Document:

Exhibit
4.4

 

EXECUTION
COPY

 

 

HSBC FINANCE
CORPORATION,

as
Master Servicer,

 

HSBC AUTOMOTIVE
TRUST 2005-2,

as
Issuer,

 

HSBC AUTO
RECEIVABLES CORPORATION,

as
Seller,

 

U.S. BANK NATIONAL
ASSOCIATION,

as
Indenture Trustee,

 

THE BANK OF NEW
YORK,

as
Owner Trustee,

 

THE BANK OF NEW
YORK (DELAWARE),

as
Delaware Trustee,

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as
Administrator

 

 

SERIES SUPPLEMENT

 

Dated as of July 27,
2005

to
the

 

INDENTURE

 

Dated as of July 27,
2005

 

MASTER SALE AND
SERVICING AGREEMENT

 

Dated as of July 27,
2005

 

and
to the

 

AMENDED AND
RESTATED TRUST AGREEMENT

 

Dated as of July 27,
2005

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  I CREATION OF THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DESIGNATION.

  	
   

  
	
  SECTION 1.02.

  	
  PLEDGE OF SERIES TRUST ESTATE.

  	
   

  
	
  SECTION 1.03.

  	
  PAYMENTS AND COMPUTATIONS.

  	
   

  
	
  SECTION 1.04.

  	
  DENOMINATIONS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  DEFINITIONS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III DISTRIBUTIONS AND STATEMENTS TO NOTEHOLDERS; SERIES SPECIFIC COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  TRUST ACCOUNTS.

  	
   

  
	
  SECTION 3.02.

  	
  RESERVE ACCOUNT.

  	
   

  
	
  SECTION 3.03.

  	
  DISTRIBUTIONS.

  	
   

  
	
  SECTION 3.04.

  	
  STATEMENTS TO NOTEHOLDERS.

  	
   

  
	
  SECTION 3.05.

  	
  REPORTING REQUIREMENTS.

  	
   

  
	
  SECTION 3.06.

  	
  COMPLIANCE WITH WITHHOLDING REQUIREMENTS.

  	
   

  
	
  SECTION 3.07.

  	
  SPECIAL COVENANTS AND ACKNOWLEDGEMENTS.

  	
   

  
	
  SECTION 3.08.

  	
  INCOME TAX CHARACTERIZATION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV EVENTS OF DEFAULT; REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  EVENTS OF DEFAULT.

  	
   

  
	
  SECTION 4.02.

  	
  RIGHTS UPON EVENT OF DEFAULT.

  	
   

  
	
  SECTION 4.03.

  	
  REMEDIES.

  	
   

  
	
  SECTION 4.04.

  	
  PRIORITIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V PREPAYMENT, REDEMPTION AND SUBSTITUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  OPTIONAL “CLEAN-UP” REDEMPTION.

  	
   

  
	
  SECTION 5.02.

  	
  OPTIONAL SUBSTITUTION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  RATIFICATION OF BASIC DOCUMENTS.

  	
   

  
	
  SECTION 6.02.

  	
  COUNTERPARTS.

  	
   

  
	
  SECTION 6.03.

  	
  GOVERNING LAW.

  	
   

  
	
  SECTION 6.04.

  	
  AMENDMENTS WITHOUT CONSENT OF NOTEHOLDERS.

  	
   

  
	
  SECTION 6.05.

  	
  AMENDMENTS WITH CONSENT OF THE NOTEHOLDERS.

  	
   

  
	
  SECTION 6.06.

  	
  AUTHORITY TO REGISTER NOTES AND FILE REPORTS.

  	
   

  
	
  SECTION 6.07.

  	
  AUTHORITY TO PERFORM DUTIES OF THE ISSUER.

  	
   

  
	
  SECTION 6.08.

  	
  NOTICES.

  	
   

  

 

	
  Schedule I

  	
  Eligibility Criteria

  	
   

  
	
  Schedule II

  	
  Schedule of Receivables

  	
   

  
	
  Exhibit A

  	
  Form of Master Servicer’s
  Certificate

  	
   

  
	
  Exhibit B

  	
  Forms of Notes

  	
   

  

 

 

This Series Supplement, dated as of July 27, 2005, is
by and among HSBC Finance Corporation, a Delaware corporation, as Master
Servicer (the “Master Servicer”), HSBC Automotive Trust 2005-2, a
Delaware statutory trust, as Issuer (the “Issuer” or the “Trust”),
HSBC Auto Receivables Corporation, a Nevada corporation, as Seller (the “Seller”),
U.S. Bank National Association, a national banking association, as trustee for
the Noteholders (the “Indenture Trustee”), The Bank of New York, a New
York banking corporation, as owner trustee for the Certificateholders (the “Owner
Trustee”), The Bank of New York (Delaware), a Delaware banking corporation,
as Delaware trustee (the “Delaware Trustee”), and HSBC Bank USA,
National Association, a national banking association, as administrator (the “Administrator”).

 

RECITALS

 

This Series Supplement is executed and delivered by
the parties hereto pursuant to Section 9.3 of the Indenture (the “Indenture”)
dated as of July 27, 2005 among the Issuer, the Indenture Trustee and the
Administrator and pursuant to Section 3.2 of the Amended and Restated Trust
Agreement (the “Trust Agreement”) dated
as of July 27, 2005 between the Seller, the Delaware Trustee and the Owner
Trustee.  In the event that any term or
provision contained herein shall conflict with or be inconsistent with any term
or provision contained in the Indenture or the Trust Agreement, the terms and
provisions of this Series Supplement shall govern.

 

ARTICLE I

CREATION OF THE
NOTES

 

SECTION 1.01.      Designation.

 

(a)           There
is hereby created a series of Notes, substantially in the form of Exhibit B
hereto, to be issued pursuant to the Indenture and this Series Supplement to be
known as “HSBC Automotive Trust 2005-2, Series 2005-2 Notes” (as used herein,
the “Notes”).  The Notes shall be
issued in four classes (each, a “Class”):  Class A-1 Notes in an aggregate initial
principal amount of $283,300,000 (the “Class A-1 Notes”), Class A-2
Notes in an aggregate initial principal amount of $241,500,000 (the “Class
A-2 Notes”), Class A-3 Notes in an aggregate initial principal amount of $291,200,000
(the “Class A-3 Notes”), and Class A-4 Notes in an aggregate initial
principal amount of $128,640,000 (the “Class A-4 Notes” and, together
with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the “Class
A Notes”).

 

(b)           There
is hereby created a series of Certificates to be issued pursuant to the Trust
Agreement and this Series Supplement to be known as the “HSBC Automotive Trust 2005-2,
Series 2005-2 Certificates” (as used herein, the “Certificates”).

 

SECTION 1.02.      Pledge of Series Trust Estate.

 

The Issuer hereby Grants to the Indenture Trustee, for
the benefit of the Secured Parties, all of the Issuer’s right, title and
interest (but none of its obligations) in and to all personal property, whether
now owned or hereafter acquired and whether general intangibles, accounts,
chattel paper, claims and causes of action, deposit accounts, documents, goods,
instruments, investment property, letter-of-credit rights, letters of credit,
money, minerals before extraction or constituting other personal property of
any nature whatsoever, including, without limitation:  (a) each and every Receivable listed as a
Receivable on the Schedule of Receivables

 

 

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

 

The foregoing Grant is made in trust to the Indenture
Trustee for the benefit of the Secured Parties. 
The Indenture Trustee hereby acknowledges such Grant, accepts the trust
under the Indenture and this Series Supplement in accordance with the
provisions of the Indenture and this Series Supplement and agrees to perform
its duties required in the Indenture and in this Series Supplement in
accordance with the provisions hereof and of the Indenture to the best of its

 

2

 

ability
to the end that the interests of such parties, recognizing the priorities of
their respective interests, may be adequately and effectively protected.

 

SECTION 1.03.      Payments and Computations.

 

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

 

SECTION 1.04.      Denominations.

 

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

 

ARTICLE II

DEFINITIONS

 

SECTION 2.01.      Definitions.

 

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

 

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

 

“Aggregate Optimal Note Principal Balance” means, with
respect to any Distribution Date, the product of (x) 55% and (y) the
Pool Balance as of the close of business on the last day of the prior
Collection Period.

 

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

 

3

 

“Basic Documents” means this Series Supplement, the
Master Sale and Servicing Agreement, the Certificate of Trust, the Trust
Agreement, the Indenture, the Control Agreement, the Master Receivables
Purchase Agreements, each Transfer Agreement related to the Owner Trust Estate
and all other documents and certificates delivered therewith or pursuant
thereto in connection with the Notes or the Certificates.

 

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

 

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

 

“Certificateholders” means the
holders of the Certificates.

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

“Class A-1 Scheduled Maturity Date” means August 17,
2006.

 

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

 

“Class A-2 Scheduled Maturity Date” means September
17, 2008.

 

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

 

“Class A-3 Scheduled Maturity Date” means May 17, 2010.

 

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

 

“Class A-4 Scheduled Maturity Date” means July 17,
2012.

 

“Closing Date” means July 27, 2005.

 

“Collection Account” means the Eligible Account
created pursuant to Section 3.01, which shall be account no. 10-879156 reference
HSBC Auto 2005-2 Collection Account at the Administrator, ABA No. 021001088.

 

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

 

“Control Agreement” means the deposit account control
agreement dated as of July 27, 2005 among the Issuer, the Indenture Trustee,
HSBC Bank USA, National Association and the Administrator.

 

“Controlling Party” means the Indenture Trustee for
the benefit of and acting solely at the direction of the Holders of a majority
of the Outstanding Amount of the Notes.

 

“Corporate Trust Office” means, (i) with respect to
the Owner Trustee, the office of the Owner Trustee, which at the time of
execution of this Series Supplement is 101 Barclay Street, 8 West ABS, New
York, New York 10286, Attention: Asset Backed Securities, (ii) with respect to
the Delaware Trustee, the office of the Delaware Trustee, which at the time of
execution of this Series Supplement is 502 White Clay Center, Route 273, P.O.
Box 6973, Newark, Delaware 19711, Attention: Corporate Trust Administration,
(iii) with respect to the Indenture Trustee, the corporate trust office of the
Indenture Trustee, which at the time of execution of this Series Supplement is 209
South LaSalle Street, Suite 300, Chicago, Illinois 60604 and (iv) with respect
to the Administrator, the corporate trust office of the Administrator, which at
the time of execution of this Series Supplement is 452 Fifth Avenue, New York,
New York 10018.

 

“Cut-off Date” means, with respect to the Receivables
transferred and assigned to the Issuer on the Closing Date, the close of
business on July 13, 2005.

 

5

 

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

 

“Delaware Trustee” means The Bank of New York
(Delaware) with its principal place of business in Delaware, not in its
individual capacity but solely as trustee under the Trust Agreement, its
successors-in-interest or any successor Delaware Trustee under the Trust
Agreement.

 

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

 

“Distribution Date” means, with respect to each
Collection Period, the seventeenth day of the calendar month next commencing
after the last day of such Collection Period, or if such day is not a Business
Day, the immediately following Business Day, commencing in August 2005.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

“Final Scheduled Distribution Date” means July 17,
2012.

 

“HACI” means HSBC Auto Credit Inc. (f/k/a Household
Automotive Credit Corporation), a Delaware corporation.  For the avoidance of doubt, HACI is an
Affiliate of HAFI.

 

“HAFI” means HSBC Auto Finance Inc. (f/k/a Household
Automotive Finance Corporation), a Delaware corporation.

 

“HSBC Finance” means HSBC Finance Corporation (f/k/a
Household Finance Corporation).

 

“Indenture” means the indenture dated as of July 27,
2005 among the Issuer, the Indenture Trustee and the Administrator, as
supplemented by this Series Supplement.

 

“Initial Reserve Account Deposit” means 1% of the Pool
Balance as of the Cut-off Date.

 

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

 

“Master Receivables Purchase Agreements” means,
collectively, (i) the Master Receivables Purchase Agreement dated as of
November 18, 2002, between HAFI and the Seller, as such agreement may be
amended or supplemented from time to time, and (ii) the Master Receivables
Purchase Agreement dated as of August 8, 2002, between HACI and the Seller, as
such agreement may be amended or supplemented from time to time.

 

“Master Sale and Servicing Agreement” means the Master
Sale and Servicing Agreement dated as of July 27, 2005, among the Issuer, the
Seller, the Master Servicer, the Indenture Trustee and the Administrator, as
such agreement may be amended or supplemented from time to time.

