SALE AND SERVICING AGREEMENT

Exhibit 10.2

Excution Version

SALE AND SERVICING AGREEMENT

among

HYUNDAI AUTO RECEIVABLES TRUST 2006-B,
Issuer,

HYUNDAI ABS FUNDING CORPORATION,
Depositor,

HYUNDAI MOTOR FINANCE COMPANY,
Seller and Servicer,

and

CITIBANK, N.A.,
Indenture Trustee

Dated as of November 3, 2006

TABLE OF CONTENTS

(2006-B Sale and Servicing Agreement)

TABLE OF CONTENTS
(continued)

(2006-B Sale and Servicing Agreement)

TABLE OF CONTENTS
(continued)

(2006-B Sale and Servicing Agreement)

     This SALE AND SERVICING AGREEMENT, dated as of November 3, 2006, among HYUNDAI AUTO RECEIVABLES TRUST 2006-B, a Delaware statutory trust (the “ Issuer ”), HYUNDAI ABS FUNDING CORPORATION, a Delaware corporation (the “ Depositor ”), HYUNDAI MOTOR FINANCE COMPANY, a California corporation, as servicer (in such capacity, the “ Servicer ”) and as seller (in such capacity, the “ Seller ”), and Citibank, N.A., a national banking association, as indenture trustee (the “ Indenture Trustee ”).

     WHEREAS, the Issuer desires to purchase a portfolio of receivables arising in connection with automobile retail installment sale contracts acquired by the Seller in the ordinary course of business and sold by the Seller to the Depositor;

     WHEREAS, the Depositor is willing to sell such receivables to the Issuer; and

     WHEREAS, the Servicer is willing to service such receivables.

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

ARTICLE I.

DEFINITIONS

     Section 1.01 Definitions . Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

     “ Administration Agreement ” means the Owner Trust Administration Agreement, dated as of November 3, 2006, among Hyundai Auto Receivables Trust 2006-B, Hyundai Motor Finance Company, and Citibank, N.A., a national banking association, as amended, supplemented, amended and restated or otherwise modified from time to time.

     “ Administrator ” means Hyundai Motor Finance Company, a California corporation, and its successors in interest.

     “ Adjusted Pool Balance ” means, with respect to any Payment Date, the Pool Balance as of the end of the previous Collection Period less the Yield Supplement Overcollateralization Amount with respect to such Payment Date.

     “ Advance ” means, as to any Payment Date, an advance made by the Servicer on such Payment Date pursuant to Section 5.08 in respect of the aggregate of all Scheduled Payments of interest which were due during the related Collection Period that remained unpaid at the end of such Collection Period.

     “ Agreement ” means this Sale and Servicing Agreement, as amended, supplemented, amended and restated or otherwise modified from time to time.

     “ Amount Financed ” means with respect to a Receivable, the amount advanced under the Receivable toward the purchase price of the Financed Vehicle and any related costs.

(2006-B Sale and Servicing Agreement)

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

     “ Available Amounts ” means, with respect to any Payment Date, the sum of the following amounts (without duplication) with respect to the related Collection Period: (i) all Collections on Receivables, (ii) the Purchased Amount of each Receivable that becomes a Purchased Receivable, (iii) Advances, (iv) Recoveries and (v) any amounts paid by the Servicer in connection with a purchase of Receivables pursuant to Section 9.01(a) hereof.

     “ Available Amounts Shortfall ” means, with respect to any Payment Date, the positive difference, if any, of the Total Required Payment for such Payment Date minus the Available Amounts for such Payment Date.

     “ Basic Documents ” means the Trust Agreement, the Securities Account Control Agreement, the Indenture, this Agreement, the Receivables Purchase Agreement, the Administration Agreement, the Note Depository Agreement and other documents and certificates delivered in connection therewith.

     “ Business Day ” means any day other than a Saturday, a Sunday or a day on which a commercial banking institution in the states of California, Delaware or New York are authorized or obligated by law or executive order to remain closed.

     “ Certificate ” means a certificate evidencing the beneficial interest of a Certificateholder in the Trust.

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

     “ Class ” means any one of the classes of Notes.

     “ Class A Noteholders ” means the Class A-1 Noteholders, the Class A-2 Noteholders, Class A-3 Noteholders and the Class A-4 Noteholders.

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

     “ Class A-1 Noteholder ” means the Person in whose name a Class A-1 Note is registered in the Note Register.

     “ Class A-1 Notes ” means the 5.34763% Asset Backed Notes, Class A-1, substantially in the form of Exhibit A-1 to the Indenture.

     “ Class A-1 Rate ” means 5.34763% per annum, computed on the basis of an actual/360-day year.

     “ Class A-2 Noteholder ” means the Person in whose name a Class A-2 Note is registered in the Note Register.

(2006-B Sale and Servicing Agreement)

     “ Class A-2 Notes ” means the 5.25% Asset Backed Notes, Class A-2, substantially in the form of Exhibit A-2 to the Indenture.

     “ Class A-2 Rate ” means 5.25% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Class A-3 Noteholder ” means the Person in whose name a Class A-3 Note is registered in the Note Register.

     “ Class A-3 Notes ” means the 5.11% Asset Backed Notes, Class A-3, substantially in the form of Exhibit A-3 to the Indenture.

     “ Class A-3 Rate ” means 5.11% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Class A-4 Noteholder ” means the Person in whose name a Class A-4 Note is registered in the Note Register.

     “ Class A-4 Notes ” means the 5.15% Asset Backed Notes, Class A-4, substantially in the form of Exhibit A-4 to the Indenture.

     “ Class A-4 Rate ” means 5.15% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Class B Maturity Date ” means May 15, 2013.

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

     “ Class B Notes ” means the 5.19% Asset Backed Notes, Class B, substantially in the form of Exhibit B to the Indenture.

     “ Class B Rate ” means 5.19% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Class C Maturity Date ” means May 15, 2013

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

     “ Class C Notes ” means the 5.25% Asset Backed Notes, Class C, substantially in the form of Exhibit C to the Indenture.

