Document:

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                                                                  EXECUTION COPY

                                                                   Exhibit 10.30

================================================================================

                                CREDIT AGREEMENT

                                   Dated as of

                                October 11, 2001

                                      among

                              AOL TIME WARNER INC.,
                                   as Borrower

                            The Lenders Party Hereto,

                                 HSBC BANK USA,

                         THE ROYAL BANK OF SCOTLAND PLC,

                                  BNP PARIBAS,

                                 COMMERZBANK AG,

                             THE FUJI BANK, LIMITED
                                   as Agents,

                               BARCLAYS BANK PLC,
                            as Documentation Manager

              (pound)550,000,000 364-DAY REVOLVING CREDIT FACILITY

                             (FACILITY B AGREEMENT)

================================================================================

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                                TABLE OF CONTENTS
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                                                                                        Page
<S>                                                                                    <C>
ARTICLE I Definitions ..........................................................          1

        SECTION 1.01. Defined Terms ............................................          1
        SECTION 1.02. Classification of Loans and Borrowings ...................         21
        SECTION 1.03. Terms Generally ..........................................         21
        SECTION 1.04. Accounting Terms; GAAP ...................................         21

ARTICLE II The Credits .........................................................         22

        SECTION 2.01. Commitments ..............................................         22
        SECTION 2.02. Loans and Borrowings .....................................         22
        SECTION 2.03. Requests for Revolving Borrowings ........................         23
        SECTION 2.04. Swingline Loans ..........................................         24
        SECTION 2.05. Letters of Credit ........................................         25
        SECTION 2.06. Funding of Borrowings ....................................         28
        SECTION 2.07. Interest Elections .......................................         29
        SECTION 2.08. Termination and Reduction of Commitments .................         30
        SECTION 2.09. Repayment of Loans; Evidence of Debt .....................         31
        SECTION 2.10. Prepayment of Loans ......................................         31
        SECTION 2.11. Fees .....................................................         32
        SECTION 2.12. Interest .................................................         33
        SECTION 2.13. Alternate Rate of Interest ...............................         34
        SECTION 2.14. Increased Costs ..........................................         34
        SECTION 2.15. Break Funding Payments ...................................         36
        SECTION 2.16. Taxes ....................................................         36
        SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Setoffs         37
        SECTION 2.18. Mitigation Obligations; Replacement of Lenders ...........         39
        SECTION 2.19. Prepayments Required Due to Currency Fluctuation .........         40
        SECTION 2.20. Adoption of the Euro .....................................         40

ARTICLE III Representations and Warranties .....................................         40

        SECTION 3.01. Organization; Powers .....................................         41
        SECTION 3.02. Authorization; Enforceability ............................         41
        SECTION 3.03. Governmental Approvals; No Conflicts .....................         41
        SECTION 3.04. Financial Condition; No Material Adverse Change ..........         41
        SECTION 3.05. Properties ...............................................         42
        SECTION 3.06. Litigation and Environmental Matters .....................         42
        SECTION 3.07. Compliance with Laws and Agreements ......................         42
        SECTION 3.08. Government Regulation ....................................         43
        SECTION 3.09. Taxes ....................................................         43
        SECTION 3.10. ERISA ....................................................         43
        SECTION 3.11. Disclosure ...............................................         43
</TABLE>

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<TABLE>
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<S>                                                                                     <C>
ARTICLE IV Conditions ..........................................................         44

        SECTION 4.01. Effective Date ...........................................         44
        SECTION 4.02. Each Credit Event ........................................         44

ARTICLE V Affirmative Covenants ................................................         45

        SECTION 5.01. Financial Statements and Other Information ...............         45
        SECTION 5.02. Notices of Material Events ...............................         47
        SECTION 5.03. Existence; Conduct of Business ...........................         47
        SECTION 5.04. Payment of Obligations ...................................         47
        SECTION 5.05. Maintenance of Properties; Insurance .....................         48
        SECTION 5.06. Books and Records; Inspection Rights .....................         48
        SECTION 5.07. Compliance with Laws .....................................         48
        SECTION 5.08. Use of Proceeds ..........................................         48
        SECTION 5.09. Fiscal Periods; Accounting ...............................         49

ARTICLE VI Negative Covenants ..................................................         49

        SECTION 6.01. Financial Covenants ......................................         49
        SECTION 6.02. Indebtedness .............................................         49
        SECTION 6.03. Liens ....................................................         50
        SECTION 6.04. Mergers, Etc .............................................         51
        SECTION 6.05. Investments ..............................................         52
        SECTION 6.07. Transactions with Affiliates .............................         52
        SECTION 6.08. Unrestricted Subsidiaries ................................         52

ARTICLE VII Events of Default ..................................................         53

ARTICLE VIII THE AGENTS & THE DOCUMENTATION MANAGER ............................         55

ARTICLE IX Miscellaneous .......................................................         58

        SECTION 9.01. Notices ..................................................         58
        SECTION 9.02. Waivers; Amendments ......................................         59
        SECTION 9.03. Expenses; Indemnity; Damage Waiver .......................         59
        SECTION 9.04. Successors and Assigns ...................................         60
        SECTION 9.05. Survival .................................................         63
        SECTION 9.06. Counterparts; Integration; Effectiveness .................         63
        SECTION 9.07. Severability .............................................         64
        SECTION 9.08. Right of Setoff ..........................................         64
        SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process         64
        SECTION 9.10. WAIVER OF JURY TRIAL .....................................         65
        SECTION 9.11. Headings .................................................         65
        SECTION 9.12. Confidentiality ..........................................         65
        SECTION 9.13. Acknowledgements .........................................         66
        SECTION 9.14. Judgment Currency ........................................         66
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SCHEDULES:

Schedule 1.01 - Mandatory Cost Rate
Schedule 2.01 - Commitments

Schedule 2.03(A) - Borrowing Notice/Interest Election Notice/Prepayment Notice
Schedule 2.03(B) - Authorized Account Numbers & Locations
Schedule 6.08 - Unrestricted Subsidiaries
Schedule 8 - List of Proper Persons

EXHIBITS:

Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Guarantee

<PAGE>

     364-DAY CREDIT AGREEMENT (as amended, supplemented or otherwise modified
from time to time, this "Agreement") dated as of October 11, 2001, among AOL
TIME WARNER INC., a Delaware corporation (the "Borrower"), the several banks and
other financial institutions from time to time parties to this Agreement (the
"Lenders"), HSBC BANK USA, THE ROYAL BANK OF SCOTLAND PLC, BNP PARIBAS,
COMMERZBANK AG and THE FUJI BANK, LIMITED as agents (each, in such capacity an
"Agent") and BARCLAYS BANK PLC as documentation manager (in such capacity, the
"Documentation Manager").

     WHEREAS, the Borrower has requested the Lenders to make loans to it in an
aggregate amount of up to (pound)550,000,000 as more particularly described
herein;

     WHEREAS, the Lenders are willing to make such loans on the terms and
conditions contained herein;

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

                                   ARTICLE I

                                  Definitions
                                  -----------

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

     "ABR" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.

     "Adjusted Financial Statements" means, for any period, (a) the balance
sheet of the Borrower and its Restricted Subsidiaries (treating Unrestricted
Subsidiaries as equity investments of the Borrower to the extent that such
Unrestricted Subsidiaries would not otherwise be treated as equity investments
of the Borrower in accordance with GAAP) as of the end of such period and (b)
the related statements of operations and stockholders equity for such period
and, if such period is not a fiscal year, for the then elapsed portion of the
fiscal year (treating Unrestricted Subsidiaries as equity investments of the
Borrower to the extent that such Unrestricted Subsidiaries would not otherwise
be treated as equity investments of the Borrower in accordance with GAAP).

     "Adjusted LIBO Rate" means, with respect to any Eurocurrency Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next Basis Point) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

     "Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Documentation Manager.

     "Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under

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                                                                               2

common Control with the Person specified; provided, that two or more Persons
shall not be deemed Affiliates because an individual is a director and/or
officer of each such Person.

     "Agents" means the collective reference to the Agents listed in the
preamble hereto.

     "Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

     "America Online" means America Online, Inc., a Delaware corporation.

     "Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.

     "Applicable Rate" means, for any day, with respect to any Loan (other than
an ABR Loan) or the Facility Fee payable hereunder, as the case may be, the
applicable rate per annum set forth below expressed in Basis Points under the
caption "Eurocurrency Spread" or "Facility Fee Rate", as the case may be, based
upon the corporate credit ratings (or an equivalent thereof, including, in the
case of Moody's, and until such time as Moody's may assign a corporate credit
rating to the Borrower, the senior unsecured long term debt credit rating) (in
each case, a "Rating") assigned by Moody's and S&P, respectively, applicable on
such date to the Borrower:

   =====================================================================
               Ratings            Eurocurrency       Facility Fee
            S&P / Moody's            Spread              Rate
   ---------------------------------------------------------------------
             Category A              28.0                  7.0
             ----------
               A / A2
   ---------------------------------------------------------------------
             Category B
             ----------
               A- / A3               32.0                  8.0
   ---------------------------------------------------------------------
             Category C
             ----------
             BBB+ / Baa1             36.0                  9.0
   ---------------------------------------------------------------------
             Category D              50.0                 12.5
             ----------
             BBB / Baa2
   ---------------------------------------------------------------------
             Category E              62.5                 17.5
             ----------
             BBB- / Baa3
   ---------------------------------------------------------------------
             Category F              75.0                 25.0
             ----------
        Lower than BBB- /Baa3
   =====================================================================

     For purposes of the foregoing, (a) if either Moody's or S&P shall not have
in effect a Rating for the Borrower (other than by reason of the circumstances
referred to in clause (c) of this definition), then the Rating assigned by the
other rating agency shall be used; (b) if the

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                                                                               3

Ratings for the Borrower assigned by Moody's and S&P shall fall within different
Categories, the Applicable Rate shall be based on the higher of the two Ratings
unless one of the two Ratings is two or more Categories lower than the other, in
which case the Applicable Rate shall be determined by reference to the Category
next below that of the higher of the two ratings; (c) if either rating agency
shall cease to assign a Rating for the Borrower solely because the Borrower
elects not to participate or otherwise cooperate in the ratings process of such
rating agency, the Applicable Rate shall not be less than that before such
rating agency's Rating for the Borrower became unavailable; and (d) if the
Ratings for the Borrower assigned by Moody's and S&P shall be changed (other
than as a result of a change in the rating system of Moody's or S&P), such
change shall be effective as of the date on which it is first announced by the
applicable rating agency. Each change in the Applicable Rate shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of Moody's or S&P shall change, or if either such rating agency
shall cease to be in the business of rating corporate debt obligations, the
Borrower and the Lenders shall negotiate in good faith to amend this definition
to reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the
Applicable Rate shall be determined by reference to the rating most recently in
effect prior to such change or cessation.

     "Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Documentation Manager, in the
form of Exhibit A or any other form approved by the Documentation Manager.

     "Availability Period" means the period from and including the Effective
Date to but excluding the Commitment Termination Date.

     "Barclays" means Barclays Bank PLC.

     "Basis Point" means 1/100th of 1%.

     "Base Rate" means (a) with respect to Dollar denominated Loans, the ABR,
(b) with respect to Pound Sterling denominated Loans, the Pound Sterling
Overnight Rate, (c) with respect to Euro denominated Loans, the Euro Overnight
Rate and (d) with respect to Yen denominated Loans, the Yen Overnight Rate.

     "Board" means the Board of Governors of the Federal Reserve System of the
United States.

     "Borrower" has the meaning assigned to such term in the preamble hereto.

     "Borrowing" means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect or (b) a Swingline Loan.

     "Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

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                                                                               4

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, (a) when used in connection with a Eurocurrency
Loan, a Base Rate Loan (other than an ABR Loan) or a Pound Sterling Quoted Rate
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in deposits in the applicable currency in the London interbank
market, (b) when used in connection with any Loan denominated in Euro, the term
"Business Day" shall also exclude any day on which the TARGET payment system is
not open for the settlement of payment in Euro and (c) when used in connection
with a Base Rate Loan denominated in Yen, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in deposits in Yen in
Tokyo.

     "Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

     "Capital Stock" means, with respect to any Person, any and all shares,
partnership interests or other equivalents (however designated and whether
voting or non-voting) of such Person's equity, whether outstanding on the date
hereof or hereafter issued, and any and all equivalent ownership interests in a
Person (other than a corporation) and any and all rights, warrants or options to
purchase or acquire or exchangeable for or convertible into such shares,
partnership interests or other equivalents.

     "Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) that (i) have maturities of not more than six months from
the date of acquisition thereof or (ii) are subject to a repurchase agreement
with an institution described in clause (b)(i) or (ii) below exercisable within
six months from the date of acquisition thereof, (b) U.S. Dollar-denominated and
Eurocurrency time deposits, certificates of deposit and bankers' acceptances of
(i) any domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (ii) any bank whose short-term commercial
paper rating from S&P is at least A-2 or the equivalent thereof or from Moody's
is at least P-2 or the equivalent thereof (any such bank, an "Approved Lender"),
in each case with maturities of not more than six months from the date of
acquisition thereof, (c) commercial paper and variable and fixed rate notes
issued by any Lender or Approved Lender or by the parent company of any Lender
or Approved Lender and commercial paper and variable rate notes issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-2 or the equivalent thereof by S&P or at least P-2 or
the equivalent thereof by Moody's, and in each case maturing within six months
after the date of acquisition thereof, (d) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's, (e) securities with
maturities of six months or less from the date of acquisition backed

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                                                                               5

by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, (f) tax-exempt
commercial paper of U.S. municipal, state or local governments rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody's and maturing within six months after the date of acquisition thereof,
(g) shares of money market mutual or similar funds sponsored by any registered
broker dealer or mutual fund distributor, (h) repurchase obligations entered
into with any bank meeting the qualifications of clause (b) above or any
registered broker dealer whose short-term commercial paper rating from S&P is at
least A-2 or the equivalent thereof or from Moody's is at least P-2 or the
equivalent thereof, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States government
or residential whole loan mortgages, and (i) demand deposit accounts maintained
in the ordinary course of business.

     "Change in Control" means either (a) a Person or "group" (within the
meaning of Section 13(d) and 14(d) of the Exchange Act) acquiring or having
beneficial ownership (it being understood that a tender of shares or other
equity interests shall not be deemed acquired or giving beneficial ownership
until such shares or other equity interests shall have been accepted for
payment) of securities (or options to purchase securities) having a majority or
more of the ordinary voting power of the Borrower (including options to acquire
such voting power) or (b) persons who are directors of the Borrower as of the
date hereof or persons designated or approved by such directors ceasing to
constitute a majority of the board of directors of the Borrower.

     "Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender (or, for purposes of
Section 2.14(b), by any lending office of such Lender or by such Lender's
holding company, if any) with any request, guideline or directive of any
Governmental Authority made or issued after the date of this Agreement.

     "Class" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or
Swingline Loans.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and/or to acquire participations in Swingline
Loans and Letters of Credit hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section 2.08
or Section 2.19 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.

     "Commitment Termination Date" means the earlier of (a) the Business Day
immediately preceding the first anniversary of the Effective Date and (b) the
date on which the Commitments shall terminate in accordance with the provisions
of this Agreement.

<PAGE>
                                                                               6

     "Conduit Lender" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument,
subject to the consent of the Borrower (which consent shall not be unreasonably
withheld); provided, that the designation by any Lender of a Conduit Lender
shall not relieve the designating Lender of any of its obligations to fund a
Loan under this Agreement if, for any reason, its Conduit Lender fails to fund
any such Loan, and the designating Lender (and not the Conduit Lender) shall
have the sole right and responsibility to deliver all consents and waivers
required or requested under this Agreement with respect to its Conduit Lender,
and provided, further, that no Conduit Lender shall (a) be entitled to receive
any greater amount pursuant to Section 2.14, 2.15, 2.16 or 9.03 than the
designating Lender would have been entitled to receive in respect of the Loans
made by such Conduit Lender or (b) be deemed to have any Commitment. The making
of a Loan by a Conduit Lender hereunder shall utilize the Commitment of a
designating Lender to the same extent, and as if, such Loan were made by such
designating Lender.

     "Consolidated EBITDA" means, for any period for any Person, the
Consolidated Net Income of such Person for such period plus, without duplication
and to the extent reflected as a charge in the statement of such Consolidated
Net Income for such period, the sum of (a) income tax expense, (b) interest
expense, amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation and amortization expense (excluding
amortization of film inventory that does not constitute amortization of purchase
price amortization), (d) amortization of intangibles (including, but not limited
to, goodwill) and organization costs (excluding amortization of film inventory
that does not constitute amortization of purchase price amortization), (e) any
extraordinary, unusual or non-recurring non-cash expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, non-cash losses on sales of assets
outside of the ordinary course of business), and (f) minority interest expense
in respect of preferred stock of Subsidiaries of such Person, and minus, to the
extent included in the statement of such Consolidated Net Income for such
period, the sum of (a) interest income and (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of
business), all as determined on a consolidated basis.

     "Consolidated Leverage Ratio" means, as at the last day of any period of
four consecutive fiscal quarters for any Person, the ratio of (a) Consolidated
Total Debt of such Person on such day to (b) Consolidated EBITDA of such Person
(and its Restricted Subsidiaries only, in the case of the Borrower) for such
period, provided that the Consolidated Leverage Ratio for the Borrower shall be
calculated, with respect to quarters ended on or prior to December 31, 2000, on
a pro forma basis consistent with the preparation of financial statements
delivered pursuant to Section 3.04(b).

     "Consolidated Net Income" means, for any period for any Person, the
consolidated net income (or loss) of such Person and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded, without duplication (a) the income (or
deficit) of any Person accrued prior to the date it becomes a

<PAGE>
                                                                               7

Subsidiary of such Person or is merged into or consolidated with such Person or
any of its Subsidiaries or that such other Person's assets are acquired by such
Person or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than (i) in the case of the Borrower, a Restricted Subsidiary and (ii) in
the case of any other Person, a Subsidiary of such Person) in which such Person
or any of its Subsidiaries has an ownership interest, except to the extent that
any such income is actually received by such Person (or (i) in the case of the
Borrower, its Restricted Subsidiary and (ii) in the case of any other Person,
its Subsidiaries) in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of its charter or any agreement or
instrument (other than any Credit Document), judgment, decree, order, statute,
rule, governmental regulation or other requirement of law applicable to such
Subsidiary; provided that the income of any Subsidiary of such Person shall not
be excluded by reason of this clause (c) so long as such Subsidiary guarantees
the Obligations of such Person.

     "Consolidated Net Worth" means at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date; provided
that such amounts shall be calculated in accordance with Section 1.04.

     "Consolidated Total Assets" means at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under total assets at such date; provided that
such amounts shall be calculated in accordance with Section 1.04.

     "Consolidated Total Debt" means, at any date, (a) with respect to the
Borrower, the aggregate principal amount of Indebtedness of the Borrower and its
Restricted Subsidiaries minus (i) the aggregate principal amount of any such
Indebtedness that is payable either by its terms or at the election of the
obligor in equity securities of the Borrower or the proceeds of options in
respect of such equity securities, (ii) the aggregate amount of any Stock Option
Loans, (iii) the aggregate principal amount of Film Financings and (iv) the
aggregate amount of cash and Cash Equivalents held by the Borrower or any of its
Restricted Subsidiaries in excess of $200,000,000 and (b) for purposes of
Section 6.02(b) (until such time as TWE becomes a Guarantor, at which time this
clause (b) shall cease to apply), the aggregate principal amount of Indebtedness
of TWE and its Subsidiaries minus (i) the aggregate principal amount of any such
Indebtedness that is payable either by its terms or at the election of the
obligor in equity securities of TWE or the proceeds of options in respect of
such equity securities, (ii) the aggregate principal amount of Film Financings,
and (iii) the aggregate amount of cash and Cash Equivalents held by TWE or any
of its Subsidiaries, all determined on a consolidated basis in accordance with
GAAP.

     "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

<PAGE>
                                                                               8

     "Copyright Liens" means any Liens granted by the Borrower or any of its
Subsidiaries on copyrights relating to movies or other programming, which movies
or other programming are subject to one or more contracts entitling the Borrower
or such Subsidiary to future payments in respect of such movies or other
programming and which contractual rights to future payments are to be
transferred by the Borrower or Subsidiary to a special purpose Subsidiary of the
Borrower or Subsidiary organized for the purpose of monetizing such rights to
future payments, provided that such Liens (a) are granted directly or indirectly
for the benefit of the special purpose Subsidiary and/or the Persons who
purchase such contractual rights to future payments from such special purpose
Subsidiary and (b) extend only to the copyrights for the movies or other
programming subject to such contracts for the purpose of permitting the
completion, distribution and exhibition of such movies or other programming.

     "Credit Documents" means this Agreement, each Guarantee and each Note.

     "Credit Parties" means the Borrower and the Guarantors; and "Credit Party"
means any of them.

     "Currency" means Pounds or any Optional Currency.

     "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

     "Defaulting Lender" means any Lender which fails to make any Loan required
to be made by it in accordance with the terms and conditions of this Agreement.

     "Documentation Manager" means Barclays.

     "Dollars" or "$" refers to lawful money of the United States.

     "Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

     "EMU" means the Economic and Monetary Union as contemplated in the Treaty.

     "EMU Legislation" means the legislative measures of the European Council
(including without limitation the European Council regulations) for the
introduction of, changeover to or operation of the Euro in one or more member
states.

     "Environmental Law" means all applicable and binding laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions, or
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.

     "Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) a violation

<PAGE>
                                                                               9

of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) the exposure to
any Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

     "ERISA Event" means (a) any "reportable event," as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or in Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Credit Party or any of its ERISA Affiliates of
any unfunded liability under Title IV of ERISA with respect to the termination
of any Plan; (e) the receipt by any Credit Party or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to terminate
any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by any Credit Party or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by any Credit Party or any ERISA Affiliate
of any notice concerning the imposition on such entity of Withdrawal Liability
or a determination that a Multiemployer Plan with respect to which such entity
is obligated to contribute or is otherwise liable is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; or (h)
the occurrence, with respect to a Plan or a Multiemployer Plan, of a nonexempt
"prohibited transaction" (within the meaning of Section 4975 of the Code or
Section 406 of ERISA) which could reasonably be expected to result in liability
to a Credit Party.

     "Euro" and "(euro)" means the single currency of Participating Member
States introduced in accordance with the provision of Article 123 of the Treaty
and, in respect of all payments to be made under this Agreement in Euro, means
immediately available, freely transferable funds.

     "Eurocurrency," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

     "Euro Overnight Rate" means, for any day, the sum of (a) the average of the
rates per annum quoted at approximately 11:00 a.m., London time, to leading
banks in the European interbank market by the Reference Banks for the offering
of overnight deposits in Euro plus (b) the Applicable Rate. The Documentation
Manager shall determine the Euro Overnight Rate by

<PAGE>
                                                                              10

obtaining quotes from the Reference Banks, and if any such Reference Bank fails
to timely provide such quote for any day, then the Euro Overnight Rate for such
day shall be determined by the average based on the quotes from the Reference
Banks that provided quotes on that day.

     "Event of Default" has the meaning assigned to such term in Article VII.

     "Exchange Act" means the Securities and Exchange Act of 1934, as amended.

     "Exchange Rate" means, with respect to any Optional Currency on a
particular date, the rate at which such Optional Currency may be exchanged into
Pound Sterling, as set forth at 11:00 a.m. London time on such date on page WRLD
of the Reuters Screen with respect to such Optional Currency. In the event that
such rate does not appear on the applicable Reuters currency page, the Exchange
Rate with respect to such Optional Currency shall be determined by reference to
such other publicly available service for displaying exchange rates as may be
agreed upon by the Documentation Manager and the Borrower or, in the absence of
such agreement, such Exchange Rate shall instead be the spot rate of exchange of
the Documentation Manager in the London interbank or other market where its
foreign currency exchange operations in respect of such Optional Currency are
then being conducted, at or about 11:00 a.m., London time, at such date for the
purchase of Pound Sterling with such Optional Currency, for delivery two
Business Days later; provided, however, that if at the time of any such
determination, for any reason, no such spot rate is being quoted, the
Documentation Manager may use any reasonable method it deems appropriate to
determine such rate, and such determination shall be conclusive absent manifest
error.

     "Excluded Taxes" means, with respect to the Documentation Manager, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction described in clause (a) above,
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.18(b)), any withholding tax (i) that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or designates a new lending office or
(ii) is attributable to such Foreign Lender's failure or inability to comply
with Section 2.16(f), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of such designation of a new lending
office or assignment, to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.16(a) and (d) in the case
of a Lender that is a U.S. Person, any withholding tax that is attributable to
the Lender's failure to comply with Section 2.16(g).

     "Facility A Agreement" means the 364-Day Revolving Credit Agreement
(Facility A Agreement) dated the date hereof in the amount of (pound)550,000,000
among the Borrower and Barclays Bank PLC, ABN AMRO Bank N.V., Westdeutsche
Landesbank Girozentrale, Sumitomo Mitsui Banking Corporation and The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch.

<PAGE>
                                                                              11

     "Facility Fee" has the meaning assigned to such term in Section 2.11(a).

     "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next Basis Point) of the rates on
overnight Federal funds transactions with members of the United States Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next Basis Point) of the quotations for
such day for such transactions received by the Documentation Manager from three
Federal funds brokers of recognized standing selected by it.

     "Film Financing" means, without duplication, monetary obligations arising
out of transactions in which so-called tax-based financing groups or other
third-party investors provide financing for the acquisition, production or
distribution of motion pictures, television programs, sound recordings or books
or rights with respect thereto in exchange, in part, for certain tax or other
benefits which are derived from such motion pictures, television programs, sound
recordings, books or rights; provided that no such monetary obligations shall
have, directly or indirectly, recourse (including by way of setoff) to the
Borrower or any Restricted Subsidiary or any of its assets other than to the
profits or distribution rights related to such motion pictures, television
programs, sound recordings, books or rights and other than to a Subsidiary of
TWE or TBS substantially all of the assets of which consist of the motion
pictures, television programs, sound recordings, books or rights which are the
subject of such transaction and related cash and Cash Equivalents.

     "Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

     "Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

     "Franchise" means, with respect to any Person, a franchise, license,
authorization or right to construct, own, operate, manage, promote, extend or
otherwise utilize any cable television distribution system operated or to be
operated by such Person or any of its Subsidiaries granted by any Governmental
Authority, but shall not include any such franchise, license, authorization or
right that is incidentally required for the purpose of installing, constructing
or extending a cable television system.

     "GAAP" means generally accepted accounting principles in the United States.

     "Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

<PAGE>
                                                                              12

     "Guarantee Obligations" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided, that the term Guarantee Obligations shall not include
endorsements for collection or deposit in the ordinary course of business.

     "Guarantees" means, collectively, the Guarantees to be executed and
delivered by each of the Guarantors, substantially in the form of Exhibit B.

     "Guarantors" means (a) America Online, (b) Time Warner, (c) TBS, (d) Time
Warner Companies, Inc., a Delaware corporation, (e) TWI Cable Inc., a Delaware
corporation, and (f) any other Person that becomes a party to the Guarantee
after the Effective Date.

     "Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

     "HSBC" means HSBC Bank USA.

     "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person (but not including
synthetic or operating leases), (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business and payment obligations of
such Person pursuant to agreements entered into in the ordinary course of
business, which payment obligations are contingent on another Person's
satisfactory provision of services or products), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien (other than a Copyright Lien
or Liens on interests or Investments in Unrestricted Subsidiaries) on property
owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed (but only to the extent of the lesser of the fair
market value of the property subject to such Lien and the amount of such
Indebtedness), (g) all Guarantee Obligations of such Person with respect to
Indebtedness of others (except to the extent that such Guarantee Obligation
guarantees Indebtedness of a Restricted Subsidiary), (h) all Capital Lease
Obligations of such Person, (i) all obligations,

<PAGE>
                                                                              13

contingent or otherwise, of such Person as an account party in respect of
letters of credit (but only to the extent of all drafts drawn thereunder) and
(j) all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances. Notwithstanding the foregoing, Indebtedness shall not
include (i) any obligation of such Person to guarantee performance of, or enter
into indemnification agreements with respect to, obligations, entered into in
the ordinary course of business, under any and all Franchises, leases,
performance bonds, franchise bonds and obligations to reimburse drawings under
letters of credit issued in lieu of performance or franchise bonds, (ii)
completion bonds or guarantees or indemnities of a similar nature issued in the
ordinary course of business in connection with the production of motion pictures
and video and television programming or (iii) obligations to make Tax
Distributions. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other contractual relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Interest Election Request" means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.

     "Interest Payment Date" means (a) with respect to any Base Rate Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurocurrency Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurocurrency Borrowing with an Interest Period of more than three
months' duration, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period, and (c) with respect to any Swingline Loan, the day that such Loan is
required to be repaid.

     "Interest Period" means with respect to any Eurocurrency Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is (a) one, two, three or six
months (or, with the consent of each Lender, a shorter period) thereafter, as
the Borrower may elect and (b) one month thereafter, if the Borrower has made no
election, provided, that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurocurrency Borrowing only,
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period pertaining to a Eurocurrency Borrowing that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.