 

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

 

7

 

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

 

Class A-1 Notes:  3.70313%

Class A-2 Notes:  4.16%

Class A-3 Notes:  4.37%

Class A-4 Notes:  4.55%

 

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

 

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

 

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

 

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

 

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

 

“Owner Trustee” means The Bank of New York, not in its
individual capacity but solely as trustee under the Trust Agreement, its
successors-in-interest or any successor Owner Trustee under the Trust
Agreement.

 

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

 

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

 

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

 

“Rating Agencies” means Standard & Poor’s, Moody’s
Investors Service and Fitch, Inc.  If any
such organization or a successor does not maintain a rating on the Notes,

 

8

 

“Rating Agency” shall be
a nationally recognized statistical rating organization or other comparable
Person designated by the Seller, notice of which designation shall be given to the
Administrator, the Indenture Trustee, the Owner Trustee and the Master
Servicer.

 

“Rating Agency Condition” means, with respect to any
action, written confirmation from each Rating Agency rating the Notes that such
action will not result in a reduction or withdrawal of its then current rating
of the Notes.

 

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

 

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

 

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

 

“Reserve Account” means the Reserve Account, which
shall be an Eligible Account created pursuant to Section 3.01 and which shall
be account no. 10-879157, reference HSBC Auto 2005-2 Reserve Account at the Administrator,
ABA No. 021001088.

 

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

 

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

 

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

 

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

 

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

 

“Secured Parties” means, collectively, the Holders
from time to time of the Notes.

 

“Securities” means the Notes and the Certificates.

 

9

 

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

 

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

 

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

 

“Servicing Fee” means, (i) with respect to the initial
Collection Period, the fee payable to the Master Servicer for servicing rendered during such Collection
Period, which shall be equal to $1,634,955.26, and (ii) with respect to
any other Collection Period, the fee payable to the Master Servicer for
services rendered during such Collection Period, which shall be equal to
one-twelfth of the Servicing Fee Rate multiplied by the Aggregate Principal
Balances of the Receivables determined as of the first day of such Collection
Period.  For the avoidance of doubt, the
Servicing Fee does not include any administrative fees, expenses or charges
paid by or on behalf of Obligors during any Collection Period.

 

“Servicing Fee Rate” means 2.25% per annum.

 

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

 

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

 

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

 

“Targeted Reserve Account Balance” means, with respect
to any Distribution Date, the lesser of: (i) the greater
of (a) 3% of the outstanding Pool Balance as of the end of the related
Collection Period, and (b) $29,065,871.24 (2% of the Pool Balance as of the Cut-off
Date) and (ii) the Aggregate Note Principal Balance.

 

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

 

“Trust Agreement” means the Trust Agreement, dated as
of July 20, 2005, between the Seller, the Delaware Trustee and the Owner
Trustee, as amended and restated as of July 27, 2005 and as supplemented by
this Series Supplement.

 

10

 

“Underwriter” means HSBC Securities (USA) Inc., as
representative of the underwriters named in the Underwriting Agreement.

 

ARTICLE III

DISTRIBUTIONS AND
STATEMENTS TO

NOTEHOLDERS;
SERIES SPECIFIC COVENANTS

 

SECTION 3.01.      Trust
Accounts.

 

(a)           The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Collection Account”) as a segregated trust
account in the Administrator’s corporate trust department, identified as the “Collection
Account for HSBC Automotive Trust 2005-2, in trust for the Secured Parties.”  The Administrator shall make or permit
withdrawals from the Collection Account only as provided in this Series
Supplement.

 

(b)           The
Administrator, for the benefit of the Secured Parties, shall establish and
maintain an account (the “Reserve Account”) as a segregated trust
account in the Administrator’s corporate trust department, identified as the “Reserve
Account for HSBC Automotive Trust 2005-2, in trust for the Secured Parties.”  The Administrator shall make or permit
withdrawals from the Reserve Account only as provided in this Series
Supplement.  On the Closing Date, the
Reserve Account will be funded with the Initial Reserve Account Deposit.

 

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

 

SECTION 3.02.      Reserve
Account.

 

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

 

SECTION 3.03.      Distributions.

 

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

 

11

 

with
respect to the Collection Period immediately preceding such Distribution Date,
in the following order of priority:

 

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

 

(ii)           to the
Administrator, the Indenture Trustee, the Owner Trustee and the Delaware
Trustee, any accrued and unpaid fees and any unreimbursed costs and expenses
(including to any successor Master Servicer, reasonable transition expenses in
an amount not to exceed $100,000 per servicing transfer) (in each case, to the
extent such fees have not been previously paid by the Master Servicer);

 

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

 

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

 

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

 

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

 

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

 

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

 

Amounts to be distributed in reduction of the
outstanding principal balance of the Class A Notes pursuant to Section 3.03(a)(iv)
or (vi) or Section 3.03(b) shall be distributed in reduction of the outstanding
principal balance of the Class A-1 Notes until the principal balance of
the Class A-1 Notes is reduced to zero; thereafter such amount shall be
distributed in reduction of the outstanding principal balance of the
Class A-2 Notes until the principal balance of the Class A-2 Notes is
reduced to zero; thereafter such amount shall be distributed in reduction of
the outstanding principal balance of the Class A-3 Notes until the
principal balance of the Class A-3 Notes is reduced to zero; and thereafter
such amount shall be distributed in reduction of the outstanding principal
balance of the Class A-4 Notes until the principal balance of the
Class A-4 Notes is reduced to zero.

 

(b)           If
on a Determination Date, the Master Servicer’s Certificate delivered with
respect to the related Distribution Date indicates that (i) the amount of
Available Funds with respect to such Distribution Date is not sufficient, when
distributed in accordance with Section 3.03(a), to cause the amounts specified
in Section 3.03(a)(i), (ii) and (iii) with respect to
such

 

12

 

Distribution Date to be paid in full; or (ii) if after
giving effect to the distribution of Available Funds pursuant to Section
3.03(a)(iv) on a Distribution Date there exists a Principal Balance Shortfall,
the Administrator shall withdraw from the Reserve Account and distribute as
follows an amount up to the amount which when distributed, first in
accordance with Section 3.03(a)(i), (ii) and (iii); and second,
in reduction of the outstanding principal balance of the Class A Notes, but only
to the extent necessary to eliminate the Principal Balance Shortfall, shall
cause the amounts specified in Section 3.03(a)(i), (ii) and (iii) to be paid in
full and such Principal Balance Shortfall to be eliminated.

 

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

 

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

 

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

 

(f)            Unless
Definitive Notes are issued pursuant to Section 2.12 of the Indenture, with
respect to Notes registered on the related Record Date in the name of a nominee
of the Clearing Agency, payment will be made by wire transfer to an account
designated by such nominee, without presentation or surrender of the Notes or
the making of any notation thereon.

 

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

 

13

 

SECTION 3.04.      Statements to Noteholders.

 

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

 

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

 

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

 

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

 

(iv)          the Class A Interest Carryover Shortfall, if any, and the
change in such amount from the preceding statement;

 

(v)           the
positive excess, if any, of the Aggregate Note Principal Balance over the Pool
Balance after giving effect to payments allocated to principal reported under
(i) above and the change in such amount from the preceding statement;

 

(vi)          the amount
of the Servicing Fee paid to the Master Servicer with respect to such
Collection Period; and

 

(vii)         the Targeted Reserve Account Balance and the amount on
deposit in the Reserve Account at the end of such Distribution Date.

 

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

 

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

 

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

 

14

 

SECTION 3.05.      Reporting Requirements.

 

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

 

(b)           By
January 31 of each calendar year, commencing January 31, 2006, the Master
Servicer on behalf of the Issuer shall prepare and distribute to the
Administrator and the Indenture Trustee a statement containing such information
as is required to be provided by an issuer of indebtedness under the Code and
such other customary information as is necessary to enable the Noteholders to
prepare their tax returns.

 

(c)           If
an Event of Default occurs and is continuing and if it is either known by, or
written notice of the existence thereof has been delivered to, a Responsible
Officer of the Administrator or the Indenture Trustee, the Administrator or the
Indenture Trustee, as the case may be, shall mail to each Noteholder notice of
the Default within 30 days after such knowledge or notice occurs.

 

SECTION 3.06.      Compliance
With Withholding Requirements.

 

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

 

SECTION 3.07.      Special Covenants and Acknowledgements.

 

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

 

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

 

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

 

SECTION 3.08.      Income Tax Characterization.

 

For purposes of federal
income, state and local income and franchise and any other income taxes, the
parties to this Series Supplement, and each owner of a beneficial interest

 

15

 

in
the Notes by acceptance of such interest, agree to treat the Notes as
indebtedness and hereby instruct the Indenture Trustee to treat the Notes as
indebtedness for federal and state tax reporting purposes.

 

ARTICLE IV

EVENTS OF DEFAULT;
REMEDIES

 

SECTION 4.01.      Events of Default.

 

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

 

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

 

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

 

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

 

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

 

(v)           the filing
of a decree or order for relief by a court having jurisdiction in the premises
in respect of the Issuer or any substantial part of the Series Trust Estate in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or

 

16

 

appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Series Trust Estate, or ordering the winding-up or liquidation of the
Issuer’s affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or

 

(vi)          the
commencement by the Issuer of a voluntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Series Trust Estate, or the making by the Issuer of any general assignment
for the benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of action by the Issuer in
furtherance of any of the foregoing.

 

SECTION 4.02.      Rights
Upon Event of Default.

 

(a)           If
an Event of Default shall have occurred and be continuing, the Indenture
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing at least 66-2/3% of the Outstanding Amount of the Notes
shall, declare by written notice to the Issuer that the Notes have become due
and payable, whereupon they shall become, immediately due and payable at 100%
of the outstanding principal balance of the Notes and accrued interest thereon
(together with interest accrued at the relevant Note Rate on such overdue
interest).

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

SECTION 4.03.      Remedies.

 

If an Event of Default shall have occurred and be
continuing, the Indenture Trustee, subject to Section 11.17 of the Indenture,
may exercise any of the remedies specified in Article V of the Indenture and,
in addition, may do one or more of the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

(z)            if the
provisions of neither subparagraph (x) nor subparagraph (y) are satisfied, if
the Indenture Trustee obtains the consent of the Holders of 100% of the
Outstanding Amount of the Notes.

 

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

 

18

 

SECTION 4.04.      Priorities.

 

(a)           On
and after the maturity date of the Notes (by acceleration or otherwise),
including, without limitation, on and after the Final Scheduled Distribution
Date, all Available Funds, all amounts on deposit in the Reserve Account
withdrawn in accordance with Section 3.02 and any proceeds of the liquidation
of all or any portion of the Series Trust Estate pursuant to Section 4.03(iv) (which
proceeds the Indenture Trustee shall remit to the Administrator), shall be
applied by the Administrator on the date of distribution in the following order
of priority:

 

FIRST:                amounts
due and owing and required to be distributed to the Master Servicer, if HSBC
Finance is no longer acting as Master Servicer, the Administrator, the Owner Trustee,
the Delaware Trustee and the Indenture Trustee, respectively, pursuant to
priorities (i) and (ii) of Section 3.03(a) and not previously distributed, in
the order of such priorities and without preference or priority of any kind
within such priorities;

 

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

 

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

 

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

 

FIFTH:               to
the Certificateholders, any remaining Available Funds.

 

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

 

ARTICLE V

PREPAYMENT,
REDEMPTION AND SUBSTITUTION

 

SECTION 5.01.      Optional “Clean-Up” Redemption.

 

On any Distribution Date occurring on or after the
date upon which the Pool Balance shall have been reduced to an amount which is
less than or equal to 10% of the Original Pool Balance, the Master Servicer and
HAFI shall each have the option to purchase the outstanding Receivables at a
price equal to the aggregate Repurchase Amount for such Receivables; provided,
however, such aggregate Repurchase Amount shall not be less than the
then Aggregate Note Principal Balance, plus all accrued and unpaid interest
thereon and all fees and other amounts owing to the Administrator, the
Indenture Trustee, the Owner Trustee and the

 

19

 

Master Servicer
(if other than HSBC Finance) under the Related Documents.  The Master Servicer or HAFI shall give the
Master Servicer (if other than HSBC Finance), the Administrator, the Indenture
Trustee and the Owner Trustee at least 10 days irrevocable prior written notice
of the date on which the Master Servicer or HAFI, as applicable, intends to
exercise such option to purchase.  Not
later than 12:00 P.M., New York City time, on the day prior to such Distribution
Date, the Master Servicer or HAFI, as applicable, shall deposit such amount in
the Collection Account in immediately available funds for distribution pursuant
to Section 3.03.  Such purchase option is
subject to payment in full of the aggregate Repurchase Amount described herein.

 

SECTION 5.02.      Optional Substitution.