     “ Class C Rate ” means 5.25% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Class D Maturity Date ” means May 15, 2013

(2006-B Sale and Servicing Agreement)

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

     “ Class D Notes ” means the 5.41% Asset Backed Notes, Class D, substantially in the form of Exhibit D to the Indenture.

     “ Class D Rate ” means 5.41% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.

     “ Closing Date ” means November 3, 2006.

     “ CFR ” means the Code of Federal Regulations.

     “ Collateral ” has the meaning specified in the Granting Clause of the Indenture.

     “ Collection ” means, with respect to any Receivable and to the extent received by the Servicer after the Cutoff Date, (a) any monthly payment by or on behalf of the Obligor thereunder, (b) full or partial prepayment of that Receivable, (c) all Liquidation Proceeds and (d) any other amounts received by the Servicer which, in accordance with its customary servicing practices, would be applied to the payment of accrued interest or to reduce the Principal Balance of that Receivable; provided , however , that the term “Collection” in no event will include (i) any amounts in respect of any Receivable purchased by the Servicer, the Seller or the Depositor on a prior Payment Date or (ii) any late fees, extension fees, non-sufficient funds charges and any and all other administrative fees or similar charges allowed by applicable law with respect to any Receivable and payable to the Servicer.

     “ Collection Account ” means the account designated as such, established and maintained pursuant to Section 5.01.

     “ Collection Period ” means each fiscal month of the Servicer during the term of this Agreement; provided , however , that the first Collection Period is the period from and including October 1, 2006 through November 30, 2006. With respect to any Determination Date or Payment Date, the “related Collection Period” means the Collection Period preceding the fiscal month in which such Determination Date or Payment Date occurs.

     “ Commission ” means the Securities and Exchange Commission.

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

     “ Controlling Class ” means with respect to any Notes that are Outstanding, the Class A Notes (voting together as a single class) so long as the Class A Notes are Outstanding, and thereafter the Class B Notes so long as any Class B Notes are Outstanding, and thereafter the Class C Notes so long as any Class C Notes are Outstanding and thereafter the Class D Notes so long as any Class D Notes are Outstanding, excluding in each case, Notes held by the Depositor, the Servicer or their affiliates.

     “ Conveyed Assets ” has the meaning provided in Section 2.01.

(2006-B Sale and Servicing Agreement)

     “ Corporate Trust Administration Department ” has the meaning set forth in the Trust Agreement.

     “ Corporate Trust Office ” has the meaning set forth in the Indenture.

     “ Credit and Collection Policy ” means the credit and collection practices, policies and procedures of HMFC from time to time.

     “ Cutoff Date ” means the close of business on September 30, 2006.

     “ Dealer ” means the dealer who sold a Financed Vehicle and who originated the related Receivable and assigned it to HMFC pursuant to a Dealer Agreement.

     “ Dealer Agreement ” means an agreement between HMFC and a Dealer pursuant to which such Dealer sells Contracts to HMFC.

     “ Defaulted Receivables ” means any Receivable (a) on which any installment is unpaid more than sixty (60) days past its original due date or (b) where the Servicer’s records show that the Obligor has suffered an Insolvency Event.

     “ Deliver ” or “ Delivered ”: when used with respect to Trust Account Property means when the relevant steps specified below are accomplished with respect to such Trust Account Property:

     (a) if such Trust Account Property is an instrument or a certificated security (each as defined in the UCC), by (i) delivering such instrument or security certificate to the Eligible Institution then maintaining the applicable Eligible Account either registered in the name of such Eligible Institution, or indorsed, by an effective endorsement, to the Eligible Institution or in blank ( provided, that no endorsement shall be required for certificated securities in bearer form), (ii) causing such Eligible Institution to maintain (on behalf of the Indenture Trustee) continuous possession of such instrument or security certificate, (iii) causing the Eligible Institution to credit such instrument or certificated security to the appropriate Eligible Account, (iv) causing the Eligible Institution to agree to treat all such instruments and certificated securities as “financial assets” (as defined in the UCC) and (v) causing the Eligible Institution to agree pursuant to a Control Agreement that it will comply with “entitlement orders” (as defined in the UCC) originated by the Indenture Trustee with respect to each security entitlement (as defined in the UCC) relating to such instruments and certificated securities without further consent by the Depositor, the Issuer or any other Person;

     (b) if such Trust Account Property is a security entitlement (as defined in the UCC), by (i) causing the Eligible Institution then maintaining the applicable Eligible Account to become the entitlement holder of such security entitlement, (ii) causing the Eligible Institution to credit such security entitlement to the appropriate Eligible Account thereby creating a securities entitlement with respect to the financial asset underlying such securities entitlement and (iii) causing the Eligible Institution to agree pursuant to a Control Agreement that it will comply with “entitlement orders” (as defined in the UCC) originated by the Indenture Trustee with respect to each security entitlement (as defined in the UCC) without further consent by the Depositor, Issuer or any other Person;

(2006-B Sale and Servicing Agreement)

     (c) if such Trust Account Property is an uncertificated security (as defined in the UCC), by (i) causing the Eligible Institution then maintaining the applicable Eligible Account to become the registered owner of such uncertificated security, (ii) causing such registration to remain effective, (iii) causing the Eligible Institution to credit such uncertificated security to the appropriate Eligible Account thereby creating a securities entitlement with respect to the uncertificated security, and (iv) causing the Eligible Institution to agree pursuant to a Control Agreement that it will comply with “entitlement orders” (as defined in the UCC) originated by the Indenture Trustee with respect to each security entitlement (as defined in the UCC) without further consent by the Depositor, Issuer or any other Person;

     (d) if such Trust Account Property consists of deposit accounts (as defined in the UCC) by either (i) causing the Indenture Trustee to be the customer with respect to such deposit accounts or (ii) causing the bank maintaining such deposit account to enter into a Control Agreement pursuant to which it agrees to comply with all instructions issued by the Indenture Trustee without further consent by the Depositor, Issuer or any other Person;

     (e) in the case of any general intangibles, by causing an effective financing statement naming the Issuer as debtor and the Indenture Trustee as secured party and covering such general intangibles to be filed in the location (within the meaning of Section 9-307 of the UCC) of the Issuer; and

     (f) in the case of any Trust Account Property not covered above or as an additional method of delivery for any of the foregoing, by delivering to the Indenture Trustee a legal opinion of counsel reasonably satisfactory to the Indenture Trustee specifying another method of delivery that will result in the Indenture Trustee having a valid and perfected security interest therein and by delivery in compliance with the method specified in such legal opinion.

