(j)            all
of Seller’s right, title and interest in its rights and benefits, but none of
its obligations or burdens, under each of the Master Receivables Purchase
Agreements and the Receivables Purchase Agreement Supplements, including the
delivery requirements, representations and warranties and the cure and
repurchase obligations of HAFI, any Affiliate of HAFI that is the seller under
a Master Receivables Purchase Agreement or HSBC Finance Corporation, as
applicable, under each of the Master Receivables Purchase Agreements and
related Receivables Purchase Agreement Supplements, on or after the related Cut-off
Date;

 

(k)           on
the initial Transfer Date only, one share of Class SV Preferred Stock of the
Seller together with the exclusive right to vote such share; and

 

A-2

 

(l)            all
present and future claims, demands, causes and chooses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing.

 

4.             Representations
and Warranties of the Seller.  The
Seller hereby represents and warrants to the Issuer as of the Transfer Date
that:

 

(a)           Each
of its representations set forth in Sections 3.1 and 8.1 of the Sale and
Servicing Agreement are true and correct as if made on the Transfer Date,
except if specified to be true as of an earlier date, in which case, such
representations and warranties are true as of such earlier date.

 

(b)           The
aggregate of the Principal Balances of the Receivables listed on Schedule A
annexed hereto and conveyed to the Issuer pursuant to this Agreement as of the Cut-off
Date is $1,371,620,501.25.

 

5.             Conditions
Precedent.  The obligation of the
Issuer to acquire the Receivables hereunder is subject to the satisfaction, on
or prior to the Transfer Date, of the following conditions precedent:

 

Representations and
Warranties.  Each of
the representations and warranties made by the Seller in Section 4 of this
Agreement shall be true and correct as of the Transfer Date.

 

Sale and Servicing
Agreement Conditions. 
Each of the conditions set forth in Section 2.1(b) to the Sale and
Servicing Agreement shall have been satisfied.

 

Additional Information.  The Seller shall have delivered to the Issuer
such information as was reasonably requested by the Issuer to satisfy itself as
to the accuracy of the representations and warranties set forth in Section 4 of
this Agreement.

 

6.             Ratification
of Agreement.  As supplemented by
this Agreement, the Sale and Servicing Agreement is in all respects ratified
and confirmed and the Sale and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.

 

7.             Counterparts.  This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the
same instrument.

 

A-3

 

8.             GOVERNING
LAW.  THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, 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-4

 

IN WITNESS WHEREOF, the Issuer, the Seller and the
Master Servicer have caused this Agreement to be duly executed and delivered by
their respective duly authorized officers as of day and the year first above
written.

 

	
   

  	
  HSBC AUTOMOTIVE TRUST 2005-3

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. Bank Trust National Association,

  not in its individual capacity but solely as

  Owner Trustee on behalf of the Trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC AUTO RECEIVABLES CORPORATION,

  
	
   

  	
   as Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC FINANCE CORPORATION,

  
	
   

  	
   as Master Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

A-5

 

	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.,

  	
   

  
	
   

  	
  not in its individual capacity but solely as

  	
   

  
	
   

  	
  Indenture Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrator

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							

 

A-6

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