 

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

 

(b)           For
any Collection Period during which the Master Servicer or HAFI substitutes one
or more Eligible Substitute Receivables, the Master Servicer shall determine
the Substitution Adjustment Amount.  The
Master Servicer or HAFI, as applicable, shall deposit the Substitution
Adjustment Amount in the Collection Account no later than the Business Day
immediately preceding the Distribution Date in the month following the end of
the Collection Period in which such substitution occurs.  The Master Servicer shall amend the Schedule
of Receivables to reflect the removal of any Receivable for which the Master
Servicer or HAFI has made a substitution election pursuant to Section 5.02(a)
from the terms of this Agreement and the substitution of the Eligible
Substitute Receivable or Receivables. 
Upon such substitution, the Eligible Substitute Receivable or
Receivables shall be subject to the terms of this Agreement in all respects,
and the Seller shall be deemed to have represented that each such Eligible
Substitute Receivable or Receivables, as of the date of substitution, satisfies
the Eligibility Criteria, to the extent such criteria do not pertain
exclusively to the Receivables transferred on the Closing Date.  The Indenture Trustee shall, upon receipt by
the Indenture Trustee of an officer’s certificate from an officer of the Master
Servicer certifying that the conditions in this Section 5.02(b) have been
satisfied, take any action requested by the Master Servicer or HAFI, as the
case may be, to effect the reconveyance of such Receivable for which the Master
Servicer or HAFI, as the case may be, has made a substitution election so
removed from the Series Trust Estate to the Master Servicer or HAFI, as the
case may be.  The procedures applied by
the Master Servicer or HAFI in selecting each Eligible Substitute Receivable
shall not be adverse to the interests of the Noteholders and shall be
comparable to the selection procedures applicable to the Receivables originally
conveyed hereunder.

 

(c)           In
the case of a substitution pursuant to this Section, upon receipt by the
Indenture Trustee of (i) a Master Servicer’s Certificate to the effect that the
Substitution Adjustment Amount, if any, has been so deposited in the Collection
Account and (ii) an Officer’s Certificate reciting the transfer and assignment
of the Eligible Substitute Receivable(s) to the

 

20

 

Indenture Trustee, the Indenture Trustee shall execute
and deliver such instrument of transfer or assignment presented to it by the
Master Servicer, in each case without recourse, as shall be necessary to vest
in the Master Servicer or HAFI, as applicable, legal and beneficial ownership
of such Receivable for which the Master Servicer has made a substitution
election (including any property acquired in respect thereof or proceeds of any
insurance policy with respect thereto).

 

ARTICLE VI

MISCELLANEOUS

 

SECTION 6.01.      Ratification of Basic Documents.

 

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

 

SECTION 6.02.      Counterparts.

 

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

 

SECTION 6.03.      GOVERNING LAW.

 

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

 

SECTION 6.04.      Amendments
Without Consent of Noteholders.

 

(a)           Without
the consent of the Noteholders and with prior written notice to the Rating
Agencies, as evidenced in writing to the Administrator, the Indenture Trustee
and the Issuer, when authorized by an Issuer Order, at any time and from time
to time, the parties hereto may enter into one or more amendments hereto, in
form satisfactory to the Administrator, the Indenture Trustee, the Delaware
Trustee and the Owner Trustee, for any of the following purposes:

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.05.      Amendments
With Consent of the Noteholders.

 

Except as otherwise provided herein, the Issuer, the
Indenture Trustee and the Administrator, when authorized by an Issuer Order
provided by the Master Servicer, also may, with prior written notice to the
Rating Agencies and with the consent of the Holders of not less

 

22

 

than a majority of the
Outstanding Amount of each Class of affected Notes, by Act of such Holders
delivered to the Issuer, the Indenture Trustee and the Administrator, enter
into an amendment hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Series
Supplement or of modifying in any manner the rights of the Noteholders under
the Indenture or under this Series Supplement; provided, however,
that no such amendment shall, without the consent of the Holder of each
Outstanding Note affected thereby:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(viii)        permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any part of the Series
Trust Estate or,

 

23

 

except as otherwise permitted or contemplated herein or the Related
Documents, terminate the lien of the Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security provided by
the lien of the Indenture.

 

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

 

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

 

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

 

By its acceptance of its interest in the Notes, each
owner of a beneficial interest in a Note shall be deemed to have agreed that
prior to the date which is one year and one day after the termination of the
Indenture, such Person shall not acquiesce, petition or otherwise invoke or
cause the Issuer or the Seller to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case against the Seller
or Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of or for the Issuer or the Seller or any substantial
part of its property or ordering the winding-up or liquidation of the affairs
of the Issuer or the Seller.

 

SECTION 6.06.      Authority to Register Notes and File Reports.

 

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

 

SECTION 6.07.      Authority to Perform Duties of the Issuer.

 

(a)           The
Issuer hereby designates the Master Servicer its agent and attorney-in-fact to
execute or otherwise authenticate any financing statement, continuation
statement or other instrument or record required by the Indenture Trustee
pursuant to Section 3.5 of the Indenture;

 

24

 

provided that such designation shall
not be deemed to create a duty in the Indenture Trustee to monitor the
compliance of the Master Servicer with respect to its duties under
Section 3.5 of the Indenture or the adequacy of any financing statement,
continuation statement or other instrument or record prepared by the Master
Servicer.

 

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

 

SECTION 6.08.      Notices.

 

All demands, notices and communications upon or to the
Seller, the Master Servicer, the Owner Trustee, the Delaware Trustee, the
Indenture Trustee or the Administrator shall be in writing, personally
delivered, or mailed by certified mail, or sent by confirmed telecopier
transmission and shall be deemed to have been duly given upon receipt (a) in
the case of the Seller, to HSBC Auto Receivables Corporation, 1111 Town Center
Drive, Las Vegas, Nevada 89144, with a copy to HSBC Finance Corporation, 2700
Sanders Road, Prospect Heights, Illinois, 60070, Attention:  Treasurer, Telecopier # (847) 205-7538, (b)
in the case of the Master Servicer, if HSBC Finance Corporation is the Master
Servicer, to HSBC Finance Corporation, 2700 Sanders Road, Prospect Heights,
Illinois 60070,  Attention: Treasurer,
Telecopier # (847) 205-7538, (c) in the case of the Issuer, at the Corporate
Trust Office of the Owner Trustee, Telecopier # (212) 815-2493, (d) in the case
of the Owner Trustee, at its Corporate Trust Office, Telecopier # (212)
815-2493, (e) in the case of the Delaware Trustee, at its Corporate Trust
Office, Telecopier # (302) 283-8079, (f) in the case of the Indenture Trustee,
at the Corporate Trust Office of the Indenture Trustee, Attention: Corporate
Trust Office, Telecopier # (312) 325-8905 and (g) in the case of the
Administrator, at the Corporate Trust Office of the Administrator, Attention: Corporate
Trust/ABS Group, Telecopier # (212) 525-1300. 
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.

 

25

 

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

 

	
   

  	
  HSBC
  FINANCE CORPORATION,

  
	
   

  	
   as Master Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  William H. Kesler

  	
   

  
	
   

  	
   

  	
  Name:  William H. Kesler

  
	
   

  	
   

  	
  Title:    Vice President and Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC
  AUTOMOTIVE TRUST 2005-2,

  
	
   

  	
   as Issuer

  
	
   

  	
   by The Bank of New York, not in its

  
	
   

  	
   individual capacity but solely as Owner
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Michael Palladino

  	
   

  
	
   

  	
   

  	
  Name:
  Michael Palladino

  
	
   

  	
   

  	
  Title:
  Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC
  AUTO RECEIVABLES CORPORATION,

  
	
   

  	
   as Seller

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Steven H. Smith

  	
   

  
	
   

  	
   

  	
  Name:  Steven H. Smith

  
	
   

  	
   

  	
  Title:    Vice President and Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  BANK NATIONAL ASSOCIATION,

  
	
   

  	
   as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/
  Patricia M. Child

  	
   

  
	
   

  	
   

  	
  Name:
  Patricia M. Child

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  THE
  BANK OF NEW YORK,

  
	
   

  	
   as Owner Trustee

  
	
   

  	
   by The Bank of New York, not in its

  
	
   

  	
   individual capacity but solely as Owner
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Palladino

  	
   

  
	
   

  	
   

  	
  Name:
  Michael Palladino

  
	
   

  	
   

  	
  Title:
  Assistant Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK (DELAWARE),

  
	
   

  	
   as Delaware Trustee

  
	
   

  	
   by The Bank of New York (Delaware), not in
  its

  
	
   

  	
   individual capacity but solely as Delaware
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Patrick Burns

  	
   

  
	
   

  	
   

  	
  Name:
  Patrick Burns

  
	
   

  	
   

  	
  Title:
  SVP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
   as Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Susie Moy

  	
   

  
	
   

  	
   

  	
  Name:
  Susie Moy

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Signature Page
for Series Supplement]

 

 

Schedule
I

 

Eligibility
Criteria

 

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

 

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

 

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

 

(c)           with
respect to which all requirements of applicable federal, state and local laws,
and regulations thereunder (including, without limitation, usury laws, the federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board’s Regulations “B” and “Z”, the Servicemembers Civil Relief Act,
as amended, and state adaptations of the National Consumer Act and of the
Uniform Consumer Credit Code and other consumer credit laws and equal credit
opportunity and disclosure laws) in respect of all of the Receivables, each and
every sale of Financed Vehicles and the sale of any physical damage, loss,
credit life and credit accident and health insurance and any extended service
contracts, have been complied with in all material respects, and each
Receivable and the sale of the Financed Vehicle evidenced by each Receivable
and the sale of any physical damage, loss, credit life and credit accident and
health

 

I-1

 

insurance and any
extended service contracts complied at the time it was originated or made and
now complies in all material respects with all applicable legal requirements;

 

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

 

(e)           which
represents the genuine, legal, valid and binding payment obligation of the
Obligor thereon, enforceable by the holder thereof in accordance with its
terms, except (A) as enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors’ rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law and (B) as such Receivable may be modified by
the application of the Servicemembers Civil Relief Act, as amended; and all
parties thereto had full legal capacity to execute and deliver such Receivable
and all other documents related thereto and to grant the security interest
purported to be granted thereby;

 

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

 

(g)           which, as
of the Cut-off Date, (i) had an original term of not more than 72 months, (ii) has
a remaining term of not more than 72 months, (iii) had a remaining Amount
Financed of at least $3,000 and not more than $40,000, (iv) had an Annual
Percentage Rate of at least 6.50% and not more than 25.95%, (v) was not more
than 30 days contractually delinquent, (vi) no funds have been advanced by the
Issuer, the Master Servicer, HAFI, any predecessor or Affiliate of HAFI, any
Dealer, or anyone acting on behalf of any of them in order to cause such
Receivable to qualify under subclause (iv) of this clause (g) and
(vii) had no provision thereof waived, altered or modified in any respect since
its origination;

 

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

 

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

 

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

 

I-2

 

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

 

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

 

(m)          with
respect to which there exists a Receivable File and such Receivable File
contains, without limitation, (a) a fully executed original of the Contract,
(b) a certificate of insurance, application form for insurance signed by the
Obligor, or a signed representation letter from the relevant Obligor named
pursuant to which the Obligor has agreed to obtain physical damage insurance
for the related Financed Vehicle, (c) the original Lien Certificate or
application therefor, or a physical or electronic copy thereof, showing HAFI
(or any predecessor or Affiliate of HAFI, as applicable) as first lienholder
and (d) an original credit application, or a physical or electronic copy
thereof, signed by the Obligor; and (x) each of the documents relating thereto
which is required to be signed by the Obligor has been signed by the Obligor in
the appropriate spaces and (y) all blanks on any form relating thereto to
be completed have been properly filled in and each form has otherwise been
correctly prepared; and, notwithstanding the above, with respect to which, a
copy of the complete Receivable File for such Receivable, which fulfills the
documentation requirements of HAFI (or any predecessor or Affiliate of HAFI, as
applicable) as in effect at the time of purchase is in the possession of the
Master Servicer or Subservicer;

 

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

 

(o)           which was
not originated in, and is not subject to the laws of, any jurisdiction the laws
of which would make unlawful, void or voidable the sale, transfer and assignment
of such Receivable and with respect to which there is no agreement with any
account debtor that prohibits, restricts or conditions the assignment of any
portion of such Receivable;

 

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

 

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

 

(r)            which is
secured by an enforceable and perfected first priority security interest in the
Financed Vehicle in favor of HAFI (or any predecessor or Affiliate of HAFI, as

 