     “ Depositor ” means Hyundai ABS Funding Corporation, a Delaware corporation, and its successors in interest.

     “ Determination Date ” means, with respect to each Payment Date, the tenth calendar day of the month in which such Payment Date occurs (or if such tenth day is not a Business Day, the next succeeding Business Day).

     “ Eligible Account ” means a segregated securities account with an Eligible Institution.

     “ Eligible Institution ” means the following:

     (a) a depository institution or trust company

(i) whose commercial paper, short-term unsecured debt obligations or other short-term deposits are rated “P-1” by Moody’s or “A-1+” by Standard & Poor’s or “F1” by Fitch, if the deposits are to be held in the account for 30 days or less, or

(ii) whose long-term unsecured debt obligations are rated at least “Aa3” by Moody’s or “AA-” by Standard & Poor’s or “AA-” by Fitch, if the deposits are to be held in the account more than 30 days, or

(2006-B Sale and Servicing Agreement)

     (b) a segregated trust account or accounts maintained in the trust department of a federal or state-chartered depository institution having a combined capital and surplus of at least $50,000,000 and subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b), or

     (c) any other institution that the Rating Agencies shall approve in writing.

     “ Eligible Investments ” means book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form and that evidence:

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

     (b) demand deposits, time deposits or certificates of deposit of any depository institution (including any affiliate of the Depositor, the Servicer, the Indenture Trustee or the Owner Trustee) or trust company incorporated under the laws of the United States of America or any state thereof or the District of Columbia (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in the first bullet point above or a portion of such obligation for the benefit of the holders of such depository receipts); provided that at the time of the investment or contractual commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Payment Date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating from each Rating Agency in the highest investment category granted thereby;

     (c) commercial paper (including commercial paper of any affiliate of Depositor, the Servicer, the Indenture Trustee or the Owner Trustee) having, at the time of the investment or contractual commitment to invest therein, a rating from each Rating Agency in the highest investment category granted thereby;

     (d) investments in money market funds (including funds for which the Depositor, the Servicer, the Indenture Trustee or the Owner Trustee or any of their respective affiliates is investment manager or advisor) having a rating from each of Moody’s and Standard & Poor’s in the highest investment category granted thereby;

     (e) bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;

     (f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b); or

(2006-B Sale and Servicing Agreement)

     (g) any other investment with respect to which the Issuer, the Indenture Trustee or the Servicer has received written notification from each Rating Agency that the acquisition of such investment will satisfy the Rating Agency Condition.

     “ Eligible Servicer ” means Hyundai Motor Finance Company or any other Person that at the time of its appointment as Servicer (a) is servicing a portfolio of motor vehicle retail installment sale contracts or motor vehicle installment loans, (b) is legally qualified and has the capacity to service the Receivables, (c) has demonstrated the ability professionally and competently to service a portfolio of motor vehicle retail installment sale contracts or motor vehicle installment loans similar to the Receivables with reasonable skill and care and (iv) has a minimum net worth of $100,000,000.

     “ Fee Letter ” means the letter regarding fees dated November 3, 2006 between the Depositor, the Owner Trustee and HMFC.

     “ Financed Vehicle ” means a new or used automobile, light-duty truck, van or minivan, together with all accessions thereto, securing an Obligor’s indebtedness under the related Contract.

     “ First Priority Principal Distribution Amount ” means, with respect to any Payment Date, an amount, not less than zero, equal to the result of (a) the aggregate outstanding principal amount of the Class A Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes on that preceding Payment Date), minus (b) the Adjusted Pool Balance at the end of the Collection Period preceding that Payment Date; provided , however , that the First Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding Payment Date); and provided further , that the First Priority Principal Distribution Amount on and after the Stated Maturity Date of a class of Class A Notes shall not be less than the amount that is necessary to reduce the outstanding principal amount of such class of the Class A Notes and all earlier maturing classes of Class A Notes to zero.

     “ Fitch ” means Fitch, Inc., and its successors.

     “ HMFC ” means Hyundai Motor Finance Company, a California corporation, and its successors.

     “ Indenture ” means the Indenture, dated as of November 3, 2006, between the Issuer and the Indenture Trustee, as amended, supplemented, amended and restated or otherwise modified from time to time.

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

     “ Initial Class A-1 Note Balance ” means $239,000,000.

     “ Initial Class A-2 Note Balance ” means $225,000,000.

(2006-B Sale and Servicing Agreement)

     “ Initial Class A-3 Note Balance ” means $249,000,000.

     “ Initial Class A-4 Note Balance ” means $130,000,000.

     “ Initial Class B Note Balance ” means $43,800,000.

     “ Initial Class C Note Balance ” means $41,800,000.

     “ Initial Class D Note Balance ” means $34,000,000.

     “ Initial Pool Balance ” means, an amount equal to the aggregate Principal Balance of the Receivables as of the Cutoff Date.

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

     “ Interest Distribution Account ” means, the account designated as such, established and maintained pursuant to Section 5.01(a)(iv).

     “ Interest Period ” means, with respect to the Class A-1 Notes, the period from and including the most recent Payment Date on which interest has been paid (or, in the case of the first Payment Date, the Closing Date) to but excluding the next succeeding Payment Date and, with respect to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, the period from and including the 15 ^th day of the calendar month (or, in the case of the first Payment Date, from and including the Closing Date) to but excluding the 15 ^th day of the next calendar month.

     “ Investment Earnings ” means, with respect to any Payment Date, any investment earnings (net of losses and investment expenses) on amounts on deposit in a Trust Account.

     “ Issuer ” means Hyundai Auto Receivables Trust 2006-B.