     "Investment" by any Person means any direct or indirect (a) loan, advance
or other extension of credit or contribution to any other Person (by means of
transfer of cash or other property to others, payments for property or services
for the account or use of others,

<PAGE>
                                                                              14

mergers or otherwise), (b) purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities (including any option, warrant or other
right to acquire any of the foregoing) or evidences of Indebtedness issued by
any other Person (whether by merger, consolidation, amalgamation or otherwise
and whether or not purchased directly from the issuer of such securities or
evidences of Indebtedness), (c) purchase or acquisition (in one transaction or a
series of transactions) of any assets of any other Person constituting a
business unit and (d) all other items that would be classified as investments on
a balance sheet of such Person prepared in accordance with GAAP. Investments
shall exclude extension of trade credit and advances to customers and suppliers
to the extent made in the ordinary course of business and in accordance with
customary industry practice.

     "Issuing Bank" means any Lender or Affiliate of any Lender selected by the
Borrower that agrees to be an Issuing Bank hereunder and any other bank
reasonably acceptable to the Required Lenders and designated as an Issuing Bank
by the Borrower, in its capacity as an issuer of Letters of Credit hereunder.
Any Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, in which case the term
"Issuing Bank" shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate. Any Issuing Bank shall become a party to this
Agreement by execution and delivery of a supplemental signature page to this
Agreement. Initially, HSBC shall be the Issuing Bank.

     "LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.

     "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.

     "L/C Sublimit" means (pound)25,000,000.

     "Lender Affiliate" means, (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.

     "Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.

     "Letter of Credit" means any letter of credit issued pursuant to this
Agreement.

<PAGE>
                                                                              15

     "LIBO Rate" means, (a) with respect to any Eurocurrency Borrowing
denominated in Pounds, Dollars or Yen for any Interest Period, the rate
appearing on Page 3740 or Page 3750, as the case may be, of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Documentation Manager from time to time for purposes of providing quotations of
interest rates applicable to Pound, Dollar or Yen deposits (as applicable) in
the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period (or, in the case
of Pounds, on the first day of such Interest Period), as the rate for dollar
deposits with a maturity comparable to such Interest Period and (b) with respect
to any Eurocurrency Borrowing denominated in Euro for any Interest Period, the
rate appearing on Page 248 of the Telerate Service (it being understood that
this rate is the Euro interbank offered rate (known as the "EURIBOR Rate")
sponsored by the Banking Federation of the European Union (known as the "FBE")
and the Financial Markets Association (known as the "ACI")) at approximately
10:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for deposits in Euro with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the "LIBO Rate" with respect to such Eurocurrency Borrowing
for such Interest Period shall be the rate per annum (rounded upwards, if
necessary, to the next Basis Point) equal to the arithmetic average of the rates
at which deposits in Pounds or the applicable Optional Currency approximately
equal in principal amount to the Pound Sterling Equivalent of (pound)5,000,000
and for a maturity comparable to such Interest Period are offered with respect
to any Eurocurrency Borrowing to the principal London offices of the Reference
Banks (or, if any Reference Bank does not at the time maintain a London office,
the principal London office of any Affiliate of such Reference Lender) in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period (or, in the case of Pounds, on the first day of such Interest
Period) and; provided, however, that, if only two Reference Banks notify the
Documentation Manager of the rates offered to such Reference Banks (or any
Affiliates of such Reference Lenders) as aforesaid, the LIBO Rate with respect
to such Eurocurrency Borrowing shall be equal to the arithmetic average of the
rates so offered to such Reference Banks (or any such Affiliates).

     "Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in
(including sales of accounts), on or of such asset, (b) the interest of a vendor
or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing, but excluding any operating leases)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

     "Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.

     "Local Time" means, for payments and disbursements (a) in respect of
Dollars, New York time, (b) in respect of Euros or Pounds, London time and (c)
in respect Yen, Tokyo time.

<PAGE>
                                                                              16

     "Mandatory Cost" means, with respect to any Lender, the cost imputed to
such Lender of compliance with the requirements of the Bank of England or the
Financial Services Authority during the relevant Interest Period, determined in
accordance with Schedule 1.01.

     "Material Adverse Effect" means a material adverse effect on (a) the
financial condition, business, results of operations, properties or liabilities
of the Borrower and the Subsidiaries taken as a whole, (b) the ability of any
Credit Party to perform any of its material obligations to the Lenders under any
Credit Document to which it is or will be a party or (c) the rights of or
benefits available to the Lenders under any Credit Document.

     "Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), of any one or more of the Borrower and its Restricted
Subsidiaries or any Material Subsidiary of the Borrower in an aggregate
principal amount exceeding $100,000,000.

     "Material Subsidiary" of any Person means, at any date, each Subsidiary of
such Person which, either alone or together with the Subsidiaries of such
Subsidiary, meets any of the following conditions:

          (i) as of the last day of such Person's most recently ended fiscal
     quarter for which financial statements have been filed with the SEC the
     investments of such Person and its Subsidiaries in, or their proportionate
     share (based on their equity interests) of the book value of the total
     assets (after intercompany eliminations) of, the Subsidiary in question
     exceeds 10% of the book value of the total assets of such Person and its
     consolidated Subsidiaries;

          (ii) for the full four consecutive quarter period ended on the last
     day of such Person's most recently ended fiscal quarter for which financial
     statements have been filed with the SEC, the equity of such Person and its
     Subsidiaries in the revenues from continuing operations of the Subsidiary
     in question exceeds 10% of the revenues from continuing operations of such
     Person and its consolidated Subsidiaries; or

          (iii) for the full four consecutive quarter period ended on the last
     day of such Person's most recently ended fiscal quarter for which financial
     statements have been filed with the SEC, the equity of such Person and its
     Subsidiaries in the Consolidated EBITDA of the Subsidiary in question
     exceeds 10% of the Consolidated EBITDA of such Person.

     "Maturity Date" means the Commitment Termination Date, or if the Borrower
has delivered a Term Out Notice, the second anniversary of the Commitment
Termination Date.

     "Moody's" means Moody's Investors Service, Inc.

     "Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

     "National Currency Unit" means the unit of currency (other than the Euro)
of a Participating Member State.

     "Note" means any promissory note evidencing Loans.

<PAGE>
                                                                              17

     "Obligations" has the meaning assigned to such term in the Guarantees.

     "Officer's Certificate" means a certificate executed by the Chief Financial
Officer, the Treasurer or the Controller of the Borrower or such other officer
of the Borrower reasonably acceptable to the Documentation Manager and
designated as such in writing to the Documentation Manager by the Borrower.

     "Optional Currency" means, at any time, Dollars, Euros and Yen, so long as
such currency is freely traded and convertible into Pounds in the London market
and as to which a Pound Sterling Equivalent can be calculated.

     "Optional Currency Sublimit" means(pound)250,000,000.

     "Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.

     "Participating Member State" means a member of the European Communities
that adopts or has adopted the Euro as its currency in accordance with EMU
Legislation.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

     "Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

     "Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

     "Pounds" or "(pound)" or "Pound Sterling" refer to lawful money of the
United Kingdom.

     "Pound Sterling Equivalent" means, with respect to an amount denominated in
any Optional Currency, the equivalent in Pound Sterling of such amount
determined at the Exchange Rate determined by the Documentation Manager on the
date of determination of such equivalent. In making any determination of the
Pound Sterling Equivalent for purposes of calculating the amount of Loans to be
borrowed from the respective Lenders on any date, the Documentation Manager
shall use the relevant Exchange Rate in effect on the date on which the Borrower
delivers a Borrowing Request (which, in accordance with Section 2.03, may be
telephonic) for such Loans pursuant to the provisions of this Agreement. As
appropriate, amounts specified herein as amounts in Pounds shall be or include
any relevant Pound Sterling Equivalent amount.

<PAGE>
                                                                              18

     "Pound Sterling Overnight Rate" means, for any day, a rate per annum equal
to the rate on overnight Pound Sterling deposits in the London interbank market
as such rates are quoted on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Documentation
Manager from time to time for purposes of providing quotations of interest rates
applicable to Pound Sterling deposits in the London interbank market), plus the
Mandatory Cost, plus the Applicable Rate.

     "Pound Sterling Quoted Rate" means, for any day for any Swingline Loan, a
rate per annum quoted by the Swingline Lender to the Borrower in response to a
Borrowing Request in respect of such Swingline Loan as its overnight offer rate
in effect for such Swingline Loan at its principal office in London, plus the
Applicable Rate.

     "Prime Rate" means the rate of interest per annum publicly announced from
time to time by the Documentation Manager as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

     "Rating" has the meaning assigned to such term in the definition of
"Applicable Rate."

     "Reference Banks" means Barclays Bank PLC, HSBC Bank USA and The Royal Bank
of Scotland PLC and their respective Affiliates.

     "Register" has the meaning set forth in Section 9.04.

     "Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.

     "Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time.

     "Responsible Officer" of the Borrower means any of the Chief Executive
Officer, Chief Legal Officer, Chief Financial Officer, Treasurer or Controller
(or any equivalent of the foregoing officers) of the Borrower.

     "Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of the Borrower, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of capital stock of the Borrower or any option, warrant or
other right to acquire any such shares of capital stock of the Borrower.

     "Restricted Subsidiaries" of the Borrower means, as of any date, all
Subsidiaries of the Borrower that have not been designated as Unrestricted
Subsidiaries by the Borrower

<PAGE>
                                                                              19

pursuant to Section 6.08 or have been so designated as Unrestricted Subsidiaries
by the Borrower but prior to such date have been (or have been deemed to be)
re-designated by the Borrower as Restricted Subsidiaries pursuant to Section
6.08.

     "Revolving Borrowing" means a Borrowing of Revolving Loans.

     "Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans,
its LC Exposure and Swingline Exposure at such time.

     "Revolving Loan" means a Loan made pursuant to Section 2.03.

     "S&P" means Standard & Poor's Rating Services.

     "SEC" means the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.

     "Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Documentation Manager is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentage shall include those imposed
pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

     "Stock Option Loans" means (a) borrowings under that certain Credit
Agreement dated as of March 13, 1998, as amended, among Time Warner, The Chase
Manhattan Bank, as administrative agent thereunder, and the lenders party
thereto; provided the lenders thereunder shall not have the benefit of any Lien
other than on the Capital Stock of the Borrower and proceeds therefrom or (b)
borrowings under substantially similar facilities.

     "Subsequent Participant" means any member state that adopts the Euro as its
lawful currency after the date hereof.

     "Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held. Unless otherwise qualified, all references to a
"Subsidiary" or "Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.

<PAGE>
                                                                              20

     "Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.

     "Swingline Lender" means HSBC, in its capacity as lender of Swingline Loans
hereunder.

     "Swingline Loan" means a Loan made pursuant to Section 2.04.

     "Tax Distribution" means, with respect to any period, distributions made to
any Person by a Subsidiary of such Person on or with respect to income and other
taxes, which distributions are not in excess of the tax liabilities that would
have been payable by such Subsidiary on a standalone basis, and which are
calculated in accordance with, and made no earlier than as required by, the
terms of the applicable organizational document which requires such
distribution.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     "TBS" means Turner Broadcasting System, Inc., a Georgia corporation.

     "Term Out Notice" has the meaning assigned to such term in Section 2.09(e).

     "Time Warner" means Time Warner Inc., a Delaware corporation.

     "Transactions" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.

     "Treaty" means the Treaty establishing the European Economic Community,
being the Treaty of Rome of March 25, 1957 (as amended by the Single European
Act 1987, the Maastricht Treaty (which was signed at Maastricht on February 7,
1992 and came into force on November 1, 1993), the Amsterdam Treaty (which was
signed at Amsterdam on October 2, 1997 and came into force on May 1, 1999) and
the Nice Treaty (which was signed on February 26, 2001), each as amended from
time to time and as referred to in legislative measures of the European Union
for the introduction of, changeover to or operating of the Euro in one or more
member states.

     "TWE" means Time Warner Entertainment Company, L.P., a Delaware limited
partnership.

     "Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate, the
Pound Sterling Overnight Rate, the Pound Sterling Quoted Rate, the Euro
Overnight Rate or the Yen Overnight Rate.

     "United States" means the United States of America.

<PAGE>
                                                                              21

     "U.S. Person" means a person who is a citizen or resident of the United
States and any corporation or other entity created or organized in or under the
laws of the United States.

     "Unrestricted Subsidiary" has the meaning assigned to such term in Section
6.08.

     "Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     "Yen" and "(Y)" shall mean lawful money of Japan.

     "Yen Overnight Rate" means, for any day, the sum of (a) the rate that
represents the cost of overnight funds for Yen in the Tokyo interbank market to
the Documentation Manager for such day plus (b) the Applicable Rate.

     SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and Type (e.g., a
"Eurocurrency Revolving Loan"). Borrowings also may be classified and referred
to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurocurrency
Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving Borrowing").

     SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words, "include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." The word
"will" shall be construed to have the same meaning and effect as the word
"shall." Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

     SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, (a) if the Borrower notifies the Documentation Manager that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Documentation Manager notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such

<PAGE>
                                                                              22

purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith and (b) Consolidated
Net Worth and Consolidated Total Assets shall be calculated at all times in
accordance with GAAP as in effect on the Effective Date solely as it relates to
the impairment of goodwill and intangibles.

                                   ARTICLE II

                                   The Credits
                                   -----------

     SECTION 2.01. Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower in Pounds or
any Optional Currency from time to time during the Availability Period so long
as, after giving effect thereto, (A) such Lender's Revolving Credit Exposure
will not exceed such Lender's Commitment and (B) the sum of the total Revolving
Credit Exposures will not exceed the total Commitments and (C) the total
Revolving Credit Exposures denominated in the Optional Currencies will not
exceed the Optional Currency Sublimit. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Loans. The Revolving Loans made in Pounds may from time
to time be Eurocurrency Loans or Pound Sterling Overnight Rate Loans, the
Revolving Loans made in Dollars may from time to time be Eurocurrency Loans or
Alternate Base Rate Loans, the Revolving Loans made in Euro may from time to
time be Eurocurrency Loans or Euro Overnight Rate Loans, and the Revolving Loans
made in Yen may from time to time be Eurocurrency Loans or Yen Overnight Rate
Loans, in each case as determined by the Borrower and notified to the
Documentation Manager in accordance with Sections 2.03 and 2.07.

     SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be made
as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably
in accordance with their respective Commitments. The failure of any Lender to
make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.

     (b) Subject to Section 2.13, each Revolving Borrowing shall be comprised
entirely of Base Rate Loans or Eurocurrency Loans as the Borrower may request in
accordance herewith. Each Swingline Loan shall be either a Pound Sterling
Overnight Rate Loan or a Pound Sterling Quoted Rate Loan. Each Lender at its
option may make any Eurocurrency Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement.

     (c) At the commencement of each Interest Period for any Eurocurrency
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of 1,000,000 units of the relevant currency and not less than
an amount which is Pound Sterling Equivalent to (pound)5,000,000. At the time
that any Base Rate Borrowing is made, such

<PAGE>
                                                                              23

Borrowing shall be in an aggregate amount that is an integral multiple of
1,000,000 units and not less than an amount which is Pound Sterling Equivalent
to (pound)5,000,000; provided that any Base Rate Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in
an amount that is an integral multiple of (pound)1,000,000 and not less than
(pound)5,000,000. Borrowings of more than one Type and Class may be outstanding
at the same time; provided that there shall not at any time be more than a total
of 20 Eurocurrency Revolving Borrowings outstanding.

     (d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.

     (e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request at any time a Borrowing hereunder without
requesting a ratable borrowing from the lenders under the Facility A Agreement
in accordance with the terms thereof.

     SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower shall notify the Documentation Manager of such request
by telephone in accordance with Schedule 2.03(A). Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Documentation Manager of a written Borrowing Request in a form
approved by the Documentation Manager and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

     (a) the aggregate amount and Currency of the requested Borrowing, and, in
the case of an Optional Currency Borrowing, the Pound Sterling Equivalent of the
requested Borrowing, as calculated using the Exchange Rate on the date of the
request;

     (b) the date of such Borrowing, which shall be a Business Day;

     (c) whether such Borrowing is to be an ABR Borrowing, Pound Sterling
Overnight Rate Borrowing or a Eurocurrency Borrowing;

     (d) in the case of a Eurocurrency Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term "Interest Period"; and

     (e) the location and number of the Borrower's account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.06.

provided, that no such notice shall alter the information required by subsection
(e) of this Section 2.03 from that set forth on Schedule 2.03(B) unless such
notice shall be written.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be a Pound Sterling Overnight Rate
Borrowing. If no Interest Period is specified with respect to any requested
Eurocurrency Revolving Borrowing, then the Borrower

<PAGE>
                                                                              24

shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Documentation Manager shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.

     SECTION 2.04. Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding
(pound)50,000,000 or (ii) the sum of the total Revolving Credit Exposures
exceeding the total Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Swingline Loans. Swingline
Loans shall only be made in Pounds.

     (b) To request a Swingline Loan, the Borrower shall notify the
Documentation Manager of such request by telephone (confirmed by telecopy) in
accordance with Schedule 2.03(A). Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day), the requested
interest rate and amount of the requested Swingline Loan. The Documentation
Manager will promptly advise the Swingline Lender of any such notice received
from the Borrower. The Swingline Lender shall make each Swingline Loan available
to the Borrower by means of a credit to the general deposit account (as more
specifically set forth on Schedule 2.03(B), and changed from time to time only
by a written notice) of the Borrower with the Swingline Lender by 3:00 p.m.,
London time, on the requested date of such Swingline Loan.

     (c) The Swingline Lender may by written notice given to the Documentation
Manager not later than 11:00 am, London time, on any Business Day require the
Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans outstanding. Such notice shall specify the aggregate amount
of Swingline Loans in which Lenders will participate. Promptly upon receipt of
such notice, the Documentation Manager will give notice thereof to each Lender,
specifying in such notice such Lender's Applicable Percentage of such Swingline
Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, to pay to the Documentation Manager, for
the account of the Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Lender
shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Documentation
Manager shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Documentation Manager shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Documentation Manager and

<PAGE>
                                                                              25

not to the Swingline Lender. Any amounts received by the Swingline Lender from
the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Documentation
Manager; any such amounts received by the Documentation Manager shall be
promptly remitted by the Documentation Manager to the Lenders that shall have
made their payments pursuant to this paragraph and to the Swingline Lender, as
their interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof. Notwithstanding the foregoing, a Lender shall not have any
obligation to acquire a participation in a Swingline Loan pursuant to this
paragraph if an Event of Default shall have occurred and be continuing at the
time such Swingline Loan was made and such Lender shall have notified the
Swingline Lender in writing, at least one Business Day prior to the time such
Swingline Loan was made, that such Event of Default has occurred and that such
Lender will not acquire participations in Swingline Loans made while such Event
of Default is continuing.

     (d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request at any time a Swingline Loan hereunder without
requesting a ratable borrowing from the swingline lender under the Facility A
Agreement in accordance with the terms thereof.

     SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the Borrower and
the Issuing Bank, at any time and from time to time during the Availability
Period; provided that the Borrower shall not be entitled to request at any time
the issuance of Letters of Credit hereunder without requesting on a pro rata
basis the issuance of letters of credit under the Facility A Agreement in
accordance with the terms thereof. Each Letter of Credit shall be issued in
Pounds or in an Optional Currency. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.

     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank (reasonably in
advance of the requested date of issuance, amendment, renewal or extension and
no later than 12:00 noon Local Time one Business Day prior to such date) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount and Currency of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended on the requested date only if (and upon issuance,
amendment,

<PAGE>
                                                                              26

renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed the L/C Sublimit, (ii)
the sum of the total Revolving Credit Exposures shall not exceed the total
Commitments and (iii) the requirements of paragraph (c) of this Section shall be
satisfied.

     (c) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the Maturity Date
unless such Letter of Credit is cash collateralized in an amount equal to its
face amount prior to 12:00 noon, Local Time on the Maturity Date.

     (d) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

     (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
in the same Currency as such LC Disbursement by paying to the Issuing Bank an
amount equal to such LC Disbursement not later than 12:00 noon, Local Time, on
the Business Day immediately following the day that the Borrower receives notice
of such LC Disbursement; provided that, if the Borrower fails to reimburse the
Issuing Bank on such date, the Borrower shall be deemed to have requested a Base
Rate Borrowing in the principal amount and Currency of the LC Disbursement,
without regard to the minimum amounts and multiples set forth in Section 2.02,
but subject to the unutilized portion of the Commitments and the Optional
Currency Sublimit. If the Borrower elects to finance amounts due under any
Letter of Credit in such a manner, the Borrower's obligation to pay an amount
equal to the LC Disbursement to the Issuing Bank shall be discharged and
replaced by the resulting Base Rate Borrowing, and the Issuing Bank shall notify
the Documentation Manager, who shall notify each Lender of the applicable LC
Disbursement and corresponding Base Rate Borrowing and such Lender's Applicable
Percentage thereof. Promptly following receipt of such notice, each Lender shall
pay to the Issuing Bank its Applicable Percentage of such Base Rate Borrowing,
in the same manner as provided in Section 2.06 with respect to Loans made by
such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Lenders). Promptly following receipt of any payment from the
Borrower pursuant to this paragraph such payment shall be distributed to the
Issuing Bank or, to

<PAGE>
                                                                              27

the extent that Lenders have made payments pursuant to this paragraph to fund
any Base Rate Loan made to reimburse the Issuing Bank, then to such Lenders and
the Issuing Bank as their interests may appear.

     (f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not strictly
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. Neither the Documentation Manager, nor any of the Lenders nor the
Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank; provided that the foregoing shall
not be construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
gross negligence or wilful misconduct in connection with any of the foregoing
circumstances. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

     (g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Lenders and the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.

     (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower

<PAGE>
                                                                              28

reimburses such LC Disbursement, at the rate per annum then applicable to Base
Rate Loans in the applicable Currency; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.12(g) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph (e)
of this Section to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.

     (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at
any time by written agreement among the Borrower, the replaced Issuing Bank and
the successor Issuing Bank and, if required, with the consent of the Required
Lenders. The Borrower shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

     SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, Local Time for the applicable
Currency, to the account of the Documentation Manager most recently designated
by it for such purpose by notice to the Lenders; provided that Swingline Loans
shall be made as provided in Section 2.04. The Documentation Manager will make
such Loans available to the Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower specified on Schedule
2.03(B) or designated by the Borrower in the applicable Borrowing Request.

     (b) Unless the Documentation Manager shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Documentation Manager such Lender's share of such
Borrowing, the Documentation Manager may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Documentation Manager, then the
applicable Lender and the Borrower severally agree to pay to the Documentation
Manager forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Documentation Manager, at
(i) in the case of such Lender, (A) in the case of Borrowings denominated in
Pounds Sterling, the Pound Sterling Overnight Rate, and (B) in the case of
Borrowings denominated in any Optional Currency, the interest rate reasonably
determined by the Documentation Manager as the rate applicable to overnight
settlements between banks for the amount advanced by the Documentation Manager
on behalf of such Lender or (ii) in the case

<PAGE>
                                                                              29

of the Borrower, the interest rate that would otherwise apply to such Borrowing.
If such Lender pays such amount to the Documentation Manager, then such amount
shall constitute such Lender's Loan included in such Borrowing.

     SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurocurrency Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurocurrency Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall
not apply to Swingline Borrowings, which may not be converted or continued.

     (b) To make an election pursuant to this Section, the Borrower shall notify
the Documentation Manager of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election (as more specifically set forth in
Schedule 2.03(A)). Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Documentation Manager of a written Interest Election Request in a form approved
by the Documentation Manager and signed by the Borrower.

     (c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

          (i) the Borrowing to which such Interest Election Request applies and,
     if different options are being elected with respect to different portions
     thereof, the portions thereof to be allocated to each resulting Borrowing
     (in which case the information to be specified pursuant to clauses (iii)
     and (iv) below shall be specified for each resulting Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
     Election Request, which shall be a Business Day;

          (iii) in the case of any Borrowing denominated in Dollars, whether the
     resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

          (iv) in the case of any Borrowing denominated in Pounds, whether the
     resulting Borrowing is to be a Pound Sterling Overnight Rate Borrowing or a
     Eurocurrency Borrowing;

          (v) in the case of any Borrowing denominated in Euro, whether the
     resulting Borrowing is to be a Euro Overnight Rate Borrowing or a
     Eurocurrency Borrowing;

<PAGE>
                                                                              30

          (vi) in the case of any Borrowing denominated in Yen, whether the
     resulting Borrowing is to be a Yen Overnight Rate Borrowing or a
     Eurocurrency Borrowing

          (vii) if the resulting Borrowing is a Eurocurrency Borrowing, the
     Interest Period to be applicable thereto after giving effect to such
     election, which shall be a period contemplated by the definition of the
     term "Interest Period".

If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.

     (d) Promptly following receipt of an Interest Election Request, the
Documentation Manager shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.

     (e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurocurrency Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to a Eurocurrency Revolving Borrowing having a one month Interest
Period. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Documentation Manager, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Revolving Borrowing may be converted to
or continued as a Eurocurrency Borrowing and (ii) unless repaid, each
Eurocurrency Revolving Borrowing denominated in Dollars shall be converted to an
ABR Borrowing at the end of the Interest Period applicable thereto and any
Eurocurrency Revolving Borrowing denominated in any Optional Currency shall be
automatically continued as Eurocurrency Loans on the last day of such then
expiring Interest Period with a new Interest Period of one month.

     SECTION 2.08. Termination and Reduction of Commitments. Unless previously
terminated, the Commitments shall terminate on the Commitment Termination Date.

     (a) The Borrower may at any time terminate, or from time to time reduce,
the Commitments; provided that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of (pound)1,000,000 and not less than
(pound)10,000,000, (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.10, the sum of the Revolving Credit Exposures would
exceed the total Commitments and (iii) if the Borrower reduces the Commitments
hereunder, the Borrower shall reduce the Commitments under the Facility A
Agreement on a pro rata basis, based on the Commitments outstanding immediately
prior to giving effect to any such reduction.

     (b) The Borrower shall notify the Documentation Manager of any election to
terminate or reduce the Commitments under paragraph (a) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Documentation Manager shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Documentation
Manager on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

<PAGE>
                                                                              31

     SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Documentation Manager for the account
of each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the earlier of the Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then outstanding.

     (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

     (c) The Documentation Manager shall maintain accounts in which it shall
record (i) the amount and Currency of each Loan made hereunder, the Class and
Type thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Documentation Manager hereunder for the account of the Lenders and each
Lender's share thereof.

     (d) Any Lender may request that Loans made by it be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) and in a form approved by the
Documentation Manager. Thereafter, the Loans evidenced by such Note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more Notes in such form payable to the order of the
payee named therein (or, if such promissory note is a registered note, to such
payee and its registered assigns).

     (e) The Borrower may elect to extend the maturity of all Revolving Loans
outstanding on the Commitment Termination Date to the date which is the second
anniversary of the Commitment Termination by giving written notice (the "Term
Out Notice") of such election to the Administration Agent at least 15 days prior
to the Commitment Termination Date. If the Borrower delivers any Term Out Notice
with respect to this Agreement, it shall also deliver a corresponding Term Out
Notice with respect to the Facility A Agreement.

     SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section. Any
prepayment by the Borrower

<PAGE>
                                                                              32

hereunder shall be made ratably with a prepayment of the loans outstanding under
the Facility A Agreement, based on the amount of the Loans outstanding hereunder
and the loans outstanding under the Facility A Agreement immediately prior to
such prepayment.

     (b) The Borrower shall notify the Documentation Manager (and, in the case
of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed
by telecopy) of any prepayment hereunder in accordance with Schedule 2.03(A).
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following
receipt of any such notice relating to a Revolving Borrowing, the Documentation
Manager shall advise the Lenders of the contents thereof. Each partial
prepayment of any Revolving Borrowing shall be in an amount that would be
permitted in the case of an advance of a Revolving Borrowing of the same Type as
provided in Section 2.02. Each prepayment of a Revolving Borrowing hereunder
shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.12.

     SECTION 2.11. Fees. (a) The Borrower agrees to pay to the Documentation
Manager for the account of each Lender a facility fee (a "Facility Fee") which
shall accrue at the Applicable Rate on the daily amount of the Commitment of
such Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates;
provided that, if such Lender continues to have any Revolving Credit Exposure
after its Commitment terminates, then such Facility Fee shall continue to accrue
on the daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Exposure. Accrued
Facility Fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the Maturity Date (or such earlier
date after the Commitment Termination Date on which the Loans are repaid in
full), commencing on the first such date to occur after the date hereof. All
Facility Fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

     (b) The Borrower agrees to pay (i) to each Lender a letter of credit fee (a
"Letter of Credit Fee") with respect to its participations in Letters of Credit,
which shall accrue at the same Applicable Rate as interest on Eurocurrency
Revolving Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender's Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee (a "Fronting Fee"), equal to 0.125% per annum of the face amount of
each Letter of Credit (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure. Letter of
Credit Fees and Fronting Fees accrued through and including the last day of
March, June, September and December of each year shall be payable on the third
Business Day following such last day,

<PAGE>
                                                                              33

commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Commitments
terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. All Letter of Credit Fees and Fronting
Fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).

     (c) The Borrower agrees to pay to the Documentation Manager, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Documentation Manager.

     (d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Documentation Manager for distribution, in
the case of Facility Fees and Letter of Credit Fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.

     SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate.

     (b) The Loans comprising each Eurocurrency Borrowing shall bear interest at
a rate per annum equal to, in the case of a Eurocurrency Revolving Loan, the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

     (c) The Loans comprising each Pound Sterling Overnight Rate Borrowing shall
bear interest at a rate per annum equal to the Pound Sterling Overnight Rate.

     (d) The Loans comprising each Euro Overnight Rate Borrowing shall bear
interest at a rate per annum equal to the Euro Overnight Rate.