I-3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(y)           as to
which there has been no default, breach, violation or event permitting acceleration
under the terms of such Receivable (other than payment delinquencies permitted
by clause (g)(iv) above) and no condition exists or event has occurred and is
continuing that with notice, the lapse of time or both would constitute a
default, breach, violation or event permitting acceleration under the terms of
such Receivable, and there has been no waiver of any of the foregoing, and with
respect to which the related Financed Vehicle had not been repossessed;

 

(z)            at the
time of the origination of which, the related Financed Vehicle was covered by a
comprehensive and collision insurance policy (i) in an amount at least
equal to the lesser of (a) its maximum insurable value and (b) the
principal amount due from the Obligor thereunder, (ii) naming HAFI (or any
predecessor or Affiliate of HAFI, as applicable) and its successors and assigns
as loss payee and (iii) insuring against loss and damage due to fire,
theft, transportation, collision and other risks generally covered by
comprehensive and collision coverage and with respect to which the Obligor is
required to maintain physical loss and damage

 

I-4

 

insurance, naming HAFI
(or any predecessor or Affiliate of HAFI, as applicable) and its successors and
assigns as additional insured parties, and such Receivable permits the holder
thereof to obtain physical loss and damage insurance at the expense of the
Obligor if the Obligor fails to do so;

 

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

 

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

 

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

 

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

 

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

 

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

 

I-5

 

Schedule II

 

Schedule of Receivables
on File in Electronic Form

at Dewey Ballantine LLP

 

II-1

 

Exhibit A

 

Form of Master Servicer’s
Certificate

HSBC Automotive Trust 2005-2

Class A-1 3.70313% Notes

Class A-2 4.16% Notes

Class A-3 4.37% Notes

Class A-4 4.55% Notes

 

Master Servicer’s Certificate

(Delivered pursuant to Section 4.9 of

the Master Sale and Servicing Agreement)

 

Collection
Period Beginning

Collection
Period Ending

Previous
Distribution Date

Distribution
Date

Days
in Interest Period

Days
in Collection Period

Months
Since Closing

 

I.  COLLECTION PERIOD
POOL BALANCE CALCULATION:

 

Beginning
of Collection Period Pool Balance

Principal
Receivables Added

Monthly
Principal Amounts:

  Principal Payments Received for the Collection
Period

  Liquidated Receivables for the Collection
Period

  Principal Amount of Repurchased Receivables
for the Collection Period

End
of Collection Period Pool Balance

End
of Collection Period Pool Factor

 

II.  COLLECTION PERIOD
NOTEHOLDER CALCULATIONS:

 

(a) Class A-1

A.   Information regarding distributions

   1.  
Total distribution per $1,000

   2.  
Principal distribution per $1,000

   3.  
Interest distribution per $1,000

B.  Calculation of Class A-1 interest due

   1.  
Class A-1 related Note Rate

   2.  
Class A-1 note balance - beginning of period

   3.  
Accrual convention

   4.  
Days in Interest Period

   5.  
Class A-1 interest due - current period

   6.  
Class A Interest Carryover Shortfall with respect to Class A-1

   7.  
Class A-1 interest paid

   8.  
Class A-1 unpaid interest with respect to the Distribution Date

 

C.  Calculation of Class A-1 principal balance

   1. 
Class A-1 note balance - beginning of period

   2. 
Class A-1 minimum principal distributable amount - due

   3. 
Class A-1 additional principal distributable amount - due

   4. 
Class A-1 minimum principal distributable amount - paid

   5. 
Class A-1 additional principal distributable amount - paid

   6. 
Class A-1 note balance - end of period

 

A-1

 

   7. 
Class A-1 notes as a percentage of the total Notes outstanding on the
Distribution Date

   8. 
Class A-1 notes as a percentage of the Pool Balance on the Distribution
Date

 

(b) Class A-2

A.   Information Regarding Distributions

   1.  
Total distribution per $1,000

   2.  
Principal distribution per $1,000

   3.  
Interest distribution per $1,000

 

B.  Calculation of Class A-2 interest due

   1.  
Class A-2 related Note Rate

   2.  
Class A-2 note balance - beginning of period

   3.  
Accrual convention

   4.  
Days in Interest Period

   5.  
Class A-2 interest due - current period

   6.  
Class A Interest Carryover Shortfall with respect to Class A-2

   7.  
Class A-2 interest paid

   8.  
Class A-2 unpaid interest with respect to the Distribution Date

 

C.  Calculation of Class A-2 principal balance

   1. 
Class A-2 note balance - beginning of period

   2. 
Class A-2 minimum principal distributable amount - due

   3. 
Class A-2 additional principal distributable amount - due

   4. 
Class A-2 minimum principal distributable amount - paid

   5. 
Class A-2 additional principal distributable amount - paid

   6. 
Class A-2 note balance - end of period

   7. 
Class A-2 notes as a percentage of the total Notes outstanding on the
Distribution Date

   8. 
Class A-2 notes as a percentage of the Pool Balance on the Distribution
Date

   9. 
Class A-1 and A-2 notes as a percentage of the Pool Balance on the
Distribution Date

 

(c) Class A-3

A.   Information Regarding Distributions

   1.   Total
distribution per $1,000

   2.  
Principal distribution per $1,000

   3.  
Interest distribution per $1,000

 

A-2

 

B.  Calculation of Class A-3 interest Due

   1.  
Class A-3 related Note Rate

   2.  
Class A-3 note balance - beginning of period

   3.  
Accrual convention

   4.  
Days in Interest Period

   5.  
Class A-3 interest due - current period

   6.  
Class A Interest Carryover Shortfall with respect to Class A-3

   7.  
Class A-3 interest paid

   8.  
Class A-3 unpaid interest with respect to the Distribution Date

 

C.  Calculation of Class A-3 principal balance

   1. 
Class A-3 note balance - beginning of period

   2. 
Class A-3 minimum principal distributable amount - due

   3. 
Class A-3 additional principal distributable amount - due

   4. 
Class A-3 minimum principal distributable amount - paid

   5. 
Class A-3 additional principal distributable amount - paid

   6. 
Class A-3 note balance - end of period

   7. 
Class A-3 notes as a percentage of the total Notes outstanding on the
Distribution Date

   8. 
Class A-3 notes as a percentage of the Pool Balance on the Distribution
Date

   9. 
Class A-1, A-2 and A-3 notes as a percentage of the Pool Balance on the
Distribution Date

 

(d) Class A-4

A.   Information Regarding Distributions

   1.  
Total distribution per $1,000

   2.  
Principal distribution per $1,000

   3.  
Interest distribution per $1,000

 

B.  Calculation of Class A-4 Interest Due

   1.  
Class A-4 related Note Rate

   2.  
Class A-4 principal balance - beginning of period

   3.  
Accrual convention

   4.  
Days in Interest Period

   5.  
Class A-4 interest due - current period

   6.  
Class A Interest Carryover Shortfall with respect to Class A-4

   7.  
Class A-4 interest paid

   8.  
Class A-4 unpaid interest with respect to the Distribution Date

 

C.  Calculation of Class A-4 principal balance

   1. 
Class A-4 note balance - beginning of period

   2. 
Class A-4 minimum principal distributable amount - due

   3. 
Class A-4 additional principal distributable amount - due

   4. 
Class A-4 minimum principal distributable amount - paid

   5. 
Class A-4 additional principal distributable amount - paid

   6. 
Class A-4 note balance - end of period

   7. 
Class A-4. notes as a percentage of the total Notes outstanding on the
Distribution Date

   8. 
Class A-4 Notes as a percentage of the Pool Balance on the Distribution
Date

 

A-3

 

   9. 
Class A-1, A-2, A-3 and A-4 notes as a percentage of the Pool Balance on
the Distribution Date

 

III.  PRINCIPAL
DISTRIBUTABLE AMOUNT CALCULATION

 Aggregate Optimal Note Principal Balance for the
Distribution Date:

   Pool Balance as of the end of the Collection
Period

   Factor

Aggregate
Optimal Note Principal Balance for the Distribution Date

Optimal Principal Distributable Amount for the Distribution
Date:

   The excess, if any, of

     (x) Aggregate Note Principal Balance over

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

Optimal
Principal Distributable Amount

Class A Minimum Principal Distributable Amount:

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

   (a) The lesser of:

        (i) Optimal Principal Distributable
Amount

        (ii) BOM Principal Balance less EOM
Principal Balance

        (iii) Aggregate Note Principal Balance

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

         Aggregate Note Principal Balance to
zero

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

         Pool Balance

Class
A Minimum Principal Distributable Amount

Class A Additional Principal Distributable Amount

   Excess of:

     (i) Aggregate Note Principal Balance

          Less: 
Class A Minimum Principal Distributable Amount paid over

     (ii) Aggregate Optimal Note Principal
Balance

Class
A Additional Principal Distributable Amount

 

IV.   RESERVE ACCOUNT
RECONCILIATION

Beginning
Reserve Account Balance

Targeted
Reserve Account Balance

Reserve
Account Shortfall

Reserve
Account Deposit

Reserve
Account Release

Ending
Reserve Account Balance

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

 

V.  CERTIFICATE
CALCULATION

Beginning
Certificate Balance

Ending
Certificate Balance

Ending
Certificate Balance as a percentage of the Ending Pool Balance

 

A-4

 

VI.  RECONCILIATION OF
COLLECTION ACCOUNT

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

i.
Collected Funds

   (a) 
Collections On Receivables

   (b) 
Net Liquidation Proceeds

   (c) 
Substitution Adjustment Amounts

Total
Collected Funds

ii.
Collection and Reserve Account investment income

iii.
Repurchase Amounts deposited in the Collection Account

iv.
Proceeds of any liquidation of the Trust

Available
Funds for distribution

 

Distributions
(Sect. 3.03)

(A)
Available Funds

 

(B)
Servicing Fee

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

 

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

Remaining
available funds for interest distribution

 

(D)
Class A Interest Distributable Amount paid

i.
Class A-1 interest paid

ii.
Class A-2 interest paid

iii.
Class A-3 interest paid

iv.
Class A-4 interest paid

Total
Class A Interest Distributable Amount paid

Remaining
Available Funds for principal distribution

 

(E)
Class A Minimum Principal Distributable Amount paid

i.
Class A-1 minimum principal paid

ii.
Class A-2 minimum principal paid

iii.
Class A-3 minimum principal paid

iv.
Class A-4 minimum principal paid

Class
A Minimum Principal Distributable Amount paid

Remaining
funds

 

(F)
Reserve Account Shortfall Amount - deposited

Remaining
funds

Class
A Additional Principal Distributable Amount

i.
Class A-1 additional principal distributable amount

ii.
Class A-2 additional principal distributable amount

iii.
Class A-3 additional principal distributable amount

iv.
Class A-4 additional principal distributable amount

Class
A Additional Principal Distributable Amount - paid

Remaining
funds

 

A-5

 

(G)
Amount released from Reserve Account

Remaining
funds for Servicing Fee

 

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

Remaining
Available Funds for distribution to Certificateholders

 

VII.  OTHER STATISTICS

Delinquency

A.
One payment delinquent - $

   % of Principal Receivables

B.
Two payments delinquent - $

   % of Principal Receivables

C.
Three or more payments delinquent - $

   % of Principal Receivables

D.
Two or more payments delinquent - $

   % of Principal Receivables

 

Repossessed
Vehicles

   % of Principal Receivables

Cumulative
Net Loss Percentage

The
weighted average coupon (WAC) was equal to

The
weighted average remaining maturity (WARM) was equal to

 

A-6

 

Exhibit B

 

Forms of Notes

 

	
  REGISTERED

  	
   

  	
  $283,300,000

  
	
  No. A-1

  	
   

  	
   

  

 

SEE REVERSE FOR
CERTAIN DEFINITIONS

 

CUSIP NO. 44328F AE 9

 

Unless this Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Issuer or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN.  ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.

 

HSBC AUTOMOTIVE TRUST 2005-2

 

CLASS A-1 3.70313% NOTE

 

HSBC Automotive Trust 2005-2, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the “Issuer”), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of TWO HUNDRED EIGHTY-THREE
MILLION THREE HUNDRED THOUSAND DOLLARS payable on each Distribution Date in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is $283,300,000 and the denominator of which is $283,300,000 by (ii)
the aggregate amount, if any, payable from Available Funds in respect of
principal on the Class A-1 Notes pursuant to the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable
on August 17, 2006 (the “Class A-1 Scheduled Maturity Date”).  The Issuer will pay interest on this Note at
the rate per annum shown above on each Distribution Date until the principal of
this Note is paid or made available for payment.  Interest on this Note will accrue for each
Distribution Date from the most recent Distribution Date on which interest has
been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from July 27, 2005.  Interest
will be computed on the basis of a 360-day year and the actual number of days
elapsed in an applicable Interest Period. 
Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.

