Document:

Exhibit 4.1

Execution Copy

 

INDENTURE

Dated as of November 1, 2006

among

HSBC AUTOMOTIVE
TRUST (USA) 2006-3

Issuer,

THE BANK OF NEW YORK TRUST COMPANY, N.A.

Indenture Trustee

and

HSBC BANK USA, NATIONAL ASSOCIATION

Administrator

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. Definitions and Incorporation by
  Reference

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
  1

  
	
  SECTION 1.2

  	
  Incorporation by Reference of the Trust Indenture
  Act

  	
  6

  
	
  SECTION 1.3

  	
  Rules of Construction

  	
  7

  
	
  SECTION 1.4

  	
  Action by or Consent of Noteholders and
  Certificateholders

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE II. The Notes

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
  Form; Amount Limited; Issuable in Series

  	
  8

  
	
  SECTION 2.2

  	
  Execution, Authentication and Delivery

  	
  8

  
	
  SECTION 2.3

  	
  Temporary Notes

  	
  9

  
	
  SECTION 2.4

  	
  Registration; Registration of Transfer and Exchange

  	
  9

  
	
  SECTION 2.5

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
  12

  
	
  SECTION 2.6

  	
  Persons Deemed Owner

  	
  13

  
	
  SECTION 2.7

  	
  Payment of Principal and Interest; Defaulted
  Interest

  	
  13

  
	
  SECTION 2.8

  	
  Cancellation

  	
  14

  
	
  SECTION 2.9

  	
  Reserved

  	
  14

  
	
  SECTION 2.10

  	
  Book-Entry Notes

  	
  14

  
	
  SECTION 2.11

  	
  Notices to Clearing Agency

  	
  15

  
	
  SECTION 2.12

  	
  Definitive Notes

  	
  15

  
	
  SECTION 2.13

  	
  Final Distribution

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE III. Covenants

  	
  17

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  Payment of Principal and Interest

  	
  17

  
	
  SECTION 3.2

  	
  Maintenance of Office or Agency

  	
  17

  
	
  SECTION 3.3

  	
  Money for Payments to be Held in Trust

  	
  17

  
	
  SECTION 3.4

  	
  Existence

  	
  19

  
	
  SECTION 3.5

  	
  Protection of Series Trust Estate

  	
  19

  
	
  SECTION 3.6

  	
  Opinions as to Series Trust Estate

  	
  20

  
	
  SECTION 3.7

  	
  Performance of Obligations; Servicing of Receivables

  	
  21

  
	
  SECTION 3.8

  	
  Negative Covenants

  	
  21

  
	
  SECTION 3.9

  	
  Annual Statement as to Compliance

  	
  22

  
	
  SECTION 3.10

  	
  Issuer May Consolidate, Etc. Only on Certain Terms

  	
  23

  
	
  SECTION 3.11

  	
  Successor or Transferee

  	
  24

  
	
  SECTION 3.12

  	
  No Other Business

  	
  25

  
	
  SECTION 3.13

  	
  No Borrowing

  	
  25

  
	
  SECTION 3.14

  	
  Servicer’s Obligations

  	
  25

  
	
  SECTION 3.15

  	
  Guarantees, Loans, Advances and Other Liabilities

  	
  25

  
	
  SECTION 3.16

  	
  Capital Expenditures

  	
  25

  
	
  SECTION 3.17

  	
  Compliance with Laws

  	
  25

  
	
  SECTION 3.18

  	
  Restricted Payments

  	
  26

  
	
  SECTION 3.19

  	
  Notice of Events of Default

  	
  26

  
	
  SECTION 3.20

  	
  Further Instruments and Acts

  	
  26

  
	
  SECTION 3.21

  	
  Amendments of Sale and Servicing Agreement and Trust
  Agreement

  	
  26

  
	
  SECTION 3.22

  	
  Income Tax Characterization

  	
  26

  

 

 i
 

 

 

	
  ARTICLE IV. Satisfaction and Discharge

  	
  26

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Satisfaction and Discharge of Indenture

  	
  26

  
	
  SECTION 4.2

  	
  Application of Trust Money

  	
  28

  
	
  SECTION 4.3

  	
  Repayment of Monies Held by Note Paying Agent

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE V. Remedies

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Events of Default

  	
  28

  
	
  SECTION 5.2

  	
  Collection of Indebtedness and Suits for Enforcement
  by Indenture Trustee

  	
  28

  
	
  SECTION 5.3

  	
  Limitation of Suits

  	
  30

  
	
  SECTION 5.4

  	
  Unconditional Rights of Noteholders To Receive
  Principal and Interest

  	
  31

  
	