     (e) The Loans comprising each Yen Overnight Rate Borrowing shall bear
interest at a rate per annum equal to the Yen Overnight Rate.

     (f) The Loans comprising each Swingline Borrowing shall bear interest at a
rate per annum equal to the Pound Sterling Overnight Rate or the Pound Sterling
Quoted Rate, as applicable.

     (g) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to Loans in the Base Rate of the
relevant Currency as provided above.

     (h) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (g) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any
Eurocurrency

<PAGE>
                                                                              34

Revolving Loan prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion
and (iv) all accrued interest shall be payable upon termination of the
Commitments.

     (i) All interest hereunder shall be computed on the basis of a year of 360
days, except that (i) interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and
(ii) with respect to Loans denominated in Pounds, the interest rate thereon
shall be calculated on the basis of a 365-day year, and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate,
LIBO Rate and Pound Sterling Overnight Rate shall be determined by the
Documentation Manager, and such determination shall be conclusive absent
manifest error.

     SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurocurrency Borrowing:

          (a) the Documentation Manager determines (which determination shall be
     conclusive absent manifest error) that adequate and reasonable means do not
     exist for ascertaining the Adjusted LIBO Rate for the relevant Currency for
     such Interest Period; or

          (b) the Documentation Manager is advised by the Required Lenders that
     the Adjusted LIBO Rate for the relevant Currency for such Interest Period
     will not adequately and fairly reflect the cost to such Lenders of making
     or maintaining their Loans included in such Borrowing for such Interest
     Period;

then the Documentation Manager shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Documentation Manager notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be
ineffective, and (ii) if any Borrowing Request requests a Eurocurrency Revolving
Borrowing, such Borrowing, shall be made as a Base Rate Loan in the applicable
Currency, and if the circumstances giving rise to such notice affect only one
Type of Borrowings, then the other Type of Borrowings shall be permitted.

     SECTION 2.14. Increased Costs. (a) If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve, special deposit or
     similar requirement against assets of, deposits with or for the account of,
     or credit extended by, any Lender (except any such reserve requirement
     reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

          (ii) impose on any Lender or the Issuing Bank or the London interbank
     market or the Tokyo interbank market any other condition affecting this
     Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit
     or participation therein;

<PAGE>
                                                                              35

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs actually incurred or reduction
actually suffered.

     (b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participation in Letters of Credit held
by such Lender, or the Letters of Credit issued by the Issuing Bank to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction actually suffered.

     (c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.

     (d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than six months prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the six-month period referred to above shall be extended to include the period
of retroactive effect thereof.

     Notwithstanding any other provision of this Section 2.14, no Lender nor
Issuing Bank shall demand compensation for any increased costs or reduction
referred to above if it shall not be the general policy or practice of such
Lender or the Issuing Bank to demand such compensation in similar circumstances
under comparable provisions of other credit agreements, if any (it being
understood that this sentence shall not in any way limit the discretion of any
Lender or the Issuing Bank to waive the right to demand such compensation in any
given case).

<PAGE>
                                                                              36

     SECTION 2.15. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
under Section 2.10(b) and is revoked in accordance herewith), or (d) the
assignment of any Eurocurrency Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurocurrency Loan, the loss to any Lender attributable to any such event shall
be deemed to include an amount determined by such Lender to be equal to the
excess, if any, of (i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period from the date
of such payment, conversion, failure or assignment to the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an affiliate of such Lender) for dollar deposits from other banks in the
Eurocurrency market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

     SECTION 2.16. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Documentation Manager, Lender or
the Issuing Bank (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

     (c) The Borrower shall indemnify the Documentation Manager, the Issuing
Bank and each Lender, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Documentation Manager, the Issuing Bank or such Lender, as
the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant

<PAGE>
                                                                              37

Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Documentation Manager
or the Issuing Bank on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

     (d) If a Lender or the Documentation Manager or the Issuing Bank receives a
refund in respect of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.16, it shall within 30 days from
the date of such receipt pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.16 with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund, as determined by such Lender in its sole
discretion), net of all out-of-pocket expenses of such Lender or the
Documentation Manager or the Issuing Bank and without interest (other than
interest paid by the relevant taxation authority with respect to such refund);
provided that the Borrower, upon the request of such Lender or the Documentation
Manager or the Issuing Bank, agrees to repay the amount paid over to the
Borrower (plus penalties, interest or other charges) to such Lender or the
Documentation Manager or the Issuing Bank in the event such Lender or the
Documentation Manager or the Issuing Bank is required to repay such refund to
such taxation authority.

     (e) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Documentation Manager the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Documentation Manager.

     (f) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Documentation Manager), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.

     (g) Any Lender that is a U.S. Person shall deliver to the Borrower (with a
copy to the Documentation Manager) a statement signed by an authorized signatory
of the Lender that it is a U.S. Person and, if necessary to avoid United States
backup withholding, a duly completed and signed Internal Revenue Service Form
W-9 (or successor form) establishing that such Lender is organized under the
laws of the United States and is not subject to United States backup
withholding.

     SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.
(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursements of LC Disbursements, or
of amounts payable under Section 2.14, 2.15 or 2.16, or otherwise) prior to 1:00
p.m., Local Time, on the date when due, in immediately available funds, without
setoff or counterclaim. Any amounts received after such time on any date may, in
the discretion of the Documentation Manager, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All

<PAGE>
                                                                              38

     such payments shall be made to the Documentation Manager (i) in New York,
for payments in Dollars, (ii) in London, for payments in Euros or Pounds and
(iii) in Tokyo, for payments in Yen, in each case, at the offices for the
Documentation Manager set forth in Section 9.01, except payments to be made
directly to the Swingline Lender as expressly provided herein, and except that
payments pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly
to the Persons entitled thereto. The Documentation Manager shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient in like funds promptly following receipt thereof. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder, whether such payments are made
in respect of principal, interest or fees, shall be made in the Currency in
which the applicable payment obligation is due; provided, that payments in
respect of Facility Fees pursuant Section 2.11 and any other payments (not in
respect of principal, interest or fees) or reimbursements shall be payable in
Pounds.

     (b) If at any time insufficient funds are received by and available to the
Documentation Manager to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, to pay interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal and unreimbursed LC
Disbursements, then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

     (c) If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans, participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans, participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Revolving Loans, participations
in LC Disbursements and Swingline Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, participations in LC Disbursements and
Swingline Loans; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans, participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

<PAGE>
                                                                              39

     (d) Unless the Documentation Manager shall have received notice from the
Borrower prior to the date on which any payment is due to the Documentation
Manager for the account of the Lenders hereunder that the Borrower will not make
such payment, the Documentation Manager may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders, severally
agrees to repay to the Documentation Manager forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Documentation Manager, (i) if the relevant amount is denominated
in Pounds Sterling, at the Pound Sterling Overnight Rate (ii) if the relevant
amount is denominated in Dollars, at the Federal Funds Effective Rate and (iii)
if the relevant amount is denominated in any other Currency, at the interest
rate reasonably determined by the Documentation Manager as the rate applicable
for overnight settlements between banks for the amount paid by the Documentation
Manager on behalf of the Borrower.

     (e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.06(b) or 2.17(d), then the Documentation Manager
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Documentation Manager for the account of
such Lender from or on behalf of any Credit Party or otherwise in respect of the
Obligations to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.

     SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

     (b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender becomes a Defaulting Lender hereunder, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the Documentation
Manager, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Documentation Manager (and, if a Commitment is
being assigned, the Swingline Lender and the Issuing Bank), which consent shall
not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, participations in LC
Disbursements

<PAGE>
                                                                              40

and Swingline Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

     SECTION 2.19. Prepayments Required Due to Currency Fluctuation. (a) Not
later than 1:00 p.m., New York City time, on the last Business Day of each
fiscal quarter of the Borrower (the "Calculation Time"), the Documentation
Manager shall determine the Pound Sterling Equivalent of the total Revolving
Credit Exposures outstanding as of such date.

     (b) If at the Calculation Time, the Pound Sterling Equivalent of the total
Revolving Credit Exposures exceeds the total Commitments then in effect by 5% or
more, then within two Business Days thereafter, the Borrower shall prepay the
Swingline Loans or Revolving Loans or cash collateralize the outstanding Letters
of Credit in an aggregate principal amount at least equal to such excess.
Nothing set forth in this Section 2.19(b) shall be construed to require the
Documentation Manager to calculate compliance under this Section 2.19(b) other
than at the times set forth in Section 2.19(a).

     SECTION 2.20. Adoption of the Euro. Each provision of this Agreement shall
be subject to such reasonable changes of construction as the Documentation
Manager may from time to time specify to be necessary or appropriate to reflect
the adoption of the Euro in any Participating Member State and any relevant
market conventions or practices relating to the Euro. Each obligation under this
Agreement of a party to this Agreement which has been denominated in the
National Currency Unit of a Subsequent Participant state shall be redenominated
into the Euro in accordance with EMU Legislation immediately upon such
Subsequent Participant becoming a Participating Member State (but otherwise in
accordance with EMU Legislation). If, in relation to the currency of any
Subsequent Participant, the basis of accrual of interest or fees expressed in
this Agreement with respect to such currency shall be inconsistent with any
convention or practice in the interbank market for the basis of accrual of
interest or fees in respect of the Euro, such convention or practice shall
replace such expressed basis effective as of and from the date on which such
Subsequent Participant becomes a Participating Member State; provided, that if
any Loan in the currency of such Subsequent Participant is outstanding
immediately prior to such date, such replacement shall take effect, with respect
to such Loan, at the end of the then current Interest Period.

                                  ARTICLE III

                         Representations and Warranties
                         ------------------------------

     The Borrower represents and warrants to the Lenders that:

<PAGE>
                                                                              41

     SECTION 3.01. Organization; Powers. Each Credit Party and each Restricted
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

     SECTION 3.02. Authorization; Enforceability. The Transactions are within
the Credit Parties' corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each Credit Document
(other than each Note) has been, and each Note when delivered hereunder will
have been, duly executed and delivered by the Credit Parties party thereto. Each
Credit Document (other than each Note) constitutes, and each Note when delivered
hereunder will be, a legal, valid and binding obligation of each such Credit
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

     SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate (i) any
applicable law or regulation or (ii) the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Subsidiaries or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any of its Subsidiaries, and (d) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries, except, in each case (other than clause
(b)(ii) with respect to any Credit Party), such as could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

     SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
consolidated balance sheet and statements of income, stockholders equity and
cash flows (including the notes thereto) (i) of America Online as of and for the
fiscal years ended December 31, 1999 and December 31, 2000, reported on by Ernst
& Young LLP, independent public accountants, and (ii) of Time Warner as of and
for the fiscal years ended December 31, 1999 and December 31, 2000, reported on
by Ernst & Young LLP, independent accountants, copies of which have heretofore
been furnished to each Lender, present fairly, in all material respects, the
financial position and results of operations and cash flows respectively, of
America Online and Time Warner and their respective consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP.

     (b) The unaudited pro forma combined balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 2000 (including the notes thereto)
and the unaudited combined pro forma statement of income of the Borrower and its
consolidated Subsidiaries for the twelve-month period ending December 31, 2000,
copies of which have heretofore been furnished to each Lender, have been
prepared giving effect (as if the merger had occurred on January 1, 2000) to the
consummation of the merger of America Online and Time

<PAGE>
                                                                              42

Warner. The financial statements described in this paragraph have been prepared
based on the best information available to the Borrower as of the date of
delivery thereof and present fairly on a pro forma basis the estimated combined
financial position of the Borrower and its consolidated Subsidiaries as of
December 31, 2000 and the combined results of their operations for the
twelve-month period then ended, assuming that the merger of America Online and
Time Warner occurred on January 1, 2000.

     (c) The unaudited consolidated balance sheets and statements of income,
stockholders equity and cash flows of the Borrower and its consolidated
Subsidiaries as of and for the three or six months ended March 31, 2001 and June
30, 2001, copies of which have heretofore been furnished to each Lender, present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such date and for such periods in accordance with GAAP.

     (d) Since June 30, 2001, there has been no material adverse change in the
business, assets, operations or financial condition of the Borrower and its
Subsidiaries, taken as a whole.

     SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property, except for defects in title that could not reasonably be expected to
result in a Material Adverse Effect.

     (b) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

     SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits, investigations or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries (i)
which could reasonably be expected to be adversely determined and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement or the Transactions.

     (b) Except with respect to any matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, (x) neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability or (iii) has received notice of
any claim with respect to any Environmental Liability and (y) the Borrower has
no knowledge of any basis for any Environmental Liability on the part of any of
its Restricted Subsidiaries.

     SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments

<PAGE>
                                                                              43

binding upon it or its property, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing.

     SECTION 3.08. Government Regulation. Neither the Borrower nor any of its
Subsidiaries is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, (b) a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935, or (c) is subject to any other statute or regulation which
regulates the incurrence of indebtedness for borrowed money, other than, in the
case of this clause (c), Federal and state securities laws and as could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

     SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves in accordance with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

     SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

     SECTION 3.11. Disclosure. As of the date hereof and the Effective Date, all
information heretofore or contemporaneously furnished by or on behalf of the
Borrower or any Subsidiary (including all information contained in the Credit
Documents but not including any projected financial statements), when taken
together with the reports and other filings with the SEC made under the Exchange
Act by any Credit Party since December 31, 2000, is, and all other such
information hereafter furnished, including all information contained in any of
the Credit Documents, including any annexes or schedules thereto, by or on
behalf of the Borrower or any Subsidiary to or on behalf of any Lender is and
will be (as of their respective dates and the Effective Date), true and accurate
in all material respects and not incomplete by omitting to state a material fact
to make such information not misleading at such time. There is no fact of which
the Borrower or any Guarantor is aware which has not been disclosed to the
Lenders in writing pursuant to the terms of this Agreement prior to the date
hereof and which, singly or in the aggregate with all such other facts of which
the Borrower or any Guarantor is aware, could reasonably be expected to result
in a Material Adverse Effect. All statements of fact and representation
concerning the present and anticipated business, operations and assets of the
Borrower and any Subsidiary, the Credit Documents and the transactions referred
to therein are true and correct in all material respects.

<PAGE>
                                                                              44

                                   ARTICLE IV

                                   Conditions

     SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
and of the Issuing Bank to Issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

          (a) Credit Documents. The Documentation Manager (or its counsel) shall
     have received (i) this Agreement executed and delivered by each party
     hereto and (ii) a Guarantee, executed and delivered by each of the
     Guarantors.

          (b) Opinion of Counsel. The Documentation Manager shall have received
     the favorable written opinions (addressed to the Documentation Manager and
     the Lenders and dated the Effective Date) of (i) Cravath, Swaine & Moore,
     counsel for the Credit Parties, and (ii) in-house counsel to the Credit
     Parties, in each case in form and substance reasonably satisfactory to the
     Documentation Manager. The Borrower hereby requests each such counsel to
     deliver such opinions.

          (c) Closing Certificate. The Documentation Manager shall have received
     a certificate from each Credit Party, in form and substance reasonably
     satisfactory to the Documentation Manager, dated the Effective Date and
     signed by the president, a vice president, a financial officer or an
     equivalent officer of such Credit Party, including, in the case of the
     Borrower, confirmation of compliance with the conditions set forth in
     paragraphs (a) and (b) of Section 4.02.

          (d) Fees. The Borrower shall have paid all fees required to be paid on
     or before the Effective Date by the Borrower in connection with the
     revolving credit facility provided for in this Agreement.

Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to Issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
December 31, 2001 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

     SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

          (a) The representations and warranties of the Credit Parties set forth
     in the Credit Documents (other than those set forth in Sections 3.04(d) and
     3.06 on any date other than the Effective Date) shall be true and correct
     in all material respects on and as of the date of such Borrowing or the
     date of issuance, amendment, renewal or extension of such Letter of Credit,
     as applicable.

<PAGE>
                                                                              45

          (b) At the time of and immediately after giving effect to such
     Borrowing or the issuance, amendment, renewal or extension of such Letter
     of Credit, as applicable, no Default or Event of Default shall have
     occurred and be continuing.

          (c) On the date of any Borrowing hereunder, there shall be a ratable
     borrowing made to the Borrower on such date by the lenders under the
     Facility A Agreement in accordance with the terms thereof.

          (d) On the date of any issuance of Letters of Credit hereunder, there
     shall be a ratable issuance of letters of credit on such date by the
     issuing bank under the Facility A Agreement in accordance with the terms
     thereof. On the date of any amendment, renewal or extension of any Letter
     of Credit hereunder, there shall be a conforming amendment, renewal or
     extension of the corresponding Letter of Credit issued under the Facility A
     Agreement.

Each Borrowing and each issuance, amendment, renewal, or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the applicable matters specified in
paragraphs (a) and (b) of this Section.

                                   ARTICLE V

                              Affirmative Covenants

     Until the Commitments have expired or been terminated and the principal of
and interest on each Loan, all fees payable hereunder and all other Obligations
shall have been paid in full (but with respect to such other Obligations only to
the extent that actual amounts hereunder are owing at the time the Loans,
together with interest and fees, have been paid in full) and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (for itself and its Subsidiaries) covenants and agrees
with the Lenders that:

     SECTION 5.01. Financial Statements and Other Information. The Borrower
will, and, until such time as TWE becomes a Guarantor, will cause TWE to,
furnish to the Documentation Manager at its New York office (which will
distribute copies to each of the Lenders):

          (a) within 105 days after the end of each fiscal year of such Person,
     its audited consolidated balance sheet and related statements of
     operations, stockholders' equity (or partnership capital) and cash flows as
     of the end of and for such year and, with respect to the Borrower only, its
     unaudited Adjusted Financial Statements for such fiscal year, setting forth
     in each case in comparative form the figures for the previous fiscal year,
     and, (i) in the case of the audited financial statements, reported on by
     Ernst & Young LLP or other independent public accountants of recognized
     national standing (without a "going concern" or like qualification or
     exception and without any qualification or exception as to the scope of
     such audit) to the effect that such consolidated financial statements
     present fairly in all material respects the financial condition and results
     of operations of the Borrower and its consolidated Subsidiaries on a
     consolidated basis in

<PAGE>
                                                                              46

     accordance with GAAP consistently applied and (ii) in the case of the
     Adjusted Financial Statements, certified by one of the Borrower's Financial
     Officers as presenting fairly in all material respects the financial
     condition and results of operations of the Borrower and its consolidated
     Subsidiaries on a consolidated basis in accordance with GAAP consistently
     applied; provided that, so long as no Default has occurred and is
     continuing, the Borrower shall not be required to furnish Adjusted
     Financial Statements for any fiscal year if all Unrestricted Subsidiaries
     of the Borrower (other than any such Unrestricted Subsidiaries that are
     already treated as equity investments on the Borrower's financial
     statements) on a combined basis would not have constituted a Material
     Subsidiary of the Borrower for such fiscal year;

          (b) within 60 days after the end of each of the first three fiscal
     quarters of each fiscal year of such Person, its consolidated balance sheet
     and related statements of operations, stockholders' equity (or partnership
     capital) and cash flows and, with respect to the Borrower only, its
     Adjusted Financial Statements as of the end of and for such fiscal quarter
     and the then elapsed portion of the fiscal year, setting forth in each case
     in comparative form the figures for the corresponding period or periods of
     (or, in the case of the balance sheet, as of the end of) the previous
     fiscal year, all certified by one of the Borrower's Financial Officers as
     presenting fairly in all material respects the financial condition and
     results of operations of the Borrower and its consolidated Subsidiaries on
     a consolidated basis in accordance with GAAP consistently applied, subject
     to normal year-end audit adjustments and the absence of footnotes; provided
     that, so long as no Default has occurred and is continuing, the
     Borrower shall not be required to furnish Adjusted Financial Statements for
     any fiscal quarter if all Unrestricted Subsidiaries of the Borrower (other
     than any such Unrestricted Subsidiaries that are already treated as equity
     investments on the Borrower's financial statements) on a combined basis
     would not have constituted a Material Subsidiary of the Borrower for such
     fiscal quarter;

          (c) concurrently with any delivery of financial statements under
     clause (a) or (b) above, a certificate of a Financial Officer of the
     Borrower (i) certifying as to whether a Default has occurred and, if a
     Default has occurred, specifying the details thereof and any action taken
     or proposed to be taken with respect thereto, (ii) setting forth reasonably
     detailed calculations demonstrating compliance with Sections 6.01, 6.02,
     6.03 and 6.08 and (iii) stating whether any change in GAAP or in the
     application thereof has occurred since the date of the audited financial
     statements referred to in Section 3.04 and, if any such change has
     occurred, specifying the effect of such change on the financial statements
     accompanying such certificate;

          (d) promptly after the same become publicly available, copies of all
     periodic and other reports, proxy statements and other materials filed by
     the Borrower or any Subsidiary with the SEC or with any national securities
     exchange, or distributed by the Borrower or any of its Subsidiaries to its
     security holders generally, as the case may be (other than registration
     statements on Form S-8, filings under Sections 16(a) or 13(d) of the
     Exchange Act and routine filings related to employee benefit plans); and

          (e) promptly following any request therefor, such other information
     regarding the operations, business affairs and financial condition of the
     Borrower or any Subsidiary,

<PAGE>
                                                                              47

     or compliance with the terms of this Agreement, as the Documentation
     Manager or any Lender may reasonably request (it being understood that the
     Borrower shall not be required to provide any information or documents
     which are subject to confidentiality provisions the nature of which
     prohibit such disclosure).

     Information required to be delivered pursuant to paragraphs (a), (b) and
(d) shall be deemed to have been delivered on the date on which the Borrower
provides notice to the Documentation Manager that such information has been
posted on the Borrower's website on the internet at the website address listed
on the signature pages of such notice, at www.sec.gov or at another website
identified in such notice and accessible by the Lenders without charge; provided
that the Borrower shall deliver paper copies of the reports and financial
statements referred to in paragraphs (a), (b) and (d) of this Section 5.01 to
the Documentation Manager or any Lender who requests the Borrower to deliver
such paper copies until written notice to cease delivering paper copies is given
by the Documentation Manager or such Lender.

     SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Documentation Manager and each Lender prompt written notice of the following,
upon any such event becoming known to any Responsible Officer of the Borrower:

          (a) the occurrence of any Default;

          (b) the filing or commencement of any action, suit or proceeding by or
     before any arbitrator or Governmental Authority against or affecting the
     Borrower or any Affiliate thereof that, if adversely determined, could
     reasonably be expected to result in a Material Adverse Effect;

          (c) the occurrence of any ERISA Event that, alone or together with any
     other ERISA Events that have occurred, could reasonably be expected to
     result in liability of the Borrower and its Subsidiaries in an aggregate
     amount exceeding $100,000,000; and

          (d) any other development that results in, or could reasonably be
     expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

     SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will
cause each of its Restricted Subsidiaries which are Material Subsidiaries to, do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.04.

     SECTION 5.04. Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could reasonably be expected to result in a Material Adverse
Effect before the same shall become

<PAGE>
                                                                              48

delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

     SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and
will cause each of its Restricted Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business (taken as a whole) in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations (it being understood that, to the extent consistent with prudent
business practice, a program of self-insurance for first or other loss layers
may be utilized).

     SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and
will cause each of its Restricted Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Restricted Subsidiaries to, permit any representatives
designated by the Documentation Manager or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine its books and records,
and to discuss its affairs, finances and condition with its officers and, so
long as a representative of the Borrower is present, or the Borrower has
consented to the absence of such a representative, independent accountants (in
each case subject to the Borrower's or its Restricted Subsidiaries' obligations
under applicable confidentiality provisions), all at such reasonable times and
as often as reasonably requested.

     SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each
of its Restricted Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

     SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only
for general corporate purposes, including the repayment of indebtedness of
existing and future Subsidiaries of the Borrower and for commercial paper
backup. No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X.

<PAGE>
                                                                              49

     SECTION 5.09. Fiscal Periods; Accounting. The Borrower will keep the same
financial reporting periods as are in effect on the date hereof.

                                   ARTICLE VI

                               Negative Covenants

     Until the Commitments have expired or terminated and the principal of and
interest on each Loan, all fees payable hereunder and all other Obligations have
been paid in full (but with respect to such other Obligations only to the extent
that actual amounts hereunder are owing at the time the Loans, together with
interest and fees, have been paid in full) and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:

          SECTION 6.01. Financial Covenants.

          (a) The Consolidated Leverage Ratio of the Borrower and its Restricted
     Subsidiaries as of the last day of any fiscal quarter of the Borrower
     (commencing with the first fiscal quarter ending after the Effective Date)
     will not exceed 4.50 to 1.00.

          (b) The Consolidated Net Worth of the Borrower at any time will not be
     less than $125,000,000,000.

          SECTION 6.02. Indebtedness.

          (a) The Borrower will not permit any of its Restricted Subsidiaries
     (other than (i) a Credit Party or (ii) TWE and the consolidated
     Subsidiaries of TWE) to, create, incur, assume or permit to exist any
     Indebtedness, except:

          (i) with respect to all such Restricted Subsidiaries that are also
     Subsidiaries of Time Warner, Indebtedness of up to an aggregate principal
     amount of $650,000,000 at any one time outstanding;

          (ii) with respect to all such Restricted Subsidiaries that are also
     Subsidiaries of America Online, Indebtedness of up to an aggregate
     principal amount of $350,000,000 at any one time outstanding;

          (iii) Indebtedness of any such Restricted Subsidiary to the Borrower
     or any Subsidiary;

          (iv) Guarantee Obligations of any such Restricted Subsidiary with
     respect to Indebtedness of the Borrower or any wholly owned Restricted
     Subsidiary;

          (v) Indebtedness of any such Restricted Subsidiary incurred to finance
     the acquisition, construction or improvement of any property, including
     Capital Lease Obligations and any Indebtedness assumed in connection with
     the acquisition of any such property or secured by a Lien on any such
     property prior to the acquisition thereof, and extensions, renewals and
     replacements of any such Indebtedness that do not increase the

<PAGE>
                                                                              50

     outstanding principal amount thereof; provided that the aggregate principal
     amount of Indebtedness permitted by this clause (v) with respect to any
     such property shall not exceed 110% of the purchase price for, or the cost
     of construction or improvement of, such property;

          (vi) Indebtedness of any Person that becomes a Restricted Subsidiary
     after the date hereof; provided that (x) such Indebtedness exists at the
     time such Person becomes a Subsidiary and is not created in contemplation
     of or in connection with such Person becoming a Subsidiary and (y) such
     Indebtedness does not, directly or indirectly, have recourse (including by
     way of setoff) to the Borrower or any of its Restricted Subsidiaries or any
     asset thereof other than to the Person so acquired and its Subsidiaries and
     the assets of the Person so acquired and its Subsidiaries; and

          (vii) Film Financings.

          (b) The Borrower will not permit TWE or any of its consolidated
Subsidiaries to create, incur or assume any Indebtedness unless, after giving
effect to the creation, incurrence or assumption of such Indebtedness, the
Consolidated Leverage Ratio of TWE will not exceed (i) at any time when 95% or
more of the Capital Stock of TWE is, directly or indirectly, owned (beneficially
or of record) or held by the Borrower, 4.50 to 1.00 and (ii) at any other time,
5.00 to 1.00; provided, that once TWE becomes a Guarantor this paragraph 6.02(b)
shall cease to apply.

     SECTION 6.03. Liens. The Borrower will not, and will not permit any of its
Restricted Subsidiaries, to create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, except:

          (a) any Lien on any property or asset of the Borrower or any
     Subsidiary existing on the date hereof; provided, that such Lien shall
     secure only those obligations which it secures on the date hereof and
     extensions, renewal and replacements thereof that do not increase the
     outstanding principal amount thereof and such Liens do not secure an
     aggregate principal amount of Indebtedness in excess of $100,000,000 or
     apply to property or assets of the Borrower and its Restricted Subsidiaries
     in excess of $100,000,000;

          (b) any Lien existing on any property or asset prior to the
     acquisition thereof by the Borrower or any Subsidiary or existing on any
     property or asset of any Person that becomes a Subsidiary after the date
     hereof prior to the time such Person becomes a Subsidiary; provided that
     (i) such Lien is not created in contemplation of or in connection with such
     acquisition or such Person becoming a Subsidiary, as the case may be, (ii)
     such Lien shall not apply to any other property or assets of the Borrower
     or any Subsidiary and (iii) such Lien shall secure only those obligations
     which it secures on the date of such acquisition or the date such Person
     becomes a Subsidiary, as the case may be and extensions, renewals and
     replacements thereof that do not increase the outstanding principal amount
     thereof;

          (c) Liens on property acquired, constructed or improved by the
     Borrower or any Subsidiary; provided that (i) such security interests
     secure Indebtedness permitted by

<PAGE>
                                                                              51

     clause (v) of Section 6.02, (ii) the Indebtedness secured thereby does not
     exceed 110% of the cost of acquiring, constructing or improving such
     property and (iii) such security interests shall not apply to any other
     property or assets of the Borrower or any of its Subsidiaries;

          (d) Liens to secure Film Financings; provided that such Liens shall
     extend only to the property or assets acquired with such Film Financing;

          (e) Liens on Capital Stock of the Borrower and proceeds therefrom
     supporting Stock Option Loans to the extent contemplated by the definition
     thereof;

          (f) any Copyright Liens securing obligations specified in the
     definition thereof;

          (g) Liens securing Indebtedness of the Borrower or any Restricted
     Subsidiary and owing to such Borrower or to a Restricted Subsidiary of such
     Borrower;

          (h) Liens on interests in or investments in any Unrestricted
     Subsidiary or in any other Person that is not a Subsidiary of the Borrower
     securing Indebtedness of such Unrestricted Subsidiary or such other Person;

          (i) Liens for taxes, assessments or governmental charges or levies not
     yet due and payable or which are being contested in good faith by
     appropriate proceedings;

          (j) Liens incidental to the ordinary conduct of the Borrower's
     business or the ownership of its assets which were not incurred in
     connection with the borrowing of money, such as carrier's, warehousemen's,
     materialmen's, landlord's and mechanic's liens, and which do not in the
     aggregate materially detract from the value of its assets or materially
     impair the use thereof in the ordinary course of its business; and

          (k) other Liens in respect of property or assets of the Borrower or
     any Restricted Subsidiary so long as at the time of the securing of any
     obligations related thereto, the aggregate principal amount of all such
     secured obligations does not exceed 5% of the Consolidated Total Assets of
     the Borrower at such time (it being understood that any Lien permitted
     under any other clause in this Section 6.03 shall not be included in the
     computation described in this paragraph).