     “ Lien ” means a security interest, lien, charge, pledge, equity or encumbrance of any kind, other than tax liens, mechanics’ liens and any liens that attach to the respective Receivable by operation of law as a result of any act or omission by the related Obligor.

(2006-B Sale and Servicing Agreement)

     “ Liquidated Receivable ” means a Receivable with respect to which the earliest of the following shall have occurred: (a) the related Financed Vehicle has been repossessed and liquidated, (b) the related Financed Vehicle has been repossessed for 90 days or more and has not yet been liquidated, (c) the end of the Collection Period in which the Receivable becomes more than 120 days past due, or (d) the Servicer has determined in accordance with its collection policies that all amounts that it expects to receive with respect to the Receivable have been received.

     “ Liquidation Proceeds ” means, with respect to any Liquidated Receivable, all proceeds of the liquidation of such Liquidated Receivable, net of the sum of any out-of-pocket expenses of the Servicer reasonably allocated to the auction, repossession, transport, reconditioning and liquidation and any amounts required by law to be remitted or allocated to the account of the Obligor on such Liquidated Receivable.

     “ Moody’s ” means Moody’s Investors Service, Inc., and its successors.

     “ Note Balance ” means, as of any date of determination, an amount equal to (a) the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2 Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the Initial Class A-4 Note Balance, (v) the Initial Class B Note Balance, (vi) the Initial Class C Note Balance and (vii) the Initial Class D Note Balance less (b) all amounts distributed to Noteholders on or prior to such date and allocable to principal thereon.

     “ Note Distribution Account ” means the account designated as such, established and maintained pursuant to Section 5.01(a)(ii).

     “ Note Pool Factor ” means, with respect to each Class of Notes as of the close of business on the last day of a Collection Period, a seven-digit decimal figure equal to the Outstanding Amount of such Class of Notes (after giving effect to any reductions thereof to be made on the immediately following Payment Date) divided by the original Outstanding Amount of such Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will decline to reflect reductions in the Outstanding Amount of such Class of Notes.

     “ Noteholders ” shall mean the Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B Noteholders, the Class C Noteholders or the Class D Noteholders.

     “ Notes ” shall mean the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes.

     “ Obligor ” means a person who obtained installment credit for the purchase of a Financed Vehicle the terms of which are evidenced by a Contract, and any other person obligated to make payments thereunder.

     “ Officers’ Certificate ” means a certificate signed by (a) the chairman of the board, any vice president, the controller or any assistant controller and (b) the president, a treasurer, assistant treasurer, secretary or assistant secretary of the Depositor or the Servicer, as appropriate.

(2006-B Sale and Servicing Agreement)

     “ Opinion of Counsel ” means one or more written opinions of counsel, who may be an employee of or counsel to the Issuer, Seller or the Servicer, which counsel shall be reasonably acceptable to the Indenture Trustee, the Owner Trustee or the Rating Agencies, as applicable, and which shall be addressed to the Owner Trustee and the Indenture Trustee.

     “ Other Assets ” means any assets (or interests therein) (other than the Trust Estate) conveyed or purported to be conveyed by the Depositor to another Person or Persons other than the Issuer, whether by way of a sale, capital contribution or by virtue of the granting of a lien.

     “ Outstanding Amount ” means, as of any date of determination, the aggregate principal amount of a Class of Notes outstanding as of such date of determination.

     “ Owner Trustee ” means Wilmington Trust Company, acting not in its individual capacity but solely as owner trustee under the Trust Agreement.

     “ Payment Date ” means, with respect to each Collection Period, the 15 ^th day of the following month or, if such day is not a Business Day, the immediately following Business Day, commencing on December 15, 2006.

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

     “ Physical Property ” has the meaning assigned to such term in the definition of “Delivery” above.

     “ Pool Balance ” means, with respect to any Payment Date, an amount equal to the aggregate Principal Balance of the Receivables at the end of the related Collection Period, after giving effect to all payments of principal received from Obligors and Purchased Amounts to be remitted by the Servicer for such Collection Period and reduction to zero of the aggregate outstanding Principal Balance of all Receivables that became Liquidated Receivables during such Collection Period.

     “ Principal Balance ” means, as of any time with respect to any Receivable, the principal balance of such Receivable as of the close of business on the last day of the preceding Collection Period under the terms of the Receivable determined in accordance with the customary servicing practices.

     “ Principal Distribution Account ” means that account designated as such established and maintained pursuant to Section 5.01(a)(iv).

     “ Purchased Amount ” means, with respect to any Receivable that became a Purchased Receivable, the unpaid principal balance owed by the Obligor thereon plus interest on such amount at the applicable APR to the last day of the Collection Period of repurchase.

     “ Purchased Receivable ” means a Receivable purchased as of the close of business on the last day of a Collection Period by or on behalf of the Servicer pursuant to Section 4.07 of this

(2006-B Sale and Servicing Agreement)

Agreement or by or on behalf of the Seller pursuant to Section 3.03 of this Agreement or Section 7.02 of the Receivables Purchase Agreement.

     “ Rating Agency ” means Fitch, Moody’s or Standard & Poor’s, as the context may require. If none of Fitch, Moody’s, Standard & Poor’s or a successor thereto remains in existence, “Rating Agency” shall mean any nationally recognized statistical rating organization or other comparable Person designated by the Depositor and, written notice of which designation shall be given to the Owner Trustee, the Indenture Trustee and the Servicer.

     “ Rating Agency Condition ” means, with respect to any action, that each Rating Agency shall have been given 10 days’ (or such shorter period as shall be acceptable to each Rating Agency) prior notice thereof and that each Rating Agency shall not have notified the Issuer or the Indenture Trustee in writing that such action will result in a reduction, withdrawal or down-grade of the then-current rating of each class of Notes.

     “ Realized Losses ” means, with respect to any Receivable that becomes a Liquidated Receivable, the excess of the Principal Balance thereof over the portion of related Liquidation Proceeds allocable to principal.

     “ Receivable ” means any Contract listed on Schedule A (which Schedule may be in the form of microfiche).