  SECTION 5.5

  	
  Restoration of Rights and Remedies

  	
  31

  
	
  SECTION 5.6

  	
  Rights and Remedies Cumulative

  	
  31

  
	
  SECTION 5.7

  	
  Delay or Omission Not a Waiver

  	
  31

  
	
  SECTION 5.8

  	
  Limitation on Voting of Preferred Stock; Control by
  Noteholders

  	
  32

  
	
  SECTION 5.9

  	
  Waiver of Past Defaults

  	
  32

  
	
  SECTION 5.10

  	
  Undertaking for Costs

  	
  32

  
	
  SECTION 5.11

  	
  Waiver of Stay or Extension Laws

  	
  33

  
	
  SECTION 5.12

  	
  Action on Notes

  	
  33

  
	
  SECTION 5.13

  	
  Performance and Enforcement of Certain Obligations

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI. The Indenture Trustee and the
  Administrator

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Duties of Indenture Trustee

  	
  34

  
	
  SECTION 6.2

  	
  Rights of Indenture Trustee

  	
  36

  
	
  SECTION 6.3

  	
  Individual Rights of Indenture Trustee

  	
  37

  
	
  SECTION 6.4

  	
  Indenture Trustee’s Disclaimer

  	
  37

  
	
  SECTION 6.5

  	
  Notice of Defaults

  	
  37

  
	
  SECTION 6.6

  	
  Reports by Servicer to Holders

  	
  38

  
	
  SECTION 6.7

  	
  Indenture Trustee Compensation and Indemnification

  	
  38

  
	
  SECTION 6.8

  	
  Replacement of Indenture Trustee

  	
  39

  
	
  SECTION 6.9

  	
  Successor Indenture Trustee by Merger

  	
  41

  
	
  SECTION 6.10

  	
  Appointment of Co-Indenture Trustee or Separate
  Indenture Trustee

  	
  41

  
	
  SECTION 6.11

  	
  Eligibility: Disqualification

  	
  42

  
	
  SECTION 6.12

  	
  Preferential Collection of Claims Against Issuer

  	
  43

  
	
  SECTION 6.13

  	
  Representations and Warranties of the Indenture
  Trustee

  	
  43

  
	
  SECTION 6.14

  	
  Waiver of Setoffs

  	
  43

  
	
  SECTION 6.15

  	
  No Consent to Certain Acts of Seller

  	
  43

  
	
  SECTION 6.16

  	
  Duties, Liabilities and Limitations on Liability of
  Administrator

  	
  44

  
	
  SECTION 6.17

  	
  Administrator Compensation and Indemnification

  	
  45

  
	
  SECTION 6.18

  	
  Replacement of Administrator

  	
  46

  
	
  SECTION 6.19

  	
  Successor Administrator by Merger

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII. Noteholders’ Lists and Reports

  	
  47

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

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

  	
  47

  

 

 ii
 

 

 

	
  SECTION 7.2

  	
  Preservation of Information; Communications to
  Noteholders

  	
  48

  
	
  SECTION 7.3

  	
  Reports by Issuer

  	
  48

  
	
  SECTION 7.4

  	
  Reports by Indenture Trustee

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII. Accounts, Disbursements and Releases

  	
  49

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Collection of Money

  	
  49

  
	
  SECTION 8.2

  	
  Release of Series Trust Estate

  	
  49

  
	
  SECTION 8.3

  	
  Opinion of Counsel

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX. Amendments; the Series Supplement

  	
  50

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  Amendments Without Consent of Noteholders

  	
  50

  
	
  SECTION 9.2

  	
  Amendments With Consent of Noteholders

  	
  52

  
	
  SECTION 9.3

  	
  Series Supplement Authorizing the Notes

  	
  53

  
	
  SECTION 9.4

  	
  Execution of the Series Supplement

  	
  53

  
	
  SECTION 9.5

  	
  Effect of Series Supplement

  	
  54

  
	
  SECTION 9.6

  	
  Conformity With Trust Indenture Act

  	
  54

  
	
  SECTION 9.7

  	
  Reference in Notes to the Series Supplement

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. [Reserved]

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI. Miscellaneous

  	
  54

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  Compliance Certificates and Opinions, etc.