     SECTION 6.04. Mergers, Etc. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) all or a substantial portion of the Borrower's consolidated
assets, or all or a substantial portion of the stock of all of its Restricted
Subsidiaries, taken as a whole (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, unless (a) at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing and (b) after giving effect to any such
transaction, the business, taken as a whole, of the Borrower and its Restricted
Subsidiaries shall not have been altered in a fundamental and substantial manner
from that conducted by them, taken as a whole, immediately prior to the
Effective Date, provided that (i) the Borrower shall

<PAGE>
                                                                              52

not merge into or consolidate with such other Person, unless the Borrower shall
survive such consolidation or merger, and (ii) the Borrower shall not liquidate
or dissolve or permit any Guarantor to liquidate or dissolve except into the
Borrower or another Guarantor.

     SECTION 6.05. Investments. The Borrower will not, and will not cause or
permit any of its Restricted Subsidiaries to, make any Investment (other than
any Investment in the ordinary course of the operation of its business) if,
before or after giving effect to the commitment thereto on a pro forma basis, a
Default shall have occurred and be continuing.

     SECTION 6.06. Restricted Payments. The Borrower will not declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, except
the Borrower may (a) declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock and (b) make Restricted
Payments so long as after giving effect to the making of such Restricted
Payment, no Default shall have occurred and be continuing on a pro forma basis.

     SECTION 6.07. Transactions with Affiliates. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into any material transaction with any of its Affiliates, except (a)
transactions entered into prior to the date hereof or contemplated by any
agreement entered into prior to the date hereof, (b) in the ordinary course of
business or at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (c) transactions between or among the Borrower and its
Restricted Subsidiaries or between or among Restricted Subsidiaries, (d) any
arrangements with officers, directors, representatives or other employees of the
Borrower and its Subsidiaries relating specifically to employment as such and
(e) transactions that are otherwise permitted by this Agreement.

     SECTION 6.08. Unrestricted Subsidiaries. (a) Schedule 6.08 sets forth those
Subsidiaries (other than a Guarantor) of the Borrower that have been designated
as Unrestricted Subsidiaries as of the date hereof. The Borrower may designate
any other of its Subsidiaries (other than a Guarantor) as Unrestricted
Subsidiaries from time to time in compliance with the provisions of this Section
6.08. The Borrower will not designate any of its Subsidiaries as an Unrestricted
Subsidiary unless (i) such Subsidiary is designated as an Unrestricted
Subsidiary within 90 days of the time it becomes a Subsidiary; and (ii) at the
time such Subsidiary is designated as an Unrestricted Subsidiary, before and
after giving effect to such designation on a pro forma basis, no Default shall
have occurred and be continuing, as shown in an Officers' Certificate delivered
to the Documentation Manager at the time of such designation. Such Officers'
Certificate shall also state the specific purpose for which such designation is
being made. All Subsidiaries of Unrestricted Subsidiaries shall be Unrestricted
Subsidiaries.

     (b) The Borrower will not designate or re-designate any Unrestricted
Subsidiary as a Restricted Subsidiary, unless at the time such Unrestricted
Subsidiary is so designated or re-designated as a Restricted Subsidiary, before
and after giving effect to such designation or re-designation on a pro forma
basis, no Default shall have occurred and be continuing, as shown in an
Officer's Certificate delivered to the Documentation Manager at the time of such
designation or re-designation.

<PAGE>
                                                                              53

                                  ARTICLE VII

                                Events of Default

          If any of the following events ("Events of Default") shall occur:

          (a) the Borrower shall fail to pay any principal of any Loan or any
     reimbursement obligation in respect of any LC Disbursement when and as the
     same shall become due and payable, whether at the due date thereof or at a
     date fixed for prepayment thereof or otherwise;

          (b) the Borrower shall fail to pay any interest on any Loan or any fee
     or any other amount (other than an amount referred to in clause (a) of this
     Article) payable under this Agreement, when and as the same shall become
     due and payable, and such failure shall continue unremedied for a period of
     five days;

          (c) any representation or warranty made or deemed made by or on behalf
     of any Credit Party in any Credit Document or any amendment or modification
     thereof, or in any report, certificate, financial statement or other
     document furnished pursuant to or in connection with any Credit Document or
     any amendment or modification thereof, shall prove to have been incorrect
     in any material respect when made or deemed made;

          (d) the Borrower shall fail to observe or perform any covenant,
     condition or agreement contained in Section 5.02 or 5.03 (with respect to
     the Borrower's existence) or in Article VI;

          (e) any Credit Party shall fail to observe or perform any covenant,
     condition or agreement contained in the Credit Documents (other than those
     specified in clause (a), (b) or (d) of this Article), and such failure
     shall continue unremedied for a period of 30 days after notice thereof from
     the Documentation Manager (given at the request of any Lender) to the
     Borrower;

          (f) the Borrower or any Subsidiary shall fail to make any payment
     (whether of principal or interest and regardless of amount) in respect of
     any Material Indebtedness, when and as the same shall become due and
     payable after giving effect to any applicable grace periods;

          (g) any event or condition occurs that results in any Material
     Indebtedness becoming due prior to its scheduled maturity or that enables
     or permits (after giving effect to any applicable grade periods) the holder
     or holders of any Material Indebtedness or any trustee or agent on its or
     their behalf to cause any Material Indebtedness to become due, or to
     require the prepayment, repurchase, redemption or defeasance thereof, prior
     to its scheduled maturity; provided that this clause (g) shall not apply to
     secured Indebtedness that becomes due as a result of the voluntary sale or
     transfer of the property or assets securing such Indebtedness;

          (h) an involuntary proceeding shall be commenced or an involuntary
     petition shall be filed seeking (i) liquidation, reorganization or other
     relief in respect of the

<PAGE>
                                                                              54

     Borrower or any Material Subsidiary or its debts, or of a substantial part
     of its assets, under any Federal, state or foreign bankruptcy, insolvency,
     receivership or similar law now or hereafter in effect or (ii) the
     appointment of a receiver, trustee, custodian, sequestrator, conservator or
     similar official for the Borrower or any Material Subsidiary or for a
     substantial part of its assets, and, in any such case, such proceeding or
     petition shall continue undismissed for 60 days or an order or decree
     approving or ordering any of the foregoing shall be entered;

          (i) the Borrower or any Material Subsidiary shall (i) voluntarily
     commence any proceeding or file any petition seeking liquidation,
     reorganization or other relief under any Federal, state or foreign
     bankruptcy, insolvency, receivership or similar law now or hereafter in
     effect, (ii) consent to the institution of, or fail to contest in a timely
     and appropriate manner, any proceeding or petition described in clause (h)
     of this Article, (iii) apply for or consent to the appointment of a
     receiver, trustee, custodian, sequestrator, conservator or similar official
     for the Borrower or any Material Subsidiary or for a substantial part of
     its assets, (iv) file an answer admitting the material allegations of a
     petition filed against it in any such proceeding, (v) make a general
     assignment for the benefit of creditors or (vi) take any action for the
     purpose of effecting any of the foregoing;

          (j) the Borrower or any Material Subsidiary shall become unable, admit
     in writing or fail generally to pay its debts as they become due;

          (k) one or more judgments for the payment of money in an aggregate
     amount in excess of $100,000,000 shall be rendered against the Borrower,
     any Material Subsidiary or any combination thereof or any action shall be
     legally taken by a judgment creditor (whose liquidated judgment, along with
     those of any other judgment creditor's, exceeds $100,000,000) to attach or
     levy upon any assets of the Borrower or any Material Subsidiary to enforce
     any such judgment, and the same shall remain undischarged for a period of
     60 consecutive days during which execution shall not be effectively stayed,
     vacated or bonded pending appeal;

          (l) an ERISA Event shall have occurred that, when taken together with
     all other ERISA Events (with respect to which the Borrower has a liability
     which has not yet been satisfied) that have occurred, could, reasonably be
     expected to result in a Material Adverse Effect;

          (m) except as otherwise permitted by this Agreement, any of the
     Guarantees shall cease, for any reason, to be in full force and effect or
     any Credit Party shall so assert; or

          (n) a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Documentation Manager may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different

<PAGE>
                                                                              55

times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder (including all amounts of LC Exposure, whether or not the
beneficiary of the then outstanding Letters of Credit shall have presented the
documents required therein), shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder (including all amounts of LC Exposure, whether or not
the beneficiary of the then outstanding Letters of Credit shall have presented
the documents required therein), shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Documentation Manager shall at such
time deposit in a cash collateral account opened by the Documentation Manager an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Documentation Manager to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Credit Documents. The
Documentation Manager shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Documentation Manager and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. After all such
Letters of Credit shall have expired or been fully drawn upon, all reimbursement
obligations shall have been satisfied and all other obligations of the Borrower
hereunder and other the other Credit Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto).

                                  ARTICLE VIII

                     THE AGENTS & THE DOCUMENTATION MANAGER

     Each of the Lenders hereby irrevocably appoints the Documentation Manager
as its agent and authorizes the Documentation Manager to take such actions on
its behalf and to exercise such powers as are delegated to the Documentation
Manager by the terms hereof, together with such actions and powers as are
reasonably incidental thereto.

     Each bank serving as an Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not an Agent, and such bank and its Affiliates may accept
deposits from, lend money to and

<PAGE>
                                                                              56

generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not an Agent hereunder.

     The Documentation Manager shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Documentation Manager shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Documentation Manager shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Documentation Manager
is required to exercise in writing by the Required Lenders (or, if so specified
by this Agreement, all the Lenders), and (c) except as expressly set forth
herein, the Documentation Manager shall not have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Documentation Manager or any of its Affiliates in any capacity.
The Documentation Manager shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or, if so
specified by this Agreement, all the Lenders) or in the absence of its own gross
negligence or willful misconduct. The Documentation Manager shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Documentation Manager by the Borrower or a Lender, and the
Documentation Manager shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Credit Document, (ii) the contents
of any certificate, report or other document delivered under any Credit Document
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in the Credit
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Credit Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Documentation Manager.

     The Documentation Manager shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by a proper Person. An initial list of the
proper Persons with respect to the Borrower appears on Schedule 8. Schedule 8
shall not be altered except in writing by a Person appearing thereon (or by a
successor to such Person occupying the equivalent office). The Documentation
Manager also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon so long as such statement, in the case of a
Borrowing Request, complies with the requirements of Section 2.03 in all
material respects (it being understood that oral notices of borrowing will be
confirmed in writing by the Borrower in accordance with Section 2.03). The
Documentation Manager may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

     The Documentation Manager may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Documentation Manager. The Documentation Manager and any such sub-agent may
perform any and all its

<PAGE>
                                                                              57

duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Documentation Manager and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Documentation Manager.

     Subject to the appointment and acceptance of a successor Documentation
Manager as provided in this paragraph, the Documentation Manager may resign at
any time by notifying the Lenders and the Borrower. Upon any such resignation,
the Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor which, so long as no Event of Default is continuing, shall
be reasonably acceptable to the Borrower. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Documentation Manager gives notice of its
resignation, then the retiring Documentation Manager may, on behalf of the
Lenders, appoint a successor Documentation Manager which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Documentation Manager hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Documentation Manager, and the retiring
Documentation Manager shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Documentation Manager
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Documentation Manager's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Documentation Manager, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by it while it was acting as Documentation Manager.

     The Lenders agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their Commitments in effect (or at any
time after the Commitments have terminated, their Revolving Credit Exposure) on
the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Commitments (or, if the Commitments have terminated earlier, their
Revolving Credit Exposures) immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against such Agent in any way relating to or arising
out of, the Commitments, this Agreement, any of the other Credit Documents or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted by
such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.

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                                                                              58

     Each Lender acknowledges that it has, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon any Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.

     The Agents shall not have any duties or responsibilities hereunder in their
capacity as such.

                                   ARTICLE IX

                                  Miscellaneous

     SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

          (a) if to the Borrower, to it at 75 Rockefeller Plaza, New York, New
     York 10019, Attention of Chief Financial Officer, (Telecopy No. (212)
     405-5213), with copies to its General Counsel (Telecopy No. (212)
     258-3172), and its Treasurer (Telecopy No. (212) 258-3020);

          (b) if to the Documentation Manager, to Global Service Unit Operations
     New York, 222 Broadway, New York, New York 10038, Attention of Jessie
     Adams, (Telephone No. 212-412-3724 Telecopy No. 212-412-5306), with a copy
     to (i) Global Service Unit Operations U.K.-London, 5 The North Colonnade,
     Canary Wharf, London E14 4BB, United Kingdom, Attention of Ian Stewart
     (Telephone No. 44 0 20 7773 6427 Telecopy No. 44 0 20 7516 9231) in the
     case of any notice with respect to Loans or Letters of Credit denominated
     in Euros or Pounds and (ii) Global Loan/Structured Loan Department, 2-2-2
     Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan, Attention of Mayumi Horikawa
     (Telephone No. 011-813 3276 5079 Telecopy No. 011-813 3276 5085) in the
     case of any notice with respect to Loans or Letters of Credit denominated
     in Yen;

          (c) if to the Swingline Lender, to it as may be provided by such
     Swingline Lender from time to time;

          (d) if to an Issuing Bank, to it as may be provided by such Issuing
     Bank from time to time; and

          (e) if to any other Lender, to it at its address (or telecopy number)
     set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other

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                                                                              59

communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.

     SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Documentation Manager, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Documentation Manager, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Documentation
Manager, the Issuing Bank or any Lender may have had notice or knowledge of such
Default at the time.

     (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Required Lenders or by the Borrower and the
Documentation Manager with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
release any material Guarantor without the written consent of each Lender, or
(vi) change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Documentation Manager, the Issuing
Bank or the Swingline Lender hereunder without the prior written consent of the
Documentation Manager, the Issuing Bank or the Swingline Lender, as the case may
be.

     SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Documentation
Manager and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Documentation Manager in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Credit Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses
incurred by the Documentation Manager, the Issuing Bank or any Lender, including
the fees, charges and

<PAGE>
                                                                              60

disbursements of any counsel for the Documentation Manager, the Issuing Bank or
any Lender, in connection with the enforcement or protection of its rights in
connection with any Credit Document, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including in connection with any workout, restructuring or negotiations in
respect thereof.

     (b) The Borrower shall indemnify each Agent, each Issuing Bank and each
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an "Indemnitee") against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses, including
the reasonable fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Credit
Documents or any agreement or instrument contemplated thereby, the performance
by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or willful misconduct of such Indemnitee.

     (c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Documentation Manager, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Documentation Manager, the Issuing Bank or the Swingline Lender,
as the case may be, such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Documentation Manager, the Issuing Bank or the Swingline
Lender in its capacity as such.

     (d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.

     (e) All amounts due under this Section shall be payable promptly after
written demand therefor.

     SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors

<PAGE>
                                                                              61

and assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender except in accordance with Section 6.04 (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Documentation Manager,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

     (b) Any Lender other than a Conduit Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that (i) except in the case of an assignment to a Lender or a
Lender Affiliate, each of the Borrower and (a) the Swingline Lender (but only in
the case of an assignment of all or a portion of a Commitment in respect of
Swingline Exposure) or (b) the Issuing Bank (but only in the case of an
assignment of all or a portion of a Commitment in respect of LC Exposure) must
give their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining balance of the
assigning Lender's Commitment, each assignment shall not be less than an
aggregate principal amount of (pound)10,000,000, (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining balance of the assigning Lender's Commitment, the remaining
amount of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Documentation Manager) shall not be less than
(pound)10,000,000 unless the Borrower otherwise consents, (iv) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, (v) except in
the case of an assignment to an Affiliate of the assigning Lender on or about
the Effective Date, the parties to each assignment shall execute and deliver to
the Documentation Manager an Assignment and Acceptance, together with a
processing and recordation fee of (pound)2,500, and (vi) the assignee, if it
shall not be a Lender, shall deliver to the Documentation Manager an
Administrative Questionnaire; provided further that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of
Default under clause (h) or (i) of Article VII has occurred and is continuing.
Upon acceptance and recording pursuant to paragraph (d) of this Section, from
and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall (i)
continue to be entitled to the benefits of Sections 2.14, 2.15, 2.16 and 9.03)
and (ii) continue to be subject to the confidentiality provisions hereof. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and

<PAGE>
                                                                              62

obligations in accordance with paragraph (e) of this Section. Notwithstanding
the foregoing, any Conduit Lender may assign at any time to its designating
Lender hereunder without the consent of the Borrower or the Documentation
Manager any or all of the Loans it may have funded hereunder and pursuant to its
designation agreement and without regard to the limitations set forth in the
first sentence of this Section.

     (c) The Documentation Manager, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Documentation Manager,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary.

     (d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Documentation Manager shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

     (e) Any Lender other than a Conduit Lender may, without the consent of the
Borrower, the Documentation Manager or the Swingline Lender, sell participations
to one or more banks or other entities (a "Participant") in all or a portion of
such Lender's rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Documentation
Manager and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.

     (f) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender

<PAGE>
                                                                              63

if it were a Lender shall not be entitled to the benefits of Section 2.16
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 2.16(f) as though it were a Lender.

     (g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.

     (h) The Borrower, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (f) above.

     (i) Each of the Borrower, each Lender and the Documentation Manager hereby
confirms that it will not institute against a Conduit Lender or join any other
Person in instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.

     SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Documentation
Manager or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and
9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.

     SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Lenders
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become

<PAGE>
                                                                              64

effective when it shall have been executed by the Documentation Manager and when
the Documentation Manager shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.

     SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

     SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

     SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

     (b) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to the Credit Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding shall be
heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

     (c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

<PAGE>
                                                                              65

     (d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.

     SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

     SECTION 9.12. Confidentiality. Each of the Documentation Manager and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, provided that in
connection with any such requirement by a subpoena or similar legal process, the
Borrower is given prior notice to the extent such prior notice is permissible
under the circumstances and an opportunity to object to such disclosure, (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an express agreement for
the benefit of the Borrower containing provisions substantially the same as
those of this Section, to any (i) assignee (or Conduit Lender) of or Participant
in, or any prospective assignee (or Conduit Lender) of or Participant in, any of
its rights or obligations under this Agreement or (ii) hedging agreement
counterparty (or such contractual counterparty's professional advisor), (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Documentation Manager or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower,
whether oral or written, relating to the Borrower or its business, other than
any such information that is available to the Documentation Manager or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided
that, in the case of information received from the Borrower after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be

<PAGE>
                                                                              66

considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information,
including in accordance with Regulation FD as promulgated by the SEC.

     SECTION 9.13. Acknowledgements. The Borrower hereby acknowledges that:

          (a) it has been advised by counsel in the negotiation, execution and
     delivery of this Agreement and the other Credit Documents;

          (b) neither the Documentation Manager nor any Lender has any fiduciary
     relationship with or duty to the Borrower arising out of or in connection
     with this Agreement or any of the other Credit Documents, and the
     relationship between Documentation Manager and Lenders, on one hand, and
     the Borrower, on the other hand, in connection herewith or therewith is
     solely that of debtor and creditor; and

          (c) no joint venture is created hereby or by the other Credit
     Documents or otherwise exists by virtue of the transactions contemplated
     hereby among the Lenders or among the Borrower and the Lenders.

     SECTION 9.14. Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or under any other
Credit Document in one currency into another currency, the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Documentation Manager could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given. The
obligation of the Borrower in respect of any such sum due from it to either the
Documentation Manager or any Lender hereunder or under any other Credit Document
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by the
Documentation Manager or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Documentation Manager or such Lender may in accordance
with normal banking procedures in the relevant jurisdiction purchase the
Agreement Currency with the Judgment Currency; if the amount of the Agreement
Currency so purchased is less than the sum originally adjudged to be due to the
Documentation Manager or such Lender in the Agreement Currency (as converted on
the date of final judgment), the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Documentation Manager or
such Lender against such loss. If the amount of the Agreement Currency so
purchased is greater than the sum originally adjudged to be due to the
Documentation Manager or such Lender in such currency, the Documentation Manager
or such Lender agrees to return the amount of any excess to the Borrower (or to
any other Person who may be entitled thereto under applicable law). The
obligations of the Borrower contained in this Section 9.14 shall survive the
termination of this Agreement and the payment of all other amounts owing
hereunder.

<PAGE>

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

                                 AOL TIME WARNER INC.

                                 By   /s/ Raymond G. Murphy
                                   ---------------------------------------
                                      Name:  Raymond G. Murphy
                                      Title: Vice President and Treasurer

                                 BARCLAYS BANK PLC,
                                      as Documentation Manager,

                                 By   /s/ Daniele Iacovone
                                   ---------------------------------------
                                      Name:  Daniele Iacovone
                                      Title: Director

<PAGE>

                                 HSBC BANK USA

                                 By   /s/ Christopher J. Heusler
                                   ---------------------------------------
                                      Name:  Christopher J. Heusler
                                      Title: Vice President

<PAGE>

                                 THE ROYAL BANK OF SCOTLAND PLC

                                 By   /s/ David A. Lucas
                                   ---------------------------------------
                                      Name:  David A. Lucas
                                      Title: Senior Vice President

<PAGE>

                                 BNP Paribas

                                 By   /s/ Nuala Marley
                                   ---------------------------------------
                                      Name:  Nuala Marley
                                      Title: Director

                                 By   /s/ Aida M. Kalla
                                   ---------------------------------------
                                      Name:  Aida M. Kalla
                                      Title: Director

<PAGE>

                                 COMMERZBANK AG, NEW YORK AND GRAND
                                 CAYMAN BRANCHES

                                 By   /s/ Robert Donohue
                                   ---------------------------------------
                                      Name:  Robert Donohue
                                      Title: Senior Vice President

                                 By   /s/ Peter Doyle
                                   ---------------------------------------
                                      Name:  Peter Doyle
                                      Title: Vice President

<PAGE>

                                 THE FUJI BANK LIMITED

                                 By   /s/ Raymond Ventura
                                   ---------------------------------------
                                      Name:  Raymond Ventura
                                      Title: Senior Vice President<PAGE>

                                                                     Exhibit 4.3

================================================================================

                      NAVISTAR FINANCIAL 200   OWNER TRUST
                                            --

                      Class A-1          Asset Backed Notes
                                --------
                      Class A-2          Asset Backed Notes
                                --------
                      Class A-3          Asset Backed Notes
                                --------
                      Class A-4          Asset Backed Notes
                                --------
                        Class B        Asset Backed Notes
                                ------

                      -------------------------------------

                                    INDENTURE

                           Dated as of         , 200
                                       --------     -

                          -----------------------------

                            ------------------------
                          a                          ,
                           --------------------------

                                Indenture Trustee

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                        <C>                                                                                   <C>
ARTICLE  I
         DEFINITIONS AND INCORPORATION BY REFERENCE...............................................................2
         SECTION  1.1      Definitions............................................................................2
                           -----------
         SECTION  1.2      Incorporation by Reference of Trust Indenture Act......................................3
                           -------------------------------------------------

ARTICLE  II
         THE NOTES................................................................................................3
         SECTION  2.1      Form...................................................................................3
                           ----
         SECTION  2.2      Execution, Authentication and Delivery.................................................4
                           --------------------------------------
         SECTION  2.3      Temporary Notes........................................................................4
                           ---------------
         SECTION  2.4      Registration; Registration of Transfer and Exchange of Notes...........................5
                           ------------------------------------------------------------
         SECTION  2.5      Mutilated, Destroyed, Lost or Stolen Notes.............................................6
                           ------------------------------------------
         SECTION  2.6      Persons Deemed Noteholders.............................................................7
                           --------------------------
         SECTION  2.7      Payment of Principal and Interest......................................................7
                           ---------------------------------
         SECTION  2.8      Cancellation of Notes..................................................................9
                           ---------------------
         SECTION  2.9      Release of Collateral..................................................................9
                           ---------------------
         SECTION  2.10     Book-Entry Notes.......................................................................9
                           ----------------
         SECTION  2.11     Notices to Clearing Agency............................................................10
                           --------------------------
         SECTION  2.12     Definitive Notes......................................................................10
                           ----------------
         SECTION  2.13     Seller as Noteholder..................................................................11
                           --------------------
         SECTION  2.14     Tax Treatment.........................................................................11
                           -------------

ARTICLE  III
         COVENANTS...............................................................................................11
         SECTION  3.1      Payment of Principal and Interest.....................................................11
                           ---------------------------------
         SECTION  3.2      Maintenance of Agency Office..........................................................11
                           ----------------------------
         SECTION  3.3      Money for Payments To Be Held in Trust................................................12
                           --------------------------------------
         SECTION  3.4      Existence.............................................................................13
                           ---------
         SECTION  3.5      Protection of Collateral; Acknowledgment of Pledge....................................13
                           --------------------------------------------------
         SECTION  3.6      Opinions as to Collateral.............................................................14
                           -------------------------
         SECTION  3.7      Performance of Obligations; Servicing of Receivables..................................15
                           ----------------------------------------------------
         SECTION  3.8      Negative Covenants....................................................................16
                           ------------------
         SECTION  3.9      Annual Statement as to Compliance.....................................................16
                           ---------------------------------
         SECTION  3.10     Consolidation, Merger, etc., of the Issuer; Disposition of Trust
                           ----------------------------------------------------------------
                           Assets................................................................................17
                           ------
         SECTION  3.11     Successor or Transferee...............................................................19
                           -----------------------
         SECTION  3.12     No Other Business.....................................................................19
                           -----------------
         SECTION  3.13     No Borrowing..........................................................................19
                           ------------
         SECTION  3.14     Guarantees, Loans, Advances and Other Liabilities.....................................19
                           -------------------------------------------------
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                        <C>                                                                                   <C>
         SECTION  3.15     Servicer's Obligations................................................................20
                           ----------------------
         SECTION  3.16     Capital Expenditures..................................................................20
                           --------------------
         SECTION  3.17     Removal of Administrator..............................................................20
                           ------------------------
         SECTION  3.18     Restricted Payments...................................................................20
                           -------------------
         SECTION  3.19     Notice of Events of Default...........................................................20
                           ---------------------------
         SECTION  3.20     Further Instruments and Acts..........................................................21
                           ----------------------------
         SECTION  3.21     Indenture Trustee's Assignment of Administrative Receivables and
                           ----------------------------------------------------------------
                           Warranty Receivables..................................................................21
                           --------------------
         SECTION  3.22     Representations and Warranties by the Issuer to the Indenture
                           -------------------------------------------------------------
                           Trustee...............................................................................21
                           -------

ARTICLE  IV
         SATISFACTION AND DISCHARGE..............................................................................22
         SECTION  4.1      Satisfaction and Discharge of Indenture...............................................22
                           ---------------------------------------
         SECTION  4.2      Application of Trust Money............................................................23
                           --------------------------
         SECTION  4.3      Repayment of Monies Held by Paying Agent..............................................23
                           ----------------------------------------
         SECTION  4.4      Duration of Position of Indenture Trustee for Benefit of
                           --------------------------------------------------------
                           Certificateholders....................................................................23
                           ------------------

ARTICLE  V
         DEFAULT AND REMEDIES....................................................................................24
         SECTION  5.1      Events of Default.....................................................................24
                           -----------------
         SECTION  5.2      Acceleration of Maturity; Rescission and Annulment....................................25
                           --------------------------------------------------
         SECTION  5.3      Collection of Indebtedness and Suits for Enforcement by Indenture
                           -----------------------------------------------------------------
                           Trustee...............................................................................26
                           -------
         SECTION  5.4      Remedies; Priorities..................................................................28
                           --------------------
         SECTION  5.5      Optional Preservation of the Collateral...............................................29
                           ---------------------------------------
         SECTION  5.6      Limitation of Suits...................................................................29
                           -------------------
         SECTION  5.7      Unconditional Rights of Noteholders To Receive Principal and
                           ------------------------------------------------------------
                           Interest..............................................................................30
                           --------
         SECTION  5.8      Restoration of Rights and Remedies....................................................30
                           ----------------------------------
         SECTION  5.9      Rights and Remedies Cumulative........................................................30
                           ------------------------------
         SECTION  5.10     Delay or Omission Not a Waiver........................................................31
                           ------------------------------
         SECTION  5.11     Control by Noteholders................................................................31
                           ----------------------
         SECTION  5.12     Waiver of Past Defaults...............................................................31
                           -----------------------
         SECTION  5.13     Undertaking for Costs.................................................................32
                           ---------------------
         SECTION  5.14     Waiver of Stay or Extension Laws......................................................32
                           --------------------------------
         SECTION  5.15     Action on Notes.......................................................................32
                           ---------------
         SECTION  5.16     Performance and Enforcement of Certain Obligations....................................33
                           --------------------------------------------------