     “ Receivable Files ” means the following documents with respect to each Financed Vehicle:

     (i) the fully executed original of each Receivable (together with any agreements modifying each such Receivable, including any extension agreement);

     (ii) the original credit application, or a copy thereof, fully executed by each Obligor thereon;

     (iii) the original certificate of title or such other documents evidencing the security interest of the Seller in the related Financed Vehicle; and

     (iv) any and all other documents that the Servicer shall have kept on file in accordance with its customary procedures relating to Receivables, Obligors or Financed Vehicles.

     “ Receivables Purchase Agreement ” means the Receivables Purchase Agreement dated as of November 3, 2006, between the Seller and the Depositor, as amended, supplemented, amended and restated or otherwise modified from time to time.

     “ Record Date ” means, as to any Payment Date, the day immediately preceding such Payment Date.

     “ Recoveries ” means, with respect to any Receivable that becomes a Liquidated Receivable, monies collected in respect thereof (other than Liquidation Proceeds), from whatever source, net of the sum of any amounts expended (and not otherwise reimbursed) by the Servicer

(2006-B Sale and Servicing Agreement)

for the account of the Obligor and any amounts required by law to be remitted or allocated to the account of the Obligor.

     “ Regular Principal Distribution Amount ” means, with respect to any Payment Date, an amount no less than zero equal to the excess, if any, of (a) the aggregate outstanding principal amount of the Notes immediately preceding such Payment Date over (b)(i) the Adjusted Pool Balance as of the last day of the related Collection Period minus (ii) the Target Overcollateralization Amount with respect to such Payment Date; provided , however , that the Regular Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on such Payment Date (after giving effect to any principal payments made on the Notes on such Payment Date in respect of the First Priority Principal Distribution Amount, the Second Priority Principal Distribution Amount, and the Third Priority Principal Distribution Amount, if any); and provided further , that the Regular Principal Distribution Amount on or after the Class D Stated Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class D Notes to zero.

     “ Reserve Account ” means the account designated as such, established by the Issuer and maintained by the Indenture Trustee pursuant to Section 5.01(a)(iii).

     “ Reserve Account Deposit ” means $4,861,762.38.

     “ Reserve Account Required Amount ” means with respect to any Payment Date, an amount equal to 0.50% of the Adjusted Pool Balance as of the Cutoff Date; provided , however , that in no event shall the Reserve Account Required Amount on any Payment Date be more than the aggregate outstanding principal amount of the Notes on such Payment Date (after giving effect to the allocation of principal payments on such Payment Date).

     “ Reserve Account Withdrawal Amount ” means, with respect to each Payment Date, the lesser of (x) the Available Amounts Shortfall with respect to such Payment Date and (y) and the amount on deposit in the Reserve Account on such Payment Date.

     “ Responsible Officer ” means the chairman of the board, the president, any executive vice president, any vice president, the treasurer, any assistant treasurer, the secretary, or any assistant secretary of the Servicer.

     “ Scheduled Payment ” means, with respect to each Receivable, the scheduled monthly payment amount set forth in the related Contract and required to be paid by the Obligor during each Collection Period.

     “ Second Priority Principal Distribution Amount ” means, with respect to any Payment Date, an amount not less than zero equal to (a) an amount equal to (i) the sum of the aggregate outstanding principal amount of the Class A Notes and the Class B Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes and the Class B Notes on that preceding Payment Date), minus (ii) the Adjusted Pool Balance at the end of the Collection Period preceding that Payment Date, minus (b) the First Priority Principal Distribution Amount; provided , however , that the Second Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding

(2006-B Sale and Servicing Agreement)

Payment Date); and provided further , that the Second Priority Principal Distribution Amount on and after the Class B Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class B Notes to zero.

     “ Securities ” means the Notes and the Certificates.

     “ Securities Account Control Agreement ” means the Securities Account Control Agreement dated as of November 3, 2006 between the Trust, the Indenture Trustee and the Securities Intermediary, as amended, supplemented, amended and restated or otherwise modified from time to time.

     “ Securities Intermediary ” means Citibank, N.A., in its capacity as the securities intermediary in the Securities Account Control Agreement.

     “ Securityholders ” means the Noteholders and/or the Certificateholders, as the context may require.

     “ Seller ” means HMFC and its successors in interest as seller of the Receivables to the Depositor pursuant to the Receivables Purchase Agreement.

     “ Servicer ” means HMFC, as the servicer of the Receivables, and each successor to HMFC (in the same capacity) pursuant to Section 7.03 or 8.03.

     “ Servicer Termination Event ” has the meaning set forth in Section 8.01.

     “ Servicer’s Certificate ” means an Officers’ Certificate of the Servicer delivered pursuant to Section 4.09, substantially in the form of Exhibit C.

     “ Servicing Fee ” means an amount equal to the product of the Servicing Fee Rate and the aggregate Principal Balance of the Receivables as of the first day of the related Collection Period.

     “ Servicing Fee Rate ” means 1.00% per annum.

     “ Simple Interest Method ” means the method of allocating the monthly payments received with respect to a Receivable to interest in an amount equal to the product of (a) the applicable APR, (b) the period of time (expressed as a fraction of a year, based on the actual number of days in the calendar month and 365 days in the calendar year) elapsed since the preceding payment was made under such Receivable and (c) the outstanding principal amount of such Receivable, and allocating the remainder of each such monthly payment to principal.

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

     “ Standard & Poor’s ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

(2006-B Sale and Servicing Agreement)

     “ Stated Maturity Date ” means, for each class of Notes, the respective date set forth opposite such class of Notes in the table below or, if such date is not a Business Day, the next succeeding Business Day:

     “ Target Overcollateralization Amount ” means, with respect to any Payment Date, the greater of (a) 4.00% of the Adjusted Pool Balance, minus amounts on deposit in the Reserve Account after withdrawals from the Reserve Account but prior to deposits to the Reserve Account, in each case, on such Payment Date and (b) 1.25% of the Adjusted Pool Balance as of the Cut-off Date. Notwithstanding the foregoing, the Target Overcollateralization Amount shall not exceed the Adjusted Pool Balance on such Payment Date.