  	
  54

  
	
  SECTION 11.2

  	
  Form of Documents Delivered to Indenture Trustee

  	
  56

  
	
  SECTION 11.3

  	
  Acts of Noteholders

  	
  57

  
	
  SECTION 11.4

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

  	
  57

  
	
  SECTION 11.5

  	
  Notices to Noteholders; Waiver

  	
  58

  
	
  SECTION 11.6

  	
  Alternate Payment and Notice Provisions

  	
  59

  
	
  SECTION 11.7

  	
  Conflict with TIA

  	
  59

  
	
  SECTION 11.8

  	
  Effect of Headings and Table of Contents

  	
  59

  
	
  SECTION 11.9

  	
  Successors and Assigns

  	
  60

  
	
  SECTION 11.10

  	
  Separability

  	
  60

  
	
  SECTION 11.11

  	
  Benefits of Indenture

  	
  60

  
	
  SECTION 11.12

  	
  Legal Holidays

  	
  60

  
	
  SECTION 11.13

  	
  GOVERNING LAW

  	
  60

  
	
  SECTION 11.14

  	
  Counterparts

  	
  60

  
	
  SECTION 11.15

  	
  Recording of Indenture

  	
  60

  
	
  SECTION 11.16

  	
  Trust Obligation

  	
  61

  
	
  SECTION 11.17

  	
  No Petition

  	
  61

  
	
  SECTION 11.18

  	
  Limited Recourse

  	
  61

  
	
  SECTION 11.19

  	
  Inspection

  	
  62

  
	
  SECTION 11.20

  	
  Limitation of Liability

  	
  62

  
	
  SECTION 11.21

  	
  Waiver of Jury Trial

  	
  62

  

 

EXHIBIT A  –  Form
of Transferee Certificate

 iii

 

INDENTURE dated as
of November 1, 2006, among HSBC AUTOMOTIVE TRUST (USA) 2006-3, a Delaware
statutory trust (the “Issuer”), THE BANK OF NEW YORK TRUST COMPANY, N.A., a national
banking association, as indenture trustee (the “Indenture Trustee”) and HSBC BANK USA, NATIONAL ASSOCIATION, a
national banking association, as administrator (the “Administrator”).

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

GRANTING CLAUSE

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

ARTICLE I.

Definitions and Incorporation by Reference

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

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

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

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

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

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

 1
 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 2
 

 

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

“Indenture Trustee”
means, initially, THE BANK OF NEW YORK TRUST COMPANY, N.A., a national
banking association, not in its individual capacity but as trustee under this
Indenture, or any successor trustee under this Indenture.

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

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

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

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

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

 3
 

 

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

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

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

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

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

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

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

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

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

 4
 

 

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

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

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

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

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

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

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

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

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

 5
 

 

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

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

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

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

“Series Supplement” means
the Series Supplement, dated as of November 1, 2006, among the Servicer, the
Issuer, the Seller, the Indenture Trustee, the Owner Trustee and the
Administrator, as such agreement may be amended or supplemented from time to
time.

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

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

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

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

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

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

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

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

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

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

 6
 

 

“Commission” means the
Securities and Exchange Commission.

“indenture securities”
means the Notes.

“indenture security
holder” means a Noteholder.

“indenture to be
qualified” means this Indenture.

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

“obligor” on the
indenture securities means the Issuer.

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

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

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

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

(iii)                  “or”
is not exclusive;

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

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

SECTION 1.4         Action by or Consent of Noteholders
and Certificateholders.  Whenever any
provision of this Indenture refers to action to be taken, or consented to, by
Noteholders or Certificateholders, such provision shall be deemed to refer to
the Certificateholder or Noteholder, as the case may be, of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders or Certificateholders.  Solely for the purposes of any action to be
taken, or consented to, by Noteholders or Certificateholders, any Note or
Certificate registered in the name of Seller or any Affiliate thereof shall be
deemed not to be Outstanding (except in the event that the Seller and/or an
Affiliate thereof then owns all outstanding Certificates and Outstanding
Notes); provided, however, that, solely for the purpose of
determining whether the Indenture Trustee is entitled to rely upon any such
action or consent, only Notes or Certificates that a Responsible Officer of the
Owner Trustee or the Indenture Trustee, as the case may be, either actually
knows to be so owned or has received written notice thereof shall be so
disregarded.

 7
 

 

ARTICLE II.

The Notes

SECTION 2.1         Form; Amount Limited; Issuable in
Series.

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

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

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

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

No Notes shall be issued
under this Indenture unless such Notes have been authorized pursuant to the
Series Supplement, and all conditions precedent to the issuance thereof, as
specified in the Series Supplement, shall have been satisfied.

All Notes issued under
this Indenture shall be in all respects equally and ratably entitled to the
benefits hereof and secured by the Series Trust Estate without preference,
priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions
hereof and the Series Supplement.

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

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

 8
 

 

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

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

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

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

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

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

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

 9
 

 

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

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

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

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

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

 10
 

 

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

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

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

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

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

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

 11
 

 

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

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

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

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

 12
 

 

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

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

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

SECTION 2.7         Payment of Principal and Interest;
Defaulted Interest.