ARTICLE  VI
         THE INDENTURE TRUSTEE...................................................................................34
         SECTION  6.1      Duties of Indenture Trustee...........................................................34
                           ---------------------------
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                        <C>                                                                                   <C>
         SECTION  6.2      Rights of Indenture Trustee...........................................................35
                           ---------------------------
         SECTION  6.3      Indenture Trustee May Own Notes.......................................................36
                           -------------------------------
         SECTION  6.4      Indenture Trustee's Disclaimer........................................................36
                           ------------------------------
         SECTION  6.5      Notice of Defaults....................................................................36
                           ------------------
         SECTION  6.6      Reports by Indenture Trustee to Holders...............................................36
                           ---------------------------------------
         SECTION  6.7      Compensation; Indemnity...............................................................36
                           -----------------------
         SECTION  6.8      Replacement of Indenture Trustee......................................................37
                           --------------------------------
         SECTION  6.9      Merger or Consolidation of Indenture Trustee..........................................38
                           --------------------------------------------
         SECTION  6.10     Appointment of Co-Indenture Trustee or Separate Indenture
                           ----------------------------------------------------------
                           Trustee...............................................................................38
                           -------
         SECTION  6.11     Eligibility; Disqualification.........................................................40
                           -----------------------------
         SECTION  6.12     Preferential Collection of Claims Against Issuer......................................41
                           ------------------------------------------------
         SECTION  6.13     Representations and Warranties of Indenture Trustee...................................41
                           ---------------------------------------------------
         SECTION  6.14     Indenture Trustee May Enforce Claims Without Possession of
                           ----------------------------------------------------------
                           Notes.................................................................................41
                           -----
         SECTION  6.15     Suit for Enforcement..................................................................42
                           --------------------
         SECTION  6.16     Rights of Noteholders to Direct Indenture Trustee.....................................42
                           -------------------------------------------------

ARTICLE  VII
         NOTEHOLDERS' LISTS AND REPORTS..........................................................................42
         SECTION  7.1      Issuer To Furnish Indenture Trustee Names and Addresses of
                           ----------------------------------------------------------
                           Noteholders...........................................................................42
                           -----------
         SECTION  7.2      Preservation of Information, Communications to Noteholders............................43
                           ----------------------------------------------------------
         SECTION  7.3      Reports by Issuer.....................................................................43
                           -----------------
         SECTION  7.4      Reports by Indenture Trustee..........................................................43
                           ----------------------------

ARTICLE  VIII
         ACCOUNTS, DISBURSEMENTS AND RELEASES....................................................................44
         SECTION  8.1      Collection of Money...................................................................44
                           -------------------
         SECTION  8.2      Designated Accounts; Payments.........................................................44
                           -----------------------------
         SECTION  8.3      General Provisions Regarding Accounts.................................................48
                           -------------------------------------
         SECTION  8.4      Release of Collateral.................................................................49
                           ---------------------
         SECTION  8.5      Opinion of Counsel....................................................................49
                           ------------------
         SECTION  8.6      Investment Earnings and Supplemental Servicing Fees...................................49
                           ---------------------------------------------------
         SECTION  8.7      Net Deposits..........................................................................50
                           ------------
         SECTION  8.8      Statements to Securityholders.........................................................50
                           -----------------------------
         SECTION  8.9      Designated Accounts...................................................................52
                           -------------------
         SECTION  8.10     Reserve Account.......................................................................52
                           ---------------
         SECTION  8.11     Pre-Funding Account...................................................................53
                           -------------------
         SECTION  8.12     Negative Carry Account................................................................53
                           ----------------------
         SECTION 8.13      Sale of Assets; Termination...........................................................54
                           ---------------------------
</TABLE>

                                      iii

<PAGE>

<TABLE>
<S>                        <C>                                                                                   <C>
ARTICLE  IX
         SUPPLEMENTAL INDENTURES.................................................................................55

         SECTION  9.1      Supplemental Indentures Without Consent of Noteholders................................55
                           ------------------------------------------------------
         SECTION  9.2      Supplemental Indentures With Consent of Noteholders...................................56
                           ---------------------------------------------------
         SECTION  9.3      Execution of Supplemental Indentures..................................................58
                           ------------------------------------
         SECTION  9.4      Effect of Supplemental Indenture......................................................58
                           --------------------------------
         SECTION  9.5      Conformity with Trust Indenture Act...................................................58
                           -----------------------------------
         SECTION  9.6      Reference in Notes to Supplemental Indentures.........................................59
                           ---------------------------------------------

ARTICLE  X
         REDEMPTION OF NOTES.....................................................................................59
         SECTION  10.1     Redemption............................................................................59
                           ----------
         SECTION  10.2     Form of Redemption Notice.............................................................59
                           -------------------------
         SECTION  10.3     Notes Payable on Redemption Date......................................................60
                           --------------------------------

ARTICLE  XI
         MISCELLANEOUS...........................................................................................60
         SECTION  11.1     Compliance Certificates and Opinions, etc.............................................60
                           ------------------------------------------
         SECTION  11.2     Form of Documents Delivered to Indenture Trustee......................................62
                           ------------------------------------------------
         SECTION  11.3     Acts of Noteholders...................................................................63
                           -------------------
         SECTION  11.4     Notices, etc., to Indenture Trustee, Issuer and
                           -----------------------------------------------
                           Rating Agencies.......................................................................63
                           ---------------
         SECTION  11.5     Notices to Noteholders; Waiver........................................................64
                           ------------------------------
         SECTION  11.6     Alternate Payment and Notice Provisions...............................................64
                           ---------------------------------------
         SECTION  11.7     Conflict with Trust Indenture Act.....................................................64
                           ---------------------------------
         SECTION  11.8     Effect of Headings and Table of Contents..............................................65
                           ----------------------------------------
         SECTION  11.9     Successors and Assigns................................................................65
                           ----------------------
         SECTION  11.10    Separability..........................................................................65
                           ------------
         SECTION  11.11    Benefits of Indenture.................................................................65
                           ---------------------
         SECTION  11.12    Legal Holidays........................................................................65
                           --------------
         SECTION  11.13    Governing Law.........................................................................65
                           -------------
         SECTION  11.14    Counterparts..........................................................................65
                           ------------
         SECTION  11.15    Recording of Indenture................................................................65
                           ----------------------
         SECTION  11.16    No Recourse...........................................................................66
                           -----------
         SECTION  11.17    No Petition...........................................................................66
                           -----------
         SECTION  11.18    Inspection............................................................................67
                           ----------
</TABLE>

Exhibit A     -    Locations of Composite Schedule of Receivables
Exhibit B     -    Form of Class A-1 Asset Backed Note
Exhibit C     -    Form of Class A-2, Class A-3, Class A-4 and Class B Asset
                   Backed Note
Exhibit D     -    Form of Note Depository Agreement

                                       iv

<PAGE>

          INDENTURE, dated as of          , 200  between NAVISTAR FINANCIAL
                                 ---------     -
200   OWNER TRUST, a Delaware business trust (the "Issuer"), and
   --
                , a                  , as trustee and not in its individual
----------------    -----------------
capacity (the "Indenture Trustee").

     Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Notes and (only to the extent
expressly provided herein) the Certificateholders:

                                 GRANTING CLAUSE

     The Issuer hereby grants to the Indenture Trustee on the Closing Date, as
trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders, all of the Issuer's right, title and
interest in, to and under (a) the Receivables listed on the Composite Schedule
of Receivables which is on file at the locations listed on Exhibit A hereto,
whether now existing or hereafter acquired and including, without limitation,
Subsequent Receivables acquired by the Issuer pursuant to the Pooling Agreement
listed on the schedules to the Subsequent Transfer PSA Assignments with respect
to such Subsequent Receivables and all Related Security; (b) the Collection
Account and the Note Distribution Account and all funds on deposit from time to
time in the Collection Account and the Note Distribution Account; (c) the
Reserve Account and all proceeds thereof (other than the Investment Earnings
thereon), including all other amounts, investments and investment property held
from time to time in the Reserve Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities,
or otherwise); (d) the Reserve Account Initial Deposit with respect to the
Closing Date and the Reserve Account Subsequent Transfer Deposit with respect to
each Subsequent Transfer Date and all proceeds thereof (other than the
Investment Earnings thereon) (c) and (d), collectively, the "Reserve Account
                                                             ---------------
Property"); (e) the Pre-Funding Account and all funds on deposit from time to
--------
time in the Pre-Funding Account and all proceeds thereof, including all other
amounts and investments held from time to time in the Pre-Funding Account
(whether in the form of deposit accounts, Physical Property, book-entry
securities, uncertificated securities or otherwise) (collectively, the
"Pre-Funding Account Property"); (f) the Negative Carry Account and all funds on
 ----------------------------
deposit from time to time in the Negative Carry Account and all proceeds thereof
(other than the Investment Earnings thereon), including all other amounts,
investments and investment property held from time to time in the Negative Carry
Account (whether in the form of deposit accounts, Physical Property, book-entry
securities, uncertificated securities or otherwise); (g) the Pooling Agreement
(including all rights of NFRRC under the Purchase Agreement, the Initial PA
Assignment and any Subsequent Transfer PA Assignments assigned to the Issuer
pursuant to the Pooling Agreement); (h) the Servicing Agreement; (i) the rights
of NFC under the Lease Purchase Agreement assigned to NFRRC pursuant to the
Purchase Agreement and then to the Issuer pursuant to the Pooling Agreement; (j)
the Titling Trust Documents; (k) all Collections, and (l) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under and all proceeds of every kind and nature
whatsoever in respect of any or all of the foregoing, including all proceeds of
the conversion, voluntary or involuntary, into cash or other

                                       1

<PAGE>

liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
                              ----------

     The foregoing Grant is made in trust to secure (a) first, the payment of
principal of and interest on, and any other amounts owing in respect of, the
Class A Notes, equally and ratably without prejudice, priority or distinction,
and (b) second, the payment of principal of and interest on, and any other
amounts owing in respect of, the Class B Notes, equally and ratably without
prejudice, priority or distinction, and to secure compliance with the provisions
of this Indenture, all as provided in this Indenture. This Indenture constitutes
a security agreement under the UCC.

     The foregoing Grant includes all rights, powers and options (but none of
the obligations, if any) of the Issuer under any agreement or instrument
included in the Collateral, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal, interest and lease
payments and other Scheduled Payments in respect of the Receivables included in
the Collateral and all other monies payable under the Collateral, 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
Issuer or otherwise and generally to do and receive anything that the Issuer is
or may be entitled to do or receive under or with respect to the Collateral.

     The Indenture Trustee, as trustee on behalf of the Noteholders and (only to
the extent expressly provided herein) the Certificateholders, acknowledges such
Grant and accepts the trusts under this Indenture in accordance with the
provisions of this Indenture.

                                    ARTICLE I
                DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.1 Definitions. Certain capitalized terms used in this Indenture
                 -----------
shall have the respective meanings assigned them in Part I of Appendix A to the
                                                              ----------
Pooling Agreement of even date herewith between the Issuer and NFRRC (as it may
be amended, supplemented or modified from time to time, the "Pooling
Agreement"). All references herein to "the Indenture" or "this Indenture" are to
this Indenture as it may be amended, supplemented or modified from time to time,
the exhibits hereto and the capitalized terms used herein which are defined in
such Appendix A. All references herein to Articles, Sections, subsections and
     ----------
exhibits are to Articles, Sections, subsections and exhibits contained in or
attached to this Indenture unless otherwise specified. All terms defined in this
Indenture shall have the defined meanings when used in any certificate, notice,
Note or other document made or delivered pursuant hereto unless otherwise
defined therein. The rules of construction set forth in Part II of such Appendix
A shall be applicable to this Indenture.

                                       2

<PAGE>

               SECTION 1.2 Incorporation by Reference of Trust Indenture Act
                           -------------------------------------------------
     Incorporation by Reference of Trust Indenture Act. Whenever this Indenture
     refers to a provision of the TIA, such 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:

          "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" means the Indenture Trustee.

          "obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.

          All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a Commission rule
have the respective meanings assigned to them by such definitions.

                                   ARTICLE II
                          THE NOTESARTICLE II THE NOTES

     SECTION 2.1 Form
                 ----

          (a) The Class A-1 Notes and each of the Class A-2 Notes, Class A-3
Notes, Class A-4 Notes and Class B Notes, with the Indenture Trustee's
certificate of authentication, shall be substantially in the form set forth in
Exhibit B and Exhibit C, respectively, with such appropriate insertions,
---------     ---------
omissions, substitutions and other variations as are required or permitted by
this Indenture, and each such class 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.

          (b) 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.

                                       3

<PAGE>

          (c) Each Note shall be dated the date of its authentication. The terms
of each class of Notes as provided for in Exhibit B and Exhibit C hereto are
                                          ---------     ---------
part of the terms of this Indenture.

     SECTION 2.2 Execution, Authentication and Delivery
                 --------------------------------------

          (a) Each Note shall be dated the date of its authentication, and shall
be issuable as a registered Note in the minimum denomination of $1,000 and in
integral multiples thereof (except, if applicable, for one Note representing a
residual portion of each class which may be issued in a different denomination).

          (b) 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 manual or facsimile.

          (c) Notes bearing the manual 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
office prior to the authentication and delivery of such Notes or did not hold
such office at the date of such Notes.

          (d) The Indenture Trustee shall upon Issuer Order authenticate and
deliver to or upon the order of the Issuer, the Notes for original issue in
aggregate principal amount of $       , comprised of (i) Class A-1 Notes in the
                               -------
aggregate principal amount of $        , (ii) Class A-2 Notes in the aggregate
                               --------
principal amount of          , (iii) Class A-3 Notes in the aggregate principal
                    --------
amount of $           and (iv) Class A-4 Notes in the aggregate principal
           ----------
amount of $          , and (v) Class B Notes in the aggregate principal amount
           ----------
of $          . The aggregate principal amount of all Notes outstanding at any
    ----------
time may not exceed $           except as provided in Section 2.5.
                     ----------

          (e) No Notes shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form set forth, in the case
of the Class A-1 Notes, in Exhibit B, and in the case of the Class A-2 Notes,
                          ---------
the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, in Exhibit C,
                                                                   ---------
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon 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
                 ---------------

          (a) Pending the preparation of Definitive Notes, if any, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, such 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

                                       4

<PAGE>

variations as are consistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.

          (b) If Temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the Temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more Temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so delivered in exchange, the Temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.

     SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes
                 ------------------------------------------------------------

          (a) The Issuer shall cause to be kept the Note Register, comprising
separate registers for each class of Notes, in which, subject to such reasonable
regulations as the Issuer may prescribe, the Issuer shall provide for the
registration of the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Registrar for the
purpose of registering the Notes and transfers of the Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor Note Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.

          (b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register. The Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.

          (c) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes in any authorized denominations, of a like aggregate principal amount.

          (d) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at the Corporate
Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and
following the delivery, in the former case, of such Notes to the Issuer by the
Indenture Trustee), the Issuer shall execute, and the Indenture Trustee shall
authenticate and the

                                       5

<PAGE>

Noteholder shall obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.

          (e) 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, as the Notes surrendered
upon such registration of transfer or exchange.

          (f) Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee and the Note
Registrar, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by a commercial bank or
trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office of the Indenture Trustee is
located, or by a member firm of a national securities exchange, and such other
documents as the Indenture Trustee may require.

          (g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer or Indenture Trustee 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, other than exchanges pursuant to Section 2.3 or Section 9.6
not involving any transfer.

          (h) The preceding provisions of this Section 2.4 notwithstanding, the
Issuer shall not be required to transfer or make exchanges, and the Note
Registrar need not register transfers or exchanges, of Notes that: (i) have been
selected for redemption pursuant to Article X, if applicable; or (ii) are due
for repayment in full within 15 days of surrender to the Corporate Trust Office
or the Agency Office.

     SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes
                 ------------------------------------------

          (a) If (i) any mutilated Note is surrendered to the Indenture Trustee,
or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a protected purchaser, the Issuer shall execute and upon the
Issuer's request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of a like class and aggregate principal amount; 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 in full,
or shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may make payment to the Holder of such destroyed, lost or stolen Note
when so due or payable or upon the Redemption Date, if applicable, without
surrender thereof.

                                       6

<PAGE>

          (b) If, after the delivery of a replacement Note or payment in respect
of a destroyed, lost or stolen Note pursuant to subsection (a), any protected
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from (i)
any Person to whom it was delivered, (ii) the Person taking such replacement
Note from the Person to whom such replacement Note was delivered or (iii) any
assignee of such Person, except any protected purchaser, and the Issuer and the
Indenture Trustee 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 Indenture Trustee in connection therewith.

          (c) In connection with the issuance of any replacement Note under this
Section 2.5, 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 all fees and
expenses of the Indenture Trustee) connected therewith.

          (d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be found at any time or be
enforced by any Person, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.

          (e) The provisions of this Section 2.5 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 Noteholders. Prior to due presentment for
                 --------------------------
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
of their agents may treat the Person in whose name any Note is registered (as of
the day of determination) as the Noteholder for the purpose of receiving
payments of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Issuer, the
Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

     SECTION 2.7 Payment of Principal and Interest.
                 ----------------------------------

          (a) Interest on the Class A-1 Notes shall accrue in the manner set
forth in Exhibit B at the applicable Interest Rate for such class, and such
         ---------
interest shall be payable on each Distribution Date, in accordance with the
priorities set forth in Section 8.2(c), as specified in the form of Note set
forth in Exhibit B. Interest on the Class A-2 Notes, the Class A-3 Notes, the
         ---------
Class A-4 Notes and the Class B Notes shall accrue in the manner set forth in
Exhibit C at the applicable Interest Rate for such class, and shall be payable
---------
on each Distribution Date, in accordance with the priorities set forth in
Section 8.2(c), as specified in the form of Note set forth in Exhibit C. Any
                                                              ---------
instalment of interest payable on any Note shall be punctually paid or duly
provided for by a deposit

                                       7

<PAGE>

by or at the direction of the Issuer or the Servicer into the Note Distribution
Account before each Distribution Date for payment to Noteholders on the related
Distribution Date and shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the applicable 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; provided, however, that, unless and
        `                                 --------  -------
until Definitive Notes have been issued pursuant to Section 2.12, with respect
to Notes registered on the applicable Record Date in the name of the Note
Depository (initially, Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account designated by the Note Depository.

          (b) Prior to the occurrence of an Event of Default and a declaration
in accordance with Section 5.2(a) that the Notes have become immediately due and
payable, the principal of each class of Notes shall be payable in full on the
Final Scheduled Distribution Date for such class and, to the extent of funds
available therefor, in instalments on the Distribution Dates (if any) preceding
the Final Scheduled Distribution Date for such class, in the amounts and in
accordance with the priorities set forth in Section 8.2(d)(ii) or (iii), as
applicable, and, if applicable, Section 8.2(e). All principal payments on each
class of Notes shall be made pro rata to the Noteholders of such class entitled
thereto. Any instalment of principal payable on any Note shall be punctually
paid or duly provided for by a deposit by the Indenture Trustee in accordance
with the provisions of Section 8.2 into the Note Distribution Account prior to
the applicable Distribution Date and shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the applicable
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; provided,
                                                                --------
however, that, unless and until Definitive Notes have been issued pursuant to
-------
Section 2.12, with respect to Notes registered on the Record Date in the name of
the Note Depository, payment shall be made by wire transfer in immediately
available funds to the account designated by the Note Depository, except for:
(i) the final instalment of principal on any Note; and (ii) the Redemption Price
for the Notes redeemed pursuant to Section 10.1, which, in each case, shall be
payable as provided herein. The funds represented by any such checks in respect
of interest or principal returned undelivered shall be held in accordance with
Section 3.3.

          (c) [Reserved.]

          (d) From and after the occurrence of an Event of Default and a
declaration in accordance with Section 5.2(a) that the Notes have become
immediately due and payable, principal on the Notes shall be payable as provided
in Section 8.2(d)(iv) or (v), as applicable and, if applicable, Section 8.2(e).

          (e) With respect to any Distribution Date on which the final
instalment of principal and interest on a class of Notes is to be paid, the
Indenture Trustee shall notify each Noteholder of such class of record as of the
Record Date for such Distribution Date of the fact that the final instalment of
principal of and interest on such Note is to be paid on such Distribution Date.
Such notice shall be sent (i) on such Record Date by facsimile, if Book-Entry
Notes are outstanding;

                                       8

<PAGE>

or (ii) not later than three Business Days after such Record Date in accordance
with Section 11.5(a) if Definitive Notes are outstanding, and shall specify that
such final instalment shall 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 instalment and the manner in which such payment
shall be made. Notices in connection with redemptions of Notes shall be mailed
to Noteholders as provided in Section 10.2. Within sixty days of the surrender
pursuant to this Section 2.7(e) or cancellation pursuant to Section 2.8 of all
of the Notes of a particular class, the Indenture Trustee shall provide each of
the Rating Agencies with written notice stating that all Notes of such class
have been surrendered or canceled.

     SECTION 2.8 Cancellation of Notes. All Notes surrendered for payment,
                 ---------------------
redemption, exchange or registration of transfer shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee 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
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 2.8, except as expressly
permitted by this Indenture. All canceled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be returned to it; provided, however, that such Issuer Order is
                                   --------  -------
timely and the Notes have not been previously disposed of by the Indenture
Trustee. The Indenture Trustee shall certify to the Issuer that surrendered
Notes have been duly canceled and retained or destroyed, as the case may be.

     SECTION 2.9 Release of Collateral. The Indenture Trustee shall release
                 ---------------------
property from the lien of this Indenture, other than as permitted by Sections
3.21, 8.2, 8.4 and 11.1, only upon receipt of an Issuer Request accompanied by
an Officers' Certificate, an Opinion of Counsel (to the extent required by the
TIA) and Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1).

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

          (a) the provisions of this Section 2.10 shall be in full force and
effect;

          (b) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture (including the
payment of principal of and interest

                                       9

<PAGE>

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;

          (c) to the extent that the provisions of this Section 2.10 conflict
with any other provisions of this Indenture, the provisions of this Section 2.10
shall control;

          (d) the rights of the 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 and unless and until Definitive Notes are issued pursuant to
Section 2.12, the initial Clearing Agency shall make book-entry transfers
between the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency Participants,
pursuant to the Note Depository Agreement; and

          (e) 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 Controlling Class, the Clearing
Agency shall be deemed to represent such percentage only to the extent that it
has (i) received written 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 and (ii) has delivered such
instructions to the Indenture Trustee.

     SECTION 2.11 Notices to Clearing Agency. 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 shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency and shall
have no other obligation to the Note Owners.

     SECTION 2.12 Definitive Notes.
                  ----------------

          If (i) the Administrator advises the Indenture Trustee in writing that
the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Issuer is unable to locate a
qualified successor; (ii) the Administrator, at its option, advises the
Indenture Trustee 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 or a Servicer Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Controlling
Class advise 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 Clearing Agency shall notify all Note Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay

                                       10

<PAGE>

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 shall recognize the Holders of the Definitive Notes
as Noteholders.

     SECTION 2.13 Seller as Noteholder. The Seller 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 the Seller.

     SECTION 2.14 Tax Treatment. The Issuer in entering into this Indenture, and
                  -------------
the Noteholders and the Note Owners, by acquiring any Note or interest therein,
(i) express their intention that the Notes qualify under applicable tax law as
indebtedness secured by the Collateral, and (ii) unless otherwise required by
appropriate taxing authorities, agree to treat the Notes as indebtedness secured
by the Collateral for the purpose of federal income taxes, state and local
income and franchise taxes, and any other taxes imposed upon, measured by or
based upon gross or net income.

                                   ARTICLE III
                                    COVENANTS

     SECTION 3.1 Payment of Principal and Interest. The Issuer shall duly and
                 ---------------------------------
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. On each Distribution Date and on the
Redemption Date (if applicable), the Indenture Trustee shall distribute amounts
on deposit in the Note Distribution Account to the Noteholders in accordance
with Sections 2.7 and 8.2, less amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal. Any
amounts so withheld shall be considered as having been paid by the Issuer to
such Noteholder for all purposes of this Indenture.

     SECTION 3.2 Maintenance of Agency Office. As long as any of the Notes
                 ----------------------------
remains outstanding, the Issuer shall maintain in the Borough of Manhattan, the
City of New York, an office (the "Agency Office"), being an office or agency
                                  -------------
where Notes may be surrendered to the Issuer for registration of transfer or
exchange, 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
Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer
shall give prompt written notice to the Indenture Trustee of the location, and
of any change in the location, of the Agency Office. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Indenture Trustee,
and the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders, notices and demands.

                                       11

<PAGE>

     SECTION 3.3 Money for Payments To Be Held in Trust.
                 --------------------------------------

          (a) As provided in Section 8.2, all payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Note Distribution Account pursuant to Section 8.2(d), (e) or (f) shall
be made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Note Distribution Account for
payments of Notes shall be paid over to the Issuer except as provided in this
Section 3.3.

          (b) Before each Distribution Date or the Redemption Date (if
applicable), the Indenture Trustee shall deposit in the Note Distribution
Account an aggregate sum sufficient to pay the amounts then becoming due with
respect to the Notes, such sum to be held in trust for the benefit of the
Persons entitled thereto.

          (c) The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section 3.3, that such Paying Agent shall:

               (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 notice of any default by the
          Issuer (or any other obligor upon the Notes) of which it has actual
          knowledge 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 Paying Agent;

               (iv) immediately resign as a 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 Paying Agent in effect at the time of determination; 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.

          (d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay

                                       12

<PAGE>

to the Indenture Trustee all sums held in trust by such 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 Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.

          (e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid by the Indenture Trustee to the Issuer on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
                                                              --------  -------
that the Indenture Trustee or such Paying Agent, before being required to make
any such payment, may at the expense of the Issuer cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be paid to the Issuer. The Indenture
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such payment (including, but not limited to,
mailing notice of such payment to Holders whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in monies due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).

     SECTION 3.4 Existence. The Issuer shall keep in full effect its existence,
                 ---------
rights and franchises as a business 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 shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall 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 Notes, the Collateral and each other
instrument or agreement included in the Collateral.

     SECTION 3.5 Protection of Collateral; Acknowledgment of Pledge. The Issuer
                 --------------------------------------------------
shall from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, amendments thereto, continuation
statements, assignments, certificates, instruments of further assurance and
other instruments, and shall take such other action as may be determined to be
necessary or advisable in an Opinion of Counsel to the Owner Trustee delivered
to the Indenture Trustee to:

               (i) maintain or preserve the lien and security interest (and the
          priority thereof) of this Indenture or carry out more effectively the
          purposes hereof including by making the necessary filings of financing
          statements or amendments thereto

                                       13

<PAGE>

          within sixty days after the occurrence of any of the following: (A)
          any change in the name of the Issuer (or its successor), (B) any
          change in the jurisdiction of formation of the Issuer (or its
          successor) and (C) any merger or consolidation or other change in the
          identity or organizational structure of the Issuer and by promptly
          notifying the Indenture Trustee of any such filings;

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

               (iii) enforce the rights of the Indenture Trustee and the
          Noteholders in any of the Collateral; or

               (iv) preserve and defend title to the Collateral and the rights
          of the Indenture Trustee and the Noteholders in such Collateral
          against the claims of all Persons and parties, and the Issuer hereby
          authorizes the Indenture Trustee to execute and file any financing
          statement, continuation statement or other instrument required by the
          Indenture Trustee pursuant to this Section 3.5.

     SECTION 3.6 Opinions as to Collateral.
                 -------------------------

          (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, any indentures supplemental hereto 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 lien and security interest of this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.

          (b) On or before April 15 in each calendar year, beginning April 15,
200 , 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, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain the lien and security interest created by this Indenture. 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 and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 15 in
the following calendar year.

                                       14

<PAGE>

     SECTION 3.7 Performance of Obligations; Servicing of Receivables.
                 ----------------------------------------------------

          (a) The Issuer shall not take any action and shall use its reasonable
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 Collateral 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
otherwise expressly provided in this Indenture, the Pooling Agreement, the
Servicing Agreement, the Purchase Agreement, the Administration Agreement or
such other instrument or agreement.

          (b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in the Basic Documents or an
Officers' Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.

          (c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Collateral, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed under the terms of this Indenture,
the Pooling Agreement and the Purchase Agreement in accordance with and within
the time periods provided for herein and therein.

          (d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Rating Agencies thereof, and shall specify in such
notice the response or action, if any, the Issuer has taken or is taking with
respect of such default. If a Servicer Default shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Receivables, the Issuer and the Indenture Trustee
shall take all reasonable steps available to them pursuant to the Servicing
Agreement to remedy such failure.

          (e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it shall not consent so as
to permit NFRRC, NFC, or Harco Leasing to, without the prior written consent of
the Indenture Trustee or the Holders of at least a majority in Outstanding
Amount of the Controlling Class, as required in accordance with the terms
thereof, amend, modify, waive, supplement, terminate or surrender, or agree to
any amendment, modification, supplement, termination, waiver or surrender of,
the terms of any Collateral or any of the Basic Documents, or waive timely
performance or observance by the Seller under the Pooling Agreement or the
Purchase Agreement, the Servicer under the Servicing Agreement, the
Administrator under the Administration Agreement, NFC under the Purchase
Agreement or Harco Leasing under the Lease Purchase Agreement, except as
specifically permitted under these documents; provided, however, that,
                                              --------  -------
notwithstanding the foregoing, no action specified in the proviso to Section
                                                          -------
9.2(a) shall be taken

                                       15

<PAGE>

except in compliance with Section 9.2. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, as applicable, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.