     “ Third Priority Principal Distribution Amount ” means, with respect to any Payment Date, an amount not less than zero equal to (a) an amount equal to (i) the sum of the aggregate outstanding principal amount of the Class A Notes, the Class B Notes and the Class C Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes, the Class B Notes and the Class C Notes on that preceding Payment Date), minus (ii) the Adjusted Pool Balance at the end of the Collection Period, minus (b) the sum of (i) the First Priority Principal Distribution Amount, plus (ii) the Second Priority Principal Distribution Amount; provided , however , that the Third Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding Payment Date); and provided further , that the Third Priority Principal Distribution Amount on and after the Class C Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class C Notes to zero.

     “ Total Required Payment ” means (a) with respect to any Payment Date prior to the occurrence of an “Event of Default” under the Indenture which has resulted in the acceleration of the Notes, the sum of (i) the Servicing Fee for the related Collection Period and all unpaid Servicing Fees from prior Collection Periods, (ii) unreimbursed Advances, (iii) the accrued and unpaid interest on the Notes, (iv) an amount equal to the change in the Adjusted Pool Balance during the related Collection Period, and (v) on or after the Stated Maturity Date of any class of

(2006-B Sale and Servicing Agreement)

Notes, an amount necessary to reduce the outstanding principal amount of such class of Notes to zero, and (b) with respect to any Payment Date following the occurrence and during the continuation of an “Event of Default” under the Indenture which has resulted in an acceleration of the Notes, until the Payment Date on which the outstanding principal amount of all the Notes has been paid in full, the sum of (i) the specified amounts payable to the Indenture Trustee, (ii) the Servicing Fee for the related Collection Period and all unpaid Servicing Fees from prior Collection Periods, (iii) unreimbursed Advances, (iv) the accrued and unpaid interest on the Notes and (v) the amount necessary to reduce the outstanding principal amount of all the Notes to zero.

     “ Trust ” means the Issuer.

     “ Trust Account Property ” means the Trust Accounts, all amounts and investments held from time to time in any Trust Account and all proceeds of the foregoing.

     “ Trust Accounts ” shall mean the Collection Account, the Note Distribution Account and the Reserve Account.

     “ Trust Agreement ” means the Amended and Restated Trust Agreement, dated as of November 3, 2006, between the Depositor, the Administrator and the Owner Trustee, as amended, supplemented, amended and restated or otherwise modified from time to time.

     “ Trust Officer ” means, in the case of the Indenture Trustee or any Officer within the Corporate Trust Office of the Indenture Trustee, as the case may be, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case having direct responsibility for the administration of the Indenture and, with respect to the Owner Trustee, any officer in the Corporate Trust Administration Department of the Owner Trustee with direct responsibility for the administration of the Trust Agreement and the other Basic Documents on behalf of the Owner Trustee.

     “ UCC ” means the Uniform Commercial Code, as in effect in the relevant jurisdiction.

     “ Yield Supplement Overcollateralization Amount ” means with respect to any Payment Date, the dollar amount set forth next to such Payment Date on Schedule B hereto.

     Section 1.02 Other Definitional Provisions .

          (a) Capitalized terms used herein that are not otherwise defined has the meanings ascribed thereto in the Indenture or, if not defined therein, in the Trust Agreement.

          (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.

(2006-B Sale and Servicing Agreement)

          (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. 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; Article, Section, Schedule and Exhibit references contained in this Agreement are references to Articles, Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; “or” shall include “and/or”; 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.

          (f) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

ARTICLE II.

CONVEYANCE OF RECEIVABLES

     Section 2.01 Conveyance of Receivables . In consideration of the Issuer’s delivery to or upon the order of the Depositor of $961,068,995.72, the Certificates and such other amounts to be distributed to the Depositor on the Closing Date, the Depositor does hereby sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations of the Depositor set forth herein), all right, title and interest of the Depositor in and to:

          (a) the Receivables and all moneys received thereon after the Cutoff Date;

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

          (c) any Liquidation Proceeds and any other proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering the Financed Vehicles or the related Obligors, including any vendor’s single interest or other collateral protection insurance policy;

(2006-B Sale and Servicing Agreement)

          (d) any property that shall have secured a Receivable and shall have been acquired by or on behalf of the Depositor, the Servicer or the Trust;

          (e) all documents and other items contained in the Receivable Files;

          (f) all of the Depositor’s rights (but not its obligations) under the Receivables Purchase Agreement;

          (g) all right, title and interest in the Trust Accounts and all funds, securities or other assets credited from time to time to the Trust Accounts and in all investments therein and proceeds thereof (including all Investment Earnings thereon);

          (h) any proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer Agreement; and

          (i) the proceeds of any and all of the foregoing (collectively, with the assets listed in clauses (i) through (viii) above, the “ Conveyed Assets ”).

     The Depositor and the Issuer agree that the purchase price for the Conveyed Assets sold by the Depositor to the Issuer represents reasonably equivalent value for the Conveyed Assets. It is the intention of the Depositor that the transfer and assignment contemplated by this Agreement shall constitute a sale of the Conveyed Assets from the Depositor to the Trust and the beneficial interest in and title to the Receivables and the related property shall not be part of the Depositor’s estate in the event of the filing of a bankruptcy petition by or against the Depositor under any bankruptcy law. In the event that, notwithstanding the intent of the Depositor, the transfer and assignment contemplated hereby is held not to be a sale or is otherwise not effective to sell the Conveyed Assets, this Agreement shall constitute a grant by the Depositor to the Issuer of a security interest in all Conveyed Assets and all accounts, money, chattel paper, securities, instruments, documents, deposit accounts, uncertificated securities, general intangibles, contract rights, goods and other property consisting of, arising from or relating to such Conveyed Assets, for the benefit of the Securityholders.

ARTICLE III.

THE RECEIVABLES

     Section 3.01 Representations and Warranties of the Seller .