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

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

 13
 

 

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

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

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

SECTION 2.9         Reserved.

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

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

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

 14
 

 

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

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

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

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

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

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

 15
 

 

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

SECTION 2.13       Final Distribution.

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

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

 16
 

 

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

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

ARTICLE III.

Covenants

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

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

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

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

The Issuer will cause
each Note Paying Agent other than the Indenture Trustee or the Administrator to
execute and deliver to the Indenture Trustee an

 17
 

 

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

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

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

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

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

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

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

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

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

 18
 

 

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

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

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

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

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

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

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

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

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

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

(iv)                  enforce
any of the Series Trust Estate;

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

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

SECTION 3.6         Opinions as to Series Trust Estate.

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

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

 20
 

 

SECTION 3.7         Performance of Obligations;
Servicing of Receivables.

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

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

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

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

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

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

 21

 

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

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

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

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

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

The Officer’s Certificate referred to in this Section
3.9 will be delivered on or before March 15 of each calendar year, beginning
March 15, 2007 and otherwise in compliance with the requirements of TIA Section
314(a)(4), unless the Issuer is not required to file periodic reports under the
Exchange Act, in which case the certificate may be delivered by March 31 of
each calendar year and otherwise in compliance with the requirements of TIA
Section 314(a)(4).

 22
 

 

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

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

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

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

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

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

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

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

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

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

 23
 

 

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

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

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

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

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

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

SECTION 3.11       Successor or Transferee.

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

 24
 

 

(b)           Upon a conveyance or transfer of all
the assets and properties of the Issuer pursuant to Section 3.10(b), HSBC
Automotive Trust (USA) 2006-3 will be released from every covenant and
agreement of this Indenture and the Series Supplement to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee stating that HSBC
Automotive Trust (USA) 2006-3 is to be so released.

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

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

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

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

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

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

 25
 

 

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

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

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

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

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

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

ARTICLE IV.

Satisfaction and Discharge

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

 26
 

 

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

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

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

(i)            have become due and payable,

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

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

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

 27
 

 

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

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

ARTICLE V.

Remedies

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

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

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

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

 28
 

 

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

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

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

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

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

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

 29
 

 

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

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

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

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

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

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

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

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

 30
 

 

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

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

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

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

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

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

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

 31
 

 

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

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

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

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

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

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

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

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

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

 32
 

 

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

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

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

SECTION 5.13       Performance and Enforcement of Certain
Obligations.

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

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

 33
 

 

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

ARTICLE VI.

The Indenture Trustee and the Administrator

SECTION 6.1         Duties of Indenture Trustee.

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

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

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

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

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

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

 34
 

 

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

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

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

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

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

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

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

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

 35
 

 

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

SECTION 6.2         Rights of Indenture Trustee.

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

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

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

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

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

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

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

 36
 

 

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

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

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

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

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

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

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

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

 37
 

 

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

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

SECTION 6.7         Indenture Trustee Compensation and
Indemnification.

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

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

 38
 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 6.17               Administrator Compensation and
Indemnification.

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

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

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

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

SECTION 6.18               Replacement of Administrator.

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

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

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

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

(d)           the Administrator otherwise becomes
incapable of acting.

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

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

 46
 

 

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

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

SECTION 6.19       Successor Administrator by Merger.

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

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

ARTICLE VII.

Noteholders’ Lists and Reports

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

 47
 

 

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

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

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

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

SECTION 7.3         Reports by Issuer.

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

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

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

(iii)                  supply
to the Indenture Trustee such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.3(a) as may be required by rules and regulations prescribed from
time to time by the Commission.

(b)           The Indenture Trustee will mail as
described in TIA Section 313(c) (if so required under the provisions of the
TIA) or make available on its website to all

 48
 

 

Noteholders the
information, documents and reports, or summaries thereof, supplied to the
Indenture Trustee pursuant to Section 7.3(a).

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

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

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

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

ARTICLE VIII.

Accounts, Disbursements and Releases

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

SECTION 8.2         Release of Series Trust Estate.

(a)           Subject to the payment of its fees
and expenses pursuant to Section 6.7, and to the extent not covered by Section
8.2(b), the Indenture Trustee may, and when required by the Issuer and the
provisions of this Indenture shall, execute instruments to release property
from the lien of this Indenture, in a manner and under circumstances that are
not inconsistent with the provisions of this Indenture.  No party relying upon an

 49
 

 

instrument executed by the
Indenture Trustee as provided in this Article VIII shall be bound to ascertain
the Indenture Trustee’s authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.

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

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

ARTICLE IX.