 

The principal of and interest on this Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect
to this Note shall be applied first to

 

B-1

 

interest due and payable
on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has
been executed by the Administrator whose name appears below by manual
signature, this Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

B-2

 

IN WITNESS WHEREOF, the Issuer has caused this
instrument to be signed, manually or in facsimile, by its Authorized Officer as
of the date set forth below.

 

	
  Date: July 27, 2005

  	
  HSBC AUTOMOTIVE TRUST
  2005-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:    THE BANK OF NEW YORK, not in its

  individual capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

B-3

 

ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred
to in the within-mentioned Indenture.

 

	
  Date: July 27, 2005

  	
  HSBC BANK USA, NATIONAL
  ASSOCIATION,

  not in its individual capacity but solely as

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

B-4

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Notes
of the Issuer, designated as its Class A-1 3.70313% Notes (herein called the
“Class A-1 Notes”), all issued under an Indenture dated as of July 27, 2005
(such indenture, as supplemented or amended, is herein called the “Indenture”),
among the Issuer, U.S. Bank National Association, as indenture trustee (the
“Indenture Trustee”, which term includes any successor Indenture Trustee under
the Indenture) and HSBC Bank USA, National Association, as administrator (the
“Administrator”, which term includes any successor Administrator under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee, the Administrator and the
Holders of the Notes.  The Notes are
subject to all terms of the Indenture. 
All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.

 

The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes (together, the “Notes”) are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.

 

Principal of the Class A-1 Notes will be payable on
each Distribution Date in an amount described on the face hereof. “Distribution
Date” means the seventeenth day of each month, or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on August 17,
2005.  The term “Distribution Date” shall
be deemed to include the Class A-1 Scheduled Maturity Date.

 

As described above, the entire unpaid principal amount
of this Note shall be due and payable on the Class A-1 Scheduled Maturity
Date.  This Note is also subject to
redemption when the Pool Balance is reduced to an amount that is less than or
equal to 10% of the original Pool Balance. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable on any
date on or after which an Event of Default shall have occurred and be
continuing if the Indenture Trustee in its discretion or if requested by
Holders of the Notes representing at least 66 2/3% of the Outstanding Amount of
the Notes have declared the Notes to be immediately due and payable in the
manner provided in the Indenture.  All
principal payments on the Class A-1 Notes shall be made pro rata to the Class
A-1 Noteholders entitled thereto.

 

Payments of interest on this Note due and payable on
each Distribution Date, together with the installment of principal, if any, to
the extent not in full payment of this Note, shall be made by check mailed to
the Person whose name appears as the Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee.  Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note Register
as of the applicable Record Date without requiring that this Note be submitted
for notation of payment.  Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration of

 

B-5

 

transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Administrator,
in the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record Date preceding such Distribution Date by notice
mailed prior to such Distribution Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Administrator’s principal Corporate Trust Office or at the office of the
Administrator’s agent appointed for such purposes located in New York, New
York.

 

The Issuer shall pay interest on overdue installments
of interest at the Class A-1 Note Rate to the extent lawful.

 

As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
“eligible guarantor institution” meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program (“Stamp”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

 

Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee, the Administrator or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Seller,
the Servicer, the Indenture Trustee, the Administrator, the Owner Trustee or
the Delaware Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Seller, the Servicer, the Indenture Trustee, the
Administrator, the Owner Trustee or the Delaware Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Owner Trustee, the Administrator, the Indenture Trustee or the
Delaware Trustee or of any successor or assign of the Seller, the Servicer, the
Indenture Trustee, the Administrator, the Owner Trustee or the Delaware Trustee
in its individual capacity, except as any such Person may have expressly agreed
(it being understood that the Indenture Trustee, the Owner Trustee and the
Delaware Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.

 

B-6

 

Prior to the due presentment for registration of
transfer of this Note, the Issuer, the Indenture Trustee and the Administrator
and any agent of the Issuer, the Indenture Trustee or the Administrator may
treat the Person in whose name this Note (as of the day of determination or as of
such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of
the Issuer, the Indenture Trustee, the Administrator nor any such agent shall
be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Noteholders
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding.

 

The term “Issuer” as used in this Note includes any
successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under
certain circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Noteholders under the Indenture.

 

The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

 

This Note and the Indenture 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 and thereunder shall be determined in accordance with such
laws.

 

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place, and rate, and in the coin or
currency herein prescribed.

 

Anything herein to the contrary notwithstanding,
except as expressly provided in the Indenture or the Basic Documents, neither The
Bank of New York in its individual capacity, any owner of a beneficial interest
in the Issuer, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purposes of
binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein
shall be taken to prevent recourse to, and enforcement against, the assets of
the Issuer for any and all liabilities, obligations and undertakings contained
in the Indenture or in this Note.

 

B-7

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying
number of assignee

 

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

unto 

(name and address of
assignee)

 

the within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints, attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.

 

	
  Dated

  	
   

  	
  (1)

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  

 

(1)           NOTE: The signature to this
assignment must correspond with the name of the registered owner as it appears
on the face of the within Note in every particular, without alteration,
enlargement or any change whatsoever.

 

B-8

 

	
  REGISTERED

  	
   

  	
  $241,500,000

  
	
  No. A-2

  	
   

  	
   

  

 

SEE REVERSE FOR
CERTAIN DEFINITIONS

 

CUSIP NO. 44328F AF 6

 

Unless this Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”),
to the Issuer or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN.  ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.

 

HSBC AUTOMOTIVE TRUST 2005-2

 

CLASS A-2 4.16% NOTE

 

HSBC Automotive Trust 2005-2, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the “Issuer”), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of TWO HUNDRED FORTY-ONE MILLION
FIVE HUNDRED THOUSAND DOLLARS payable on each Distribution Date in an amount
equal to the result obtained by multiplying (i) a fraction the numerator of
which is $241,500,000 and the denominator of which is $241,500,000 by (ii) the
aggregate amount, if any, payable from Available Funds in respect of principal
on the Class A-2 Notes pursuant to the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable
on September 17, 2008 (the “Class A-2 Scheduled Maturity Date”).  The Issuer will pay interest on this Note at
the rate per annum shown above on each Distribution Date until the principal of
this Note is paid or made available for payment.  Interest on this Note will accrue for each
Distribution Date from the most recent Distribution Date on which interest has
been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from July 27, 2005.  Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day
months.

 

The principal of and interest on this Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect
to this Note shall be applied first to interest due and payable on this Note as
provided above and then to the unpaid principal of this Note.

 

B-9

 

Reference is made to the further provisions of this
Note set forth on the reverse hereof, which shall have the same effect as
though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has
been executed by the Administrator whose name appears below by manual
signature, this Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

B-10

 

IN WITNESS WHEREOF, the Issuer has caused this
instrument to be signed, manually or in facsimile, by its Authorized Officer as
of the date set forth below.

 

	
  Date: July 27, 2005

  	
  HSBC AUTOMOTIVE TRUST
  2005-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:    THE BANK OF NEW YORK, not in its

  individual capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

B-11

 

ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred
to in the within-mentioned Indenture.

 

	
  Date:  July 27, 2005

  	
  HSBC BANK USA, NATIONAL
  ASSOCIATION,

  not in its individual capacity but solely as

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

B-12

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Notes
of the Issuer, designated as its Class A-2 4.16% Notes (herein called the
“Class A-2 Notes”), all issued under an Indenture dated as of July 27, 2005
(such indenture, as supplemented or amended, is herein called the “Indenture”),
among the Issuer, U.S. Bank National Association, as indenture trustee (the
“Indenture Trustee”, which term includes any successor Indenture Trustee under
the Indenture) and HSBC Bank USA, National Association, as administrator (the
“Administrator”, which term includes any successor Administrator under the
Indenture) to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee, the Administrator and the
Holders of the Notes.  The Notes are
subject to all terms of the Indenture. 
All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.

 

The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes (together, the “Notes”) are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.

 

Principal of the Class A-2 Notes will be payable on
each Distribution Date in an amount described on the face hereof. “Distribution
Date” means the seventeenth day of each month, or, if any such date is not a
Business Day, the next succeeding Business Day, commencing on August 17,
2005.  The term “Distribution Date” shall
be deemed to include the Class A-2 Scheduled Maturity Date.

 

As described above, the entire unpaid principal amount
of this Note shall be due and payable on the Class A-2 Scheduled Maturity
Date.  This Note is also subject to
redemption when the Pool Balance is reduced to an amount that is less than or
equal to 10% of the original Pool Balance. Notwithstanding the foregoing, the
entire unpaid principal amount of the Notes shall be due and payable on any
date on or after which an Event of Default shall have occurred and be continuing
if the Indenture Trustee in its discretion or if requested by Holders of the
Notes representing at least 66 2/3% of the Outstanding Amount of the Notes have
declared the Notes to be immediately due and payable in the manner provided in
the Indenture.  All principal payments on
the Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders
entitled thereto.

 

Payments of interest on this Note due and payable on
each Distribution Date, together with the installment of principal, if any, to
the extent not in full payment of this Note, shall be made by check mailed to
the Person whose name appears as the Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on each
Record Date, except that with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately
available funds to the account designated by such nominee.  Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment.  Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of

 

B-13

 

transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Administrator,
in the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record Date preceding such Distribution Date by notice
mailed prior to such Distribution Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Administrator’s principal Corporate Trust Office or at the office of the
Administrator’s agent appointed for such purposes located in New York, New
York.

 

The Issuer shall pay interest on overdue installments
of interest at the Class A-2 Note Rate to the extent lawful.

 

As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
his attorney duly authorized in writing, with such signature guaranteed by an
“eligible guarantor institution” meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program (“Stamp”) or such other “signature guarantee program”
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

 

Each Noteholder or Note Owner, by acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee, the Administrator or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Seller,
the Servicer, the Indenture Trustee, the Administrator, the Owner Trustee or
the Delaware Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director or employee of the Seller, the Servicer, the Indenture
Trustee, the Administrator, the Owner Trustee or the Delaware Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Seller, the Servicer, the Owner Trustee, the Administrator, the Indenture
Trustee or the Delaware Trustee or of any successor or assign of the Seller,
the Servicer, the Indenture Trustee, the Administrator, the Owner Trustee or
the Delaware Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee, the
Owner Trustee and the Delaware Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

 

B-14

 

Prior to the due presentment for registration of
transfer of this Note, the Issuer, the Indenture Trustee and the Administrator
and any agent of the Issuer, the Indenture Trustee or the Administrator may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and none of
the Issuer, the Indenture Trustee, the Administrator nor any such agent shall
be affected by notice to the contrary.

 

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Noteholders
representing a majority of the Outstanding Amount of all Notes at the time
Outstanding.

 

The term “Issuer” as used in this Note includes any
successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under
certain circumstances, to merge or consolidate, subject to the rights of the
Indenture Trustee and the Noteholders under the Indenture.

 

The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.

 

This Note and the Indenture 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 and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place, and rate, and in the coin or currency
herein prescribed.

 

Anything herein to the contrary notwithstanding,
except as expressly provided in the Indenture or the Basic Documents, neither
The Bank of New York in its individual capacity, any owner of a beneficial
interest in the Issuer, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns shall be
personally liable for, nor shall recourse be had to any of them for, the
payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in
this Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of
the Issuer.  The Holder of this Note by
the acceptance hereof agrees that except as expressly provided in the Indenture
or the Basic Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.

 

B-15

 

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying
number of assignee

 

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

unto 

(name and address
of assignee)

 

the within Note and all
rights thereunder, and hereby irrevocably constitutes and appoints, attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.

 

	
  Dated

  	
   

  	
  (1)

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranteed:

  

 

                (1)  NOTE: The
signature to this assignment must correspond with the name of the registered
owner as it appears on the face of the within Note in every particular, without
alteration, enlargement or any change whatsoever.