          (a) The Seller has made each of the representations and warranties set forth in Exhibit A hereto under the Receivables Purchase Agreement and has consented to the assignment by the Depositor to the Issuer of the Depositor’s rights with respect thereto. Such representations and warranties speak as of the respective dates set forth therein, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge of such Receivables to the Indenture Trustee. Pursuant to Section 2.01 of this Agreement, the Depositor has sold, assigned, transferred and conveyed to the Issuer, as part of the assets of the Issuer, its rights under the Receivables Purchase Agreement, including the representations and warranties of the Seller therein as set forth in Exhibit A, upon which representations and warranties the Issuer relies in accepting the Receivables and delivering the Securities, together with all rights of

(2006-B Sale and Servicing Agreement)

the Depositor with respect to any breach thereof, including the right to require the Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement. It is understood and agreed that the representations and warranties referred to in this Section shall survive the sale and delivery of the Receivables to the Issuer.

          (b) The Seller hereby agrees that the Issuer shall have the right to enforce any and all rights under the Receivables Purchase Agreement assigned to the Issuer herein, including the right to cause the Seller to repurchase any Receivable with respect to which it is in breach of any of its representations and warranties set forth in Exhibit A, directly against the Seller as though the Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall not be obligated to exercise any such rights indirectly through the Depositor.

     Section 3.02 Representations and Warranties of the Depositor . The Depositor makes the following representations and warranties, on which the Issuer relies in accepting the Receivables and delivering the Securities. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables by the Depositor to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture:

          (a) This Agreement creates a valid and continuing security interest (as defined in the UCC) in the Receivables in favor of the Issuer, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Depositor.

          (b) Each Receivable constitutes “chattel paper” within the meaning of the UCC.

          (c) Immediately upon the transfer thereof from the Depositor to the Issuer pursuant to this Agreement, the Issuer shall have good and marketable title to each Receivable, free and clear of any Lien of any Person.

          (d) The Depositor has caused, or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdiction under the applicable UCC in order to perfect the security interest in the Receivables granted to the Issuer under this Agreement.

          (e) Other than the security interest granted to the Issuer pursuant to this Agreement, the Depositor has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables. The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that include a description of collateral describing the Receivables other than any financing statement relating to the security interest granted to the Issuer under this Agreement. The Depositor is not aware of any judgment or tax lien filings against the Depositor.

          (f) The Contracts that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Issuer, except for such marks or notations indicating that they have been pledged, assigned or otherwise conveyed (i) to the Depositor or the Indenture Trustee in accordance with the Basic Documents, (ii) pursuant to the Second Amended and Restated

(2006-B Sale and Servicing Agreement)

Receivables Purchase Agreement, dated as of July 23, 2002, as amended, among the Seller, Hyundai BC Funding Corporation, Amsterdam Funding Corporation, Asset One Securitization, LLC, Sheffield Receivables Corporation, Société Générale, ABN AMRO Bank N.V., Barclays Bank PLC, Park Avenue Receivables Company, LLC and JPMorgan Chase Bank, N.A. and the Purchase and Sale Agreement dated as of January 17, 2000, as amended, between the Seller and Hyundai BC Funding Corporation or (iii) to HMFC in accordance with Dealer Agreements. All financing statements filed or to be filed against the Depositor in favor of the Issuer in connection with this Agreement describing the Receivables contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement, except as provided in the Sale and Servicing Agreement, will violate the rights of the Issuer.”

     Section 3.03 Repurchase upon Breach . Upon discovery by any party hereto of a breach of any of the representations and warranties set forth in part (b) of Exhibit A at the time such representations and warranties were made which materially and adversely affects the interests of the Issuer or the Noteholders, the party discovering such breach shall give prompt written notice thereof to the other parties hereto; provided that the failure to give such notice shall not affect any obligation of the Seller hereunder. If the Seller does not correct or cure such breach prior to the end of the Collection Period which includes the 60th day (or, if the Seller elects, an earlier date) after the date that the Seller became aware or was notified of such breach, then the Seller shall purchase any Receivable materially and adversely affected by such breach from the Issuer on the Payment Date following the end of such Collection Period. Any such purchase by the Seller shall be at a price equal to the Purchased Amount. In consideration for such repurchase, the Seller shall make (or shall cause to be made) a payment to the Issuer equal to the Purchased Amount by depositing such amount into the Collection Account in accordance with Section 5.04 on such Payment Date. Upon payment of such Purchased Amount by the Seller, the Issuer and the Indenture Trustee shall release and shall execute and deliver such instruments of release, transfer or assignment, in each case without recourse or representation, as shall be reasonably necessary to vest in the Seller or its designee any Receivable repurchased pursuant hereto. It is understood and agreed that the right to cause the Seller to purchase (or to enforce the obligations of Seller under the Receivables Purchase Agreement to purchase) any Receivable as described above shall constitute the sole remedy respecting such breach available to the Issuer, the Noteholders, the Owner Trustee, the Certificateholders and the Indenture Trustee. Neither the Owner Trustee nor the Indenture Trustee will have any duty to conduct an affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section 3.03 .

ARTICLE IV.

ADMINISTRATION AND SERVICING OF RECEIVABLES

     Section 4.01 Duties of Servicer . The Servicer, for the benefit of the Issuer and the Indenture Trustee, shall manage, service, administer and make collections on the Receivables and perform the other actions required of the Servicer under this Agreement. The Servicer shall service the Receivables in accordance with its customary servicing practices, using the degree of skill and attention that the Servicer exercises with respect to all other comparable motor vehicle receivables that it services for itself and others. The Servicer’s duties shall include the collection and posting of all payments, responding to inquiries of Obligors, investigating delinquencies,