Amendments; the Series Supplement

SECTION 9.1         Amendments Without Consent of
Noteholders.

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

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

 50
 

 

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

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

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

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

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

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

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

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

 51
 

 

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

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

	
  (i)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  

 

 52
 

 

 

	
  (vi)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (vii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (viii)

  	
   

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

  

 

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

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

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

SECTION 9.3         Series Supplement Authorizing the
Notes.

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

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

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

 53
 

 

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

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

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

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

ARTICLE X.

[Reserved]

ARTICLE XI.

Miscellaneous

SECTION 11.1       Compliance Certificates and Opinions,
etc.

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

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

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

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

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

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

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

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

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

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

 55
 

 

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

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

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

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

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

 56
 

 

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

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

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

SECTION 11.3       Acts of Noteholders.

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

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

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

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

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

 57
 

 

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

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

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

(c)           The Issuer by the Indenture Trustee
or by any Noteholder shall be sufficient for every purpose hereunder if
personally delivered, delivered by facsimile or overnight courier or mailed
first class, and shall be deemed to have been duly given upon receipt to the
Issuer addressed to:  HSBC Automotive
Trust (USA) 2006-3, in care of the Owner Trustee at its Corporate Trust Office,
or at any other address previously furnished in writing to the Indenture
Trustee by the Issuer.  Each of the
Issuer and the Administrator shall promptly transmit any notice received by it
from the Noteholders to the Indenture Trustee.

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

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

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

 58
 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 60
 

 

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

SECTION 11.17     No Petition.  The Indenture Trustee and the Administrator,
by entering into this Indenture, and each Noteholder, by accepting a Note,
hereby covenant and agree that they will not at any time institute against the
Seller, or the Issuer, or join in, cooperate with or encourage others in
connection with the institution against the Seller, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents or any of the Related Documents.

SECTION 11.18             Limited Recourse.

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

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

 61
 

 

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

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

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

SECTION 11.21     Waiver of Jury Trial.  Each
party to this Indenture hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement, the Notes or the
transactions contemplated hereby.

[Signature Page Follows]

 62

 

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

	
  

  	
  HSBC AUTOMOTIVE TRUST (USA) 2006-3

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. Bank Trust National Association,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia M. Child

  	
   

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A., not in its individual capacity but

  solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cindi Garcia as Trustee

  	
   

  
	
   

  	
   

  	
  Name: Cindi Garcia

  
	
   

  	
   

  	
  Title:   Trust Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Fernando Acebedo

  	
   

  
	
   

  	
   

  	
  Name: Fernando Acebedo

  
	
   

  	
   

  	
  Title:   Vice President

  
					

 

 

Exhibit A

FORM OF TRANSFEREE CERTIFICATE

Pursuant to Section 2.4
of the Indenture dated as of November 1, 2006 between HSBC Automotive Trust
(USA) 2006-3, The Bank of New York Trust Company, N.A., a national banking
association, and HSBC Bank USA, National Association, a national banking
association,                            
(the “Transferee”) hereby certifies on the date hereof that either (check
appropriate certification):

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

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

	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Name of Transferee]Exhibit
4.2

Execution
Copy

 

AMENDED AND
RESTATED

TRUST AGREEMENT

 

between

HSBC AUTO
RECEIVABLES CORPORATION,

and

U.S.
BANK TRUST NATIONAL ASSOCIATION

Owner Trustee

 

Dated as of November 1,
2006

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
   

  	
  Capitalized Terms

  	
   

  	
  1

  
	
  Section 1.2.

  	
   

  	
  Other Definitional Provisions

  	
   

  	
  3

  
	
  Section 1.3.

  	
   

  	
  Action by or Consent of Noteholders and
  Certificateholders

  	
   

  	
  3

  
	
  Section 1.4.

  	
   

  	
  Material Adverse Effect

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II Organization

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Name

  	
   

  	
  4

  
	
  Section 2.2.

  	
   

  	
  Office

  	
   

  	
  4

  
	
  Section 2.3.

  	
   

  	
  Purposes and Powers

  	
   

  	
  4

  
	
  Section 2.4.

  	
   

  	
  Appointment of Owner Trustee

  	
   

  	
  5

  
	
  Section 2.5.

  	
   

  	
  Initial Capital Contribution of Owner Trust Estate

  	
   

  	
  5

  
	
  Section 2.6.

  	
   

  	
  Declaration of Trust

  	
   

  	
  5

  
	
  Section 2.7.

  	
   

  	
  Liability

  	
   

  	
  6

  
	
  Section 2.8.

  	
   

  	
  Title to Owner Trust Estate

  	
   

  	
  6

  
	
  Section 2.9.