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

          (a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except the Issuer may (i) collect,
liquidate, sell or otherwise dispose of Receivables (including Warranty
Receivables, Administrative Receivables and Liquidating Receivables), (ii) make
cash payments out of the Designated Accounts and the Certificate Distribution
Account and (iii) take other actions, in each case as contemplated by the Basic
Documents;

          (b) claim any credit on, or make any deduction from the principal or
interest payable in respect of the Notes (other than amounts properly withheld
from such payments under the Code or applicable state law) 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 Collateral;

          (c) voluntarily commence any insolvency, readjustment of debt,
marshaling of assets and liabilities or other proceeding, or apply for an order
by a court or agency or supervisory authority for the winding-up or liquidation
of its affairs or any other event specified in Section 5.1(f); or

          (d) either (i) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of 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 except as may be expressly permitted hereby, (ii) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Collateral 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), or (iii)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Collateral (other than with respect to any such tax,
mechanics' or other lien).

     SECTION 3.9 Annual Statement as to Compliance. The Issuer shall deliver to
                 ---------------------------------
the Indenture Trustee, with a copy to each of the Rating Agencies, on or before
February 1 of each year, beginning February 1, 200  , an Officer's Certificate
                                                  --
signed by an Authorized Officer, dated as of the immediately preceding October
31, stating that:

                                       16

<PAGE>

          (a) a review of the activities of the Issuer during such fiscal year
and of performance by the Issuer under this Indenture has been made under such
Authorized Officer's supervision; and

          (b) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has fulfilled in all material respects all of its obligations
under this Indenture throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such Authorized Officer and the nature and status thereof. A copy of such
certificate may be obtained by any Noteholder by a request in writing to the
Issuer addressed to the Corporate Trust Office of the Indenture Trustee.

     SECTION 3.10 Consolidation, Merger, etc., of the Issuer; Disposition of
                  ----------------------------------------------------------
Trust Assets.
------------

          (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, in form satisfactory to the
          Indenture Trustee, the due and timely payment of the principal of and
          interest on all Notes and the performance or observance of every
          agreement and covenant of this Indenture on the part of the Issuer to
          be performed or observed, all as provided herein;

               (ii) immediately after giving effect to such merger or
          consolidation, no Default shall have occurred and be continuing;

               (iii) the Rating Agency Condition shall have been satisfied with
          respect to such transaction and such Person for each then outstanding
          class of Notes;

               (iv) any action as is necessary to maintain the lien and security
          interest created by this Indenture shall have been completed; and

               (v) the Issuer shall have delivered to the Indenture Trustee an
          Officers' Certificate and an Opinion of Counsel addressed to the
          Issuer, each stating:

                    (A) that such consolidation or merger and such supplemental
               indenture comply with this Section 3.10;

                    (B) that such consolidation or merger and such supplemental
               indenture shall have no material adverse tax consequence to the
               Issuer or any Securityholder; and

                                       17

<PAGE>

                    (C) that all conditions precedent herein provided for in
               this Section 3.10 have been complied with, which shall include
               any filing required by the Exchange Act.

          (b) Except as otherwise expressly permitted by this Indenture or the
other Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets, including those included
in the Collateral, to any Person, unless:

               (i) the Person that acquires such properties or assets of the
          Issuer (A) shall be a United States citizen or a Person organized and
          existing under the laws of the United States of America or any State
          and (B) by an indenture supplemental hereto, executed and delivered to
          the Indenture Trustee, in form satisfactory to the Indenture Trustee:

                    (A) expressly assumes 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 on
               the part of the Issuer to be performed or observed, all as
               provided herein;

                    (B) expressly agrees that all right, title and interest so
               sold, conveyed, exchanged, transferred or otherwise disposed of
               shall be subject and subordinate to the rights of Noteholders;

                    (C) unless otherwise provided in such supplemental
               indenture, expressly agrees to indemnify, defend and hold
               harmless the Issuer against and from any loss, liability or
               expense arising under or related to this Indenture and the Notes;
               and

                    (D) expressly agrees that such Person (or if a group of
               Persons, then one specified Person) shall 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 shall have occurred and be continuing;

               (iii) the Rating Agency Condition shall have been satisfied with
          respect to such transaction and such Person for each then outstanding
          class of Notes;

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

                                       18

<PAGE>

               (v) the Issuer shall have delivered to the Indenture Trustee an
          Officers' Certificate and an Opinion of Counsel addressed to the
          Issuer, each stating that:

                    (A) such sale, conveyance, exchange, transfer or disposition
               and such supplemental indenture comply with this Section 3.10;

                    (B) such sale, conveyance, exchange, transfer or disposition
               and such supplemental indenture have no material adverse tax
               consequence to the Issuer or to any Noteholders or
               Certificateholders; and

                    (C) that all conditions precedent herein provided for in
               this Section 3.10 have been complied with, which shall include
               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 with the same
effect as if such Person had been named as the Issuer herein.

          (b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), the Issuer shall be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Securityholders immediately upon the delivery
of written notice to the Indenture Trustee from the Person acquiring such assets
and properties stating that the Issuer is to be so released.

     SECTION 3.12 No Other Business. The Issuer shall not engage in any business
                  -----------------
or activity other than acquiring, holding and managing the Collateral and the
proceeds therefrom in the manner contemplated by the Basic Documents, issuing
the Securities, making payments on the Securities and such other activities that
are necessary, suitable, desirable or convenient to accomplish the foregoing or
are incidental thereto, as set forth in Section 2.3 of the Trust Agreement.
After the end of the Funding Period, the Issuer shall not fund the purchase of
any new Receivables.

     SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
                  ------------
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.

     SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities. Except as
                  -------------------------------------------------
contemplated by this Indenture or the other Basic Documents, 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),

                                       19

<PAGE>

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 contingently 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 3.15 Servicer's Obligations. The Issuer shall use its best efforts
                  ----------------------
to cause the Servicer to comply with its obligations under Sections 2.17, 3.01
and 3.02 of the Servicing Agreement.

     SECTION 3.16 Capital Expenditures. The Issuer shall not make any
                  --------------------
expenditure (whether by long-term or operating lease or otherwise) for capital
assets (either real, personal or intangible property) other than the purchase of
the Receivables and other property and rights from the Seller pursuant to the
Pooling Agreement.

     SECTION 3.17 Removal of Administrator. So long as any Notes are
                  ------------------------
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition for each class of Notes then outstanding shall have
been satisfied in connection with such removal.

     SECTION 3.18 Restricted Payments. Except for payments of principal or
                  -------------------
interest on or redemption of the Notes, so long as any Notes are Outstanding,
the Issuer shall not, directly or indirectly:

          (a)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, in each case with respect to any ownership or equity interest or
similar security in or of the Issuer or to the Servicer;

          (b) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or similar security; or

          (c) 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 Servicer, the Seller, the Indenture Trustee, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose hereunder or under, the Pooling Agreement, the Servicing Agreement,
the Trust Agreement or the other Basic Documents. The Issuer shall not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with the Basic Documents.

     SECTION 3.19 Notice of Events of Default. The Issuer agrees to give the
                  ---------------------------
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder, each Servicer Default under the Servicing Agreement, each
default on the part of the Seller of its obligations under the Pooling
Agreement, each default on the part of NFC of its obligations under

                                       20

<PAGE>

the Purchase Agreement and each default on the part of Harco Leasing under the
Lease Purchase Agreement.

     SECTION 3.20 Further Instruments and Acts. Upon request of the Indenture
                  ----------------------------
Trustee, the Issuer shall 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 Indenture Trustee's Assignment of Administrative Receivables
                  ------------------------------------------------------------
and Warranty Receivables. Upon receipt of the Administrative Purchase Payment or
------------------------
the Warranty Payment with respect to an Administrative Receivable or a Warranty
Receivable, as the case may be, the Indenture Trustee shall release to the
Servicer or the Warranty Purchaser, as applicable, all of the Indenture
Trustee's right, title and interest in and to such repurchased Receivable and
the Related Security with respect thereto and any documents relating thereto,
and the Servicer or the Warranty Purchaser, as applicable, shall thereupon own
such Receivable and the Related Security with respect thereto free of any
further obligation to the Indenture Trustee or the Noteholders with respect
thereto. If in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Receivable on the ground that it is not a real party
in interest or a holder entitled to enforce such Receivable, the Indenture
Trustee shall, at the Servicer's expense, take such steps as the Servicer deems
necessary to enforce the Receivable, including bringing suit in the Indenture
Trustee's name or the names of the Securityholders.

     SECTION 3.22 Representations and Warranties by the Issuer to the Indenture
                  -------------------------------------------------------------
Trustee. The Issuer hereby represents and warrants to the Indenture Trustee as
-------
follows:

          (a) Good Title. No Receivable has been sold, transferred, assigned or
              ----------
pledged by the Issuer to any Person other than the Indenture Trustee;
immediately prior to the grant of a security interest in the Receivable pursuant
to this Indenture, the Issuer had good and marketable title thereto, free of any
Lien (except for Permitted Liens); and, upon execution and delivery of this
Indenture by the Issuer, the Indenture Trustee shall have all of the right,
title and interest of the Issuer in, to and under the Collateral, free of any
Lien (except for any Lien which may exist in accessions to the Financed Vehicles
not financed by NFC); and

          (b) All Filings Made. All filings necessary under the UCC in any
              ----------------
jurisdiction to give the Indenture Trustee a first priority perfected security
interest in the Receivables and, to the extent constituting Code Collateral, the
other Collateral shall have been made. The Receivables constitute Code
Collateral.

          (c) Series 200 Portfolio Certificate. The Series 200_ Portfolio
              --------------------------------
Certificate has been duly registered in the name of the Indenture Trustee and
all other action necessary (including the filing of UCC-1 financing statements)
to protect and perfect the Indenture Trustee's security interest in the
Collateral now in existence and hereafter acquired or created has been duly and
effectively taken.

                                       21

<PAGE>

          (d) Lien of Indenture. This Indenture constitutes a valid and
continuing Lien on the Collateral in favor of the Indenture Trustee on behalf of
the Noteholders, which Lien will be prior to all other Liens (other than
Permitted Liens), will be enforceable as such as against creditors of and
purchasers from the Issuer in accordance with its terms, except as such
enforceability may be limited by may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
and all action necessary to perfect such prior security interest has been duly
taken.

                                   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 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 3.2, 3.3, 3.4, 3.5,
3.8, 3.10, 3.11, 3.12, 3.13, 3.14, 3.16, 3.17, 3.19 and 3.21; (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.7 and the obligations of the
Indenture Trustee under Sections 4.2 and 4.4); and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on 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, if:

          (a) either:

               (i) all Notes theretofore authenticated and delivered (other than
          (A) Notes that have been destroyed, lost or stolen and that have been
          replaced or paid as provided in Section 2.5 and (B) 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 Indenture Trustee for cancellation; or

               (ii) all Notes not theretofore delivered to the Indenture Trustee
          for cancellation:

                    (A) have become due and payable,

                    (B) will be due and payable on their respective Final
               Scheduled Distribution Dates within one year, or

                                       22

<PAGE>

                    (C) are to be called for redemption within one year under
               arrangements satisfactory to the Indenture Trustee for the giving
               of notice of redemption by the Indenture Trustee in the name, and
               at the expense, of the Issuer.

and the Issuer, in the case of (A), (B) or (C) of subsection 4.1(a)(2) above,
has irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee 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 unpaid principal and accrued interest on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Distribution Date for such Notes or the Redemption Date for such
Notes (if such Notes are to be called for redemption pursuant to Section
10.1(a)), as the case may be;

          (b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and

          (c) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate of the Issuer, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section 11.1(a)
and each stating that all conditions precedent herein provided for relating to
the satisfaction and discharge of this Indenture have been complied with.

     SECTION 4.2 Application of Trust Money. All monies deposited with the
                 --------------------------
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
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 Servicing Agreement or by applicable law.

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

     SECTION 4.4 Duration of Position of Indenture Trustee for Benefit of
                 --------------------------------------------------------
Certificateholders. Notwithstanding (i) the earlier payment in full of all
------------------
principal and interest due to the Noteholders under the terms of Notes of each
class, (ii) the cancellation of such Notes pursuant to Section 2.8 and (iii) the
discharge of the Indenture Trustee's duties hereunder with

                                       23

<PAGE>

respect to such Notes, the Indenture Trustee shall continue to act in the
capacity as Indenture Trustee hereunder for the benefit of the
Certificateholders and the Indenture Trustee, for the benefit of the
Certificateholders, shall comply with its obligations under Sections 2.02, 7.02
and 7.03 of the Servicing Agreement, as appropriate, until such time as all
distributions in respect of the Certificates have been paid in full.

                                    ARTICLE V
                              DEFAULT AND REMEDIES

     SECTION 5.1 Events of Default. For the purposes of this Indenture, "Event
                 -----------------
of Default" wherever used herein, means any one of the following events:

          (a) failure to pay any interest on any Note as and when the same
becomes due and payable, and such default shall continue unremedied for a period
of five (5) days; or

          (b) except as set forth in Section 5.1(c), failure to pay any
instalment of the principal of any Note as and when the same becomes due and
payable, and such default shall continue unremedied for a period of thirty (30)
days after there shall have been given, by registered or certified mail, to the
Issuer and the Seller (or the Servicer, as applicable) by the Indenture Trustee
or to the Issuer and the Seller (or the Servicer, as applicable) and the
Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of
the Controlling Class, a written notice specifying such default, demanding that
it be remedied and stating that such notice is a "Notice of Default" hereunder;
or

          (c) failure to pay in full the outstanding principal balance of any
class of Notes by the Final Scheduled Distribution Date for such class; or

          (d) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of which is
specifically dealt with elsewhere in this Section 5.1) which failure materially
and adversely affects the rights of the Noteholders, and such default shall
continue or not be cured for a period of thirty (30) days after there shall have
been given, by registered or certified mail, to the Issuer and the Seller (or
the Servicer, as applicable) by the Indenture Trustee or to the Issuer and the
Seller (or the Servicer, as applicable) and the Indenture Trustee by the Holders
of at least 25% of the Outstanding Amount of the Controlling Class, a written
notice specifying such default, demanding that it be remedied and stating that
such notice is a "Notice of Default" hereunder; or

          (e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Owner Trust Estate 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

                                       24

<PAGE>

similar official of the Issuer (other than as Owner Trustee) or for any
substantial part of the Collateral, or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain unstayed and in
effect for a period of sixty (60) consecutive days; or

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

The Issuer shall deliver to the Indenture Trustee, within five (5) Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any Default under Section 5.1(d), its status and what
action the Issuer is taking or proposes to take with respect thereto.

     SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
                 --------------------------------------------------

          (a) If an Event of Default should occur and be continuing, then and in
every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority of the Outstanding Amount of the
Controlling Class may declare all the Notes to be immediately due and payable,
by a notice in writing to the Issuer (and to the Indenture Trustee if given by
the Noteholders) setting forth the Event or Events of Default, and upon any such
declaration the unpaid principal amount of the Notes together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.

          (b) At any time after such declaration of acceleration of maturity of
the Notes has been made and before a judgment or decree for payment of the money
due thereunder has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Holders of Notes representing not less than a
majority of the Outstanding Amount of the Controlling Class, by written notice
to the Issuer and the Indenture Trustee, may rescind and annul such declaration
and its consequences with respect to the Notes; provided, that no such
                                                --------
rescission and annulment shall extend to or affect any subsequent or other
Default or impair any right consequent thereto; and provided further, that if
                                                    -------- -------
the Indenture Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission and annulment or for any other reason, or such proceedings
shall have been determined adversely to the Indenture Trustee, then and in every
such case, the Indenture Trustee, the Issuer and the Noteholders, as the case
may be, shall be restored to their respective former positions and rights
hereunder, and all rights, remedies and powers of the Indenture Trustee, the
Issuer and the Noteholders, as the case may be, shall continue as though no such
proceedings had been commenced.

                                       25

<PAGE>

     SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
                 -------------------------------------------------------
Indenture Trustee.
-----------------

          (a) The Issuer covenants that if there shall occur an Event of Default
under Sections 5.1(a), (b) or (c), the Issuer shall, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders in accordance with their respective outstanding principal amounts,
the entire amount then due and payable on the Notes for principal and interest,
with interest through the date of such payment on the overdue principal amount
of each class of Notes, at the rate applicable to such class of Notes, 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 counsel.

          (b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon the Notes, wherever situated, the monies adjudged or decreed to be payable.

          (c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee 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 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 or by
applicable law.

          (d) If 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 Collateral, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if 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, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes 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 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

               (i) to file and prove a claim or claims for the entire amount of
          the unpaid principal and interest owing in respect of the Notes and to
          file such other papers or documents as may be necessary or advisable
          in order to have the claims of the Indenture Trustee (including any
          claim for reasonable compensation to the Indenture

                                       26

<PAGE>

          Trustee and each predecessor trustee, and their respective agents,
          attorneys and counsel, and for reimbursement of all expenses and
          liabilities incurred, and all advances made, by the Indenture Trustee
          and each predecessor trustee, except as a result of negligence or bad
          faith) and of the Noteholders allowed in such Proceedings;

               (ii) unless prohibited by applicable law and regulations, to vote
          on behalf of the Holders of Notes 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 to distribute all amounts
          received with respect to the claims of the Noteholders 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 Holders of Notes allowed in any judicial
          proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor 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 trustee, except as
a result of negligence or bad faith.

          (e) 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 Noteholder 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
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

          (f) All rights of action and of asserting claims under this Indenture,
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 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
trustee and their respective agents and attorneys, shall be applied in
accordance with Section 5.4(b).

                                       27

<PAGE>

          (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.

     SECTION 5.4 Remedies; Priorities.
                 --------------------

          (a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under Section 5.2(a), the Indenture Trustee may
do one or more of the following (subject to Section 5.5):

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

               (ii) institute Proceedings from time to time for the complete or
          partial foreclosure of this Indenture with respect to the Collateral;

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

               (iv) sell the Collateral or any portion thereof or rights or
          interest therein, at one or more public or private sales called and
          conducted in any manner permitted by law or elect to have the Issuer
          maintain possession of the Collateral, including the Receivables
          included therein and continue to apply collections on such Receivables
          as if there had been no declaration of acceleration; provided,
                                                               --------
          however, that the Indenture Trustee may not sell or otherwise
          -------
          liquidate the Collateral following an Event of Default and
          acceleration of the Notes, unless (A) the Holders of all of the
          aggregate Outstanding Amount of the Notes consent thereto, (B) the
          proceeds of such sale or liquidation distributable to the Noteholders
          are sufficient to discharge in full the principal of and the accrued
          interest on the Notes, in each case as of the date of such sale or
          liquidation or (C) (i) there has been an Event of Default under
          Section 5.1(a), (b) or (c) or otherwise arising from a failure to make
          a required payment of principal on any Notes, (ii) the Indenture
          Trustee determines that the Collateral will not continue to provide
          sufficient funds for the payment of principal of and interest on the
          Notes as and when they would have become due if the Notes had not been
          declared due and payable and (iii) the Indenture Trustee obtains the
          consent of Holders of a majority of the aggregate Outstanding Amount
          of the Controlling Class. In determining such sufficiency or
          insufficiency with respect to clauses (B) and (C), the Indenture
          Trustee may, but need not, obtain and rely upon an opinion of an Inde-

                                       28

<PAGE>

          pendent investment banking or accounting firm of national reputation
          as to the feasibility of such proposed action and as to the
          sufficiency of the Collateral for such purpose.

          (b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out or deposit such money or property in the
following order:

               FIRST: to the Indenture Trustee for amounts due under Section
               6.7; and

               SECOND: to the Collection Account, for distribution pursuant to
          Section 4.02 of the Pooling Agreement and Section 8.2(c) of this
          Indenture.

     SECTION 5.5 Optional Preservation of the Collateral. If the Notes have been
                 ---------------------------------------
declared to be due and payable under Section 5.2(a) following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled in accordance with Section 5.2(b), the Indenture Trustee may, but need
not, elect to take and maintain possession of the Collateral. It is the desire
of the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to take and maintain possession of the Collateral. In determining whether
to take and maintain possession of the Collateral, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose.

     SECTION 5.6 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 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;

               (ii) the Holders of not less than 25% of the Outstanding Amount
          of the Controlling Class 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 reasonable indemnity against the costs, expenses and
          liabilities to be incurred in complying with such request;

               (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

                                       29

<PAGE>

               (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 Controlling
          Class;

it being understood and intended that no Holder or 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 of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable (on the basis of
the respective aggregate amount of principal and interest, respectively, due and
unpaid on the Notes held by each Noteholder) and common benefit of all
Noteholders. For the protection and enforcement of the provisions of this
Section 5.6, each and every Noteholder shall be entitled to such relief as can
be given either at law or in equity.

          If the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Controlling
Class, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.

     SECTION 5.7 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 on such Note on or after the respective
due dates thereof expressed in such Note or in this Indenture (or, in the case
of redemption, if applicable, on or after the Redemption Date) and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.

     SECTION 5.8 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 and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally to their respective former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.

     SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
                 ------------------------------
conferred upon or reserved to the Indenture Trustee or to the 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.

                                       30

<PAGE>

     SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of the
                  ------------------------------
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or constitute a
waiver of any such Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee or by the Noteholders, as the case may be.

     SECTION 5.11 Control by Noteholders. The Holders of a majority of the
                  ----------------------
Outstanding Amount of the Controlling Class shall, subject to provision being
made for indemnification against costs, expenses and liabilities in a form
satisfactory to the Indenture Trustee, 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 or exercising any trust or power conferred on
the Indenture Trustee; provided, however, that:
                       --------  -------

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

               (ii) subject to the express terms of Section 5.4, any direction
          to the Indenture Trustee to sell or liquidate the Collateral shall be
          by the Holders of Notes representing 100% of the Outstanding Amount of
          the Notes;

               (iii) if the conditions set forth in Section 5.5 have been
          satisfied and the Indenture Trustee elects to retain the Collateral
          pursuant to Section 5.5, then any direction to the Indenture Trustee
          by Holders of Notes representing less than 100% of the Outstanding
          Amount of the Notes to sell or liquidate the Collateral shall be of no
          force and effect; and

               (iv) 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 cause it to incur any liability (a)
with respect to which the Indenture Trustee shall have reasonable grounds to
believe that adequate indemnity against such liability in not assured to it and
(b) which might materially adversely affect the rights of any Noteholders not
consenting to such action.

     SECTION 5.12 Waiver of Past Defaults.
                  -----------------------
          (a) Prior to the declaration of the acceleration of the maturity of
the Notes as provided in Section 5.2(a), the Holders of not less than a majority
of the Outstanding Amount of the Controlling Class may waive any past Default
and its consequences except a Default (i) in the payment of principal of or
interest on any of the Notes or (ii) 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

                                       31

<PAGE>

case of any such waiver, the Issuer, the Indenture Trustee and the Noteholders
shall be restored to their respective former positions and rights hereunder; but
no such waiver shall extend to or affect any subsequent or other Default or
impair any right consequent thereto.

          (b) 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; but no such waiver shall extend to or
affect any subsequent or other Default or impair any right consequent thereto.

     SECTION 5.13 Undertaking for Costs. All parties to this Indenture 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 Proceeding
for the enforcement of any right or remedy under this Indenture, or in any
Proceeding against the Indenture Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such Proceeding of
an undertaking to pay the costs of such Proceeding, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such Proceeding, 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 5.13 shall not apply to:

          (a) any Proceeding instituted by the Indenture Trustee;

          (b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Controlling Class; or

          (c) any Proceeding 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 (or, in the case of
redemption, on or after the Redemption Date).

     SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer, covenants (to
                  --------------------------------
the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may adversely affect the covenants or the performance
of this Indenture. The Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.

     SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek and
                  ---------------
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired

                                       32

<PAGE>

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
Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.4(b).

     SECTION 5.16 Performance and Enforcement of Certain Obligations.
                  --------------------------------------------------
          (a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator'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 of its obligations to the Issuer under or in
connection with the Pooling Agreement and the Purchase Agreement, by the
Servicer of its obligations to the Issuer under or in connection with the
Servicing Agreement, by NFC of its obligations under or in connection with the
Lease Purchase Agreement and the Purchase Agreement, by Harco Leasing of its
obligation under or in connection with the Lease Purchase Agreement or any other
party to a Titling Trust Document of its obligations under or in connection with
such Titling Trust Document 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 Pooling Agreement, the Servicing
Agreement, the Purchase Agreement, the Lease Purchase Agreement and the Titling
Trust Documents 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, the Servicer, NFC, Harco Leasing or any other party to a Titling Trust
Document thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Seller, the Servicer, NFC,
Harco Leasing or any other Party to a Titling Trust Document of each of their
respective obligations under the Pooling Agreement, the Servicing Agreement, the
Purchase Agreement, Lease Purchase Agreement and the Titling Trust Documents.

          (b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the Outstanding Amount of the Controlling Class shall,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Seller under or in connection with the Pooling Agreement and the
Purchase Agreement, the Servicer under or in connection with the Servicing
Agreement, NFC under or in connection with the Lease Purchase Agreement and the
Purchase Agreement, Harco Leasing under or in connection with the Lease Purchase
Agreement or any party to a Titling Trust Document under or in connection with
such Titling Trust Document, including the right or power to take any action to
compel or secure performance or observance by the Seller, the Servicer, NFC,
Harco Leasing or such party of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Pooling Agreement, the Servicing Agreement, the
Purchase Agreement, the Lease Purchase Agreement and the Titling Trust
Documents, and any right of the Issuer to take such action shall be suspended.

                                       33

<PAGE>

                                   ARTICLE VI
                              THE INDENTURE TRUSTEE

     SECTION 6.1 Duties of Indenture Trustee.
                 ---------------------------

          (a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their 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:

               (i) the Indenture Trustee undertakes to perform such duties and
          only such duties as are specifically set forth in this Indenture, the
          Pooling Agreement and the Servicing Agreement and no implied covenants
          or obligations shall be read into this Indenture, the Pooling
          Agreement, the Servicing Agreement or any other Basic Document 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 and conforming to the
          requirements of this Indenture; provided, however, that the Indenture
                                          --------  -------
          Trustee shall examine the certificates and opinions to determine
          whether or not they conform to any applicable requirements of this
          Indenture.

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

               (i) this Section 6.1(c) does not limit the effect of Section
          6.1(b);

               (ii) the Indenture Trustee shall not be liable for any error of
          judgment made in good faith by a Responsible Officer unless it is
          proved 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 5.11.

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

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

                                       34

<PAGE>

          (f) No provision of this Indenture 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 repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

          (g) The Indenture Trustee shall reimburse the Seller and any director,
officer, employee or agent of the Seller for any contractual damages, liability
or expense incurred by reason of the Indenture Trustee's willful misfeasance,
bad faith or gross negligence (except errors in judgment) in the performance of
its duties under any of the Further Transfer and Servicing Agreements, or by
reason of reckless disregard of its obligations and duties under any of the
Further Transfer and Servicing Agreements.

          (h) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.

     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 from the Issuer or an Opinion of Counsel that
such action or omission is required or permissible hereunder. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officer's Certificate 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, any such 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 wilful 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 this Indenture and
the Notes 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.

                                       35

<PAGE>

     SECTION 6.3 Indenture Trustee May Own Notes. 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, the Servicer or any of their respective
Affiliates with the same rights it would have if it were not Indenture Trustee;
provided, however, that the Indenture Trustee shall comply with Sections 6.10
--------  -------
and 6.11. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may
do the same with like rights.

     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 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 or in any document issued in connection with the
sale of the Notes or in the Notes other than the Indenture Trustee's certificate
of authentication.

     SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing and
                 ------------------

if it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of the Default within 30 days after
such Responsible Officer obtained knowledge of such Default. Except in the case
of a Default in payment of principal of or interest on any Note, the Indenture
Trustee may withhold the notice 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 Indenture Trustee to Holders. The Indenture Trustee
                 ---------------------------------------

shall deliver to each Noteholder the information and documents set forth in
Article VII, and, in addition, all such information with respect to the Notes as
may be required, as specified by the Servicer, to enable such Holder to prepare
its federal and state income tax returns.

     SECTION 6.7 Compensation; Indemnity.
                 -----------------------

          (a) The Issuer shall cause the Servicer pursuant to the Servicing
Agreement to pay to the Indenture Trustee from time to time such compensation
for its services as shall be agreed upon in writing. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall cause the Servicer pursuant to the 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, counsel, accountants and experts. The Issuer shall cause the Servicer
pursuant to the Servicing Agreement to indemnify the Indenture Trustee in
accordance with Section 6.05 of the Servicing Agreement.

          (b) The Issuer's obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(e) or (f) the expenses are intended to constitute

                                       36

<PAGE>

expenses of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.