 

B-16Exhibit 10.1

Execution Copy

 

MASTER RECEIVABLES
PURCHASE AGREEMENT

 

 

between

 

HOUSEHOLD
AUTOMOTIVE CREDIT CORPORATION,

as
Seller

 

and

 

 

HOUSEHOLD AUTO
RECEIVABLES CORPORATION,

as
Purchaser

 

 

dated
as of

 

August 8,
2002

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  General

  	
   

  
	
  SECTION 1.2

  	
  Specific Terms

  	
   

  
	
  SECTION 1.3

  	
  Other Definitional Provisions

  	
   

  
	
  SECTION 1.4

  	
  Certain References

  	
   

  
	
  SECTION 1.5

  	
  No Recourse

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II CONVEYANCE OF THE RECEIVABLES AND THE OTHER
  CONVEYED PROPERTY

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1

  	
  Purchase

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  SECTION 3.1

  	
  Representations and Warranties of Seller

  	
   

  
	
  SECTION 3.2

  	
  Representations and Warranties of HARC

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS OF SELLER

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1

  	
  Seller’s Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPURCHASES

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1

  	
  Repurchase of Receivables Upon Breach of
  Warranty

  	
   

  
	
  SECTION 5.2

  	
  Reassignment of Repurchased Receivables

  	
   

  
	
  SECTION 5.3

  	
  Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1

  	
  Liability of Seller

  	
   

  
	
  SECTION 6.2

  	
  Amendment

  	
   

  
	
  SECTION 6.3

  	
  GOVERNING LAW

  	
   

  
	
  SECTION 6.4

  	
  Notices

  	
   

  
	
  SECTION 6.5

  	
  Severability of Provisions

  	
   

  
	
  SECTION 6.6

  	
  Assignment

  	
   

  
	
  SECTION 6.7

  	
  Acknowledgment and Agreement of Seller

  	
   

  
	
  SECTION 6.8

  	
  Further Assurances

  	
   

  
	
  SECTION 6.9

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  SECTION 6.10

  	
  Counterparts

  	
   

  
	
  SECTION 6.11

  	
  Binding Effect; Third-Party Beneficiaries

  	
   

  
	
  SECTION 6.12

  	
  Merger and Integration

  	
   

  
	
  SECTION 6.13

  	
  Heading

  	
   

  
	
  SECTION 6.14

  	
  Schedules and Exhibits

  	
   

  
	
  SECTION 6.15

  	
  Survival of Representations and Warranties

  	
   

  
	
  SECTION 6.16

  	
  Nonpetition Covenant

  	
   

  

 

i

 

EXHIBITS

 

	
  EXHIBIT A

  	
  Form of Receivables Purchase
  Agreement Supplement

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE A

  	
  Schedule of Related Master Sale and
  Servicing Agreements

  	
   

  

 

ii

 

THIS MASTER RECEIVABLES PURCHASE AGREEMENT, dated as
of August 8, 2002, executed between Household Auto Receivables
Corporation, a Nevada corporation, as purchaser (“HARC”) and Household
Automotive Credit Corporation, a Delaware corporation, as seller (“Seller”).

 

W I T N E S S E T H :

 

WHEREAS, HARC has agreed to purchase from time to time
from Seller, and Seller, pursuant to this Agreement, has agreed to transfer
from time to time to HARC the Receivables and the Other Conveyed Property.

 

WHEREAS, HARC intends from time to time to transfer
Receivables and Other Conveyed Property to different Delaware business trusts,
each of which will issue notes and certificates secured by the Receivables and
Other Conveyed Property.

 

NOW, THEREFORE, in consideration of the premises and
the mutual agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is acknowledged, HARC and Seller, intending
to be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1         General.  Capitalized terms used herein without
definition shall have the respective meanings assigned to such terms in the
related Master Sale and Servicing Agreement.

 

SECTION 1.2         Specific Terms.  Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

 

“Agreement” means this Master Receivables
Purchase Agreement and all amendments hereof and supplements hereto.

 

“Conveyance” shall have the meaning specified
in Section 2.1.

 

“Conveyance Papers” shall have the meaning
specified in Section 3.1.

 

“Cutoff Date” shall have the meaning assigned
to such term in the applicable Series Supplement or Receivables Purchase
Agreement Supplement.

 

“Master Sale and Servicing Agreement” means
each agreement so entitled set forth on Schedule A among HARC, Household
Finance Corporation, as Master Servicer, the indenture trustee named therein
and the issuer named therein, each as supplemented by a related series
supplement among HARC, Household Finance 

 

1

 

Corporation, as Master
Servicer, the indenture trustee named therein, the issuer named therein and the
owner trustee and Delaware trustee (if necessary) named therein, pursuant to
which Receivables are conveyed by HARC to such issuer.

 

“Other Conveyed Property” means all money,
instruments, rights and other property that are subject or intended to be
subject to the lien and security interest of the related Indenture (including
all property and interests granted to the related Indenture Trustee), including
all proceeds thereof, other than the Receivables.

 

“Purchase Date” means, with respect to
Receivables, any date, on which Receivables are to be purchased by HARC
pursuant to this Agreement and a Receivables Purchase Agreement Supplement is
executed and delivered by Seller and HARC.

 

“Receivables” means the Receivables listed on
the Schedules of Receivables attached to a Receivables Purchase Agreement
Supplement as Schedule A.

 

“Receivables Purchase Agreement Supplement”
means an agreement between HARC and Seller in connection with a Series,
substantially in the form of Exhibit A hereto.

 

“Repurchase Event” means a determination
pursuant to Section 3.2 of the related Master Sale and Servicing Agreement
that HARC is required to repurchase a Receivable.

 

“Schedule of Receivables” means a
schedule of Receivables sold and transferred pursuant to this Agreement
and a related Receivables Purchase Agreement Supplement, which is attached as
Schedule A to such related Receivables Purchase Agreement Supplement.

 

SECTION 1.3         Other Definitional Provisions.

 

(a)           All
terms defined in this Agreement shall have the defined meanings when used in
any certificate, other documents, or Conveyance Paper made or delivered
pursuant hereto unless otherwise defined herein.

 

(b)           The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement or any Conveyance Paper shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
Subsection, Schedule and Exhibit references contained in this
Agreement are references to Sections, Subsections, Schedules and Exhibits in or
to this Agreement unless otherwise specified.

 

(c)           All
determinations of the principal or finance charge balance of any Receivable,
and of any collections thereof, shall be made in accordance with the related
Master Sale and Servicing 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 

 

2

 

business
on such day, or as of the first day of a Collection Period shall refer to the
opening of business on such day.  All
references to the last day of a Collection Period shall refer to the close of
business on such day.

 

SECTION 1.5         No
Recourse.  Without limiting the
obligations of 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 Seller, or of any predecessor or successor of Seller.

 

ARTICLE II

 

CONVEYANCE OF THE
RECEIVABLES

AND THE OTHER CONVEYED
PROPERTY

 

SECTION 2.1         Purchase.

 

(a)           By
execution of this Agreement and subject to the terms and conditions of this
Agreement, on a Purchase Date with respect to a Receivables Purchase Agreement
Supplement, Seller shall sell, transfer, assign, and otherwise convey to HARC
(each, a “Conveyance”) without recourse (but without limitation of its
obligations in this Agreement), and HARC shall purchase, all right, title and
interest of Seller in and to:

 

(i)            each
and every Receivable listed from time to time on Schedule A to such
related Receivables Purchase Agreement Supplement and all monies paid or
payable thereon or in respect thereof on or after the related Cutoff Date
(including amounts due on or before the related Cutoff Date but received by Seller
after such date);

 

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

 

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

 

(vi)          any proceeds and the right to receive proceeds with respect
to the related Receivables from claims on any physical damage, loss, credit
life or disability insurance policies, if any, covering Financed Vehicles or
Obligors, including rebates of insurance premiums relating to 

 

3

 

the
Receivables and any proceeds from the liquidation of such Receivables;

 

(vii)         all
items contained in the Receivables Files with respect to such Receivables and
any and all other documents that Seller or Master Servicer keeps on file in
accordance with its customary procedures relating to the related Receivables,
or the related Financed Vehicles or Obligor;

 

(viii)        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
HARC pursuant to the liquidation of such Receivable; and

 

(ix)           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, 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)           Simultaneously
with each Conveyance, HARC will pay or cause to be paid to or upon the order of
Seller an amount equal to 100% of the Principal Balance of the related
Receivables on the books and records of Seller, plus the present value of
anticipated excess spread on such Receivables, discounted to take into account
any uncertainty as to future performance matching historical performance,
servicing fees, delinquencies, pay down rates, yield and such other factors as
may be mutually agreed upon between Seller and HARC, by wire transfer of
immediately available funds.

 

(c)           In
connection with each Conveyance, Seller further agrees that it will, at its own
expense, on or prior to the related Purchase Date (i) indicate in its
computer files or microfiche lists that the related Receivables have been
conveyed to HARC in accordance with this Agreement and the related Receivables
Purchase Agreement Supplement, and have been conveyed by HARC to the related
Indenture Trustee pursuant to the related Master Sale and Servicing Agreement
for the benefit of the related Secured Parties by including in such computer
files and microfiche lists the code identifying each such Receivable and
(ii) deliver to HARC (or to the related Indenture Trustee if HARC so
directs) a computer file or microfiche list containing a true and complete list
of all such Receivables specifying for each such Receivable, as of the Cutoff
Date (A) its account number and (B) the outstanding balance of such
Receivable.  Such computer files or
microfiche lists shall be delivered to HARC (or to the related Indenture Trustee
if so directed by HARC) and marked as proprietary and confidential.  Seller further agrees not 

 

4

 

to alter the code referenced in
clause (i) of this paragraph with respect to any Receivable during the
term of this Agreement.

 

(d)           The
parties hereto intend that each Conveyance shall constitute a sale of the
Seller’s right, title and interest in and to the related Receivables and Other
Conveyed Property, conveying good title free and clear of any liens, claims,
encumbrances or rights of others from Seller to HARC and that the such
Receivables and Other Conveyed Property subject to such Conveyance shall not be
part of Seller’s estate in the event of the insolvency of Seller or a
conservatorship, receivership or similar event with respect to Seller.  It is the intention of the parties hereto
that the arrangements with respect to each Conveyance of Receivables and Other
Conveyed Property shall constitute a purchase and sale of such Receivables and
Other Conveyed Property and not a loan. 
In the event, however, that a court of competent jurisdiction were to
hold that the transactions evidenced hereby constitute a loan and not a
purchase and sale, it is the intention of the parties hereto that this
Agreement shall constitute a security agreement under applicable law, and that
Seller shall be deemed to have granted to HARC a first priority perfected
security interest in all of such Seller’s right, title and interest in and to
the Receivables and Other Conveyed Property.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.1         Representations
and Warranties of Seller.  Seller
makes the representations and warranties set forth in
Section 3.1(b) through (h) as of each Purchase Date on which
HARC relies in purchasing the Receivables and the Other Conveyed Property subject
to the related Conveyance and in transferring the Receivables and the Other
Conveyed Property to the Issuer under the related Master Sale and Servicing
Agreement.  The representations set forth
in Section 3.1(a), on which HARC relies in purchasing the Receivables and
the Other Conveyed Property subject to the related Conveyance and in
transferring the Receivables and the Other Conveyed Property to the Issuer
under the related Master Sale and Servicing Agreement, are made with respect to
Receivables and Other Conveyed Property conveyed hereunder, as of the execution
and delivery of the related Receivables Purchase Agreement Supplement, but
shall, together with the representations and warranties set forth in
Section 3.1(b) through (h), survive the sale, transfer and assignment
of the Receivables and the Other Conveyed Property hereunder, and the sale,
transfer and assignment thereof by HARC to the Issuer under each Master Sale
and Servicing Agreement.  Seller and HARC
agree that HARC will assign to Issuer all HARC’s rights under this Agreement
and each Receivables Purchase Agreement Supplement and that the Indenture
Trustee will thereafter be entitled to enforce this Agreement and each
Receivables Purchase Agreement Supplement against Seller in the Indenture
Trustee’s own name on behalf of the Securityholders.

 

(a)           Eligibility
Criteria.  Each of the Receivables
which is to be pledged as collateral for a Series of Notes will satisfy
the applicable Eligibility Criteria set forth in, or to be set forth in, Schedule I
to the Series Supplement establishing such Series.

 

5

 

(b)           Organization
and Good Standing.  Seller is a
corporation duly organized and validly existing in good standing under the laws
of the state of Delaware and has, in all material respects, full power and
authority to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement.

 

(c)           Due
Obligation.  Seller is duly qualified
to do business and is in good standing as a foreign corporation (or is exempt
from such requirements) and has obtained all necessary licenses and approvals,
in each jurisdiction in which failure to so qualify or to obtain such licenses
and approvals would (i) render any Receivable unenforceable by Seller,
HARC or any Trust and (ii) have a material adverse effect on any Secured
Parties.

 

(d)           Due
Authorization.  The execution,
delivery and performance of this Agreement and any other document or instrument
delivered pursuant hereto (such other documents and instruments, including, but
not limited to, the Receivables Purchase Agreement Supplement collectively, the
“Conveyance Papers”) and the consummation of the transactions provided
for in this Agreement or any other Conveyance Papers have been duly authorized
by all necessary corporate action on the part of Seller and constitute or will
constitute the legal, valid and binding obligation of Seller, enforceable in
accordance with their terms.