  	
   

  	
  Situs of Owner Trust Estate

  	
   

  	
  6

  
	
  Section 2.10.

  	
   

  	
  Representations and Warranties of the Depositor

  	
   

  	
  6

  
	
  Section 2.11.

  	
   

  	
  Federal Income Tax Allocations

  	
   

  	
  8

  
	
  Section 2.12.

  	
   

  	
  Covenants of the Depositor

  	
   

  	
  8

  
	
  Section 2.13.

  	
   

  	
  Covenants of the Certificateholders

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III Certificates and Transfer of Interests

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Initial Ownership

  	
   

  	
  10

  
	
  Section 3.2.

  	
   

  	
  The Certificates

  	
   

  	
  10

  
	
  Section 3.3.

  	
   

  	
  Authentication of Certificates

  	
   

  	
  11

  
	
  Section 3.4.

  	
   

  	
  Registration of Transfer and Exchange of
  Certificates

  	
   

  	
  11

  
	
  Section 3.5.

  	
   

  	
  Mutilated, Destroyed, Lost or Stolen Certificates

  	
   

  	
  12

  
	
  Section 3.6.

  	
   

  	
  Persons Deemed Certificateholders

  	
   

  	
  13

  
	
  Section 3.7.

  	
   

  	
  Access to List of Certificateholders’ Names and
  Addresses

  	
   

  	
  13

  
	
  Section 3.8.

  	
   

  	
  Maintenance of Office or Agency

  	
   

  	
  13

  
	
  Section 3.9.

  	
   

  	
  ERISA Restrictions

  	
   

  	
  13

  
	
  Section 3.10.

  	
   

  	
  Securities Matters

  	
   

  	
  14

  
	
  Section 3.11.

  	
   

  	
  Distributions

  	
   

  	
  14

  
	
  Section 3.12.

  	
   

  	
  Certificate Paying Agent

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV Voting Rights and Other Actions

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Prior Notice to Holders with Respect to Certain
  Matters

  	
   

  	
  14

  
	
  Section 4.2.

  	
   

  	
  Action by Certificateholders with Respect to Certain
  Matters

  	
   

  	
  15

  
	
  Section 4.3.

  	
   

  	
  Action by Certificateholders with Respect to
  Bankruptcy

  	
   

  	
  15

  
	
  Section 4.4.

  	
   

  	
  Restrictions on Certificateholders’ Power

  	
   

  	
  15

  
	
  Section 4.5.

  	
   

  	
  Majority Control

  	
   

  	
  16

  

 

 

	
  Section 4.6.

  	
   

  	
  [Reserved]

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V Certain Duties

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

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

  	
   

  	
  16

  
	
  Section 5.2.

  	
   

  	
  Signature on Returns; Tax Matters Partner

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI Authority and Duties of Owner Trustee

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  General Authority

  	
   

  	
  17

  
	
  Section 6.2.

  	
   

  	
  General Duties

  	
   

  	
  18

  
	
  Section 6.3.

  	
   

  	
  Action upon Instruction

  	
   

  	
  18

  
	
  Section 6.4.

  	
   

  	
  No Duties Except as Specified in this Agreement or
  in Instructions

  	
   

  	
  19

  
	
  Section 6.5.

  	
   

  	
  No Action Except under Specified Documents or
  Instructions

  	
   

  	
  19

  
	
  Section 6.6.

  	
   

  	
  Restrictions

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII Concerning the Owner Trustee

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  Acceptance of Trust and Duties

  	
   

  	
  20

  
	
  Section 7.2.

  	
   

  	
  Furnishing of Documents

  	
   

  	
  21

  
	
  Section 7.3.

  	
   

  	
  Representations and Warranties

  	
   

  	
  21

  
	
  Section 7.4.

  	
   

  	
  Reliance; Advice of Counsel

  	
   

  	
  22

  
	
  Section 7.5.

  	
   

  	
  Not Acting in Individual Capacity

  	
   

  	
  22

  
	
  Section 7.6.

  	
   

  	
  Owner Trustee Not Liable for Certificates or
  Receivables

  	
   

  	
  23

  
	
  Section 7.7.

  	
   

  	
  Owner Trustee May Own Certificates and Notes

  	
   

  	
  23

  
	
  Section 7.8.

  	
   

  	
  Payments from Owner Trust Estate

  	
   

  	
  23

  
	
  Section 7.9.

  	
   

  	
  Doing Business in Other Jurisdictions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII Compensation of Owner Trustee

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Owner Trustee’s Fees and Expenses

  	
   

  	
  24

  
	
  Section 8.2.

  	
   

  	
  Indemnification

  	
   

  	
  24

  
	
  Section 8.3.