     SECTION 6.8 Replacement of Indenture Trustee.
                 --------------------------------

          (a) The Indenture Trustee may at any time give notice of its intent to
resign by so notifying the Issuer; provided, however, that no such resignation
                                   --------  -------
shall become effective and the Indenture Trustee shall not resign prior to the
time set forth in Section 6.8(c). The Holders of a majority in Outstanding
Amount of the Controlling Class may remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor Indenture Trustee. Such
resignation or removal shall become effective in accordance with Section 6.8(c).
The Issuer shall remove the Indenture Trustee if:

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

               (ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

               (iii) a receiver or other public officer takes charge of the
          Indenture Trustee or its property; or

               (iv) the Indenture Trustee otherwise becomes incapable of acting.

          (b) If the Indenture Trustee gives notice of its intent to resign or
is removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint and designate a
successor Indenture Trustee.

          (c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment and designation to the retiring Indenture Trustee and to the
Issuer. 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 Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to Noteholders
and to each of the Rating Agencies. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.

          (d) If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee gives notice of its intent to resign
or is removed, the retiring Trustee, the Issuer or the Holders of a majority of
the Outstanding Amount of the Controlling Class may petition any court of
competent jurisdiction for the appointment and designation of a successor
Indenture Trustee.

                                       37

<PAGE>

          (e) 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.

          (f) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the Issuer's obligations under Section 6.7 and the
Servicer's corresponding obligations under the Servicing Agreement shall
continue for the benefit of the retiring Indenture Trustee.

     SECTION 6.9 Merger or Consolidation of Indenture Trustee.
                 --------------------------------------------

          (a) Any Person into which the Indenture Trustee may be merged or with
which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
                                                                      --------
however, that such Person shall be eligible under the provisions of Section
-------
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding. Following such merger or consolidation, the
successor Indenture Trustee shall mail a notice of such merger or consolidation
to each of the Rating Agencies.

          (b) If at the time such successor or successors by merger or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, 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 Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Notes or herein with respect to the certificate of authentication of 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 Collateral or any Financed Vehicle 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
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and (only to the extent expressly provided herein)
the Certificateholders, such title to the Collateral, or any part hereof, and,
subject to the other provisions of this Section 6.10, 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

                                       38

<PAGE>

and no notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 6.8.

          (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
          Collateral 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; 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 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 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, 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.

                                       39

<PAGE>

     SECTION 6.11 Eligibility; Disqualification.
                  -----------------------------
          (a) The Indenture Trustee shall at all times satisfy the requirements
of TIA Section 310(a). The Indenture Trustee shall 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 (unless waived by Moody's) it shall have a long term
unsecured debt rating of Baa3 or better by Moody's. The Indenture Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be excluded
                                --------  -------
from the operation of TIA Section 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 Section 310(b)(1) are met.

          (b) If a Default occurs and is continuing, and the Indenture Trustee
is deemed to have a conflicting interest as a result of acting as trustee for
both the Class A Notes and the Class B Notes, the Issuer shall appoint a
successor Indenture Trustee for one or both of such classes, so that there will
be separate Indenture Trustees for the Class A Notes and the Class B Notes. No
such event shall alter the voting rights of the Class A Noteholders or Class B
Noteholders under this Indenture or any other Basic Document. However, so long
as any amounts remain unpaid with respect to the Class A Notes, only the
Indenture Trustee for the Class A Noteholders will have the right to exercise
remedies under this Indenture (but subject to the express provisions of Section
5.4 and to the right of the Class B Noteholders to receive their share of any
proceeds of enforcement, subject to the subordination of the Class B Notes to
the Class A Notes as described herein) to make deposits to and withdrawals from
the Designated Accounts, hold Designated Account Property and to make
distributions to Noteholders from the Note Distribution Account. Upon repayment
of the Class A Notes in full, all rights to exercise remedies under the
Indenture will transfer to the Indenture Trustee for the Class B Notes.

          (c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any class of Notes, the Issuer, the retiring Indenture
Trustee and the successor Indenture Trustee with respect to such class of Notes
shall execute and deliver an indenture supplemental hereto wherein the successor
Indenture Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, the successor Indenture Trustee all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of the class
to which the appointment of such successor Indenture Trustee relates, (ii) if
the retiring Indenture Trustee is not retiring with respect to all classes of
Notes, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of each class as to which the
retiring Indenture Trustee is not retiring shall continue to be vested in the
retiring Indenture Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Indenture Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Indenture Trustee; and upon the execution and delivery of such

                                       40

<PAGE>

supplemental indenture the resignation or removal of the retiring Indenture
Trustee shall become effective to the extent provided therein.

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

     SECTION 6.13 Representations and Warranties of Indenture Trustee. The
                  ---------------------------------------------------
Indenture Trustee represents and warrants as of the Closing Date that:

          (a) the Indenture Trustee is a                        duly organized,
                                         -----------------------
validly existing and in good standing under the laws of the State of
                   and the eligibility requirements set forth in Section 6.11
------------------
are satisfied with respect to the Indenture Trustee;

          (b) the Indenture Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture;

          (c) the execution, delivery and performance by the Indenture Trustee
of this Indenture (i) shall not violate any provision of any law or regulation
governing the banking and trust powers of the Indenture Trustee or any order,
writ, judgment or decree of any court, arbitrator, or governmental authority
applicable to the Indenture Trustee or any of its assets, (ii) shall not violate
any provision of the corporate charter or by-laws of the Indenture Trustee or
(iii) shall not violate any provision of, or constitute, with or without notice
or lapse of time, a default under, or result in the creation or imposition of
any lien on any properties included in the Collateral pursuant to the provisions
of any mortgage, indenture, contract, agreement or other undertaking to which it
is a party, which violation, default or lien could reasonably be expected to
have a materially adverse effect on the Indenture Trustee's performance or
ability to perform its duties under this Indenture or on the transactions
contemplated in this Indenture;

          (d) the execution, delivery and performance by the Indenture Trustee
of this Indenture shall not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action in respect of, any governmental authority or agency regulating the
banking and corporate trust activities of the Indenture Trustee; and

          (e) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of the
Indenture Trustee, enforceable in accordance with its terms.

     SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession of
                  ----------------------------------------------------------
Notes. All rights of action and claims under this Indenture or the Notes may be
-----
prosecuted and enforced by the Indenture Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Indenture Trustee shall be

                                       41

<PAGE>

brought in its own name as Indenture Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders in respect of which such judgment has
been obtained.

     SECTION 6.15 Suit for Enforcement. If an Event of Default shall occur and
                  --------------------
be continuing, the Indenture Trustee in its discretion may, subject to the
provisions of Section 6.1, proceed to protect and enforce its rights and the
rights of the Noteholders under this Indenture by a Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.

     SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee. Holders of
                  -------------------------------------------------
Notes evidencing not less than a majority of the Outstanding Amount of the
Controlling Class shall have the right to direct in writing the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee or exercising any trust or power conferred on the Indenture Trustee;
provided, however, that subject to Section 6.1, the Indenture Trustee shall have
--------  -------
the right to decline to follow any such direction if the Indenture Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Indenture Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability or be unduly prejudicial to the rights of Noteholders
not parties to such direction; and provided, further, that nothing in this
                                   --------  -------
Indenture shall impair the right of the Indenture Trustee to take any action
deemed proper by the Indenture Trustee and which is not inconsistent with such
direction by the Noteholders.

                                   ARTICLE VII
                         NOTEHOLDERS' LISTS AND REPORTS

     SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses of
                 ----------------------------------------------------------
Noteholders. The Issuer shall furnish or cause to be furnished by the Servicer
-----------
to the Indenture Trustee (a) not more than five days before each Distribution
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of the close of business on
the Record Date, and (b) at such other times as the Indenture Trustee may
request in writing, within 14 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
                                          --------  -------
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished.

                                       42

<PAGE>

     SECTION 7.2 Preservation of Information, Communications to Noteholders.
                 ----------------------------------------------------------

          (a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. 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.

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

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

     SECTION 7.3 Reports by Issuer.
                 -----------------
          (a) 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 of the information, documents and other reports (or
          copies of such portions of any of the foregoing as the Commission may
          from time to time by rules and regulations prescribe) which the Issuer
          may be required to file with the Commission pursuant to Section 13 or
          15(d) of the Exchange Act;

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

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

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

     SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
                 ----------------------------
313(a), within 60 days after each February 1, beginning with February 1, 200_,
the Indenture Trustee shall mail to each

                                       43

<PAGE>

Noteholder as required by TIA Section 313(c) a brief report dated as of such
date that complies with TIA Section 313(a). The Indenture Trustee also shall
comply with TIA Section 313(b). A copy of any report delivered pursuant to this
Section 7.4(a) shall, at the time of its mailing to Noteholders, be filed by the
Indenture Trustee with the Commission and each stock exchange, if any, on which
the Notes are listed. 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 or in the other Basic Documents, 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. The Indenture Trustee shall apply all such money received by it as
provided in this Indenture and the Servicing Agreement. Except as otherwise
expressly provided in this Indenture or in Article II of the Servicing
Agreement, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Collateral, the Indenture
Trustee may 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 an
Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.

     SECTION 8.2 Designated Accounts; Payments.
                 -----------------------------

          (a) On or before each Determination Date, with respect to the
preceding Monthly Period and the related Distribution Date, the Servicer shall
calculate the Total Available Amount, Collected Amount, the Total Servicing Fee,
the Aggregate Class A Noteholders' Interest Distributable Amount, the Class B
Noteholders' Interest Distributable Amount, the Principal Payment Amount, the
Noteholders' Principal Distributable Amount and all other amounts required to
determine the amounts to be deposited in or paid from each of the Collection
Account, the Pre-Funding Account, the Negative Carry Account, the Note
Distribution Account, the Certificate Distribution Account and the Reserve
Account on the next succeeding Distribution Date and supply such information to
the Issuer and the Indenture Trustee.

          (b) On or before each Transfer Date, the Indenture Trustee shall cause
to be made the following withdrawals, deposits, transfers and distributions in
the amounts set forth in the Servicer's Certificate delivered to the Indenture
Trustee pursuant to Section 2.17 of the Servicing Agreement:

               (i) from the Collection Account to the Servicer, in immediately
          available funds, reimbursement of Outstanding Monthly Advances
          pursuant to Section 2.14 of

                                       44

<PAGE>

          the Servicing Agreement, payments of Liquidation Expenses with respect
          to Receivables which became Liquidating Receivables during the related
          Monthly Period pursuant to Section 2.04 of the Servicing Agreement and
          any unpaid Liquidation Expenses from prior periods;

               (ii) from the Pre-Funding Account to the Collection Account, the
          Investment Earnings on the Pre-Funding Account for the related Monthly
          Period;

               (iii) from the Negative Carry Account to the Collection Account,
          the Negative Carry Amount for such Distribution Date; and

               (iv) from the Reserve Account to the Collection Account, the
          lesser of (A) the amount of cash or other immediately available funds
          therein on the day preceding such Distribution Date and (B) the
          amount, if any, by which (I) the sum of the Total Servicing Fee, the
          Aggregate Class A Noteholders' Interest Distributable Amount, the
          Class B Noteholders' Interest Distributable Amount and the
          Noteholders' Principal Distributable Amount exceeds (II) the sum of
          the Collected Amount for such Distribution Date plus the amounts
          deposited to the Collection Account on such date pursuant to Sections
          8.2(b)(ii) and 8.2(b)(iii).

          (c) Before 12:00 noon, New York City time, on each Transfer Date, the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered to the Indenture Trustee pursuant to Section 2.17 of the
Servicing Agreement) shall make the following distributions from the Collection
Account (after the withdrawals, deposits and transfers specified in Section
8.2(b) have been made) in the following order of priority:

               (i) first, to the Servicer, to the extent of the Total Available
          Amount, the Total Servicing Fee;

               (ii) second, to the Note Distribution Account, to the extent of
          the Total Available Amount (as such amount has been reduced by the
          distributions described in clause (c) (i) above), the Aggregate Class
          A Noteholders' Interest Distributable Amount;

               (iii) third, to the Note Distribution Account, to the extent of
          the Total Available Amount (as such amount has been reduced by the
          distributions described in clauses (c) (i) and (ii) above), the Class
          B Noteholders' Interest Distributable Amount;

               (iv) fourth, to the Note Distribution Account, to the extent of
          the Total Available Amount (as such amount has been reduced by the
          distributions described in clauses (c) (i), (ii) and (iii) above), the
          Noteholders' Principal Distributable Amount; and

                                       45

<PAGE>

               (v) fifth, to the Reserve Account, any portion of the Total
          Available Amount remaining after the distributions described in
          clauses (c) (i) through (iv), inclusive, above.

          (d) On each Distribution Date, the Indenture Trustee shall distribute
all amounts on deposit in the Note Distribution Account, other than amounts
deposited in the Note Distribution Account pursuant to Section 8.11(b) and
subject to the Certificateholder's rights under Section 8.6 to Investment
Earnings, to the Noteholders to the extent of amounts due and unpaid on the
Notes for principal and interest, in the following amounts, and in the following
order of priority:

               (i) (A) first, to accrued and unpaid interest on the Class A
          Notes; provided, however, that if there are not sufficient funds in
                 --------  -------
          the Note Distribution Account to pay the entire amount of accrued and
          unpaid interest then due on the Class A Notes, the amount in the Note
          Distribution Account shall be applied to the payment of such interest
          on each Note of each class of the Class A Notes pro rata on the basis
          of the respective aggregate amount of interest due on each such class
          of Class A Notes; and (B) second, unless otherwise provided in clause
          (iv) below, to accrued and unpaid interest on the Class B Notes;
          provided, however, that if there are not sufficient funds in the Note
          --------  -------
          Distribution Account (after the payment of all accrued and unpaid
          interest on the Class A Notes) to pay the entire amount of accrued and
          unpaid interest then due on the Class B Notes, the amount in the Note
          Distribution Account shall be applied to the payment of such interest
          on each of the Class B Notes pro rata on the basis of the aggregate
          amount of interest due on each such Class B Note;

               (ii) unless otherwise provided in clause (iii), (iv) or (v)
          below, the Principal Payment Amount shall be applied on each
          Distribution Date, as follows:

                    (A) first, 100% of the Principal Payment Amount shall be
               applied to pay the principal of the Class A-1 Notes until the
               Class A-1 Notes are paid in full;

                    (B) thereafter,      % of the Principal Payment Amount (in
                                    -----
               the case of the Distribution Date on which the Class A-1 Notes
               are paid in full,      % of the remaining Principal Payment
                                 -----
               Amount) shall be applied to pay the principal of the other Class
               A Notes (all of which shall be applied to pay the principal of
               the Class A-2 Notes until paid in full, then shall be applied to
               pay the principal of the Class A-3 Notes until paid in full, and
               then shall be applied to pay the principal of the Class A-4 Notes
               until paid in full) and     % of the Principal Payment Amount (in
                                       ----
               the case of the Distribution Date on which the Class A-1 Notes
               are paid full,     % of the remaining Principal Payment Amount)
                              ----
               shall be applied to pay the principal of the Class B Notes until
               the Class A Notes are paid in full; and

                                       46

<PAGE>

                    (C) thereafter, 100% of the Principal Payment Amount (in the
          case of the Distribution Date on which the Class A Notes are paid in
          full, the remaining Principal Payment Amount) to the Class B Notes
          until the Class B Notes are paid in full;

               (iii) if the amount on deposit in the Reserve Account on any
          Distribution Date would be, after giving effect to the application of
          the Principal Payment Amount in accordance with the foregoing
          priorities, less than     % of the Initial Aggregate Receivables
                                ----
          Balance, then on each Distribution Date thereafter until either the
          Class A Notes are paid in full or the amount on deposit in the Reserve
          Account equals or exceeds the Specified Reserve Account Balance, 100%
          of the Principal Payment Amount shall be applied on each Distribution
          Date to pay the principal of the Class A Notes (all of which shall be
          applied to pay the principal of the Class A-1 Notes until paid in
          full, then shall be applied to pay the principal of the Class A-2
          Notes until paid in full, then shall be applied to pay the principal
          of Class A-3 Notes until paid in full, and then shall be applied to
          pay the principal of the Class A-4 Notes until paid in full). When
          principal payments on the Class B Notes resume in accordance with the
          preceding sentence, the Principal Payment Amount for such Distribution
          Date shall be applied in accordance with Section 8.2(d)(ii) hereof
          until the Class A Notes have been paid in full, and thereafter 100% of
          the Principal Payment Amount for such Distribution Date shall be
          applied to pay the principal of the Class B Notes until the Class B
          Notes are paid in full;

               (iv) if the Notes have been declared immediately due and payable
          as provided in Section 5.2(a) following the occurrence of an Event of
          Default specified in Section 5.1(a), (b) or (c) until such time as the
          Class A Notes have been paid in full and this Indenture has been
          discharged with respect to the Class A Notes any amounts remaining in
          the Note Distribution Account after the application described in
          Section 8.2(d)(i)(A) shall be applied in the following priority: (1)
          to the repayment of principal of each of the Class A-1 Notes pro rata
          on the basis of the respective unpaid principal amount of each such
          Class A-1 Note; (2) to the repayment of principal of each of the Class
          A-2 Notes, the Class A-3 Notes and the Class A-4 Notes pro rata on the
          basis of the respective unpaid principal amount of each such Class A
          Note; (3) to the repayment of interest on each of the Class B Notes
          pro rata on the basis of the amount of interest due and unpaid on each
          such Class B Note and (4) to the repayment of principal on each of the
          Class B Notes pro rata on the basis of the respective unpaid principal
          amount of each such Class B Note; and

               (v) if the Notes have been declared immediately due and payable
          as provided in Section 5.2(a) following the occurrence of an Event of
          Default specified in Section 5.1(d), (e) or (f), 100% of the Principal
          Payment Amount shall be applied on each Distribution Date to the
          payment of principal of the Class A-1 Notes on the basis of the
          respective unpaid principal balance of each such Class A-1 Note,

                                       47

<PAGE>

          thereafter 100% of the Principal Payment Amount shall be applied on
          each Distribution Date to the payment of principal of the Class A-2
          Notes, the Class A-3 Notes and the Class A-4 Notes pro rata on the
          basis of the respective unpaid principal amount of each such Class A
          Note, and, thereafter, 100% of the Principal Payment Amount shall be
          applied on each Distribution Date to the payment of principal of the
          Class B Notes pro rata on the basis of the respective unpaid principal
          amount of each such Class B Note.

          (e) Subject to Sections 8.2(d)(iii), (iv) and (v), on the Distribution
Date on which the Funding Period ends (or, if the Funding Period does not end on
a Distribution Date, on the Distribution Date following the end of the Funding
Period), the Indenture Trustee shall apply any and all amounts deposited into
the Note Distribution Account pursuant to Section 8.11(b) (other than
Noteholders' Prepayment Premium) to the repayment of principal on the Notes in
accordance with the priorities set forth in Section 8.2(d)(ii); provided,
however, that if the Pre-Funded Amount as of the end of the Funding Period is
greater than $100,000, the Indenture Trustee shall apply such amounts to the
repayment of principal of each Class of Notes pro rata on the basis of the
respective initial principal amount of each such Class of Notes, as instructed
by the Servicer in writing.

          (f) On the Distribution Date on which the Funding Period ends (or, if
the Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period), the Indenture
Trustee shall distribute to the Noteholders the Noteholders' Prepayment Premiums
deposited in the Note Distribution Account, as instructed by Servicer in writing
pursuant to Section 8.11(b); provided, however, if less than the required
                             --------  -------
Noteholders' Prepayment Premium for all classes of Notes has been deposited into
the Note Distribution Account, the amount distributable to the holders of each
class of Notes shall be their ratable share of the amount so deposited into the
Note Distribution Account based upon the amount of Noteholders' Prepayment
Premium due with respect to each class of Notes. In either case, the Indenture
Trustee shall distribute the Noteholders' Prepayment Premium allocated to each
class of Notes to the Noteholders of such class of Notes pro rata on the basis
of the unpaid principal amount of such Noteholder's Notes of such class, as
instructed by the Servicer in writing.

          SECTION 8.3 General Provisions Regarding Accounts.
                      -------------------------------------

          (a) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Designated
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance with
their terms.

          (b) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Designated Accounts to the Indenture
Trustee by 11:00 a.m., New York City time (or such other time as may be agreed
by the Servicer and the Indenture Trustee) on any Business Day; or (ii) a
Default shall have occurred and be continuing with respect to the Notes but the
Notes

                                       48

<PAGE>

shall not have been declared due and payable pursuant to Section 5.2(a), or, if
such Notes shall have been declared due and payable following an Event of
Default, but amounts collected or receivable from the Collateral are being
applied in accordance with Section 5.5 as if there had not been such a
declaration; then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Designated Accounts in one or more
Eligible Investments selected by the Indenture Trustee.

     SECTION 8.4 Release of Collateral.
                 ---------------------

          (a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property in the Collateral
from the lien of this Indenture, or convey the Indenture Trustee's interest in
the same, in a manner and under circumstances that are consistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.

          (b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7
have been paid, notify the Issuer thereof in writing and upon receipt of an
Issuer Request, release any remaining portion of the Collateral that secured the
Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Note Distribution
Account. The Indenture Trustee shall (i) release any remaining portion of the
Collateral that secured the Certificates from the lien of this Indenture and
(ii) deposit in the Certificate Distribution Account any funds then on deposit
in the Reserve Account or the Collection Account only at such time as (y) there
are no Notes Outstanding and (z) all sums due to the Indenture Trustee pursuant
to Section 6.7 have been paid.

     SECTION 8.5 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 8.4(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, in form and substance satisfactory to the Indenture Trustee,
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 shall not materially and
adversely impair the security for the Notes or the rights of the Noteholders 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 Collateral. 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.

     SECTION 8.6 Investment Earnings and Supplemental Servicing Fees. The
                 ---------------------------------------------------
Servicer shall be entitled to retain all Supplemental Servicing Fees. Except as
otherwise provided in Section 2.02(b)(i) of the Servicing Agreement, the
Certificateholders (via the Certificate Distribution

                                       49

<PAGE>

Account or such other account as shall be designated in writing by the
Certificateholders to the Servicer) shall be entitled to receive all Investment
Earnings (other than Investment Earnings from amounts on deposit in the
Pre-Funding Account), when and as paid without any obligation to (a) either
Trustee, (b) with respect to the Supplemental Servicing Fees, the
Certificateholders or (c) with respect to the Investment Earnings, the Servicer,
in respect thereof. The Servicer will not have any obligation to deposit any
such amount in any account established hereunder. To the extent that any such
amount shall be held in any account (other than, with respect to amounts to be
distributed to the Certificateholders, the Certificate Distribution Account)
held by either Trustee, or otherwise established hereunder, such amount will be
withdrawn therefrom and paid to the Servicer or deposited in the Certificate
Distribution Account for distribution to the Certificateholders, as applicable,
upon presentation of a certificate signed by a Responsible Officer of such
Person setting forth, in reasonable detail, the amount of such Supplemental
Servicing Fees or such Investment Earnings, respectively.

     SECTION 8.7 Net Deposits. At any time that (i) NFC shall be the Servicer
                 ------------
and (ii) the Servicer shall be permitted by Section 2.12 of the Servicing
Agreement to remit collections on a basis other than a daily basis, the
Indenture Trustee may make any remittances pursuant to this Article VIII net of
amounts to be distributed by the Indenture Trustee to such remitting party.
Nonetheless, shall account for all of the above described remittances and
distributions as if the amounts were deposited and/or transferred separately.

     SECTION 8.8 Statements to Securityholders.
                 -----------------------------

          (a) On each Distribution Date, the Issuer shall include with each
distribution to each Certificateholder, and the Indenture Trustee shall include
with each distribution to each Noteholder, a statement (which statement shall
also be provided to the Rating Agencies) based on (subject to the last sentence
of this paragraph (a)) information in the Servicer's Certificate furnished
pursuant to Section 2.17 of the Servicing Agreement. Each such statement shall
set forth the following information as to the Notes with respect to such
Distribution Date or the preceding Monthly Period, as applicable:

               (i) the amount of the distribution allocable to interest on or
          with respect to each class of Notes;

               (ii) the Aggregate Receivables Balance as of the close of
          business on the last day of such Monthly Period;

               (iii) the amount of Outstanding Monthly Advances with respect to
          all Receivables on such Distribution Date;

               (iv) the amount of the Total Servicing Fee paid or payable to the
          Servicer with respect to the related Monthly Period;

                                       50

<PAGE>

               (v) the amount of Aggregate Losses for the related Monthly
          Period;

               (vi) the Delinquency Percentage for the related Monthly Period;

               (vii) the sum of all Administrative Purchase Payments and all
          Warranty Payments made for the related Monthly Period;

               (viii) the amount of the distribution allocable to principal of
          each class of Notes;

               (ix) the Note Principal Balance and the Note Pool Factor for each
          class of Notes, each after giving effect to all payments reported
          under (viii) above on such date;

               (x) the amounts, if any, paid to the Servicer or distributed to
          Noteholders from amounts on deposit in the Reserve Account plus
          amounts in respect thereof to be distributed to each class of
          Noteholders as a prepayment of principal (expressed as a dollar amount
          per $1,000 of the face amount of the Notes);

               (xi) the amount of the Class A Noteholders' Interest Carryover
          Shortfall, the Noteholders' Principal Carryover Shortfall and the
          Class B Noteholders' Interest Carryover Shortfall if any, and the
          change in such amounts from the preceding Distribution Date;

               (xii) the balance (if any) of the Reserve Account on such date,
          after giving effect to distributions, withdrawals, transfers and
          deposits made on such date, and the change in such balance from that
          of the prior Distribution Date;

               (xiii) the Negative Carry Amount and the balance, if any, of the
          Negative Carry Account on such date, after giving effect to the
          withdrawals made on such date;

               (xiv) for Distribution Dates during the Funding Period, the
          Starting Receivables Balance of all Subsequent Receivables transferred
          to the Issuer since the preceding Distribution Date, the remaining
          Pre-Funded Amount and the Investment Earnings on amounts on deposit in
          the Pre-Funding Account (if any) for the related Monthly Period; and

               (xv) for the first Distribution Date occurring on or after the
          last day of the Funding Period, the amount of any remaining Pre-Funded
          Amount that has not been used to fund the purchase of Subsequent
          Receivables.

                                       51

<PAGE>

Each amount set forth pursuant to clauses (i), (iv), (viii), (x) and (xi) above
shall be expressed as a dollar amount per $1,000 of initial Note Principal
Balance. In lieu of preparing and delivering a separate statement to
Securityholders pursuant to this Section, a Trustee may deliver a copy of the
Servicer's Certificate furnished pursuant to Section 2.17 of the Servicing
Agreement.

          (b) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of this Agreement, the
Servicer shall prepare and execute and the Indenture Trustee and the Owner
Trustee shall mail to each Person who at any time during such calendar year
shall have been a holder of Notes or Certificates, respectively, and received
any payments thereon, a statement prepared and supplied by the Servicer
containing the amounts set forth in each of clauses (i), (iv), (viii), (x) and
(xi) in paragraph (a) above, for such calendar year or, if such Person shall
have been a Securityholder during a portion of such calendar year and received
any payments thereon, for the applicable portion of such year, for the purposes
of such Securityholder's preparation of federal income tax returns.

     SECTION 8.9 Designated Accounts. On or prior to the Closing Date, the
                 -------------------
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Securityholders, the Designated
Accounts as provided in Section 2.02 of the Servicing Agreement.

     SECTION 8.10 Reserve Account.
                  ---------------

          (a) On the Closing Date, the Seller shall deposit the Reserve Account
Initial Deposit into the Reserve Account. The Reserve Account shall be the
property of the Issuer, subject to the rights of the Indenture Trustee in the
Reserve Account Property.

          (b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits therein or withdrawals
therefrom on such Distribution Date) exceeds the Specified Reserve Account
Balance for such Distribution Date, the Indenture Trustee shall, upon receipt of
instruction from the Servicer, deposit into the Certificate Distribution Account
an amount equal to any such excess for distribution to the Certificateholders or
upon the order of the Certificateholders in an account designated in writing by
the Certificateholders to the Servicer.

          (c) If the Servicer, pursuant to Section 2.14 of the Servicing
Agreement, determines on any Determination Date that it is required to make a
Monthly Advance and does not do so from its own funds, the Indenture Trustee
shall, upon receipt of instructions from the Servicer, withdraw funds from the
Reserve Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the Servicer
pursuant to Section 2.14 of the Servicing Agreement for purposes of making
distributions pursuant to this Agreement, but shall not otherwise satisfy the
Servicer's obligation to deliver the amount of the Monthly Advances to the
Collection Account, and the Servicer shall within two Business Days replace any
funds in the Reserve Account so used. The Servicer shall not be entitled to
reimbursement for any such deemed

                                       52

<PAGE>

Monthly Advances unless and until the Servicer shall have replaced such funds in
the Reserve Account.

     SECTION 8.11 Pre-Funding Account.
                  -------------------

          (a) On the Closing Date, the Seller shall deposit in the Pre-Funding
Account $               from the net proceeds of the sale of the Notes. On each
         --------------
Subsequent Transfer Date, the Indenture Trustee shall, upon receipt of
instructions from the Servicer, withdraw from the Pre-Funding Account an amount
equal to (i) the aggregate Starting Receivables Balance of the Subsequent
Receivables transferred to the Issuer on such Subsequent Transfer Date less the
Reserve Account Subsequent Transfer Deposit with respect to such Subsequent
Transfer Date and distribute such amount to or upon the order of the Seller upon
satisfaction of the conditions set forth in Section 2.02(b) of the Pooling
Agreement with respect to such transfer, and (ii) the Reserve Account Subsequent
Transfer Deposit with respect to such Subsequent Transfer Date and, on behalf of
the Seller, deposit such amount in the Reserve Account.