 

(e)           No
Conflict.  The execution and delivery
of this Agreement and the Conveyance Papers, the performance of the
transactions contemplated by this Agreement and the Conveyance Papers, and the
fulfillment of the terms of this Agreement and the Conveyance Papers applicable
to Seller will not conflict with, violate or result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture, contract,
agreement, mortgage, deed of trust, or other instrument to which Seller is a
party or by which it or any of its properties are bound.

 

(f)            No
Violation.  The execution, delivery
and performance of this Agreement and the Conveyance Papers and the fulfillment
of the terms contemplated herein and therein applicable to Seller will not
conflict with or violate any requirements of law applicable to Seller.

 

(g)           No
Proceedings.  There are no
proceedings or investigations pending or, to the best knowledge of Seller,
threatened against Seller, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement or the Conveyance Papers, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement or the Conveyance Papers, (iii) seeking any determination or
ruling that, in the reasonable judgment of Seller, would materially and
adversely affect the performance by Seller of its obligations under this
Agreement or the Conveyance Papers, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Conveyance Papers or (v) seeking to
affect adversely the income tax attributes of any Trust under United States
Federal, Nevada or California income tax systems.

 

6

 

(h)           All
Consents.  All authorizations,
consents, orders, approvals, registrations or declarations with, or of, any
Governmental Authority required to be obtained, effected or given by Seller in
connection with the execution and delivery by Seller of this Agreement or the
Conveyance Papers and the performance of the transactions contemplated by this
Agreement or the Conveyance Papers by Seller have been duly obtained, effected
or given and are in full force and effect.

 

SECTION 3.2         Representations and Warranties of
HARC.  HARC makes the representations
and warranties set forth in Section 3.2 (a) through (f) as of
each Purchase Date, on which Seller relies in selling, assigning, transferring
and conveying the Receivables and the Other Conveyed Property subject to the
related conveyance to HARC hereunder. 
The representations are made with respect to Receivables and Other
Conveyed Property conveyed hereunder, as of the execution and delivery of the
related Receivables Purchase Agreement Supplement, but shall survive the sale,
transfer and assignment of the Receivables and the Other Conveyed Property
hereunder and the sale, transfer and assignment thereof by HARC to the related
Issuer under each Master Sale and Servicing Agreement.

 

(a)           Organization
and Good Standing.  HARC is a
corporation duly organized and validly existing under the laws of the State of
Nevada and has, in all material respects, full power and authority to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted and to execute, deliver and perform its
obligations under this Agreement and the Conveyance Papers.

 

(b)           Due
Authorization.  The execution and
delivery of this Agreement and the Conveyance Papers and the consummation of
the transactions provided for in this Agreement and the Conveyance Papers have
been duly authorized by HARC by all necessary corporate action on the part of
HARC.

 

(c)           No
Conflict.  The execution and delivery
of this Agreement and the Conveyance Papers, the performance of the
transactions contemplated by this Agreement and the Conveyance Papers, and the
fulfillment of the terms hereof and thereof, will not conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which HARC is a party or by which it or its properties is bound.

 

(d)           No
Violation.  The execution, delivery
and performance of this Agreement and the Conveyance Papers by HARC and the
fulfillment of the terms contemplated herein and therein applicable to HARC
will not conflict with or violate any requirements of law applicable to HARC.

 

(e)           No
Proceeding.  There are no proceedings
or investigations pending or, to the best knowledge of HARC, threatened against
HARC, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of
this Agreement or the Conveyance Papers, (ii) seeking to 

 

7

 

prevent the consummation of any of the transactions
contemplated by this Agreement or the Conveyance Papers, (iii) seeking any
determination or ruling that, in the reasonable judgment of HARC, would
materially and adversely affect the performance by HARC of its obligations
under this Agreement or the Conveyance Papers or (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or the Conveyance Papers.

 

(f)            All
Consents.  All authorizations,
consents, orders or approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by HARC in
connection with the execution and delivery by HARC of this Agreement and the
Conveyance Papers and the performance of the transactions contemplated by this
Agreement and the Conveyance Papers or the fulfillment of the terms of this
Agreement and the Conveyance Papers by HARC have been duly obtained.

 

In the event of any breach of a representation and
warranty made by HARC hereunder, Seller covenants and agrees that it will not
take any action to pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes and Certificates issued by any Trust have been paid in full.  Seller and HARC agree that damages will not
be an adequate remedy for such breach and that this covenant may be
specifically enforced by HARC, the related Issuer or by the related Indenture
Trustee on behalf of the related Secured Parties and the related Owner Trustee
on behalf of the related Certificateholders. 
Seller agrees that with respect to its obligations in connection with a
Repurchase Event it will exercise no rights of offset with respect to any
claims it may have against HARC.

 

ARTICLE IV

 

COVENANTS OF SELLER

 

SECTION 4.1         Seller’s
Covenants.  Seller hereby covenants
and agrees with HARC as follows:

 

(a)           Receivables
Not To Be Evidenced by Promissory Notes. 
Seller will take no action to cause any Receivable to be evidenced by
any instrument (as defined in the UCC).

 

(b)           Security
Interests.  Except for the
conveyances hereunder or as otherwise provide herein, Seller will not sell,
pledge, assign or transfer to any other Person, or take any other action
inconsistent with HARC’s ownership of the Receivables and Other Conveyed
Property or grant, create, incur, assume or suffer to exist any Lien on any
Receivable or any Other Conveyed Property, whether now existing or hereafter created,
or any interest therein, and Seller shall not claim any ownership interest in
the Receivables or any Other Conveyed Property and shall defend the right,
title and interest of HARC in and to the Receivables and Other Conveyed
Property, whether now existing or hereafter created, against all claims of
third parties claiming through or under Seller.

 

8

 

(c)           Security’s Interest.  Except for the conveyances hereunder and in
connection with any transaction permitted pursuant to Section 6.6, Seller
hereby agrees not to transfer, assign, exchange or otherwise convey or pledge,
hypothecate or otherwise grant a security interest in the Receivables or any
Other Conveyed Property and any such attempted transfer, assignment, exchange,
conveyance, pledge, hypothecation or grant shall be void.

 

(d)           Delivery
of Collections or Recoveries.  In the
event that Seller receives collections or recoveries with respect to the
Receivables, Seller agrees to pay to HARC (or to the Master Servicer if HARC so
directs) all such collections and recoveries to the extent such amounts are
payable to HARC as soon as practicable after receipt thereof.

 

(e)           Notice
of Liens.  Seller shall notify HARC
promptly after becoming aware of any Lien on any Receivable or any Other
Conveyed Property other than the conveyances hereunder.

 

(f)            Documentation
of Transfer.  Seller shall undertake
to file the documents which would be necessary to perfect and maintain the
transfer of the security interest in and to the Receivables and Other Conveyed
Property.

 

(g)           Approval
of Office Records.  Seller shall
cause this Agreement to be duly approved by Seller’s Board of Directors, and
Seller shall maintain this Agreement as a part of the official records of
Seller for the term of this Agreement.

 

(h)           Maintenance
of Security Interests in Vehicles. 
In the event that the assignment of a Receivable to HARC or any assignee
thereof 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 HARC or any assignee thereof, Seller hereby agrees that the
designation of Seller or any Affiliate of Seller as the secured party on the
certificate of title is in its capacity as agent of HARC or the agent of any
assignee of HARC for such limited purpose.

 

ARTICLE V

 

REPURCHASES

 

SECTION 5.1         Repurchase of Receivables Upon Breach
of Warranty.  Upon the occurrence of
a Repurchase Event, Seller shall, unless the breach which is the subject of
such Repurchase Event shall have been cured in all material respects,
repurchase the Receivable relating thereto from the related Issuer under the
related Master Sale and Servicing Agreement by the last day of the first full
calendar month following the discovery of such breach by Seller or receipt by
Seller of notice of such breach from any of the Master Servicer, HARC, a Trust
Officer of the related Indenture Trustee or the related Owner Trustee and,
simultaneously with the repurchase of the Receivable, Seller shall deposit the
Repurchase Amount in full, without deduction or offset, in the Collection
Account, pursuant to Section 3.2 of the related Master Sale and 

 

9

 

Servicing Agreement.  It is understood and agreed that, except as
set forth in Section 6.1 hereof, the obligation of Seller to repurchase
any Receivable, as to which a breach occurred and is continuing, shall, if such
obligation is fulfilled, constitute the sole remedy against Seller for such
breach available to HARC, the related Issuer, the related Secured Parties, the
related Certificateholders, the related Indenture Trustee on behalf of the
related Noteholders or the related Owner Trustee on behalf of the related
Certificateholders.  The provisions of
this Section 5.1 are intended to grant the related Indenture Trustee or
the related Issuer a direct right against Seller to demand performance
hereunder, and in connection therewith, Seller waives any requirement of prior
demand against HARC with respect to such repurchase obligation.  Any such repurchase shall take place in the
manner specified in Section 3.2 of the related Master Sale and Servicing
Agreement.  Notwithstanding any other
provision of this Agreement or the related Master Sale and Servicing Agreement
to the contrary, the obligation of Seller under this Section shall not
terminate upon a termination of Household Finance Corporation as Master
Servicer under the related Master Sale and Servicing Agreement and shall be
performed in accordance with the terms hereof notwithstanding the failure of
the Master Servicer or HARC to perform any of their respective obligations with
respect to such Receivable under the related Master Sale and Servicing
Agreement.

 

SECTION 5.2         Reassignment of Repurchased Receivables.  Upon deposit in the Collection Account of the
Repurchase Amount of any Receivable repurchased by Seller under
Section 5.1 hereof, HARC and the related Issuer shall take such steps as
may be reasonably requested by Seller in order to assign to Seller all of
HARC’s and the related Issuer’s right, title and interest in and to such
Receivable and all security and documents and all Other Conveyed Property
conveyed to HARC and the related Issuer directly relating thereto, without
recourse, representation or warranty, except as to the absence of liens,
charges or encumbrances created by or arising as a result of actions of HARC or
the related Issuer.  Such assignment
shall be a sale and assignment outright, and not for security.  If, following the reassignment of a
Repurchased Receivable, in any enforcement suit or legal proceeding, it is held
that Seller may not enforce any such Receivable on the ground that it shall not
be a real party in interest or a holder entitled to enforce the Receivable,
HARC and the related Issuer shall, at the expense of Seller, take such steps as
Seller deems reasonably necessary to enforce the Receivable, including bringing
suit in HARC’s or in the related Issuer’s name.

 

SECTION 5.3         Waivers.  No failure or delay on the part of HARC, or
the related Issuer as assignee of HARC, in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any
other or future exercise thereof or the exercise of any other power, right or
remedy.

 

10

 

ARTICLE VI

 

MISCELLANEOUS

 

SECTION 6.1         Liability of Seller.  Seller shall be liable in accordance herewith
only to the extent of the obligations in this Agreement specifically undertaken
by Seller and the representations and warranties of Seller.

 

SECTION 6.2         Amendment. 
This Agreement and any Conveyance Papers and the rights and obligations
of the parties hereunder may not be changed orally, but only by an instrument
in writing signed by HARC and Seller in accordance with this Section 6.2.  This Agreement and any Conveyance Papers may
be amended from time to time by HARC and Seller only with the prior written
consent of all of the Secured Parties.

 

SECTION 6.3         GOVERNING
LAW.  THIS AGREEMENT AND THE
CONVEYANCE PAPERS 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.

 

SECTION 6.4         Notices.  All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of Seller, 5855 Copley Drive, San Diego, CA 92111, Attention:  Chief Operating Officer, with a copy to 2700
Sanders Road, Prospect Heights, Illinois 60070 
Attention:  Director—Asset
Securitization, (b) in the case of HARC, 1111 Town Center Drive, Las
Vegas, Nevada 89134 Attention: 
Compliance Officer, with a copy to 2700 Sanders Road, Prospect Heights,
Illinois 60070,  Attention:  Treasurer; or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party.

 

SECTION 6.5         Severability of Provisions.  If any one or more of the covenants,
agreements, provisions, or terms of this Agreement or Conveyance Paper shall
for any reason whatsoever be held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, and terms of this Agreement or any Conveyance Paper and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of any Conveyance Paper.

 

SECTION 6.6         Assignment. 
Notwithstanding anything to the contrary contained herein, other than
HARC’s assignment of its rights, title, and interests in, to, and under this
Agreement to the Issuer specified in a Master Sale and Servicing Agreement
(which Issuer shall assign such rights, title and interest in and to this
Agreement to the related Indenture Trustee for the benefit of the related
Secured Parties), as contemplated by the Master Sale and Servicing Agreement
and Section 6.7 hereof, the Receivables, the Other Conveyed Property, this
Agreement and all other Conveyance 

 

11

 

Papers may not be
assigned by the parties hereto; provided, however, that Seller
shall have the right to assign its rights, title and interests, in to and under
this Agreement to (i) any successor by merger or consolidation, or any
Person which acquires by conveyance, transfer or sale the properties and assets
of Seller or (ii) any Affiliate owned directly or indirectly by Household
International, Inc.  The right
granted in the foregoing proviso is subject to the further condition that any
such successor or other Person shall expressly assume by written agreement, in
form and substance satisfactory to HARC, the obligations of Seller hereunder
and under the Conveyance Papers.