  	
   

  	
  Payments to the Owner Trustee

  	
   

  	
  24

  
	
  Section 8.4.

  	
   

  	
  Non-recourse Obligations

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX Termination of Agreement

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Termination of Agreement

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X Successor Owner Trustees and Additional
  Owner Trustees

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
   

  	
  Eligibility Requirements for Owner Trustee

  	
   

  	
  26

  
	
  Section 10.2.

  	
   

  	
  Resignation or Removal of Owner Trustee

  	
   

  	
  27

  
	
  Section 10.3.

  	
   

  	
  Successor Owner Trustee

  	
   

  	
  28

  
	
  Section 10.4.

  	
   

  	
  Merger or Consolidation of Owner Trustee

  	
   

  	
  29

  
	
  Section 10.5.

  	
   

  	
  Appointment of Co-Trustee or Separate Trustee

  	
   

  	
  29

  

 

 ii
 

 

 

	
  ARTICLE XI Miscellaneous

  	
   

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Supplements and Amendments

  	
   

  	
  31

  
	
  Section 11.2.

  	
   

  	
  No Legal Title to Owner Trust Estate in
  Certificateholders

  	
   

  	
  32

  
	
  Section 11.3.

  	
   

  	
  Limitations on Rights of Others

  	
   

  	
  32

  
	
  Section 11.4.

  	
   

  	
  Notices

  	
   

  	
  32

  
	
  Section 11.5.

  	
   

  	
  Severability

  	
   

  	
  33

  
	
  Section 11.6.

  	
   

  	
  Separate Counterparts

  	
   

  	
  33

  
	
  Section 11.7.

  	
   

  	
  Assignments; Support Provider

  	
   

  	
  33

  
	
  Section 11.8.

  	
   

  	
  Covenants of the Depositor

  	
   

  	
  33

  
	
  Section 11.9.

  	
   

  	
  No Petition

  	
   

  	
  33

  
	
  Section 11.10.

  	
   

  	
  No Recourse

  	
   

  	
  33

  
	
  Section 11.11.

  	
   

  	
  Headings

  	
   

  	
  34

  
	
  Section 11.12.

  	
   

  	
  GOVERNING LAW

  	
   

  	
  34

  
	
  Section 11.13.

  	
   

  	
  Servicer

  	
   

  	
  34

  
	
  Section 11.14.

  	
   

  	
  [Reserved]

  	
   

  	
  34

  
	
  Section 11.15.

  	
   

  	
  Regulation AB

  	
   

  	
  34

  
	
  Section 11.16.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  35

  

 

EXHIBITS

	
  Exhibit A

  	
   

  	
  Form of Certificate

  
	
  Exhibit B

  	
   

  	
  Form of Certificate of Trust

  

 

 iii

 

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

ARTICLE I

Definitions

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

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

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

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

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

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

“Certificate
Paying Agent” means the Administrator.

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

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

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

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

 

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

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

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

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

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

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

“HSBC
Finance” shall mean HSBC Finance Corporation.

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

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

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

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

“Sale
and Servicing Agreement” means the Sale and Servicing Agreement dated as of
November 1, 2006, among the Issuer, the Seller, the Servicer, the Indenture
Trustee and the Administrator, as such agreement may be amended or supplemented
from time to time.

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

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

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

 2
 

 

 

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

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

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

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

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

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

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

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

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

 3
 

 

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

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

ARTICLE II

Organization

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

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

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

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

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

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

 4
 

 

 

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

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

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

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

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

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

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

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

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

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

 5
 

 

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

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

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

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

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

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

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

 6
 

 

 

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

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

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

(d)           Binding Obligations.  This Agreement, when duly executed and
delivered, shall constitute legal, valid and binding obligations of the
Depositor enforceable against the Depositor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a proceeding
in equity or at law.

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

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

 7
 

 

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

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

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

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

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

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

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

 8
 

 

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

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

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

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

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

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

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

 9
 

 

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

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

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

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

ARTICLE III

Certificates and Transfer of Interests

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

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

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

 10
 

 

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

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

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

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

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

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

 11
 

 

 

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

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

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

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

 12
 

 

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

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

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

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

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

 13
 

 

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

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

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

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

ARTICLE IV

Voting Rights and Other Actions

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

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

 14
 

 

 

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

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

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

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

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

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

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

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

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

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

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

Section 4.6.            [Reserved]

ARTICLE V

Certain Duties

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

 16
 

 

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

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

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

ARTICLE VI

Authority and Duties of Owner Trustee

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

 17
 

 

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

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

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

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

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

 18
 

 