(2006-B Sale and Servicing Agreement)

sending payment statements to Obligors, reporting any required tax information to Obligors, monitoring the Collateral, accounting for collections, furnishing monthly and annual statements to the Owner Trustee and the Indenture Trustee with respect to distributions and performing the other duties specified herein. The Servicer also shall administer and enforce all rights of the holder of the Receivables under the Receivables and the Dealer Agreements to the extent and in a manner consistent with its customary practices. To the extent consistent with the standards, policies and procedures otherwise required hereby and the Credit and Collection Policy, the Servicer shall follow its customary standards, policies and procedures and shall have full power and authority, acting alone, to do any and all things in connection with the managing, servicing, administration and collection of the Receivables that it may deem necessary or desirable. Without limiting the generality of the foregoing and subject to Section 4.02, the Servicer is hereby authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders, or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments with respect to the Receivables and with respect to the Financed Vehicles. The Servicer is hereby authorized to commence, in its own name or in the name of the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the Noteholders, a legal proceeding to enforce a Receivable pursuant to Section 4.03 or to commence or participate in any other legal proceeding (including a bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or participates in any such legal proceeding in its own name, the Indenture Trustee or the Issuer shall thereupon be deemed to have automatically assigned the applicable Receivable to the Servicer solely for purposes of commencing or participating in such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Indenture Trustee or the Issuer to execute and deliver in the Indenture Trustee’s or the Issuer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. If in any enforcement suit or legal proceeding it shall be held that the Servicer may not enforce a Receivable on the ground that it shall not be a real party in interest or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the Servicer’s expense and direction, take steps to enforce such Receivable, including bringing suit in its name or the name of the Issuer, the Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee and the Indenture Trustee shall upon the written request of the Servicer furnish the Servicer with any powers of attorney and other documents reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.

     Section 4.02 Collection of Receivable Payments; Modifications of Receivables .

          (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable motor vehicle receivables that it services for itself or others. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable.

          (b) Subject to Section 4.06 , the Servicer may grant extensions, rebates, deferrals, amendments, modifications or adjustments on a Receivable in accordance with its

(2006-B Sale and Servicing Agreement)

customary servicing practices; provided, however , that if the Servicer (i) extends the date for final payment by the Obligor of any Receivable beyond the last day of the Collection Period prior to the Class D Maturity Date or (ii) reduces the APR or unpaid principal balance with respect to any Receivable other than as required by applicable law, it will promptly purchase such Receivable in the manner provided in Section 4.07 .

     Section 4.03 Realization upon Receivables . Consistent with the standards, policies and procedures required by this Agreement and the Credit and Collection Policy, the Servicer shall use reasonable efforts to repossess or otherwise convert the ownership of and liquidate any Financed Vehicle securing a Receivable with respect to which the Servicer shall have determined that eventual payment in full is unlikely; provided , however , that the Servicer may elect not to repossess a Financed Vehicle if in its good faith judgment it determines that the proceeds ultimately recoverable with respect to such Receivable would not be greater than the expense of such repossession. In repossessing or otherwise converting the ownership of a Financed Vehicle and liquidating a Receivable, the Servicer is authorized to follow such customary practices and procedures as it shall deem necessary or advisable, consistent with the standard of care required by Section 4.01, which practices and procedures may include reasonable efforts to realize upon any recourse to Dealers, the sale of the related Financed Vehicle at public or private sale, the submission of claims under an insurance policy and other actions by the Servicer in order to realize upon a Receivable; provided , however , that in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed Vehicle unless it shall determine in its reasonable judgment that such repair or repossession shall increase the related Liquidation Proceeds by an amount materially greater than the expense for such repair or repossession. The Servicer shall be entitled to recover all reasonable expenses incurred by it in the course of repossessing and liquidating a Financed Vehicle into cash proceeds, but only out of the cash proceeds of the sale of such Financed Vehicle, any deficiency obtained from the related Obligor or any amounts received from recourse to the related Dealer.

     Section 4.04 [Reserved].

     Section 4.05 Maintenance of Security Interests in Financed Vehicles . The Servicer shall, in accordance with its customary servicing procedures, take such steps as are necessary to maintain perfection of the security interest created by each Receivable in the related Financed Vehicle. The Servicer is hereby authorized to take such steps as are necessary to re-perfect such security interest on behalf of the Issuer and the Indenture Trustee in the event of the relocation of a Financed Vehicle, or for any other reason. In the event that the assignment of a Receivable to the Issuer is insufficient, without a notation on the related Financed Vehicle’s certificate of title, or without fulfilling any additional administrative requirements under the laws of the state in which such Financed Vehicle is located, to perfect a security interest in the related Financed Vehicle in favor of the Issuer, the Servicer hereby agrees that the designation of HMFC as the secured party on the certificate of title is in its capacity as agent of the Issuer.

     Section 4.06 Covenants of Servicer . By its execution and delivery of this Agreement, the Servicer hereby covenants as follows (upon which covenants the Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the Receivables and delivering the applicable Securities):

(2006-B Sale and Servicing Agreement)

          (a) Liens in Force . The Servicer will not release the Financed Vehicle securing any Receivable from the security interest granted by such Receivable in whole or in part except (i) in the event of payment in full by or on behalf of the Obligor thereunder or payment in full less a deficiency which the Servicer would not attempt to collect in accordance with its customary servicing practices, (ii) in connection with repossession and sale of the Financed Vehicle or (iii) as may be required by an insurer in order to receive proceeds from any Insurance Policy covering such Financed Vehicle;

          (b) No Impairment . The Servicer shall do nothing to impair the rights of the Trust in the property of the Trust;

          (c) No Amendments . The Servicer shall (i) not extend the date for final payment by the Obligor of any Receivable beyond the last day of the Collection Period prior to the Class D Maturity Date; or (ii) reduce the APR or unpaid principal balance with respect to any Receivable other than as required by applicable law.

     Section 4.07 Purchase of Receivables Upon Breach . Upon discovery by any party hereto of a breach of any of the covenants set forth in Sections 4.02 , 4.03 , 4.05 or 4.06 which materially and adversely affects the interests of the Issuer or the Noteholders, the party discovering such breach shall give prompt written notice thereof to the other parties hereto; provided that the failure to give such notice shall not affect any obligation of the Servicer under this Section 4.07. If the Servicer does not correct or cure such breach prior to the end of the Collection Period which includes the 60th day (or, if the Servicer elects, an earlier date) after the date that the Servicer became aware or was notified of such breach, then the Servicer shall purchase any Receivable materially and adversely affected by such breach from the Issuer on the Payment Date following the end of such Collection Period. Any such purchase by the Servicer shall be at a price equal to the Pu