 

SECTION 6.7         Acknowledgment and Agreement of Seller.  By execution below, Seller expressly
acknowledges and agrees that all of HARC’s right, title, and interest in, to,
and under this Agreement, including, without limitation, all of HARC’s right
title, and interest in and to the Receivables purchased pursuant to this
Agreement, shall be assigned by HARC to an Issuer specified in a Master Sale
and Servicing Agreement and by such Issuer to the related Indenture Trustee for
the benefit of the related Secured Parties, and Seller consents to such
assignment.  Additionally, Seller agrees
for the benefit of such Indenture Trustee that any amounts payable by Seller to
HARC hereunder which are to be paid by HARC to such Indenture Trustee for the
benefit of the related Secured Parties shall be paid by Seller, on behalf of
HARC, directly to such Indenture Trustee. 
Any payment required to be made on or before a specified date in
same-day funds may be made on the prior business day in next-day funds.

 

SECTION 6.8         Further
Assurances.  HARC and Seller agree to
do and perform, from time to time, any and all acts to authenticate any and
further records, to execute any and further instruments, in each case required
or reasonably requested by the other party more fully to effect the purposes of
this Agreement and the Conveyance Papers, including, without limitation, the
execution of any financing statements or continuation statements or equivalent
documents relating to the Receivables for filing under the provisions of the
UCC or other law of any applicable jurisdiction.

 

SECTION 6.9         No Waiver; Cumulative Remedies.  No failure to exercise and no delay in
exercising, on the part of HARC or Seller, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.

 

SECTION 6.10       Counterparts.  This Agreement and all Conveyance Papers may
be executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.

 

SECTION 6.11       Binding Effect; Third-Party
Beneficiaries. 
This Agreement and the Conveyance Papers will inure to the benefit of and
be binding upon the parties hereto and their
respective successors and permitted assigns. 
Each of the Indenture Trustee and Issuer with respect to a Master Sale
and Servicing Agreement and 

 

12

 

the
related Owner Trustee shall be considered a third-party beneficiary of this
Agreement.

 

SECTION 6.12       Merger and Integration.  Except as specifically stated otherwise
herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof,  and all prior
understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers.  This Agreement and
the Conveyance Papers may not be modified, amended, waived or supplemented
except as provided herein.

 

SECTION 6.13       Heading.  The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

 

SECTION 6.14       Schedules
and Exhibits.  The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

 

SECTION 6.15       Survival of
Representations and Warranties.  All
representations, warranties and agreements contained in this Agreement or
contained in any Conveyance Paper, shall remain operative and in full force and
effect and shall survive conveyance of the Receivables by HARC to the Issuer
pursuant to the Master Sale and Servicing Agreement and the pledge thereof by
the Issuer to the Indenture Trustee pursuant to the related Indenture and the
related Series Supplement.

 

SECTION 6.16       Nonpetition
Covenant.  Until the date which is
one year and one day after payment in full of all the Notes of all Series,
neither HARC nor Seller shall petition or otherwise invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against Seller or any 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 Seller or any
Issuer or any substantial part of their respective properties, or ordering the
winding up or liquidation of the affairs of Seller or any Issuer.  This provision shall survive the termination
of this Agreement.

 

[Signature Page Follows]

 

13

 

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

 

	
   

  	
  HOUSEHOLD AUTOMOTIVE
  CREDIT 

  CORPORATION

  
	
   

  	
  as
  Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy R. Condon

  
	
   

  	
   

  	
  Name: Timothy R. Condon

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice
  President and Chief

  
	
   

  	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO
  RECEIVABLES CORPORATION,

  
	
   

  	
  as
  Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. H. Smith

  
	
   

  	
   

  	
  Name: S. H. Smith

  
	
   

  	
   

  	
  Title: Vice President
  and Assistant Treasurer

  

 

14

 

EXHIBIT A

 

FORM OF RECEIVABLES PURCHASE AGREEMENT SUPPLEMENT

 

Transfer No.     of Receivables,
dated as of                             ,
pursuant to a Master Receivables Purchase Agreement (the “Purchase Agreement”)
dated as of August 8, 2002, between Household Automotive Credit
Corporation, a Delaware corporation (“Seller”) and Household Auto
Receivables Corporation, a Nevada corporation (“HARC”).

 

W I T N E S S E T H :

 

WHEREAS pursuant to the Purchase Agreement, Seller
wishes to convey Receivables and Other Conveyed Property to HARC; and

 

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

 

NOW, THEREFORE, Seller and HARC hereby agree as
follows:

 

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

 

“Cutoff Date” shall mean with respect to the
Receivables conveyed hereby, the close of business on                       ,
200   .

 

“Master Sale and Servicing Agreement” means the
agreement dated as of                   ,
        among HARC, Household Finance
Corporation, as Master Servicer,                      ,
as indenture trustee and                      ,
as issuer.

 

“Purchase Date” shall mean with respect to the
Receivables conveyed hereby,                             ,
200  .

 

“Purchase Price” shall mean 100% of the
Principal Balance of the Receivables on the books and records of Seller, plus
the present value of anticipated excess spread on such Receivables, discounted
to take into account any uncertainty as to future performance matching
historical performance, servicing fees, delinquencies, paydown rates, yield and
such other factors as may be mutually agreed upon by Seller and HARC.

 

“Transfer Date” means, with respect to
Receivables, the date on which Receivables and Other Conveyed Property are to
be transferred to the Trust pursuant to the Master Sale and Servicing
Agreement.

 

A-1

 

2.             Schedule of
Receivables.  Annexed
as Schedule A hereto is a computer file which reflects the Receivables
that constitute the Receivables to be conveyed pursuant to this Agreement on
the Purchase Date.

 

3.             Conveyance
of Receivables.  In consideration of
HARC’s delivery to or upon the order of Seller of the Purchase Price, Seller
does hereby sell, transfer, assign, set over and otherwise convey to HARC,
without recourse (except as expressly provided in the Purchase Agreement), all
right, title and interest of Seller in and to:

 

(i)            each and every Receivable listed on Schedule A hereto
and all monies paid or payable thereon or in respect thereof on or after the
Cutoff Date (including amounts due on or before the Cutoff Date but received by
Seller after such date);

 

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

 

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

 

(vi)          any
proceeds and the right to receive proceeds with respect to the related
Receivables from claims on any physical damage, loss, credit life or disability
insurance policies, if any, covering Financed Vehicles or Obligors, including
rebates of insurance premiums relating to the Receivables and any proceeds from
the liquidation of such Receivables;

 

(vii)         all
items contained in the Receivables Files with respect to such Receivables and
any and all other documents that Seller or the Master Servicer keeps on file in
accordance with its customary procedures relating to the related Receivables,
or the related Financed Vehicles or Obligor;

 

(viii)        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 HARC pursuant to liquidation of such Receivable;

 

(ix)           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, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and 

 

A-2

 

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 Seller.  As of the
Purchase Date, Seller hereby makes the representations and warranties to HARC
that are set forth in Section 3.1 of the Purchase Agreement with respect
to the Conveyance effected hereby to the same extent as if set forth in full
herein.

 

5.             Representations
and Warranties of HARC.  As of the
Purchase Date, HARC hereby makes the representations and warranties to Seller
that are set forth in Section 3.2 of the Purchase Agreement with respect
to the Conveyance effected hereby to the same extent as if set forth in full
herein.  In the event of any breach of a
representation and warranty made by HARC hereunder, Seller covenants and agrees
that it will not take any action to pursue any remedy that it may have
hereunder, in law, in equity or otherwise, until a year and a day have passed
since the date on which all Notes and Certificates issued by the Trust have
been paid in full.  Seller and HARC agree
that damages will not be an adequate remedy for such breach and that this
covenant may be specifically enforced by HARC, the related Issuer or by the
related Indenture Trustee on behalf of the related Secured Parties and the
related Owner Trustee on behalf of the related Certificateholders.

 

6.             Conditions
Precedent.  The obligation of HARC to
acquire the Receivables hereunder is subject to the satisfaction, on or prior
to the Purchase Date, of the following conditions precedent:

 

(a)           Representations and Warranties.  Each of the representations and warranties
made by Seller in Section 4 of this Agreement and in Section 3.1 of
the Master Receivables Purchase Agreement shall be true and correct as of the
date of this Agreement and as of the Purchase Date.

 

(b)           Additional Information.  Seller shall have delivered to HARC such
information as was reasonably requested by HARC to satisfy itself as to
(i) the accuracy of the representations and warranties set forth in
Section 4 of this Agreement and in Section 3.1 of the Purchase Agreement
and (ii) the satisfaction of the conditions set forth in this Section.

 

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

 

8.             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

 

9.             Conveyance
of the Receivables and the Other Conveyed Property to the Issuer.  Seller acknowledges that HARC intends,
pursuant to the related Master Sale and Servicing Agreement, to convey the
Receivables and the Other Conveyed Property, together with its rights under
this Agreement, to the related Issuer on the Transfer Date.  The Seller acknowledges and consents to such
conveyance and pledge and waives any further notice thereof and covenants and
agrees that the representations and warranties of the Seller contained in this
Agreement and the rights of HARC hereunder are intended to benefit the related
Issuer, the related Owner Trustee, the related Indenture Trustee, the related
Secured Parties and the related Certificateholders.  In furtherance of the foregoing, the Seller
covenants and agrees to perform its duties and obligations hereunder, in accordance
with the terms hereof for the benefit of the related Issuer, the related Owner
Trustee, the related Indenture Trustee and the related Secured Parties and
that, notwithstanding anything to the contrary in this Agreement, the Seller
shall be directly liable to the related Issuer, the related Owner Trustee, the
related Indenture Trustee and the related Secured Parties (notwithstanding any
failure by the Master Servicer or HARC to perform their respective duties and
obligations hereunder or under any Basic Document) and that the related Indenture
Trustee may enforce the duties and obligations of Seller under this Agreement
against Seller for the benefit of the related Secured Parties and the related
Owner Trustee.

 

10.           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, Seller and HARC have caused this
Purchase Agreement to be duly executed and delivered by their respective duly
authorized officers as of day and the year first above written.

 

	
   

  	
  HOUSEHOLD AUTOMOTIVE
  CREDIT 

  CORPORATION,

  
	
   

  	
  as
  Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  HOUSEHOLD AUTO
  RECEIVABLES CORPORATION,

  
	
   

  	
  as
  Purchaser

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  TITLE:

  

 

A-5

 

SCHEDULE A

 

SCHEDULE OF
RELATED MASTER SALE AND SERVICING AGREEMENTS

 

(1) Master Sale and
Servicing Agreement dated as of August 8, 2002, among Household Finance
Corporation, as Master Servicer, Household Automotive Trust 2002-2, as Issuer,
Household Auto Receivables Corporation, as Seller and JPMorgan Chase Bank, as
Indenture Trustee.

 

(2) Master Sale and
Servicing Agreement dated as of May 29, 2003, among Household Finance
Corporation, as Master Servicer, Household Automotive Trust 2003-1, as Issuer,
Household Auto Receivables Corporation, as Seller and U.S. Bank National
Association, as Indenture Trustee.

 

(3) Master Sale and Servicing Agreement, dated as
of November 26, 2003, among Household Finance Corporation, as Master
Servicer, Household Automotive Trust 2003-2, as Issuer, Household Auto
Receivables Corporation, as Seller and Wells Fargo Bank Minnesota, National
Association, as Indenture Trustee.

 

(4) Master Sale and Servicing Agreement, dated as
of June 22, 2005, among HSBC Finance Corporation (formerly Household
Finance Corporation), as Master Servicer, HSBC Automotive Trust 2005-1, as
Issuer, HSBC Auto Receivables Corporation (formerly Household Auto Receivables
Corporation), as Seller, Wells Fargo Bank, National Association, as Indenture
Trustee and HSBC Bank USA, National Association, as Administrator.

 

(5) Master Sale and Servicing Agreement, dated as
of July 27, 2005, among HSBC Finance Corporation, as Master Servicer, HSBC
Automotive Trust 2005-2, as Issuer, HSBC Auto Receivables Corporation, as
Seller, U.S. Bank National Association, as Indenture Trustee and HSBC Bank USA,
National Association, as Administrator.

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