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

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

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

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

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

ARTICLE VII

Concerning the Owner Trustee

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

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

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

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

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

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

 20
 

 

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

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

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

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

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

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

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

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

 21
 

 

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

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

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

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

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

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

 22
 

 

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

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

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

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

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

 23
 

 

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

ARTICLE VIII

Compensation of Owner Trustee

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

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

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

 24
 

 

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

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

ARTICLE IX

Termination of Agreement

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

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

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

 25
 

 

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

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

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

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

ARTICLE X

Successor Owner Trustees and Additional Owner Trustees

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

 26
 

 

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

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

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

 27
 

 

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

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

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

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

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

 28
 

 

 

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

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

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

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

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

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

 29
 

 

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

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

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

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

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

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

 30
 

 

 

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

ARTICLE XI

Miscellaneous

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

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

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

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

 31
 

 

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

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

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

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

Section 11.4.          Notices.  (a)  Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt personally delivered, delivered by overnight
courier or mailed first class mail or certified mail, in each case return
receipt requested, and shall be deemed to have been duly given upon receipt, if
to the Owner Trustee, addressed to its Corporate Trust Office; if to the
Depositor, addressed to HSBC Auto Receivables Corporation, 1111 Town Center
Drive, Las Vegas, Nevada 89144, with a copy to HSBC Finance Corporation, 2700
Sanders Road, Prospect Heights, Illinois 60070, Attn: Treasurer; if to the
Servicer, addressed to HSBC Finance Corporation, 2700 Sanders Road, Prospect
Heights, Illinois 60070, Attn: Treasurer; if to any Support Provider, at the
address of such Support Provider as set forth in the Series Supplement; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party.

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

 32
 

 

 

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

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

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

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

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

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

 33
 

 

 

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

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

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

Section 11.14.        [Reserved].

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

 34
 

 

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

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

 35
 

 

 

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

	
   

  	
  U.S. BANK TRUST NATIONAL

  ASSOCIATION,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia M. Child

  
	
   

  	
   

  	
  Name: Patricia M. Child

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HSBC AUTO RECEIVABLES 

  CORPORATION,

  
	
   

  	
  as Depositor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven H. Smith

  
	
   

  	
   

  	
  Name: Steven H. Smith

  
	
   

  	
   

  	
  Title: Vice
  President and Assistant

  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and
  Agreed:

  	
   

  	
   

  
	
  HSBC FINANCE
  CORPORATION,

  	
   

  	
   

  
	
  as Servicer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William H.
  Kesler

  	
   

  	
   

  	
   

  
	
   

  	
  Name: William H.
  Kesler

  	
   

  	
   

  
	
   

  	
  Title: Senior
  Vice President-Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HSBC BANK USA,
  NATIONAL ASSOCIATION,

  	
   

  	
   

  
	
  not in its
  individual capacity

  	
   

  	
   

  
	
  but solely as
  Certificate Paying Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Fernando
  Acebedo

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Fernando
  Acebedo

  	
   

  	
   

  
	
   

  	
  Title: Vice
  President

  	
   

  	
   

  

 

[Signature Page for
Amended and Restated Trust Agreement]

 36

 

EXHIBIT A

[FORM OF
CERTIFICATE]

NUMBER

HSBC AUTOMOTIVE
TRUST (USA) 2006-3

CERTIFICATE

SEE REVERSE FOR
CERTAIN DEFINITIONS

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

CERTIFICATE

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

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

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

 A-1
 

 

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

OWNER TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

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

U.S.
BANK TRUST NATIONAL ASSOCIATION,

not in its individual

capacity but solely as

Owner Trustee

by                                                                                                                                                             
Authenticating Agent

by                                                                                                                                                                                                

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

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

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

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

 A-2
 

 

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

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

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

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

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

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

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

 A-3
 

 

 

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

	
   

  	
   

  	
  HSBC AUTOMOTIVE TRUST (USA) 2006-3

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  U.S. Bank Trust National Association,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
						

 A-4
 

 

 

(Reverse of
Certificate)

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

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

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

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

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

 A-5
 

 

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

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

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

 A-6
 

 

 

ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE

 

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

 

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

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

Dated:

	
  

  	
   

  	
  *

  
	
   

  	
  Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  	
  *

  

 

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

 A-7

 

EXHIBIT B

[FORM OF
CERTIFICATE OF TRUST]

CERTIFICATE
OF TRUST

OF

HSBC AUTOMOTIVE TRUST (USA) 2006-3

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

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

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

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

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

	
  

  	
   

  	
  U.S. BANK TRUST NATIONAL

  ASSOCIATION,

  
	
   

  	
   

  	
  not in its individual capacity but solely as

  Owner Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

 B-1

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