          (b) If the Pre-Funded Amount has not been reduced to zero on or prior
to the Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period), the Indenture Trustee shall, upon
receipt of instructions from the Servicer, transfer from the Pre-Funding Account
on such Distribution Date any amount then remaining in the Pre-Funding Account
to the Note Distribution Account and, if such amount is greater than $100,000
the Issuer will deposit into the Note Distribution Account an amount equal to
the aggregate of Noteholders' Prepayment Premiums for all classes of Notes;
provided, however, that the Issuer's obligation to pay the Noteholders'
--------  -------
Prepayment Premiums shall be limited to funds which are received by the Issuer
from the Seller pursuant to Section 2.02(c) of the Pooling Agreement as
liquidated damages for the failure to deliver the Subsequent Receivables, and no
other assets of the Issuer will be available for making such payments. If the
amount of funds available for payment of the Noteholders' Prepayment Premiums is
less than the sum of the Noteholders' Prepayment Premium for each class of
Notes, then the available funds will be allocated among each class of Notes in
accordance with the Pre-Funded Percentage for such class of Notes.

     SECTION 8.12 Negative Carry Account.
                  ----------------------

          (a) On the Closing Date, the Seller shall deposit in the Negative
Carry Account $             (the "Negative Carry Account Initial Deposit") from
               ------------
the net proceeds of the sale of the Notes. On or before the Transfer Date
preceding each Distribution Date occurring on or prior to the first Distribution
Date that occurs on or after the end of the Funding Period, the Indenture
Trustee shall, upon receipt of instructions from the Servicer, withdraw from the
Negative Carry Account and deposit into the Collection Account an amount equal
to the Negative Carry Amount for such Distribution Date.

                                       53

<PAGE>

          (b) On each Distribution Date during the Funding Period, the Indenture
Trustee shall, upon receipt of instructions from the Servicer, withdraw from the
Negative Carry Account an amount equal to the excess, if any, of the amount on
deposit in the Negative Carry Account over the Required Negative Carry Account
Balance and deposit it (i) in the Certificate Distribution Account for
distribution to the Certificateholders or (ii) upon the order of the
Certificateholders in an account designated in writing by the Certificateholders
to the Servicer, and on the Distribution Date on or immediately following the
last day of the Funding Period, the Indenture Trustee shall, upon receipt of
instructions from the Servicer, withdraw from the Negative Carry Account the
amount remaining on deposit in the Negative Carry Account and deposit it in the
Certificate Distribution Account for distribution to the Certificateholders or
upon the order of the Certificateholders in an account designated in writing by
the Certificateholders to the Servicer.

     SECTION 8.13 Sale of Assets; Termination.
                  ---------------------------

          (a) Upon any sale or other disposition of the assets of the Collateral
pursuant to Article V of the Indenture (an "Event of Default Sale"), the
                                            ---------------------
Indenture Trustee, based on information supplied by the Servicer, shall deposit
the proceeds from such disposition after all payments and reserves therefrom
have been made or the amount specified in clause SECOND of Section 5.4(b) (the
"Event of Default Proceeds") in the Collection Account. On the Transfer Date on
 -------------------------
which the Event of Default Proceeds are deposited in the Collection Account (or,
if such proceeds are not so deposited on that Transfer Date, on the Transfer
Date immediately following such deposit), the Indenture Trustee, based on
information supplied by the Servicer, shall make the following deposits (after
the application on the Transfer Date of the Collected Amount and funds on
deposit in the Reserve Account pursuant to Sections 8.2 and 8.10) from the Event
of Default Proceeds and any funds remaining on deposit in the Reserve Account
(including the proceeds of any sale of investments therein as described in the
following sentence) in the following priority:

               (i) to the Note Distribution Account, any portion of the
          Aggregate Class A Noteholders' Interest Distributable Amount not
          otherwise deposited into the Note Distribution Account on the Transfer
          Date;

               (ii) if such Event of Default Sale results from the occurrence of
          an Event of Default specified in Section 5.1(a), (b) or (c), to the
          Note Distribution Account, an amount equal to the Note Principal
          Balance of the Class A Notes (after giving effect to the reduction in
          the Aggregate Note Principal Balance to result from the deposits made
          in the Note Distribution Account on the Transfer Date and on each
          prior Transfer Date);

               (iii) to the Note Distribution Account, any portion of the Class
          B Noteholders' Interest Distributable Amount not otherwise deposited
          into the Note Distribution Account on the Transfer Date;

                                       54

<PAGE>

               (iv) if such Event of Default Sale does not result from the
          circumstances specified in Section 8.13(a)(ii), to the Note
          Distribution Account, an amount equal to the Note Principal Balance of
          the Class A Notes (after giving effect to the reduction in the
          Aggregate Note Principal Balance to result from the deposits made in
          the Note Distribution Account on the Transfer Date and on each prior
          Transfer Date); and

               (v) to the Note Distribution Account, an amount equal to the Note
          Principal Balance of the Class B Notes (after giving effect to the
          reduction therein to result from the deposits made in the Note
          Distribution Account on the day preceding such Distribution Date and
          on the Transfer Date and on each prior Transfer Date).

Subject to the Section 2.02(b) of the Servicing Agreement, any investments on
deposit in the Reserve Account which shall not mature on or before the day
preceding such Distribution Date shall be sold by the Indenture Trustee at such
time as shall result in the Indenture Trustee receiving the proceeds from such
sale not later than the Transfer Date. Any Event of Default Proceeds remaining
after the deposits described above shall be deposited into the Certificate
Distribution Account for distribution to the Certificateholders.

          (b) Notice of any termination of the Trust shall be given by the
Servicer to each Trustee as soon as practicable after the Servicer has received
notice thereof.

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

     SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
                 ------------------------------------------------------

          (a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Indenture Trustee, when
authorized by an Issuer Order, at any time and from time to time, may enter into
one or more indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture 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
          additional property to the lien of this Indenture;

               (ii) to evidence the succession, in compliance with Section 3.11
          and the applicable provisions hereof, of another Person to the Issuer,
          and the assumption by any such successor of the covenants of the
          Issuer contained herein and in the Notes;

                                       55

<PAGE>

               (iii) to add to the covenants of the Issuer for the benefit of
          the Securityholders, 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 or to correct or supplement any
          provision herein or in any supplemental indenture which may be
          inconsistent with any other provision herein, in any supplemental
          indenture or in any other Basic Document;

               (vi) to evidence and provide for the acceptance of the
          appointment hereunder by a successor or additional Indenture Trustee
          with respect to the Notes or any class thereof 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, and the
          Indenture Trustee is hereby authorized to join in the execution of any
          such supplemental indenture and to make any further appropriate
          agreements and stipulations that may be therein contained.

          (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, at any time and from time to time enter into one
or more indentures supplemental hereto for the purpose of adding any provisions
to, changing in any manner, or eliminating any of the provisions of, this
Indenture or modifying in any manner the rights of the Noteholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
           --------  -------
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.

     SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
                 ---------------------------------------------------

          (a) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies and with the consent
of the Holders of not less than a majority of the Outstanding Amount of the
Controlling Class, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, changing in any manner, or eliminating
any of the provisions of, this Indenture or modifying in any manner the rights
of the Noteholders under this Indenture; provided, however, that no such
                                         --------  -------
supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:

                                       56

<PAGE>

               (i) change the due date of any instalment of principal of or
          interest on any Note, or reduce the principal amount thereof, the
          interest rate applicable thereto, or the Redemption Price with respect
          thereto, change any place of payment where, or the coin or currency in
          which, any Note or any interest thereon is payable, or 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 (or, in the case of
          redemption, on or after the Redemption Date);

               (ii) reduce the percentage of the Outstanding Amount of the
          Controlling Class, the consent of the Holders of which is required for
          (a) any such supplemental indenture, (b) any waiver of compliance with
          certain provisions of this Indenture, certain defaults hereunder and
          their consequences as provided for in this Indenture or (c) any action
          described in Sections 2.12, 3.7(e), 5.2, 5.6, 5.11, 5.12(a), 6.8, or
          6.16;

               (iii) modify or alter the provisions of the proviso to the
          definition of the term "Outstanding";

               (iv) reduce the percentage of the Outstanding Amount of the Notes
          required to direct the Indenture Trustee to sell or liquidate the
          Collateral pursuant to Section 5.4 if the proceeds of such sale would
          be insufficient to pay the principal amount of and accrued but unpaid
          interest on the Outstanding Notes;

               (v) modify any provision of this Section 9.2 to decrease the
          required minimum percentage necessary to approve any amendments to any
          provisions of this Indenture or any of the Basic Documents;

               (vi) 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 modify or alter the provisions of the Indenture
          regarding the voting of Notes held by the Issuer, the Seller or any
          Affiliate of either of them; or

               (vii) 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
          Collateral or, except as otherwise permitted or contemplated herein,
          terminate the lien of this Indenture on any property at any time
          subject to the lien of this Indenture or deprive the Holder of any
          Note of the security afforded by the lien of this Indenture.

          (b) The Indenture Trustee may in its discretion determine whether or
not any Notes would be affected (such that the consent of each Noteholder would
be required) by any

                                       57

<PAGE>

supplemental indenture proposed pursuant to this Section 9.2 and any such
determination shall be conclusive and binding upon all of the Noteholders,
whether authenticated and delivered thereunder before or after the date upon
which such supplemental indenture becomes effective. The Indenture Trustee shall
not be liable for any such determination made in good faith.

          (c) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.

          (d) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the
Indenture Trustee shall mail to the Noteholders to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. 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 supplemental indenture.

     SECTION 9.3 Execution of Supplemental Indentures. In executing, or
                 ------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent to
such execution have been satisfied. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.

     SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
                 --------------------------------
supplemental indenture pursuant to the provisions 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 Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

     SECTION 9.5 Conformity with Trust Indenture Act. Every amendment of this
                 -----------------------------------
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.

     SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
                 ---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and

                                       58

<PAGE>

the Issuer, to any such supplemental indenture may be prepared and executed by
the Issuer and authenticated and delivered by the Indenture Trustee in exchange
for Outstanding Notes of the same class.

                                    ARTICLE X
                               REDEMPTION OF NOTES

     SECTION 10.1 Redemption
                  ----------

          (a) The Class A-4 Notes and Class B Notes are subject to redemption in
whole, but not in part, upon the exercise by the Servicer of its option to
purchase the Receivables pursuant to Section 4.01 of the Pooling Agreement. Such
redemption shall occur on any Distribution Date after all Class A-1 Notes, Class
A-2 Notes and Class A-3 Notes have been paid in full. The purchase price for the
Class A-4 Notes and Class B Notes to be redeemed shall be equal to the
applicable Redemption Price, provided the Issuer has available funds sufficient
to pay such amount. The Issuer shall furnish the Rating Agencies notice of such
redemption. If the Class A-4 Notes and Class B Notes are to be redeemed pursuant
to this Section 10.1(a), the Issuer shall furnish notice thereof to the
Indenture Trustee not later than 25 days prior to the Redemption Date and the
Issuer shall deposit into the Note Distribution Account, before the Redemption
Date, the aggregate Redemption Price of the Class A-4 Notes and Class B Notes to
be redeemed, whereupon all such Notes shall be due and payable on the Redemption
Date.

          (b) [Reserved.]

          (c) Within sixty days after the redemption in full pursuant to this
Section 10.1 of any class of Notes, the Indenture Trustee shall provide each of
the Rating Agencies with written notice stating that all of such Notes have been
redeemed.

     SECTION 10.2 Form of Redemption Notice.
                  -------------------------

          (a) Notice of redemption of the Class A-4 Notes and Class B Notes
under Section 10.1(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of the Class A-4 Notes and Class B Notes of
record, respectively, at such Noteholder's address appearing in the Note
Register.

          (b) All notices of redemption shall state:

               (i) the Redemption Date;

               (ii) the Redemption Price;

                                       59

<PAGE>

               (iii) the place where Class A-4 Notes and Class B Notes are to be
          surrendered for payment of the Redemption Price (which shall be the
          Agency Office to be maintained as provided in Section 3.2); and

               (iv) CUSIP numbers.

          (c) Notice of redemption of the Class A-4 Notes and Class B Notes
shall be given by the Indenture Trustee in the name and at the expense of the
Issuer. Failure to give notice of redemption, or any defect therein, to any
Holder of any Class A-4 Note or Class B Note to be redeemed shall not impair or
affect the validity of the redemption of any other Class A-4 Note or Class B
Note to be redeemed.

          (d) [Reserved.]

     SECTION 10.3 Notes Payable on Redemption Date. The Class A-4 Notes or Class
                  --------------------------------
B Notes to be redeemed shall, following notice of redemption as required by
Section 10.2, on the Redemption Date cease to be Outstanding for purposes of
this Indenture and shall thereafter represent only the right to receive the
applicable Redemption Price and (unless the Issuer shall default in the payment
of such Redemption Price) no interest shall accrue on such Redemption Price for
any period after the date to which accrued interest is calculated for purposes
of calculating such Redemption Price.

                                   ARTICLE XI
                                  MISCELLANEOUS

     SECTION 11.1 Compliance Certificates and Opinions, etc.
                  -----------------------------------------

          (a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture 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 11.1, except 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, 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 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;

                                       60

<PAGE>

               (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 judgment 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 with the Indenture Trustee of any
Collateral or other property or securities that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, 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 60 days of such deposit) to the Issuer
of the Collateral or other 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 (b)(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 on the basis of any such withdrawal or release since the
          commencement of the then current fiscal year of the Issuer, as set
          forth in the certificates delivered pursuant to clause (b)(i) above
          and this clause (b)(ii), is 10% or more of the Outstanding Amount of
          the Notes, but 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 one percent of the Outstanding Amount of the Notes.

               (iii) Other than with respect to the release of any Warranty
          Receivables, Administrative Receivables or Liquidating Receivables,
          whenever any property or securities are to be released from the lien
          of this Indenture, 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 60
          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 in
          contravention of the provisions hereof.

                                       61

<PAGE>

               (iv) Whenever the Issuer is required to furnish to the Indenture
          Trustee an Officer's Certificate certifying or stating the opinion of
          any signatory thereof as to the matters described in clause (b)(iii)
          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
          Warranty Receivables, Administrative Receivables and Liquidating
          Receivables, or securities released from the lien of this Indenture
          since the commencement of the then current calendar year, as set forth
          in the certificates required by clause (b)(iii) above and this clause
          (b)(iv), equals 10% or more of the Outstanding Amount of the Notes,
          but 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
          one percent of the then Outstanding Amount of the Notes.

               (v) Notwithstanding Section 2.9 or any other provision of this
          Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
          dispose of Receivables as and to the extent permitted or required by
          the Basic Documents, (B) make cash payments out of the Designated
          Accounts and the Certificate Distribution Account as and to the extent
          permitted or required by the Basic Documents and (C) take any other
          action not inconsistent with the TIA.

          SECTION 11.2 Form of Documents Delivered to Indenture Trustee
                       ------------------------------------------------

          (a) 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.

          (b) 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 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, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, 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.

          (c) 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.

                                       62

<PAGE>

          (d) Whenever in this Indenture, 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 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 or a class of 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 and the Issuer, if made in the
manner provided in this Section 11.3.

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

          (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 (or any one or more
predecessor 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 of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with the Indenture Trustee, the
Issuer or the Rating Agencies under this Indenture shall be made upon, given or
furnished to or filed with such party as specified in Appendix B to the Pooling
                                                      ----------
Agreement.

     SECTION 11.5 Notices to Noteholders; Waiver.
                  ------------------------------

                                       63

<PAGE>

          (a) Where this Indenture provides for notice to Noteholders of any
condition or event, such notice shall be given as specified in Appendix B to the
                                                               ----------
Pooling Agreement.

          (b) Where this Indenture 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 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.

          (c) 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 of 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.

          (d) Where this Indenture 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 an Event of
Default.

     SECTION 11.6 Alternate Payment and Notice Provisions. Notwithstanding any
                  ---------------------------------------
provision of this Indenture 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 Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer shall furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee shall cause payments to be made
and notices to be given in accordance with such agreements.

     SECTION 11.7 Conflict with Trust Indenture Act.
                  ---------------------------------

          (a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.

          (b) The provisions of TIA Sections 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.

     SECTION 11.9 Successors and Assigns.
                  ----------------------

                                       64

<PAGE>

          (a) All covenants and agreements in this Indenture and the
Notes by the Issuer shall bind its successors and assigns, whether so expressed
or not.

          (b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.

     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 in the
                   ---------------------
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Noteholders and the Note Owners and
(only to the extent expressly provided herein) the Certificateholders, any other
party secured hereunder and any other Person with an ownership interest in any
part of the Collateral, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

     SECTION 11.12 Legal Holidays. If the date on which any payment is due shall
                   --------------
not be a Business Day, then (notwithstanding any other provision of the Notes or
this Indenture) 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 on 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 Illinois, without reference to its
conflict of law provisions, except that the obligations, rights and remedies of
the Indenture Trustee hereunder shall be determined in accordance with the
internal laws of the State of New York, without reference to its conflict of law
provisions.

     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 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 Indenture Trustee 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.

     SECTION 11.16 No Recourse. No recourse may be taken, directly or
                   -----------
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or

                                       65

<PAGE>

under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against:

               (i) the Indenture Trustee 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 Indenture Trustee or the Owner Trustee in
          their individual capacities, any holder of a beneficial interest in
          the Issuer, the Owner Trustee or the Indenture Trustee or of any
          successor or assign of the Indenture Trustee or the Owner Trustee in
          their individual capacities (or any of their successors or assigns),
          except as any such Person may have expressly agreed (it being
          understood that the Indenture Trustee and the Owner Trustee have no
          such obligations in their individual capacities) and except that any
          such partner, owner or beneficiary shall be fully liable, to the
          extent provided by applicable law, for any unpaid consideration for
          stock, unpaid capital contribution or failure to pay any instalment 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.
                   -----------

          (a) The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Note Owner, by accepting a Note (or interest therein) issued
hereunder, hereby covenant and agree that they shall not, prior to the date
which is one year and one day after the termination of this Indenture with
respect to the Issuer pursuant to Section 4.1, acquiesce, petition or otherwise
invoke or cause the Seller or the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Seller or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller, or the Issuer.

          (b) Notwithstanding any prior termination of the Series 200_ Portfolio
Supplement, the Indenture Trustee (and each Noteholder by its acceptance of a
Note) covenants and agrees that it shall not, prior to the date which is one
year and a day after which all obligations under each Permitted Financing have
been paid in full, acquiesce, petition or otherwise invoke, or join any other
Person in acquiescing, petitioning or otherwise invoking, against the Titling
Trust or any Special Purpose Entity, any proceeding in court or with any
governmental authority for the purpose of (i) commencing or sustaining a case
against the Titling Trust or such Special Purpose Entity under any federal or
state bankruptcy, insolvency or similar law, or (ii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of all or any substantial part of the

                                       66

<PAGE>

respective property of the Titling Trust or such Special Purpose Entity, or
(iii) ordering the winding up or liquidation of the affairs of the Titling Trust
or such Special Purpose Entity.

          (c) Except as otherwise provided in the Titling Trust Agreement, as
may be amended, restated and supplemented from time to time, the Indenture
Trustee (and each Noteholder by its acceptance of a Note) hereby releases all
Claims to the Titling Trust Assets allocated to the General Interest and to each
Portfolio Interest other than the Series 200_ Portfolio Interest whether then or
thereafter created and, in the event that such release is not given effect, to
fully subordinate all Claims it may be deemed to have against the Titling Trust
Assets allocated to the General Interest and each Portfolio Interest other than
the Series 200_ Portfolio Interest whether then or thereafter created.

     SECTION 11.18 Inspection. The Issuer agrees that, on reasonable prior
                   ----------
notice, it shall 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.

                                       67

<PAGE>

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

NAVISTAR FINANCIAL 200  OWNER TRUST
                      -

By:
   -------------------------------------------
not in its individual capacity but solely as
Owner Trustee

By:
   -------------------------------------------
Name:
Title:

----------------------------------------------,
as Indenture Trustee

By:
   -------------------------------------------
Name:
Title:

<PAGE>

STATE OF ILLINOIS)
                          )       ss.:
COUNTY OF COOK   )

          BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared             , known to me to
                                                  ------------
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the Navistar Financial 200
                                                                              -
Owner Trust and that he executed the same as the act of said business trust for
the purpose and consideration therein expressed, and in the capacities therein
stated.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the       day of
                                                      -----
             , 200 .
-------------     -

                                 -----------------------------------------------
                                 Notary Public in and for the State of Illinois.

My commission expires:

----------------------------

<PAGE>

STATE OF ILLINOIS)
                          )       ss.:
COUNTY OF COOK   )

          BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared                            ,
                                                  ---------------------------
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said                                      , and that he executed the same as the
     -------------------------------------
act of said                       for the purpose and consideration therein
            ---------------------
stated.

          GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the      day of       ,
                                                           ----       -------
200 .
   -

Notary Public in and for the State of Illinois.

My Commission expires:

----------------------------

<PAGE>

                                                                       EXHIBIT A

                                  LOCATIONS OF
                        COMPOSITE SCHEDULE OF RECEIVABLES

          The Composite Schedule of Receivables is on file at the offices of:

          1.   The Indenture Trustee

          2.   The Owner Trustee

          3.   Navistar Financial Corporation

          4.   Navistar Financial Retail Receivables Corporation

<PAGE>

                                                                       EXHIBIT B

                       FORM OF CLASS A-1 ASSET BACKED NOTE

REGISTERED                                                      $            /1/
                                                                 ------------

No. R-                                                      CUSIP NO.
       --------                                                      --------

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

                       NAVISTAR FINANCIAL 200  OWNER TRUST
                                             -

                        CLASS A-1    % ASSET BACKED NOTES
                                  ---

          NAVISTAR FINANCIAL 200_ OWNER TRUST, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of                 DOLLARS ($         )
                                         ---------------           ---------
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal amount hereof and the
denominator of which is [aggregate principal amount for class] by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on such class of the Notes pursuant to Sections

----------
/1/  Denominations of $1,000 and integral multiples thereof.

                                       1

<PAGE>

2.7, 3.1 and 8.2 of the Indenture; provided, however, that the entire unpaid
                                   --------  -------
principal amount of this Note shall be due and payable on             (the
                                                          -----------
"Final Scheduled Distribution Date"). The Owner Trustee shall pay interest on
 ---------------------------------
this Note at the rate per annum shown above on each Distribution Date until the
principal of this Note is paid or made available for payment, on the principal
amount of this Note outstanding on the preceding Distribution Date (after giving
effect to all payments of principal made on the preceding Distribution Date).
Interest on this Note will accrue for each Distribution Date from and including
the most recent Distribution Date on which interest has been paid to but
excluding the then current Distribution Date or, if no interest has yet been
paid, from            , 200  Interest on this Note will be calculated on the
           -----------     -
basis of the actual number of days elapsed since the Closing Date or the
preceding Distribution Date divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.

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

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

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

                                       2

<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.

Date:                                     NAVISTAR FINANCIAL 200_ OWNER TRUST

                                          By:
                                              ---------------------------------,
                                              not in its individual capacity
                                              but solely as Owner Trustee under
                                              the Trust Agreement

                                              By:
                                                  ----------------------------
                                                  Name:
                                                  Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                              ---------------------------------,
                                              not in its individual capacity but
                                              solely as Indenture Trustee

                                              By:
                                                  ----------------------------
                                                  Name:
                                                  Title:

                                       3

<PAGE>

                                 REVERSE OF NOTE

          This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Class A-1     % Asset Backed Notes (herein called the "Class
                            ----
A-1 Notes"), all issued under an Indenture, dated as of                (such
                                                        --------------
Indenture, as supplemented or amended, is herein called the "Indenture"),
                                                             ---------
between the Issuer and                                     as trustee (the
                       -----------------------------------
"Indenture Trustee", which term includes any successor trustee under the
 -----------------
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Notes
are governed by and subject to all terms of the Indenture (which terms are
incorporated herein and made a part hereof), to which Indenture the holder of
this Note by virtue of acceptance hereof assents and by which such holder is
bound. All capitalized terms used and not otherwise defined in this Note that
are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture.

          The Indenture secures (a) first, the payment of principal and interest
on, and any other amounts owing in respect of the Class A Notes, equally and
ratably without prejudice, priority or distinction and (b) second, the payment
of principal of and interest on, and any other amounts owing in respect of the
Class B Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of the Indenture, as provided
therein.

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

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee,

                                       4

<PAGE>

custodian, sequestrator or other similar official of the Seller or the Issuer or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Seller or the Issuer.

          Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Amount of all the Controlling Class. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Controlling Class, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders.

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

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

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

          This Note and the Indenture shall be construed in accordance with the
laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such

                                       5

<PAGE>

laws, except that the obligations, rights and remedies of the Indenture Trustee
hereunder shall be determined in accordance with the internal laws of the State
of New York.

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

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

                                       6

<PAGE>

                                   ASSIGNMENT

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

---------------------------------

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

-----------------------------------------------

-----------------------------------------------------------------------
                       (name and address of assignee)

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

Dated:                                                                 /1/
      -------------------            ----------------------------------

                                             Signature Guaranteed:

-------------------------            ----------------------------------

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

                                       7

<PAGE>

                                                                       EXHIBIT C

                   FORM OF CLASS A-2, CLASS A-3, CLASS A-4 AND
                            CLASS B ASSET BACKED NOTE

     REGISTERED                                               $              /1/
                                                               --------------

No. R-                                                     CUSIP No.
      ----                                                           -----------

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

                       NAVISTAR FINANCIAL 200  OWNER TRUST
                                             -

                      CLASS           % ASSET BACKED NOTES
                            ---- -----

     NAVISTAR FINANCIAL 200_ OWNER TRUST, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of                 DOLLARS ($          )
                                         ---------------           ---------
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal amount hereof and the
denominator of which is

----------
 /1/ Denominations of $1,000 and integral multiples thereof (except, if
applicable, for one Note representing a residual portion of such class which may
be issued in a different denomination).

                                       8

<PAGE>

[aggregate principal amount for class] by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on such class
of the Notes pursuant to Sections 2.7, 3.1 and 8.2 of the Indenture; provided,
                                                                     --------
however, that the entire unpaid principal amount of this Note shall be due and
-------
payable on [the earlier of]                  (the "Final Scheduled Distribution
                            ---------------        ----------------------------
Date") [and the Redemption Date, if any, pursuant to Section 10.1(a) of the
----
Indenture]. The Owner Trustee shall pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date). Interest on this
Note will accrue for each Distribution Date from and including the most recent
Distribution Date on which interest has been paid to but excluding the then
current Distribution Date or, if no interest has yet been paid, from
                       Interest on this Note will be computed on the basis of a
----------------------
360-day year of twelve 30-day months (or, in the case of the initial
Distribution Date,   /30ths of a month). Such principal of and interest on this
                  --
Note shall be paid in the manner specified on the reverse hereof.

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

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

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

                                       9

<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.

Date:                                     NAVISTAR FINANCIAL 200  OWNER TRUST
                                                                -

                                          By:                                  ,
                                              ---------------------------------
                                              not in its individual capacity,
                                              but solely as Owner Trustee under
                                              the Trust Agreement

                                              By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                                                               ,
                                              --------------------------------
                                              not in its individual capacity but
                                              solely as Indenture Trustee

                                              By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                                       10

<PAGE>

                                 REVERSE OF NOTE

          This Note is one of a duly authorized issue of Notes of the Issuer
designated as its Class            % Asset Backed Notes (herein called
                       ------ -----
the "Class Notes"), all issued under an Indenture, dated as of
     -----------                                                --------------
(such Indenture, as supplemented or amended, is herein called the "Indenture"),
                                                                   ---------
between the Issuer and                                   , as trustee (the
                       ---------------------------------
"Indenture Trustee", which term includes any successor trustee under the
 -----------------
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Notes
are governed by and subject to all terms of the Indenture (which terms are
incorporated herein and made a part hereof), to which Indenture the holder of
this Note by virtue of acceptance hereof assents and by which such holder is
bound. All capitalized terms used and not otherwise defined in this Note that
are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture.

          The Indenture secures (a) first, the payment of principal and interest
on, and any other amounts owing in respect of the Class A Notes, equally and
ratably without prejudice, priority or distinction and (b) second, the payment
of principal of and interest on, and any other amounts owing in respect of the
Class B Notes, equally and ratably without prejudice, priority or distinction,
and to secure compliance with the provisions of the Indenture, as provided
therein.

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

                                       11

<PAGE>

          Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Seller or the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Seller or the
Issuer under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Seller, or the Issuer.

          Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.

          Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Amount of all the Controlling Class. The Indenture also contains
provisions permitting the Holders of Notes representing specified percentages of
the Outstanding Amount of the Controlling Class, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of the Noteholders.

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

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

                                       12

<PAGE>

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

          This Note and the Indenture shall be construed in accordance with the
laws of the State of Illinois, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws, except that the
obligations, rights and remedies of the Indenture Trustee hereunder shall be
determined in accordance with the internal laws of the State of New York.

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

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

                                       13

<PAGE>

                                   ASSIGNMENT

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

---------------------------------

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

-----------------------------------------------------------------------
                 (name and address of assignee)

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

Dated:                                                                 /1/
      -------------------            ----------------------------------

                                          Signature Guaranteed:

-------------------------            ----------------------------------

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

                                       14

<PAGE>

                                                                       EXHIBIT D

                        FORM OF NOTE DEPOSITORY AGREEMENT

                                       15

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